The story of government fraudster Joanne Harrison is one of almost unbelievable greed. But in many ways as shocking, writes Peter Newport, is how her boss, Martin Matthews, ignored the whistle-blowers – and allowed Harrison to exact her revenge.

Update 1pm, 3 August 2017: Martin Matthews has resigned his position as Auditor General following the publication of a critical report into his handling of the Harrison case.

It’s not quite as bad as the Russians hacking the US election, but in New Zealand terms it’s right up there.

Could our current auditor general have hired and then supported one of the most shocking, audacious fraudsters ever seen in this country? And could he have allowed the sacking or removal of government staff who warned him of the fraud eight times in three years before he finally took action?

Martin Matthews was chief executive at the Ministry of Transport when he hired Joanne Harrison, also known as Joanne Sharp or Joanne Sidebottom, as a general manager. It’s not clear what checks were done at that stage; it seems they weren’t aware that she’d been the subject of an earlier fraud investigation in Australia. In fact, then police minister Paula Bennett revealed last year that the Australian police had repeatedly contacted their New Zealand counterparts in 2011 about Joanne Harrison, seeking information about her.

Joanne Harrison/Sharp/Sidebottom abused her position at the Ministry of Transport in a way that even a Netflix docu-drama writer would find a stretch. She stole over $700,000 to fund personal property and credit card debt, she got a job for her husband by tricking another government agency and then (presumably bored with her “real” job) got a job at the Ministry of Transport for a friend who was paid for 10 months but never once showed up for work. She flew around the world on personal trips, funded by the taxpayer.

It turns out that her husband may also have faced suspicion about his behaviour at the government agency where Harrison fixed him a job. The Transport Accident Investigation Commission is quoted as saying “several strange things” happened with Sharp (Harrison’s husband) in terms of expenses, accommodation and behaviour before he left abruptly in mid-2015. You’ve got to wonder about their employment processes as well. Apparently, Harrison wanted him sent to the UK to complete an accident investigation course.

Now all of this was apparently pretty obvious to the people that worked around Harrison – including the ministry’s legal and finance teams. The fake invoices had no phone numbers, website, email address, nothing. Even in the “keep your head down” world of Wellington government agency office politics, other senior managers could see that she was a fraud. They became whistle-blowers, which shows just how blatant all of this was. In a well-paid and secure Wellington government job you just don’t put everything on the line if someone is stealing paper clips or even just downright incompetent.

What happened to some of those people who tried to stop all of this, the whistle-blowers? They got sacked or restructured out of the ministry: three of them within two months of accusing Harrison of fraud. They had warned Martin Matthews and his team back in 2013 that something was seriously wrong, but rather than listening or acting he allowed Harrison to get rid of them.

According to Labour’s transport spokesperson Sue Moroney, “They’ve had their careers ruined. I understand they’ve been working for the ministry for 20 years plus – not between them – each of them.”

Now Harrison is behind bars and a separate civil action is under way in an attempt to recover assets alleged to be linked to her.

But what’s the story with Martin Matthews? And what’s the story with the people who lost their jobs for trying to warn him, three years before he took action?

Well, he got the seven-year job as auditor general back in late 2016 and officially started on February 1 this year. Parliament’s approval of the appointment came three months before the court found Harrison guilty in February this year.

Cross-party MPs presented arguments in support of Matthews’ appointment in November 2016 including this glowing reference from current foreign minister and then leader of the house Gerry Brownlee: “My own experience of Martin Matthews is working alongside him for three years, as the minister of transport, when he was running the transport ministry. What I can assure the House is that he is a first-class public servant. His career in the public service started in the Audit Office, and I think the broad experience that he has had since his early days as an auditor through to being chief executive of a very large government department will serve him well in the role of auditor-general. We therefore unreservedly support his appointment.”

This was the statement from Labour’s Trevor Mallard, supporting Matthews but referencing the fraud case which at that stage was still before the courts: “I think it would not be fair for this appointment to proceed through the House without referring to what might be described as an elephant in the room, and that is a case that I will not refer to in any detail but it involved Mr Matthews’ previous ministry. All I want to say is that members of the committee looked into this very, very carefully, were well briefed on the issue, and came to the conclusion that Mr Matthews’ handling of the matter was described to us as having been exemplary.”

Matthews stood down as chief executive at the Ministry of Transport in July 2016, just three days before news broke that Harrison had been stealing from the ministry before fleeing New Zealand for Canada. She had then been arrested while trying to re-enter New Zealand, which does not seem a smart move if she wanted to avoid jail.

In fact it’s hard to describe Harrison’s fraud as particularly smart or sophisticated. The crude invoices point to that.

The whistle-blowers are now starting to talk, though. It turns out that at least eight times Matthews was warned about Harrison and eight times he decided not to act.

It also turns out there were no proper purchase orders or contracts to cover the invoices paid to Harrison’s fake companies. How is that even possible with a government department? Who approved the payments?

Can you imagine Harrison’s regular performance reviews at the ministry? “Joanne is charming and clever but should look at ways to stop stealing Ministry money and needlessly sacking her staff and colleagues. Joanne will need to learn to tell the truth, and get approval for global travel, if she is to be further promoted within the Ministry. Joanne enjoys a close and healthy working relationship with the chief executive.”

In a victim impact statement to the court when Harrison was found guilty, the Ministry of Transport’s new chief executive Peter Mersi said, “No one in the ministry has been immune from Harrison’s fraudulent actions.” He outlined all of the improvements that were being made to the ministry’s employee screening processes which he said had “fallen behind best practice”. He also said that “some improvements” were being made around the way that contracts were paid for. In fact, there were 33 formal recommendations for change at the ministry following the fraud case.

Remarkably, Mersi is still refusing to introduce police checks when staff get promoted, saying that would breach the trust that the ministry wishes to have with its senior staff.

During his appointment process, Matthews told MPs that “the point I would make is that anybody who has dealt with people who commit these crimes is that they are typically quite sophisticated”.

Let’s stop right there.

Harrison was a known fraudster whom the Australian police were actively talking to the NZ police about in 2011. She had multiple names. She paid herself over $700,000 on invoices that a trainee accountant would recognise as fraudulent, and which were not supported by either proper contracts or purchase orders. Multiple senior staff warned Matthews about the fraud from 2013 and he did nothing until 2016. Some of those senior staff then lost their jobs, within two months.

Harrison was not some junior staff member that Matthews as chief executive would be unaware of. She was a general manager. He worked with her every day.

Today two former ministry employees have told RNZ News of the “incredible day” their jobs were axed. The whistle-blowers say they alerted senior managers to the fake invoices and dubious travel Harrison was involved with but then were targeted in restructuring she helped lead. They had found, among other things, that Harrison travelled to London to a conference that was cancelled long before she left.

Where was human resources? The Public Service Association? The police? The SFO? The auditor general? The chief executive?

This all happened in a modern New Zealand government ministry. In the full light of day.

Clearly, it’s not Harrison’s fault that the Ministry of Transport did not check her background. It’s not her fault that the NZ police somehow did not do anything effective after being contacted by the Australian police in 2011. It’s not Harrison’s fault that the Ministry pays invoices that are not supported by contracts or purchase orders, it’s not her fault that she can get rid of whistle-blowers by just having them moved or sacked. It’s not her fault she can just fix jobs for her family or fly around the world on a taxpayer ticket. It’s not her fault that the chief executive, and his successor, have consistently refused to properly investigate either what she got away with or the further systemic failings behind the scenes.

In fact if you think about all the middle and senior managers in Wellington and beyond who somehow have the confidence of their chief executive and who might be bullying or conniving their way up the slippery pole – it gets a bit scary. It’s hard not to talk about workers’ rights without sounding like a socialist but just look at what Harrison did. It’s disgusting. Where does the buck stop and who gets the whistle-blowers their jobs back?

Should Martin Matthews be our auditor general? His mission according to the government website is “Independent Reporting on how your taxes and rates are spent.”

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