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What’s the story?

Melissa Lee has a bit of a reputation for being accident-prone. Her campaign in the Mt Albert by-election was marked with – depending on your point of view – some naivete or some straight talking.

Melissa Lee at parliamentPhoto: Marty Melville

Melissa Lee at parliament
Photo: Marty Melville

This week she’s being accused of having her fingers in NZ On Air’s (NZOA) till, by hanging on to money allocated to her production company, Asia Vision, for Asia Downunder which should have been returned.

The story seems to be a bit of a beat-up, and not for the first time. During the Mt Albert campaign, serious allegations were made against Ms Lee and Asia Vision that she had exercised editorial control for Asia Downunder programme items dealing with politics during the run-up to the 2008 election that sent her to parliament as a National list MP; that she misled NZOA concerning her intentions to stand for Parliament at a time when she was seeking NZOA funding for the 2009 series of Asia Downunder; and that public (NZOA) funds intended for the production of Asia Downunder were used to make an election campaign promotional video.

The last allegation was initially reported in a way that suggested Ms Lee had used money to make her own campaign video, whereas in fact the video in question was on behalf of Pansy Wong.

NZOA conducted an investigation into the allegations and issued a press release and the Report on Allegations Surrounding the Production of the television series Asia Downunder on 21 May, clearing Ms Lee and Asia Vision of any wrongdoing, and stating that NZOA would take no further action with respect to the claims alleged.

It was obviously a beat-up and, given that the timing of the allegations coincided with Ms Lee’s campaign for the Mt Albert seat, was presumably politically-motivated.

One item noted in the report was that “Some minor administrative improvements, unrelated to this investigation, require further attention as is often revealed during production audits.”

These minor issues were what made the news on Monday. According to NZOA, an amount of unspent contingency money, accrued over a number of years, should have been returned to the funder but wasn’t. According to Ms Lee, it was an honest mistake which, now that it is understood, “will be attended to as a matter of priority”.

Following the item on 3News on Monday evening, Ms Lee released a statement, part of which said “The issue involves a budgeted contingency fund set aside from profits, which NZ On Air has concluded should have been repaid at the end of each financial year. At a time when there was no increase in funding, the company reduced its profit margins so it could continue making quality television and prudently maintain a contingency fund.”

The full statement is here.

Asia Vision directed a small amount of its 10% production company overhead (PCO) to provide a contingency fund for its Asia Downunder budgets. When that money wasn’t spent at the end of the financial year, it was returned to PCO. Ms Lee believed that as the money was not originally earmarked as contingency, but allowed as contingency essentially by reducing the company’s PCO/profit margin, Asia Vision was not required to return a share to NZOA.

Because NZOA conducts only six or seven random audits a year against the many productions it funds, the way in which Asia Vision has accounted unspent contingency has gone unnoticed by NZOA for a number of years, and would probably have continued to go unnoticed had it not been for the earlier investigation following the allegations of misuse of funds.

The amount of unspent contingency involved is $100,126. By the terms of the original agreement between Asia Vision and NZOA, 20% of this amount may be retained by Asia Vision, with the balance to be returned to NZOA.

Asia Vision has produced Asia Downunder for many years. Melissa Lee, a co-owner of the production company, acted as presenter and producer prior to becoming an MP. Between 2004 and 2009, the period during which Asia Vision apparently accounted the contingency fund incorrectly, Asia Vision produced 200 episodes of Asia Downunder and received $5,838,665 of NZOA funding, an average of $29,193 per episode.

From this perspective, $100,126 isn’t a major amount of money – less than 1.8% in fact. NZOA’s share represents $80,000 that could be spent supporting other programming, and will be welcome for that purpose, but it’s also less than half the amount of NZOA money that went up in smoke when Ninox was placed in receivership earlier in the year. Shit happens.

There’s been no suggestion from NZOA that Asia Vision or Melissa Lee has attempted to defraud the taxpayer, and this writer understands that NZOA has written to Ms Lee expressing that belief.

This writer spoke to three other producers, none of whom wanted to be named and all of whom have received NZOA funding, to ask whether Ms Lee’s explanation held water in their experience.

Two said that were it necessary to support contingency with funds intended for other purposes, including the producer’s margin, they wouldn’t assume NZOA to have a claim on any such ‘additional’ contingency which remained unspent at the conclusion of a production. The third declined to comment.

So, what’s the real story here? A misunderstanding leads to an accounting error which isn’t picked up, is repeated and, when the error is discovered, leads to Ms Lee agreeing to refund the monies to NZOA. It’s hardly the stuff that lead items on the evening news are made of.

But throw in a whistle-blower, a letter to be waved around and politicians desperate to score some points and it becomes something else. It seems someone has gone to quite a lot of effort to stir up the storm in this particular tea cup.

The Labour Party has been all over it, with acting leader Annette King trying to score points off John Key at Question Time on Tuesday, and Pete Hodgson coming off second best in his attempts to present Minister of Broadcasting Jonathan Coleman as covering up the affair.

However, TV3’s ‘whistle-blower’ believed either that misconduct had taken place or that mud thrown might stick. The question – which nobody else seems to be asking – is why journalists have made such a meal of it, when there’s obviously a considerable slice of somebody’s self-interest being served up along with the story. It’s hard to believe the whistle-blower is acting disinterestedly if they remain anonymous.

The copy of the letter that was made available to the Labour Party and members of parliamentary press gallery on Monday was, according to a source who’d seen it, annotated with sufficient detail to suggest it had come from either a member of the production company or someone with very detailed knowledge of Asia Vision’s activities and the funding arrangements NZOA enters into with producers.

Responding to a question from Acting Labour Leader Annette King in parliament on Tuesday, John Key stated that the member (Ms King) “might like to ask NZOA why it had leaked a letter to the Labour Party rather than sending it directly to Ms Lee.”

Assuming Ms King was probably busy being Acting Leader, we rang up NZOA CEO Jane Wrightson to ask her. Ms Wrightson said that she had already conducted an internal investigation to check that NZOA was not responsible for the leak, and “can assure the Prime Minister that this is not the case”.

The story slipped from top spot to fourth on TV3’s evening news on Tuesday. Obviously it wasn’t going to retain top spot following the discovery of the body of Aisling Symes, but it was also outranked by the news that the buses might start running again in Auckland later this week.

Duncan Garner did entertain, pursuing Ms Lee through parliament, calling out, “Were you pocketing contingency?” and keeping a straight face as if he genuinely expected an answer other than the dagger look he got.

However, he wasn’t put off. He concluded his report by saying, “The whistle-blower has told 3News there are many more questions to come.”

The story is not one about misappropriation of public money, nor about what appears to be what the Prime Minister described as “an innocent mistake”. It’s not even about the wanton excesses of a TV production company. There’s no sex, good drugs or rock’n’roll.

It does seem, on current evidence, to be about journalists selling us half the story. There’s little evidence at the moment to contradict the suspicion that the whistle-blower is calling the shots without revealing his or her agenda to the public scrutiny s/he believes Ms Lee is apparently so deserving of.

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