Earl Hagaman, the founder of Scenic Hotel Group, gave $101,000 to the National Party in September 2014. In October, Scenic Hotel Group announced it had the contract for the Matavai Resort on Niue - a contract awarded by a trust which was appointed by Foreign Affairs Minister Murray McCully to oversee the resort.
Mr McCully told RNZ National that there was no link between the donation and the contract and he had not been involved in awarding the contract. That was decided by the Niue Tourism Property Trust after running an international and competitive process. Mr McCully appoints the trustees for that but said he was not involved in the decision. "I can tell you that I had no involvement in the appointment process, conducted purely by the trustees and commercial management they appointed. These are reputable professional people who conducted a full international process."
Since 2009, the Government has put in $18 million to upgrade the hotel as part of its aid effort to build Niue's tourism industry. That includes $7.5 million toward developing a conference centre at the Scenic Matavai Resort Niue in 2015 after Scenic Hotels took over the contract. Mr McCully said that aid funding was at the request of the Niuean Government.
Labour leader Andrew Little said the close timing of the donation to the awarding of the contract "stinks to high heaven" and he had asked the Auditor-General to investigate whether it was above board.
"New Zealand money, which was earmarked as aid for the island nation, has instead been given to upgrade a resort run by a National party donor."
He said it was Mr McCully's personal appointees on the trust which awarded the contract. "We must have questions answered on how the tender process worked, who knew about links between donations and the tenderer and whether Niuean people will ultimately benefit from the resort's funding. The perception of propriety is key."
Mr McCully said he would not have been aware Mr Hagaman was a donor to the National Party. "Even if I had, I had no capacity to influence the decision." Mr Hagaman's donations were publicly disclosed on September 23 and received media coverage at the time.
