State Sector watchdog broadens inquiry into misuse of private security firms

State Services Commissioner Peter Hughes has expanded an inquiry into the state sector use of a controversial private eye company.

The public sector watchdog has broadened an inquiry into the alleged misuse of a private eye company, amid revelations of "serious staff misconduct" at at least one ministry, and internal investigations at two. 

State Services Commissioner Peter Hughes has announced his agency would be scrutinising the use of private security firm Thompson & Clark across all Government agencies. 

It comes after the Ministry of Primary Industries and internal spy agency the Security and Intelligence Service have both revealed internal investigations have been launched. 

MPI said in a statement, it had evidence of "serious staff misconduct" from two former staffers who had left the department a couple of years ago. 

Hughes' decision is a major extension of the inquiry mandate, which originally set out to investigate Crown-owned Entity Southern Response after it engaged a contractor to investigate Christchurch earthquake claimants due to what it said was the "escalating level of threatening" behaviour toward its staff. 

It's understood agency, which is responsible for settling claims by AMI policyholders for Canterbury earthquake damage, used Thompson & Clark to spy on insurance claimants. 

Hughes said he was concerned about what had surfaced in the inquiry, which had been ongoing since March 16. 

New information relating to other government agencies had been brought to light, so he had decided to "broaden and deepen" the inquiry.

"The fresh material came to light in Official Information Act requests to the Ministry of Primary Industries and the New Zealand Security Intelligence Service.

"What I have seen raises serious questions about the nature of engagement between Thompson and Clark and State sector agencies," said Mr Hughes."

In a coinciding statement, MPI has revealed it had requested the commissioner to include it in the investigation, after an apparent Official Information lead to a discovery of emails between former members of its staff and Thompson & Clark. 

"The Ministry for Primary Industries has uncovered evidence of potential serious staff misconduct relating to events that occurred some years ago. This involved several employees who no longer work for MPI," acting director-general Bryan Wilson said. 

"The conduct was of a sufficiently serious nature that MPI has referred it to the State Services Commission for consideration."

MPI was also conducting its own internal inquiry.

Wilson said the department was "extremely disappointed" to learn that past employees had potentially breached the Code of Conduct, "our trust, and by proxy the trust that was given to them by the New Zealanders that we serve".

SIS director Rebecca Kitteridge confirmed she had also launched an internal investigation into interactions between the agency and Thompson Clark, similarly brought about by an official information request.'

Kitteridge said while the SIS had never procured any services from Thompson and Clark Investigations, there had been "interactions" in relation to their providing protective security advisory and consultancy services to government agencies.

Those interactions raised questions "in relation to conduct and possible bias in favour of Thompson and Clark".Some of those interactions were detailed in email exchanges between Thompson Clark and members of the Protective Security Requirements (PSRE) engagement team, which was part of the SIS.

The tone of some of the emails raised concerns about the standards of professionalism being displayed, Kitteridge said.

"In the light of this correspondence, I have asked for several matters to be looked into. The emails raise questions in relation to conduct and possible bias in favour of Thompson and Clark.

"These questions are the subject of an internal investigation. I have also asked for our internal processes, policies and guidance to be reviewed to ensure that our necessary and important engagement with private sector providers is professional, appropriate and even handed."

Hughes said he had also appointed Simon Mount QC to bolster the investigation team and work alongside Doug Martin, who was leading the inquiry.

It was now likely to take another few months to complete.