Rebecca Stevenson writing for The Spinoff
Gambling and booze, booze and gambling. Those legal - but potentially devastating - vices. Rebecca Stevenson investigates how a handful of people, including sitting councillors, hold a tight grip on West Auckland nightlife.
A piece published last week on the Spinoff, arguing that licensing trusts are holding back West Auckland, triggered a national conversation about the arcane governance that continues to control alcohol sales in parts of New Zealand. Do we really need licensing trusts any more, many asked, especially if they appear to be as focused on empire building as giving back? And if one of a licensing trust's bars is considered among the worst by police for arrests, doesn't that suggest the model is a failure?
A closer look at the set-up in West Auckland reveals that many of those holding the levers of power on booze are also in charge of the pokies. The same names pop up on the licensing trusts and the gaming trusts. These are people entrusted with overseeing million-dollar industries; how and where gaming and drinking are done, and where the grants go.
There is meant to be a separation between the bars (that host gaming machines) and the gaming trusts, but in West Auckland - thanks to the presence of the monopoly-holding licensing trusts - the lines are blurred, and the shots are called by an influential few.
The head honcho
Let me introduce to you Ross Clow, the president of the Portage Licensing Trust, one half of the The Trusts group which runs alcohol sales from Avondale to Westgate. Mr Clow is also chairman of The Trusts Community Foundation (TTCF), which runs the pokie machines in various licensing trust outlets around the country including some in West Auckland.
I should also probably mention Mr Clow is also a Labour councillor representing the Whau ward on Auckland Council, where he is chairman of the influential Finance and Performance Committee - annual salary: $127,481.
The affable and sharp Mr Clow is a working example of how New Zealand's convoluted "the local community runs booze and gaming" system has actually concentrated power in the hands of a few.
As chairman of TTCF, Mr Clow is at the head of an organisation overseeing gaming machines in 54 venues, 27 of which are licensing trust premises including Portage and Waitākere licensing trust venues.
The trust is mandated, by gaming law, to give back 40 percent of the proceeds of gaming. For TTCF's financial year ended 31st March 2017, it returned 43 percent or close to $13 million in grants, on revenue of about $29m. TTCF is a not-for-profit; it was previously run as a charity but was "obliged to restructure as its charitable status made it difficult to support sporting and/or racing related activities".
Over that period the trust earned about $6.2m from Portage machines; $2.7m was paid back into the community by way of grants. For the Waitākere licensing trust, they earned $5.3m from pokies in their bars and taverns, with $2.1m paid back as grants into the licensing trust's community.
Despite a sinking lid policy on the number of gaming machines, the flow of cash through pokies in West Auckland has been increasing, up 30 percent in the Waitākere Ranges Local Board area, and 23 percent in Henderson-Massey.
Chairman Clow and directors (including Henderson-Massey local board member Warren Flaunty) were paid $140,000 in fees, depending on how many meetings they attended. Also on TTCF are Horace McAuley and Gary Williams. (To check out the absolutely dizzying number of grants TTCF looks at and accepts or rejects in a grant period head here.)
In 2016 TTCF paid out grants to organisations with which Mr Clow had an association to the tune of more than $830,000 (he recused himself from voting on these applications) and in 2017 it was $276,927.
It paid venue payments to the licensing trusts - including, of course, Portage, of which Mr Clow is president - valued $4.2m for the latest financial year. It admits it has a few conflicts of interest (with directors on both gaming and licensing trusts) and related party transactions, but in terms of handing out grants it says having its licensing trust members pitch in on funding decisions is valuable and benefits the local communities.
But they would say that, wouldn't they? Mr Clow's Portage Licensing Trust, along with the Waitākere trust, monopolise retail alcohol sales (no, you can't buy booze at the supermarket out west) and bars and taverns in West Auckland, and of course controls the gaming machines operating in them.
There was once a nightclub (that may be coming back) - but on the whole The Trusts, as the two are collectively known, own the night from Avondale through New Lynn, Te Atatu, Henderson, out to Titirangi and through to the border of Kumeu.
Portage reported revenue of $43 million for the 2016/17 financial year and profit of about $11m, with president Clow paid a $30,000 a year honorarium. The licensing trusts booked increased gaming site rental (from TTCF) of about $770,000 for the 16/2017 financial year, up more than $100,000.
Collectively The Trusts gave away at least a million dollars last year with its Million Dollar Mission, attracting reported marketing costs of $200,000. But it has at least $14m in the bank, and many, many millions more in retained earnings.
Some West Auckland agitators would like to see a vote on The Trusts monopoly, noting it has been about 15 years since they were last asked whether the system should stay.
But Mr Clow is not the only elected local government politician that is also involved with the trusts (both gaming and booze). National-aligned fellow Auckland councillor Linda Cooper (salary more than $100,000) is also the president of the Waitākere Licensing Trust (honorarium $30,000 per year), and Henderson-Massey local board member Warren Flaunty is both a director of TTCF and Waitākere Licensing Trust (and the Waitemata DHB even), for example.
In response to questions about his remuneration (and following my appearance on The Project which discussed conflicts of interest on licensing trusts), Mr Clow says that what matters is not conflicts of interest, but that they are declared. "I know that if my reputation is slandered and or/libelled and hence damaged by false accusations I will not hesitate to protect myself. My integrity and reputation are critically important to me as an elected person."
And, look, I'm absolutely not saying it's dodgy, certainly not that it's corrupt. At the very least, however, for the chairman of a gaming trust to be the president of a licensing trust that does business with the gaming trust has caused confusion, whether it not it was ill-intentioned. And it's no wonder it's confusing for the trustees - could it be they are wearing too many hats to keep them stably balanced on their heads?
More importantly still, it's fair to ask whether it is really in the interests of democracy to have community decision-making (and the doling out of all that pokie cash or control over the alcohol trade) concentrated among a small group of people. And with voting for trusts so low (a few thousand was enough to get a seat on some licensing trusts) can we be confident they are truly representative, particularly when such enormous amounts of money are up for grabs?