Pokie inquiry clouds Otago Rugby's cash crisis

Desperate attempts to rescue the Otago Rugby Football Union from liquidation are at risk of being overshadowed by another controversy the union is embroiled in.

Just days before the union learns whether a NZRU led team has managed to come up with a recovery package, it is caught up in a Department of Internal Affairs investigation into one of its major funders, the Trusts Charitable Foundation (TTCF).

DIA gambling compliance director Debbie Despard has started an in-depth audit of the TTCF, which channelled more than $2.5 million of pokie money to the union between 2005 and 2010.

The money was designated solely for amateur rugby in Otago.

Ms Despard said the audit would investigate "outstanding matters, including a look at ORFU grants, among others."

"Should the department find any anomalies it will address them with the foundation."

NBR Online has submitted various questions to Ms Despard to get further clarification of the issues under investigation but she has yet to respond.

The TTCF pulled the plug on further grants to ORFU in January this year until it got receipts for $286,000 given in 2011.

TTCF general manager Warwick Hodder, told NBR Online it was a routine audit and it would be "inappropriate to anticipate the outcome, but we've done nothing wrong in any part of our operation."

Asked how long it was likely to take, he said: "How long is a piece of string?"

It's not the first time Internal Affairs has raised questions about grants from the TTCF to the ORFU.

The last time it conducted an audit into the organisation back in 2006 it looked into issues surrounding several grants in Dunedin but found "there was insufficient evidence of links to, or influence of, Otago Rugby and TTCF passed audit."

And according to documents obtained by the Otago Daily Times under the Official Information Act the ORFU tried to set up its own trust in 2003 to feed pokie profits from Auckland bars to Carisbrook.

The union was involved in a bid to get a pokie licence through the Murrayfield Sports Trust.

The trust was set up to distribute pokie profits from three bars in Manurewa, Pt Chevalier and the central city - known collectively as the "Jokers Group"- bought by a company with strong links to the union.

Following the failure of the trust to obtain a licence the bars were changed to the TTCF where Warwick Hodder says they remained until a year or so ago.

It's unclear who was behind the trust and the purchase of the bars, which have since changed hands.

In declining the application for a pokie licence the DIA said that "notwithstanding the elaborate arrangements that have been set up we believe (the union) is the beneficial owner of, and has the ability to exert significant influence over, the various entities, including the jokers sites."