ORFU: Black-tie dinner on ratepayers

Correspondence received.
Monday, 17 March 2014 9:28 a.m.

From: Bev Butler
To: Steve Tew [NZRU]; Doug Harvie [ORFU]
CC: Steve Hepburn [ODT]; Rebecca Fox [ODT]; Murray Kirkness [ODT]; Ian Telfer [RNZ]
Subject: FW: ORFU board responsible for paying the black tie dinner bill
Date: Mon, 17 Mar 2014 09:26:55 +1300

Monday 17th March 2014

Dear Steve

It is a while since we corresponded and Doug [Harvie] has indicated he doesn’t intend to respond any further (always best to keep the lines of communication open when in a leadership role) so thought I would let you in on the current situation of the ORFU.
Please read from the bottom up and then read the rest of this email.

Either Doug doesn’t fully appreciate the situation or is just hoping the issue will go away.
Let me explain the situation from a different perspective so that both you and Doug may have a deeper understanding of the full implications.

Let’s say that you and Doug decide to borrow a considerable amount of money to build a new restaurant with a state of the art glass roof. Absolutely stunning – is going to be just wonderful for me to conduct my business dealings there. Just days after your restaurant opens I come along and make a booking for 350 guests. Unfortunately, my business hasn’t been going that well so am using your new restaurant to have a fund-raising dinner. I employ one of my close friends, Elly-May, to organise the dinner for my business. She sells tickets for this dinner for $250 each. Now 350 guests at $250 each is $87,500. You charge me about $75 per guest – a total of about $26,000. Now after the event I pay my close friend Elly-May about $10,000 and have a few other expenses which leave me with a ‘profit’ of $52,000. BUT instead of paying you the $26,000 I put the lot in my ‘pot’ and cry that I’m poor. You and Doug were such wonderful hosts, our guests were well fed, plenty of booze and cleaned up after us. Thanks for that.

One of your colleagues gets a bit shirty and accuses me of being dishonest. How dare him [sic]. I just wanted to spend the money on something else – I had other bills to pay even though my 350 guests were under the impression they were paying for the night out I just wanted to use the money for something else. Done it before – ask Jeremy Curragh. Well. I have some very important friends, you know. So I get them to sue him for defamation. Felt good when your colleague had to apologise.

Do you really think I have acted honestly and with integrity?

Now do you understand why the Dunedin ratepayers are still angry about this?
I am still being approached by people (as recently as yesterday – some of them rugby coaches) upset by the ORFU’s actions.

I suggest you two have a chat and do the right thing and pay this bill now that the ORFU have announced a ‘profit’ for the year. Someone needs to show some leadership over this. The Dunedin community deserve better. Personally I believe you have a moral obligation to pay this bill and set this wrong right. It is but a small gesture for the many indiscretions perpetrated by the ORFU on the Dunedin community.
Some people in the Dunedin community think that the ORFU are rotten to the core but I don’t actually agree with them. I am an optimist at heart and believe that there is human decency in everyone. In the ORFU’s case it just requires a bit of deeper prodding.

The ORFU have a moral obligation to show some human decency and pay this bill. It is a matter of principle. I will not be silenced on this. You have my word on that.

Yours sincerely
Bev Butler

—————————–

From: Bev Butler
To: Doug Harvie [ORFU]
CC: Steve Hepburn [ODT]
Subject: RE: ORFU board responsible for paying the black tie dinner bill
Date: Fri, 14 Mar 2014 09:43:19 +1300

Dear Doug

Saying that “ALL creditors have been satisfied in full, in one way or another” is not the same as saying that all creditors have been PAID in full.
I know it is uncomfortable for you to be reminded of this but it still does not excuse the ORFU from doing the decent thing and paying their obscene black-tie dinner given they already had the money but decided to pocket it instead.
How about showing some decency or goodwill towards those that bailed you out of your financial mess now that you are flush with $406,859 profit?

Yours sincerely
Bev Butler

—————————–

From: Doug Harvie [ORFU]
To: Bev Butler
CC: Steve Hepburn [ODT]
Subject: RE: ORFU board responsible for paying the black tie dinner bill
Date: Thu, 13 Mar 2014 20:16:32 +0000 [sic]

You have your facts wrong Bev – ALL creditors of ORFU have been satisfied in full, in one way or another.

I will not be responding to any further correspondence on this matter.

D J Harvie

Partner
Harvie Green Wyatt

(P O Box 5740, Dunedin 9016, New Zealand. Phone +64 3 4775005 or +64 21 2234169. Fax +64 3 4775447

—————————–

From: Bev Butler
Sent: Friday, 14 March 2014 7:32 a.m.
To: Doug Harvie [ORFU]
Cc: Steve Hepburn [ODT]
Subject: ORFU board responsible for paying the black tie dinner bill

Friday 14th March 2014

Dear Doug

In today’s ODT the ORFU have reported a profit of $406,859 for the 2013 financial year and a profit of $134,656 for the 2012 financial year. Part of this so called profit is just pocketing of monies from unpaid bills.

As you are fully aware, the ORFU ran up a DVML bill of $25,352 for their black tie fund raiser at the stadium on 5th August 2011. This was for food, booze, soft drinks and cleaning.

Not only did the ORFU run off without paying this bill but the ORFU paid no venue hire for this brand new venue. Then to top it off the ORFU pocketed $52,000 from this fundraising event into their ‘pot’ which then is reported as profit for the 2012 financial year.

The fact that the ORFU then pressurised the Council to ‘write it off’ does not excuse the ORFU from the moral obligation to pay this bill.

I was quoted in the ODT as saying this was ‘obscene’. It is like booking a large restaurant, gorging yourselves on all their food and drink and hospitality then doing a runner.

It is ‘obscene’ and I expect this bill to be paid in full.

Laurie Mains, and his wife, Anne-Marie, refused to answer questions as to whether Anne-Marie was paid for her services in organising this event. I actually have no problem with her charging for her professional services. What I do have a problem with is that it is standard practice for professional event organisers to ensure all outstanding bills are paid before the ‘surplus’ is paid to the organisation. This did not happen. I don’t know whether Anne-Marie was paid $10,000, $12,000 or even more but whatever the amount the issue is that the other bills should have been paid first.

I fully expect this bill to be paid as the ORFU did actually have sufficient funds to pay this bill as evidenced by the reported profit of $134,656 for the 2012 financial year.

I also remind you that the $350 guests to this black-tie dinner paid $250 per ticket which would have been paid with the understanding that this would cover the costs. When a function such as this is organised, the ticket price is to cover the costs of the meal, venue hire, cleaning etc. Once the bills are paid, then any surplus is genuine ‘profit’ and the organisation then can legally pocket this ‘profit’.

The fact that the ORFU pocketed this money instead of paying their bill is unacceptable.

It is time the ORFU did the decent thing and pay this bill.

Yours sincerely

Bev Butler

[ends]

Posted by Elizabeth Kerr

15 Comments

Filed under Business, DCC, DVML, Economics, Events, Hot air, Media, Name, New Zealand, ORFU, People, Politics, Project management, Site, Sport, Stadiums

15 responses to “ORFU: Black-tie dinner on ratepayers

  1. John P.Evans, concerned citizen

    If the ORFU paid one creditor in full it would have a real problem!

    It might be able to get away with one surreptitiously, but if it pays the dinner bill it will quickly become public knowledge and upset its previous arrangements. Bev would like that, but it’s not going to happen.

  2. Rob Hamlin

    John P. Evans, It did pay at least one bill related to this event in full surreptitiously at the time if all the stories are true – just not the one owed to the ratepayers… It didn’t seem to upset its arrangements then, so why would it now? Remediation of iniquitous treatment of creditors only becomes enforceable as part of a receivership/liquidation, and of course the ORFU moved heaven and earth to ensure that THAT did not become part of its arrangements. As of now it would appear to me that it can pay who it likes when it likes – not that as you say it is likely to do any such thing… In light of this, I would only deal with the ORFU on a cash in advance basis.

  3. Russell Garbutt

    Rob is perfectly correct. The conscience of the ORFU is totally absent. The normal procedure for staging an event such as the black-tie dinner is to budget all costs, set the entrance fees to cover those costs and establish a profit level. That is both normal and straightforward – some I’m sure, would say honest, business practice..

    The way the ORFU operated was to set the costs, pay out the organiser – who just happened to be the wife of Laurie Mains – ignore the costs and bank the difference. Can anyone tell me that if this scenario happened with anyone else other than the dear old rugby-mad idiots on the Council involved, would this be tolerated? Not on your nelly. Can anyone tell me why this isn’t either theft or fraud? And as such why the DCC didn’t force the ORFU into bankruptcy? Perhaps too much would have been revealed if that had happened, and it seems that the NZRU know exactly why, and I suspect some in the DCC governance area know exactly why.

    Just why the DCC continue to pander to pro rugby is beyond comprehension and I’d remind readers of that shining, locked new edifice sitting on Logan Park replete with all mod cons that was supposed to be a public shed. The only time it is unlocked is when the wretched pro rugby teams want to use it for free and gratis – at total cost to the ratepayers.

    • Russell, despite DCC’s expensive bailout package to ORFU which included covering the cost of the private black-tie dinner held at the Stadium – and given the $480,000 was NOT consulted on with ratepayers and residents through the annual plan process – is there something legal we can do to bring charges of fraud and misappropriation of funds and which may impact on both DCC and ORFU ?

      Unfortunately, I have no legal background to assist this (rhetorical) question.

      ****

      On the matter of the locked architect-reworked shed for Professional Rugby ONLY – this must surely be a request through the DAP 2014/15 submission process, for public access to the facility! ALL interested could add a short paragraph on this matter to their DAP submissions.
      http://www.dunedin.govt.nz/your-council/draft-annual-plan-2014-2015

      Latest DCC media release on DAP (13 March 2014):
      http://www.dunedin.govt.nz/your-council/latest-news/march-2014/have-your-say-on-the-201415-draft-annual-plan

      █ Submissions close at 5pm, Tuesday 15 April 2014.

      • Mike

        I think people tend to forget that the bailout is ongoing, not only did we just chuck away the $480k that they (still) owe us, but Cull also signed a contract with the ORFU to do a bunch of things for them: marketing, ticketing, office work, who knows what else, it’s all in a secret contract that must be so embarrassing that we’re not allowed to know about its contents (remember Davies made the public comment that we’d all be scandalised if we knew) – in essence we have transferred the loss making portion of the ORFU’s operations to DVML, it’s one reason why they lose so much money, and so we continue to bail the ORFU out year after year.

        • Mike

          Oh and historically the $480k bailout was the second bailout – the DCC likely bought Carisbrook to forestall an ORFU bankruptcy when the value of the property dropped so much that I’m sure the bank started questioning the security of the value of the property that was backing the ORFU’s loan.

          In retrospect it cost the DCC ~$3.5m to buy Carisbrook making that first bailout about 7 times that of the second one – so all up the ORFU owes us ~$4m for their various bailouts.

        • Although, that’s overly simplistic given other DCC supports in place for professional rugby over many many years through council departments and council owned companies. All of which has been canvassed here and elsewhere but which has not attracted a forensic audit to factor numbers. The stadium and the current operating model is monumentally more of same. It’s well understood by many, and “bailout” is merely a pleasant word in distraction that cannot cover multimillion-dollar rorting perpetuated by the vehicle that is most palpably the city council in both its arms, the elected and staff/management ranks – aided/guided/swayed by a loose council company director or two… (some of which thinking directly and indirectly comes to light in OAG’s report on Delta tabled for reading in parliament at 2pm tomorrow Thursday).

        • Mike

          I wont disagree – the point I was trying to make was that the Carisbrook deal was basically a bailout deal, similar to the one that everyone made a fuss about, and it was far larger than the $480k – if the DCC hadn’t done it I think that the ORFU would have gone under because the bank would have called their loan (and you’ll remember that the DCC ended up guaranteeing that same loan after the deal).

          Speaking of that guarantee I’ve always wondered how it was that the bank didn’t call on that when the latest almost bankruptcy happened (or maybe they did and the DCC just kept quiet) – the ORFU just made “arrangements” with the BNZ whatever that means.

  4. Mike, always happy to consider wider charges…

  5. Hype O'Thermia

    Who’s Dave Cull working for? I remember the ratepayers pay his salary but he seems to have forgotten. Why else does he stiff us to give his favours to professional rugby, why is he running sabotage on the city finances, why is he a dead ringer for a quisling? What’s in it for him – can’t be self-respect, isn’t the respect of the people he used to hang with, so what is it?

  6. Mike; I reckon it’s worse than you think. The ORFU owed the DCC $2 million. The DCC bought Carisbrook for $7 million. The ORFU (reputedly) paid the $2 million back to the DCC. The DCC’s Carisbrook cost now $5 million. The DCC sold Carisbrook for $3.5 million. Result: The DCC bought its own $2 million debt back for $3.5 million. Right? Please tell me I’m wrong.

    • Mike

      Yes you’re right we paid $3.5m to make sure we’d get our $2m back. We would have done far better if we’d gone to bankruptcy, had the receivers sell Carisbrook and split the proceeds with the bank, we probably wouldn’t have gotten it all back but we’d have gotten some of it, lost $1m rather than $3.5m or something like that.

  7. Hype O'Thermia

    Calvin – LeftHand pays RightHand top dollar for unnecessary glove that doesn’t fit. RightHand buys said glove back from LeftHand………. and so on, it keeps them busy for years what with the measuring, finger- and thumb-counting, setting pick a number “valuations” to base the price on. Doesn’t matter really, it’s not their money, it’s the (ratepayers’) pockets’ money so hey-ho, go to the unfair.
    What’s that about the left hand not knowing what the right hand’s doing?

  8. Hype O'Thermia

    The pattern is SO similar to victims of Nigerian scams. Pay, and pay, and pay, because the more they pay the more firmly embedded in their minds is the belief that there will be “lost relative’s stash of bullion” a.k.a. riches from tourism, putting Dunedin on the map etc. And the more they pay the more it must be “worth” because to believe otherwise goes against all the faith-mechanisms in the human mind.
    And don’t let’s forget the “Nigerians” urging them on, embellishing the visions of big returns, pointing out that to stop now would be to lose this opportunity for want of the “last” payment. Which, spookily, turns out not to be the last payment, not until the victim is flat broke and has sold both kidneys.

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