Collins risks ACC fortune in Pullar affair

Billions of dollars of government investment have been put at risk following the gutting of the ACC board by ACC minister Judith Collins.

When Miss Collins earlier this year dumped ACC board chairman John Judge and board members Rob Campbell and John McCliskie, she either knew, or had no idea, they were ACC’s investment committee – key professional stewards of a $1 billion a month investment fund.

Board member Murray Hilder resigned shortly after and finished at ACC this week.

The removal of the three directors, followed by Mr Hilder’s resignation, resulted in chief executive Ralph Stewart giving notice because, according to insiders, he may have felt he could not continue his work without them.

Since their exit from the helm of what is arguably New Zealand’s biggest investment fund manager, insiders say the huge ACC fund has stagnated.

Curtains for Collins?

Whether Miss Collins did or did not know the gravity of her refusal to renew the directors’ appointments, the consequences for her are expected to be terminal, according to ACC watchers, who predict she will lose the ACC portfolio and come out badly in a soon-to-be-released auditor-general investigation.

Miss Collins, seen by some as an "Iron Lady" prime minister-in-waiting, has already denied persistent parliamentary rumours she got a career-strangling bollocking from Prime Minister John Key over her mishandling of the ACC board. 

To make matters worse for the government, at the time Miss Collins cut a swathe through the board it was on course – largely as a result of the leadership of John Judge – to meet the government’s 2019 book-balancing target.

The ACC investment committee approved and oversaw the buying and selling of bonds, shares and property investments from a flow of millions of dollars of levy payment funds.

The investment committee oversaw a series of complex formulae around which investment policy and strategy was approved.

For example, investments of between $50 million and $100 million need investment committee approval because such sums are outside the delegated authority of senior managers.

The committee would reinvest existing portfolios or invest new funds worth up to $1 billion a month.

ACC forecast it would have $20 billion worth of investment funds in the 2011-12 year.

Now in the hands of interim chairwoman Paula Rebstock, she and remaining board members Jane Huria, Jill Spooner and John Meehan are said to be “too scared” to do anything for fear it goes wrong.

How they got the news

Messrs Judge, McCliskie and Campbell, appointed in 2009, were told by letter from Miss Collins in March they would not be reappointed for a second three-year term – something insiders said was almost unheard of.

In positions of this kind – when board members are getting into their stride – a second three-year term is usually automatic, provided the directors show they are doing a good job.

From all accounts Messrs Judge, McCliskie and Campbell were certainly doing that and were well regarded in government and corporate circles for dealing professionally and efficiently with a difficult brief.

Removal a shock

News of their removal sent shock waves through the commercial community.

All three are highly regarded, experienced and competent professional directors with impressive track records.

For example, Mr Judge is a former chief executive of Ernst & Young and a director of Fletcher Building and ANZ National Bank who was recently appointed chairman of the bank. His fellow board members have similar strong commercial credentials.

The Collins letter came at the time ACC claimant Bronwyn Pullar and her spin doctor chum Michelle Boag had been putting pressure on ACC to give Ms Pullar an extra two years of payments over what had been a long and messy claim wrangle.

When news of the Pullar/Boag affair and their allegations against ACC became public in March, Miss Collins was under pressure to do something in the face of a media campaign which painted ACC as a wicked ogre bullying a brain-injured victim.

When the Pullar affair went public it was revealed she had received about 6700 ACC client files accidentally sent to her in an email the previous August.

NBR’s Pullar and Boag revelations

As the National Business Review revealed last week, the return of those files to ACC – according to an email Ms Boag sent to Ms Collins – was “contingent on” reaching an agreement acceptable to both parties.

Observers say Miss Collins over-reacted when she got rid of Messrs Judge, McCliskie and Campbell, none of whom as board members had anything to do with Ms Pullar’s claim.

Pullar a sideshow

One insider described the Pullar affair as “a complete sideshow” which forced Miss Collins into a corner from where she had to be seen acting tough and shooting from the hip.

Miss Collins’ removal of the directors came out of the blue and without warning.

Former ACC minister Nick Smith, who quit all his ministerial jobs when it was revealed he wrote an endorsement letter for Ms Pullar on ministerial letterhead in July 2011 supporting her claim while he was ACC minister, was happy with the performance of the board members.

As was his practice, Mr Judge is understood to have kept Dr Smith regularly and well informed about progress in turning things around at ACC – in accordance with the National government’s wishes.

Mr Judge’s board, appointed by National in 2009, had the job of examining the state of a business which was in poor shape, highlighted by a lack of systems, lack of accountability and plagued by many people claiming ACC they were not entitled to.

According to observers, the Judge board put in new risk management procedures and made changes around setting of levies and accountability as part of their brief to correct a breakdown in systems over the previous 12-15 years.

Mr Judge is also understood to have conveyed to Miss Collins, shortly before he was dumped, the board’s view of how best to run ACC from the board level down.

Today, the wealth of commercial experience and professionalism brought by Messrs Judge, McCliskie, Campbell, Hilder and Stewart is gone, effectively disposed of over something they played no part in.

NBR ONLINE has been told a number of commercial professionals have been approached to fill the ACC void but the most suitable have refused.

It appears no-one wants to be at the mercy of a minister seen as too prone to react to headlines ahead of results. 

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