How to reduce a nice forestry earner to sawdust

Looks like a gaggle of lawyers, economists, advisers and so on are killing a golden goose.

Last year the Crown Forestry Rental Trust paid $20 million worth of bills from lawyers, economists, taxmen, valuation and communications advisers and other specialists.

The trust coughs up the cash for treaty settlement work with the interest generated from rental income from Crown forestry land – assets held in trust for Maori – until ownership is determined.

But these things can be sucked dry, alas, and the Weekend Herald today tells us the trust faces the prospect of falling $30 million into the red this year – the first time in its 20-year history.

The trust says it will receive $20.7 million from investments. But – hey, look at this – it will need to spend $50.7 million to keep pace with targets for the 2014 deadline.

Continual operating deficits are a worrying part of its future, an “unsustainable” scenario blamed in part on the demand for “specialist advisers”.

Chief executive Ben Dalton will voice his concerns about the situation at celebrations of the half-billion dollar Treelords settlement in Turangi today.

But some commentators say that if CFRT is worried about costs, it shouldn’t be funding those who have been part of failed attempts for large settlements.

The Weekend Herald recalls former MP John Tamihere chairing a Maori Affairs select committee inquiry into Treaty funding and the trust in 2003.

He said large firms were as much to blame for past failures as iwi and individuals who had not secured settlements.

“People and firms should be paid for success, not paid for prolonging the pain of the process. What you get is a number of prospects, firms, whose names continue to come up, who have really made the process far more tedious, far more tiresome and hugely costly.”

Three previous attempts at settling the 176,000ha Kaingaroa estate apparently have cost $30 million over 19 years for no settlement.

Today the trust will hand over $284 million of accumulated rentals to Treelords iwi – about half its asset base.

Earnings off the remaining assets have been slashed because banks are offering rates of around 3 per cent compared with 8-9 per cent last year.

While the funding pool is shrinking, demand isn’t.
It’s caused in part by the Government’s 2014 deadline for settling claims and the sharp increase in iwi demand to fund more “specialist advisers” over the past 18 months.

So who’s clipping the ticket?

The Herald doesn’t list everyone.

But it has been looking into two months of Treelords negotiations and three iwi facilitators being paid partly by the Treasury – a first for the department.

Papers obtained by the Weekend Herald reveal that at the top of the tree is lead negotiator George Asher, who was in line to earn $88,000 during May and June 2008 from Crown Forestry Rental Trust.

Two other iwi facilitators, Matt Te Pou and Graham Pryor, earned $67,500 each over the same period.
The Treasury increased the spending on the deal’s iwi facilitators by $90,000, although it refused to confirm each person’s cut.

Mr Asher said the negotiations component of the settlement cost about $5 million, including administrative support.

He said the sum should be measured against successfully negotiating the Central North Island Collective (Treelords) settlement, worth roughly $500 million, in five months when others had taken years and been paid multi-millions for no result.

Mr Te Pou said he earned considerably more from consultancy work, although the CNI negotiations meant working seven days a week for months.

A few days ago, Alf was drawing attention to a Dominion-Post report that showed lawyers, researchers, iwi representatives and meeting organisers had racked up nearly $60 million in fees and expenses for the “Treelords” settlement.

Crown Forestry Rental Trust annual reports showed $57m had been paid out in costs since 1990. Almost $20m went on expenses for iwi representatives to meet and negotiate among themselves regularly.
Part of the $57m was spent on lawyers, consultants and those paid to implement the deal. Another $5m to $10m is expected to be paid in fees to finalise the deal in the present financial year.

We may suppose the families of those who have benefited from this boodle aren’t complaining too much about the “recession”.

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