SALE OF ARMY VEHICLES

Timaru Herald, Volume CLVI, Issue 22998, 15 September 1944, Page 4

SALE OF ARMY VEHICLES

IRREGULAR DEALS ALLEGED Full Dress Debate In House (N.Z.P.A.) WELLINGTON. Sept. 14. The sale of Army vehicles again came up for discussion in the House of Representatives to-day, the Prime Minister (the Rt. Hon. P. Fraser) making a debate on the question possible by moving the adjournment of the House. He said he did so in order to clear up the question of the responsibility which had been raised yesterday. The House had a right to know the attitude and actions of Ministers in such matters.

' In moving the adjournment of the House, Mr Fraser said that the Member for Mid-Canterbury (Mr. R. G. Gerard, National) had asked a question regarding certain alleged irregularities in the sale of surplus motor cars to officers of the Defence Forces. The reply given by the Minister of Supply (the Hon. D. G. Sullivan) had been challenged by members. Technically the debate was over but, as it had become clear from the brief debate that charges against the Government were being- made, he moved the adjournment of the House to allow the whole matter to be discussed under the halfhour rule for speeches. The Government was entitled to have the whole matter cleared up at the earliest date and the Minister should be given the opportunity of replying to the charges against his administrative actions.

Investigation Suggested The Leader of the Opposition (Mr S. G. Holland) said that the course suggested by the Prime Minister was a desirable one. The Opposition was not reflecting on the Minister of Supply. What had happened was that the Minister in his reply to the member for Mid-Canterbury had referred to two vehicles, while the Auditor-General’s

report had mentioned 11, and that had led to the member considering that he had not received a full reply to his question. The Minister could not be responsible, for every little happening, and what the Opposition wanted was to sheet home the responsibility to the officer or officers responsible. The difficulty about a debate in the House was that they could not have the evidence before them, and he suggested an investigation by a special committee or a magisterial inquiry. The Auditor-General’s report was before the Public Accounts Committee, which could hear the evidence and report to the House, said Mr Fraser. That report should be made public. He wanted it made clear that no Minister would condone the actions reported upon by the Auditor-General. Mr Fraser said that it was absolutely essential to the good government of the country that such matters should be thoroughly examined. While he himself could not give an authoritative report about the various people who were responsible, he thought that the Public Accounts Committee could very well undertake that job and report back to the House. The public was entitled to the fullest information concerning public property. Mr Fraser said that from the time the matter was first brought to Ministerial notice—it was first notified to the Minister of Finance (the Hon. W. Nash) in November, 1943 —the Ministerial attitude had been that the Auditor-General should make the fullest possible investigation and take whatever action he thought fit. First Notice In 1943 Mr Fraser read a letter from the Auditor to Mr Nash under today’s date, in which the AuditorGeneral said that the matter was first brought to his notice in November, 1943, following a request made by the Government Inspector of Motor Vehicles (Mr Laing) for an inquiry by an inspector of the Auditor-General’s staff into the sale of army vehicles in Christchurch. Mr Fraser said that an audit inspector in Christchurch was instructed to go into the matter fully in conjunction with a representative of the Security Intelligence Bureau. He detailed the reports which he later received concerning the inquiry.

Mr Fraser added that on January 12 this year the Crown Law Office advised the Auditor-General that there was no case for any criminal proceedings arising from the investigation which had been made.

The Prime Minister said that Mr Sullivan, in his answer the previous day, had not attempted to shuffle from the facts of the situation. He himself had discussed the matter only with the Auditor-General and had not considered it necessary to consult the Minister of Supply. If there had been any misunderstanding as to responsibility among Ministers, said Mr Fraser, he was quite ready to accept the blame for that, but the question was one which the Public Accounts Committee could determine. There were two to which he had referred. He had not had prior knowledge of any of the other cases mentioned in the AuditorGeneral's report. Those two cases—in which the sums of £lO and £2O were recovered —were the only ones in which the Auditor-General had succeeded in taking any action. In regard to the case of an Army officer who resold a vehicle at a profit of £lOO, Mr Fraser said that the officer was a returned man with a good record of two years' service in the Middle East. He was entitled to 15 per cent reduction on the purchase, but not to a profit of £lOO An Opposition inter jector: What happened to the £100?

No Power of Compulsion Mr Fraser said that the AuditorGeneral had investigated every possibility in regard to that. The difficulty was that the officer could claim he made a bona fide purchase and later a bona fide sale. While public servants were forbidden to traffic in public property at a profit, there did not seem to be the same restriction on members of the Army. Even tl.e two men who returned sums of money did so in the last degree on their own volition. There was no power to have compelled them to do so. Mr Fraser said that no Minister could have done more than had been done, and any Minister would have been unworthy of office if. when the irregularities came under his notice, he did not ask the Auditor-General to investigate: No one had tried to evade the issue and no one had tried to shelter behind a subterfuge. Action was taken as promptly as possible.

Mr Holland said that no one on the Opposition side of the House considered that the Minister of Supply had done anything reprehensible. There had been a misapprehension regarding the information given, but the Minister had explained that and his explanation was not doubtedi What the Opposition complained of was that these things only came to the surface when there was a charge, and they did not want to have to make the charge when there was an explanation that would clear the matter up. He considered that, when the Government discovered that there was something wrong, it should have informed both sides of the House. Recently, a high ranking Air Force officer had been court-martialled for receiving 20 per cent of all business transacted with a Christchurch firm.

He had got away with thousands of pounds, but nothing had been done to him and now he was out of the country. Mr Jones: He lost a pension of £5OO a ypar. Rumours in Country Mr Holland said that the case they were discussing had been known to the Government for a year and rumours of it had gone through the country, but no information had been given until the Member for MidCanterbury placed the question on the Order Paper. He believed that the Prime Minister had taken the proper course in asking for information. The Inspector of Government Motor Vehicles had been appointed to supervise the use, purchase and sale of motor vehicles, but apparently, when he got on to this case, someone had said, “Take him off. He is not the man for the job at all.”

Mr Holland said he hoped that all the evidence and files would be admitted to meetings of that committee. Mr Nash said that every step that could be taken was taken and the matter had been brought to the notice of the House in the usual way by the Auditor-General’s report, and no other course could have been followed. The Police Department had made a full inquiry and the Crown Law Office had said that a prosecution could not succeed. He had never stopped any inquiry into the matter. He* had said that the inspection of Government motor vehicles was not to make an inquiry, because it was being made by higher authorities. It was the Auditor-General’s job, and no one else’s.

In reply to an interjection Mr Nash said that the investigation had been started because of information, which would be made available to the Public Accounts Committee. It would show that everything possible had been done. No Immediate Statement Mr Sullivan said that it was impossible to make an immediate statement to the House, when charges were made against a Department or against individuals. Such a course would condemn people before they were tried, broadcasting their names throughout the country when there might be absolutely no truth in the charges. A case must be proved before a statement was made to the House, and it was incorrect to pretend that the information could only be dragged from the Government. Mr Sullivan said that, compared with nearly 5000 Army vehicles sold, the complaints concerned an extremely small proportion—■ comparatively only a few pounds were involved. He agreed that the question of principle was Important, but the real issue was—could anyone say with absolute conviction even now that there had been anything of a criminal nature in connection with the transactions. He would not defend any wrong or anyone who did an unjust thing, but the question of value still entered into the matter. There had been a great diversity of opinions as to the basis on which the vehicles should be valued and some doubt as to who it was who actually valued them. He thought that the Public Accounts Committee itself would still have considerable difficulty in agreeing on the true value of the vehicles.

“Before we decide in a selfsatisfied manner that the officers were blameworthy, we must consider all the facts,” said Mr Sullivan. “I do not wish to blame until it is proved that certain people were blameworthy. Possibly some blame may come to myself, I do not know. I was not concerned in the appointment of the set-up, except that the Commissioner of Supply and his officers are under my control.” Mr G. H. Mackley (National, Masterton) said that the appointment of Mr Laing had been most unsatisfactory. It was not in accordance with the Public Service Act and had caused the Government more headaches than the rest of the Public Service put together. . Mr R. M. Algie (National, Remuera): Was he defeated at the polls. Mr Mackley: I understand he was a friend of the late Prime Minister. The Hon. J. O’Brien said that he had been brought into the disposal of used Army vehicles as Minister of Transport, because one of his problems was to get sufficient vehicles to keep the country’s transport going. It was impossible to get a valuation for such vehicles that was completely satisfactory. They had 10.000 vehicles to sell and they were nearly all secondhand trucks and cars that had been impressed from private users. They had received some hard usage from the Army and many of them had been standing out in the weather for months. So it was impossible to lay down any hard and fast rules for valuation.

The Minister quoted examples of valuations made first by Mr Laing and then by three other valuers and mentioned vehicles that had been resold for higher figures.

Mr A. G. Osborne (Government, Onehunga), who is Parliamentary Under-Secretary to the Prime Minister, said that the Auditor-General had sent a memorandum to the Minister of Defence, pointing out that two cars had been sold to Army officers, one £lO and the other £2O below valuation. There was no legal claim for a refund’, but there was a moral one. Both sums had been refunded.

Mr F. w. Doidge (National, Tauranga) suggested that there should be a public investigation of the whole

matter. When large amounts were being spent on the war. there were sure to be some irregularities and, when they occurred, they should be made as public as possible. To hold such inquiries in camera gave wings to suspicion. Mr Jones also referred to the two cases mentioned by Mr Osborne, and said that he did not know who was responsible for the reductions made, but assumed that it was Government officers. If Army officers misused their position to secure bargains, he wanted jt cleared up. There was nothing to be gained by trying to hide anything. Mr W. A. Bodkin (National, Central Otago) protested against what he declared were political appointments to the Civil Service. Individuals had been given cushy jobs by the Government. History proved that, wherever corruption appeared in government, it appeared in the administrative branch. Therefore, no Government dared avoid a full inquiry when allegations were made against its administration. Mr Bodkin said that some of the plums of the Civil Service had gone to friends of the Government. Some of the most lucrative positions in the service of the State had been given to people who had never been trained in the Service. They were the people who were creating trouble to-day and that was the reason for secrecy in the matter. Mr Bodkin said that in the instance of the vehicle which a soldier bought and resold at a profit of £lOO there were two parties to the transaction. The soldier had been named. So should the person who negotiated the sale to him. Was it a member of the Transport Department or some high officer of the State? Tire country wanted to know that. Every member of the Government must know it, but the Opposition had only a rumour to go by. The Hon. W. E. Parry said that the original question had been answered fairly and reasonably, yet the

Opposition wanted to create an impression in the country that there was something abnormal about it all. The Opposition should agree to the investigation which was to be held and get the information it wanted by the interrogation of witnesses. Mr Fraser suggested that the debate should go on until finished. This was agreed to. "Stupid Party Wrangle” Mr H. Atmore (Independent. Nelson) said that an inquiry had been asked for and promised, so why were they continuing the debate? It was a stupid Party wrangle and. instead of taking an extension of time, the House should bring the debate to an end. Mr Fraser in reply said that the matter had been referred to the Public Accounts Committee on Tuesday and that body had adequate powers. If it decided that there should be a public inquiry, it could report accordingly. While the matter was being investigated by the Auditor-General It would have been wrong for any Minister to step in and make explanations. If the committee thought that anyone should be indicted, it was the perogative of the committee to act accordingly, but it was not the du.lv of any Minister to say who was guilty or who was innocent. That was‘the perogative of the Auditor-General and, if there had been a case to take, he would have reported • accordingly. Mr .Fraser said that the crux of the matter was that the prohibition on trafficking in public property by Civil Servants did not seem to apply to the Aymy. That was a no-man’s-land due apparently to an oversight in the past. However, the sense of propriety of the persons concerned should have been a guide in this instance. Mr Fraser said there was on file an instruction from Lieutenant-General Puttick which was very definite in regard to such matters. It laid down that, if any person was guilty of conduct unworthy of an officer, the consequences would be drastic. Mr Fraser said that the day’s discussion had been worthwhile as a vindication of the principle that the Government would not stand for any departure from the principle of absolute honesty in dealing with public property.