America’s Cup: MBIE Opposes Paying $ 3 Million Boat Design Bill

The ministry that pays $ 40 million in costs for next year’s America’s Cup regatta in Auckland, says none of that money should have gone to the New Zealand team to design the AC75 class of monohull foil boats.

The opposition of the Ministry of Business, Innovation and Employment (MBIE) to a payment of $ 3 million to the New Zealand Team, by the team’s events arm, is detailed in the full version of an audit, published at Stuff.

Auditor Beattie Varley’s report embodies a previously published summary that found no wrongdoing in how the team, or sister company America’s Cup Event Limited (ACE), spent taxpayer funds for event costs. .

The abstract found record keeping that was not up to scratch, and left the $ 3 million design contribution to be handled in mediation between MBIE, ACE and Team New Zealand.

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Team New Zealand has maintained that part of creating the radical new design rule for the AC75 is a legitimate event cost and that it billed its sister company ACE less than half of the $ 6.9 million spent.

But “such expense was not contemplated as part of the administration and delivery of the Event at the time of the Host Venue Agreement,” MBIE said in her presentation to Beattie Varley.

“MBIE states that ACE’s payment of $ 3 million of the event investment to Emirates Team New Zealand for this purpose was not communicated to the hosts (MBIE and Auckland Council); it was not established in the budgets provided by ACE to MBIE prior to the parties’ entry into the Headquarters Agreement; it was not raised in joint committee meetings and it was not mentioned precisely in the Event Investment panels, ”said Beattie Varley.

“As of May 31, 2020, the use of this $ 3 million was captured under the heading ‘Project Management,'” the report says.

Team New Zealand has previously said Stuff trusts that the suitability of the payment will be confirmed by mediation.

Much of the full version of the report Beattie Varley details how she explored the allegations made to MBIE by a “whistleblower” earlier this year.

The “whistleblower” was later confirmed as the event management company Mayo and Calder, fired by ACE in late June for alleged information leaks.

ACE is now suing Mayo and Calder for the loss of $ 2.8 million of event funds in a Hungarian bank account scam, while the firm is countering ACE for what it considers an illegal termination of the contract.

Beattie Varley rejected an accusation from the “whistleblower” about how payment was made for the disputed design.

“We don’t believe the accusation; that the $ 3 million was an advance / loan that was later reclassified as an expense, it can be sustained ”, she concluded.

However, exploring the allegation constitutes 17 pages of the final 64-page audit report.

The New Zealand team staff did not keep the timesheets, and Beattie Varley found that it was only the third version explaining how the $ 3 million design payment could be justified, which was accepted by the ACE board.

“Each version was created long after ACE set its sights on $ 3 million. Each version had significant differences in composition, ”said the audit.

“Even [redacted], who had decided to top-up $ 3 million more than a year earlier, had to ask who had been included in the schedule when it was discussed at the December 2019 board meeting. “

“The $ 3 million was an amount that [redacted] evaluated as an appropriate sum. ACE says ‘there was no science,’ “said Beattie Varley.

“In the immediate aftermath of Bermuda [July 2017] until June 29, 2018 [being the date of publication of Version 1.1 of the AC75 Class Rule], Team New Zealand staff were almost exclusively engaged in the activities related to the Event, ”ACE told the auditor.

However, as described in last month’s summary report, Beattie Varley said she could not conclude whether the design rule work was an “event cost” and would be left to mediation.

Throughout the full version of the Beattie Varley report, names and most sums of money are redacted.

The auditors found that most of the payments matched the invoices, although the work of some contractors was not always covered by written agreements.

The release of the report’s findings last month ended the formal “escalation” process between ACE, MBIE and the Auckland Council, sparked by allegations from “whistleblowers.”

Installment payments covering the remaining $ 11 million of the $ 40 million taxpayer contribution were expected to resume.