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Katherine Rich stands firm against call to resign after allegations of conflict

BusinessDesk report by Fiona Rotherham
Former National MP Katherine Rich is standing firm against a call for her to resign from the government-funded Health Promotion Agency board.

The call came from a group of senior health researchers who want Rich investigated over allegations in Nicky Hager’s ‘Dirty Politics’ book and an apparent conflict of interest with her role as head of the industry lobby group, the Wellington-based Food & Grocery Council.

Rich, who was paid $16,000 in the June 2013 year for the health promotion role, continues to have the backing of both HPA chair Lee Mathias and FGC chair Pierre van Heerden, who say they have full confidence in her integrity.

“The FGC board has full confidence in Mrs Rich and has not reviewed her position,” said van Heerden, who wouldn’t respond beyond an emailed statement.

Mathias said she believed any potential conflicts of interest with Rich’s dual roles had been managed in terms of the State Services Commission’s guidelines. She had talked through the issue with other board members who support Rich continuing in the role.

“She’s been a very strong supporter of every decision made by this agency,” said Matthias, who added that she hadn’t bothered to read Hager’s book despite the serious nature of the allegations against one of her board members.

Rich has issued a written statement saying she has no intention of resigning from the HPA, which was set up in 2012 as a Crown entity to promote healthy lifestyles as a replacement to the former independent Alcohol Advisory Council and Health Sponsorship Council.

When Rich was first appointed concerns were raised over the potential conflict with her role at the FGC, which advocates on behalf of big business interests including alcohol manufacturers. The FGC has an annual budget of about $1.2 million, of which $197,475 went on communications and public relations in the March 2014 year, up from $119,441 a year earlier. At the time, Prime Minister John Key said any conflicts could be managed.

Key has not responded to the letter from the health professionals, instead passing the buck to Health Minister Tony Ryall who is due to retire at the election on Sept. 20. Ryall said in a short emailed statement today that he was “confident that any conflicts are being managed appropriately, and I will be responding to the letter in due course”. He declined to answer other questions including what his confidence was based on.

Former MP Rich said she had not been involved in any campaign that had undermined the public health of Kiwis, and found the suggestion offensive. But she is refusing to front up to interviews on the allegations in Hager’s book that she used the services of public relations adviser Carrick Graham to pay blogger Cameron Slater to attack the council’s opponents as recently as February this year.

“I have personally been involved in many campaigns that promote the public health of Kiwis. New Zealand is a country that allows freedom of expression and these people are entitled to their views. I put my heart and soul into playing my part in the effective governance of the HPA, which successfully delivers a multitude of great programmes dealing with immunisation, rheumatic fever, sun safety, alcohol harm minimisation, and smoking cessation,” she wrote.

One of those targeted by Slater was Doug Sellman, head of the National Addiction Centre. Sellman is one of the health professionals now calling for the government to review Rich’s role. He said he was not surprised that an apparent conflict had emerged but was shocked there was evidence of it. “It’s a bit creepy seeing the evidence,” he said.

Just Water International founder Tony Falkenstein was another said in ‘Dirty Politics’ to have been targeted by Slater at Rich’s instigation after he was named as the New Zealand contact for Australian lawyers considering a class action against cola companies in relation to the health impact of sugary drinks. He said the personal attacks were nasty enough to stop him speaking out, so “they worked”. He described Rich’s on-going role at the HPA as a “real shocker” given her lobbyist role for food manufacturers.

The health professionals said in their letter to Key that Rich’s actions represented an “unavoidable conflict of interest with the Health Promotion Agency’s goal of improving the population’s health”. They said the actions fell far short of the standard that would be reasonably expected of someone appointed as a board member to a Crown Entity and apparently breached a couple of the requirements under the Act. They also believed this episode illustrated the need for additional investigation and guidance development of how potential conflicts of interest are handled for Crown Entity Board members both when appointed and during their period of service,

Joint Media Statement – Sept 10
A group of 33 senior population health researchers and practitioners have made public a letter they sent to the Prime Minister last week calling for an investigation into the apparent serious conflicts of interest on the Board of the Health Promotion Agency.

Board member Katherine Rich, who is CEO of the Wellington-based Food and Grocery Council, has been at the centre of controversy because of evidence in Nicky Hager’s book ‘Dirty Politics’ that she has been denigrating and undermining population health professionals.

One of the group of senior population health experts, Professor Richard Edwards from the University of Otago, said that this represents a potential major conflict of interest.

“We wrote to the Prime Minister more than a week ago raising this as a very serious concern and asked that he officially investigates these accusations,” he said. “We have not heard back from him and now this issue has hit the media.”

“The Prime Minister and Minister for Health have not yet indicated that they plan to take further action and the group felt the need to make a strong public statement that action was needed,” said Professor Edwards.

The group notes that Crown Entities Act 2004 requires Board members to act with ‘honesty and integrity’ and not to pursue their interests ‘at the expense of the entity’s interests’.

“If these accusations are investigated and proven to be true, then Mrs Rich would clearly be in breach of these rules and her position as a Board member of the Health Promotion Agency would be untenable,” said Professor Edwards. “The public needs to have confidence in government processes and New Zealand’s strong track record of good governance should not be put at risk.”

There was an outcry from public health groups when Mrs Rich, who acts as a lobbyist for the processed food and alcohol industries, was appointed to the Board of the HPA.

“It seems that those original fears may have now come true, although we should not be surprised since these undermining tactics are well documented throughout the tobacco, alcohol and junk food industries,” said Professor Edwards. “Governments need to be extremely careful that their public policy making is not subverted by the tactics of these industries and a full inquiry into these accusations about Mrs Rich is certainly warranted.”

The Prime Minister, The Rt Hon John Key
Private bag 18.888,
Parliament Buildings
Wellington 6160

28 August 2014
Dear Prime Minister,

We the undersigned, senior population health scientists and practitioners, write to express our grave concern at recent claims made in the book ‘Dirty Politics’ about Katherine Rich’s actions[1] which appear to be incompatible with her role as a member of the Health Promotion Agency Board.

We are concerned at the contents of the book and e-mails that have come to light in the past weeks. These appear to indicate that Mrs Rich was involved in clandestine attacks designed to undermine and denigrate population health professionals.

Despite numerous opportunities to refute the allegations, Mrs Rich has chosen neither to deny nor to disprove these. Indeed, media comment attributed to her reported that she confirmed the emails were accurate.[2] Mrs Rich’s actions represent an unavoidable conflict of interest with the Health Promotion Agency’s goal of improving the population’s health.

Furthermore, these actions fall far short of the standard that would reasonably be expected of a person appointed by Ministers as a Board member of a Crown Entity, and appear to be a direct breach of the requirements of a member of a Crown Entity as laid out in Sections 54 (‘to act with honesty and integrity’) and 55 (‘to act in good faith and not pursue his or her own interests at the expense of the entity’s interests’) of the Crown Entities Act 2004.

We believe the allegations should be fully investigated and if proven, the only reasonable course of action is to seek her resignation from the Health Promotion Agency Board. We also believe this episode illustrates the need for additional investigation and guidance development of how potential conflicts of interest are handled for Crown Entity Board members both at the time of their appointment and during their period of service.

We are conscious that this is occurring in the context of an election campaign and have therefore decided to approach this as a private rather than public letter at this stage.
As you know, we are committed to working with government and its agencies to improve New Zealanders’ health. We look forward to engaging constructively with all government members to achieve the goals we share.

We look forward to your urgent attention and rapid response to this letter.

Signed on behalf of 33 listed signatories

Please address reply to:
Professor Richard Edwards
Department of Public Health
University of Otago, Wellington
PO Box 7343
Wellington 6242

References
1 See pages 83-85, Hagar,N. Dirty Politics, Craig Potton Publishing, Nelson, 2014.
2 See, for example: Nippert N, ‘The hacker revealed’; Sunday Star Times, 24 August 2014. http://www.stuff.co.nz/business/industries/10417726/The-hacker-revealed
cc Hon Tony Ryall, Minister of Health

Signatories in alphabetical order:

Max Abbott
Pro Vice-Chancellor and Dean, Faculty of Health and Environmental Sciences
Professor of Psychology and Public Health
AUT University

Gillian Abel
Associate Professor and Head of Population Health
University of Otago, Christchurch

Peter James Adams
Associate Professor, School of Population Health
University of Auckland

Shanthi Ameratunga
Professor of Epidemiology and Public Health
University of Auckland

Tony Blakely
Professor, Department of Public Health
University of Otago, Wellington

Chris Bullen
Associate Professor, School of Population Health
University of Auckland

Sally Casswell
Professor, College of Health
Massey University, Auckland

Jennie Connor
Professor and Head, Department of Preventive and Social Medicine
University of Otago, Dunedin

Julian Crane
Professor, Department of Medicine
University of Otago, Wellington

Richard Edwards
Professor and Head, Department of Public Health
University of Otago, Wellington

Janet Hoek
Professor of Marketing, Department of Marketing
University of Otago, Dunedin

Andrew Hornblow CNZM
Emeritus Professor
University of Otago, Christchurch
Philippa Howden-Chapman
Professor, Department of Public Health
University of Otago, Wellington

Rod Jackson
Professor of Epidemiology
University of Auckland

Peter Joyce
Professor and Dean of the Christchurch School of Medicine
University of Otago, Christchurch

Kypros Kypri
Associate Professor, Injury Prevention Research Unit
University of Otago, Dunedin

Antonia Lyons
Associate Professor, School of Psychology
Massey University, Wellington

Rob McGee
Professor in Health Promotion, Department of Preventive and Social Medicine
University of Otago, Dunedin

Jim Mann
Professor of Medicine and Human Nutrition
University of Otago, Dunedin

Cliona Ni Mhurchu
Professor of Population Nutrition
University of Auckland

John Potter
Adjunct Professor, University of Canterbury
Professorial Fellow, Massey University

Patricia Priest
Associate Professor in Epidemiology, Department of Preventive and Social Medicine
University of Otago, Dunedin

Ann Richardson
Professor of Cancer Epidemiology
University of Canterbury

Geoff Robinson
Adjunct Professor, School of Biological Sciences
Victoria University of Wellington

Robert Scragg
Professor and Head of Epidemiology and Biostatistics
University of Auckland

Doug Sellman
Professor and Director, National Addiction Centre
University of Otago, Christchurch

Louise Signal
Associate Professor, Department of Public Health
University of Otago, Wellington

Boyd Swinburn
Professor of Population Nutrition and Global Health
University of Auckland

Barry Taylor
Professor and Dean of the Dunedin School of Medicine
University of Otago, Dunedin

George Thomson
Associate Professor, Department of Public Health
University of Otago, Wellington

John Scott Werry
Emeritus Professor of Child and Adolescent Psychiatry
University of Auckland

Nick Wilson
Associate Professor
University of Otago, Wellington

Karen Witten
Professor, College of Health
Massey University, Auckland

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