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Security firm probably spied: Treasury

Emails released to Newsroom under the Official Information Act suggest taxpayer-funded spying probably took place at a public meeting of Christchurch earthquake victims in 2014. David Williams reports.

Christchurch earthquake victims who suspect they’ve been spied on in a taxpayer-funded snooping operation now have a high-profile supporter – the Treasury department.

Emails released to Newsroom under the Official Information Act show Treasury believes – “on the balance of probabilities” – security firm Thompson & Clark Investigations attended and covertly recorded a March 2014 public meeting of Southern Response insurance claimants discussing a class action case. The spying was paid for by the taxpayer, as the firm was being used by Government-owned insurance claims company Southern Response.

Treasury says it hasn’t uncovered anything illegal, but there are suggestions of behaviour that was “less than fully honest”, perhaps even in comments made to police. Also, there might have been an “undesirable appearance” of trying to put “improper pressure” on police to speak to one insurance claimant.

In March, weeks after the Treasury emails were written, the State Services Commission announced it was launching an investigation into the incident. Days later, Prime Minister Jacinda Ardern banned Government departments from using Thompson & Clark for spying.

Threatening behaviour

Newshub reported in March that Southern Response – the Government company responsible for settling Canterbury quake claims lodged with AMI Insurance – spent almost $180,000 employing security and investigations firm Thompson & Clark between February 2014 and April 2017.

The firm was initially asked to conduct a security review, after Southern Response staff, board members and the then chief executive Peter Rose, who left in July 2016, experienced a range of threatening and aggressive behaviour from customers. It was then retained to run a “risk management package”, including monitoring “social media, media and any other public outlets”, as well as “residential security reviews” for those at Southern Response thought to be at personal risk.

The spying focused on a public meeting about a potential class action against Southern Response held in Christchurch on March 13, 2014. Accountant Cam Preston helped organise the meeting.

The day after that meeting, Thompson & Clark wrote to Southern Response recommending a complaint be laid with police, official emails reveal. The ensuing discussion included the comment that “pressure should go on the police” to speak with one person – probably Preston, who has since settled his claim.

Five days later, on March 19, a Thompson & Clark email referred to a recording from the meeting. The following week, police visited Preston at his home. A police report, released to Newshub, said Southern Response told police there were concerns over “a repeat Ashburton WINZ incident”.

‘Please explain’

In February of this year, Treasury demanded an explanation about Thompson & Clark’s (TCIL) activities from Southern Response chief executive Anthony Honeybone. Following his response, and after consulting Crown Law, Treasury’s Shelley Hollingsworth, the acting manager of commercial operations – strategy and policy, wrote to Earthquake Commission Minister Megan Woods’ office.

Regarding the recording of the March 2014 meeting, Hollingsworth wrote: “A reading of the entire body of information leads us – on the balance of probabilities – to view that this was probably an audio recording and that the recording was made by TCIL.” Recording the meeting didn’t appear to breach the Crimes Act or Privacy Act, she said, but “there may have been an ethical breach if there was any effort to mislead the police” about the source of the recording.

It was Treasury’s view the email trail between Southern Response and Thompson & Clark suggested “behaviour which could be criticised as being less than fully honest”. Further, Hollingsworth wrote that “it could create a sense of public disquiet and, implicitly, diminish trust in Southern Response”.

A police complaint was “not thought to be an inappropriate response” to comments at the meeting, Hollingsworth said, and it was not illegal or unethical to suggest “pressure should go on police” to talk to a claimant. But the words could give rise to an “undesirable appearance” of “attempting to put improper pressure on the police”.

Hollingsworth’s email, written on February 14, suggested Southern Response’s shareholding ministers – Woods, who originally passed the spying incident to the State Services Commission, and Finance Minister Grant Robertson – write to the board, reminding them to uphold the company’s promised values and to match or exceed public servants’ standards of integrity and conduct. The matter should also be referred to the State Services Commission’s integrity, ethics and standards team, the email said.

“It is more than conceivable that media and other attendees at the meeting may have recorded the meeting themselves.” – Anthony Honeybone

Southern Response boss Honeybone told Treasury on February 8 that the Crown-owned company decided to undertake a security review after a fiery protest outside its offices in December 2013. Thompson & Clark was retained for “ongoing risk management services” until April 2017 “to ensure the health and safety of its people”.

Honeybone said it was unaware of any advice or service provided by the security firm that was unethical or illegal. Any actions Southern Response took as a result of the firm’s advice “accorded with genuine concern for the safety and well-being of company personnel”, he said.

The March 2014 class action meeting wasn’t attended by Southern Response staff, as far as Honeybone was aware. “We are not aware whether TCIL attended the class action meeting in person, or how this information was obtained by them, but we acknowledge a reference in their email to a recording made of the meeting,” he wrote. He added: “It is more than conceivable that media and other attendees at the meeting may have recorded the meeting themselves.”

Thompson & Clark told Southern Response comments made at the meeting by one person, whose name was redacted, “could be construed as threatening” to Southern Response’s board members. Subsequently, a Southern Response staff member spoke to police. Honeybone said no record was kept of the conversation.

In her email to Woods’ office, Hollingsworth recommended the company be upbraided for that “shortcoming”.

In September last year, Thompson & Clark undertook “a one-off residential security review of the current CEO’s residences and family’s public and social media presence”. Honeybone told Treasury in February that Southern Response had no ongoing contracts with the security firm “or any requirement for its services”. But he added “this may change in the future if necessary to ensure the safety of its staff”.

Hollingsworth was unimpressed with that line. She wrote to Woods’ office: “While recognising that staff safety is of paramount concern, given our views below, we consider that this matter should be taken into account by Southern Response when considering who to seek such services from in the future, should it need them.”

In March, State Services Commissioner Peter Hughes announced that Doug Martin, a former deputy State Services Commissioner, would lead the inquiry into Thompson & Clark’s activities on behalf of Southern Response. Hughes said the allegations “raised serious questions about the conduct and integrity of a contractor hired by a Crown company”. Two weeks later, the inquiry’s terms of reference were broadened to include the security firm’s relationship with the Ministry of Business, Innovation and Employment.