Who to blame for ARC losses?

The ARC is groaning under the weight of Official Information Act requests for details of losses sustained by the LA Galaxy/Beckam football event held at Mt Smart late last year. During the night of the dramatically low turnout, the ARC Chairman appropriately fronted TV cameras and accepted full responsibility. But as the full magnitude of the loss became apparent, and details emerged about which staff member had done what, tactics changed and ARC's Chairman asked the Office of the Auditor General to investigate everything and anything related to the event. The O.A.G. has been offered wide terms of reference for its investigation. Last I heard that report might come in a few months. These things take time.

Interestingly, on a David Beckham blog site at: http://www.davidbeckhamnet.com/ the following extracts from a NewsTalkZB report are quoted:

"The new Local Government Minister wants to know what went wrong, after the
disappointing LA Galaxy exhibition match which will leave the Auckland Regional
Council out of pocket.For organisers to break even, 19,000 people were needed to
attend Saturday night's game at Mt Smart Stadium between David Beckham's
football team and the Oceania All Stars. However, the crowd numbered only 16,600
with many taking advantage of the two-tickets-for-one deal which was on offer
when it was realised attendance would be lower than expected.Minister Rodney
Hide says if the Auckland Regional Council can afford to promote football
matches, it is obviously swimming in cash. He says rates need to be brought
under control and ratepayers need to be getting value for money.The ARC has said
ratepayers will not be affected and the loss will be offset by profitable events
such as the upcoming Big Day Out and the Iron Maiden concert. LA Galaxy won the
match 3-0. Earlier this year, The Herald reported that the Galaxy's match fee
was $1.71 million...."

While the details of the ARC meeting (Full Council 28th April 2008) which decided to go ahead with the Beckham event are confidential, you don't have to be a rocket scientist to guess how much the event would have cost in total, adding to the match fee: LA Galaxy travel and accommodation costs; marketing and promotion costs; and all the other costs that are properly associated with a professionally run event like this.

We can all see what happened. The idea of a Beckham event in Auckland was attractive. But it could only be guaranteed if LA Galaxy were booked and paid for well in advance. The die was cast in the middle of 2008. Then along came the mother of all crashes. But the show had to go on. It was then a question of maximising attendance in the teeth of a recession which saw people scratching around to fill their family christmas stockings. A completely different economic context from the time when the decision to commit to LA Galaxy was taken.

Who do you blame for the recession?

Anyway, shortly after the Herald published a dramatic front page expose of ARC's losses on another front (losses sustained by its treasury function ARH which manages Ports of Auckland Ltd, Regional cash reserves, Waterfront development etc on ARC's behalf)

(see: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10554681),

the Hon Rodney Hide paid the ARC Chairman a visit. I can't reveal what was discussed, but again, you don't need to be a rocket scientist to guess.

What a conundrum. The Chair has stated he's responsible for the Beckham losses - speaking for the ARC Council. Now everybody and their dog wants to know what the losses are, and they are leaving no stone unturned trying to get at the facts. And now the Auditor General has been asked to investigate. Where will it all end?

The Beckham thing is all very interesting, but surely the losses sustained by ARH - following decisions by the ARC - are of rather greater significance. Somewhere between $35million and $70million in the past 12 months. With more in store. Who is to blame for them? Who is accountable? How did those decisions get made based on available information?

Surely it would be a better use of public money to have the Office of the Auditor General investigate that one, if it is to investigate anything at all.