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Exclusive: The America’s Cup whistleblowers
November 27, 2020
For Mayo & Calder, the America’s Cup was meant to be ‘the pinnacle’. After months of silence in the face of claims that they were ‘spies’, the America’s Cup whistleblowers break their silence on whythey felt they had to go to the Government.
Tom Mayo and Grant Calder say they walked out of a meeting at the end of 2019 knowing they faced a decision.
Should they stay silent about what they saw as growing risks around safety and the way taxpayer money was being spent in the lead-up to the America’s Cup, or risk the ire of Team New Zealand boss Grant Dalton?
Mayo & Calder is an event company, best known for organising the Auckland stopover for the Volvo Ocean Race.
After landing their dream contract to help deliver the 36th America’s Cup in Auckland, the duo had become increasingly uncomfortable, claiming they were shut out of decisions and watched the budget repeatedly eroded for what they considered key elements.
But addressing those concerns was not easy.
Mayo and Calder believe Dalton operates Team New Zealand and America’s Cup Event (known as ACE, an interconnected company Dalton also heads which is being given $40 million of taxpayer money to run the Cup) as a “dictatorship”, trying to prevent different parts of the organisation from talking to each other and maintaining absolute control over practically everything.
Anyone who stood up to him risked being fired, they claim.
In an interview – the first the pair have given since turning Government whistleblowers despite Dalton levelling serious allegations against them – Mayo and Calder claimed that in the first 18 months of ACE, a period during which it received around $20m from taxpayers, there was not a single board meeting.
They allege this made it difficult to raise their growing concerns that the budget would be inadequate for both on-water safety and for security around a Cup village on the Auckland waterfront.
Because the company is being sued, accused (among other things) of breach of confidence, they refused to go into details of the concerns they say prompted them to raise warnings, beyond saying they did not believe they were being given the funds required to run a safe event, and their concerns were being “actively ignored”.
“Appropriate resources were not being provided for, with the advice of the appropriate authorities,” said Calder.
Last week, ACE is sued a statement rejecting Mayo’s and Calder’s claims.
The statement denied that the ACE board had not met for 18 months, claiming it “met informally at least weekly” after returning from the 2017 America’s Cup in Bermuda.
“Mayo and Calder also met regularly with the Directors of ACE and had the opportunity to raise concerns at these meetings. Despite repeated requests for progress reports from Mayo and Calder on the status of their services, they were not forthcoming,” ACE said.
“Mayo and Calder did not at any stage raise issues of concern formally with the ACE or ETNZ Boards or any of the individual Directors. Had they done so those issues would have been investigated.”
ACE also claimed that “Mayo and Calder’s inability to work within tight budgets appears to be one of the causes of their vindictive actions. Their inexperience with operating within budget constraints became increasingly an issue for concern by ACE.”
The statement said ACE had such serious concerns about Mayo & Calder’s “lack of focus and output” that it considered taking “corrective action” until Covid-19 intervened, and Mayo & Calder’s move to “oust themselves which apart from the serious damage to the reputations of the directors of both ACE and ETNZ and the distraction from the real business of delivering the Event, has been a blessing”.
Mayo & Calder said their performance was never raised with them, any staff or the Crown or council at any stage.
“If there was a performance management issue then why is it now being addressed six months after being publicly fired?”
The company said paperwork was “over forthcoming and the budgets we worked towards were the size and scale of an event promised to the Crown and an event much needed right now”.
“We are surprised to hear of informal board meetings as [ACE chairwoman] Tina Symmans sat next to us. More to the point – why would a publicly funded mega event hold informal board meetings for 18 months?”
Mayo has said the pair faced difficulties at the start of the year. In February, Mayo’s father died, his wife had given birth to a baby daughter, while Calder’s daughter spent two weeks in Starship Hospital.
The turning point
Mayo says at some point in mid-2019, he pointedly told an official at ATEED, Auckland Council’s event arm, that it should establish a finance and audit committee to examine ACE’s financial presentations, but there was no follow-up. (ATEED denies the exchange took place.)
While the pair claimed the scrutiny of the Volvo stopovers was often intense, Mayo said at the event steering group meetings for ACE, there was little probing of what was being put to it.
“We’d go into meetings, and no one would ask the question. In a funny way, it was like no one wanted to know,” Mayo said.
By the end of 2019 a meeting was due to take place, where they hoped the concerns would be addressed.
“We thought that meeting was perhaps the meeting where things would be corrected, because the right people were there to correct,” Mayo said. “We’re dealing with some big personalities, some pillars of the industry, and this is when we thought ‘finally the ship will turn. Surely, the ship will turn’. But the accelerator went down.”
Rather than stand up to the Team New Zealand boss, the meeting simply accommodated what was happening.
“That was the pivotal moment when we thought, right, we need to seek advice,” Calder said. From their perspective “it wasn’t just a cultural issue, it wasn’t just safety concerns, there were concerns around public spending.
“If we stayed after that point, if we didn’t say something, we’re complicit,” Mayo said. “This was our biggest concern. If you’re there in a year’s time and then get blamed because you haven’t spoken up and you’re in a worse position, or something happens and someone dies and you’ll never be able to forgive yourself.”
Mayo and Calder refused to discuss the meeting beyond describing it as “an internal meeting in late 2019”.
The Herald has already reported on a meeting in November 2019 at which senior ACE staff and a consultant discussed the creation of a “clean up memo” covering a series of payments between the two companies.
A board meeting then took place in December; a High Court injunction prevents the Herald from disclosing what happened at the later meeting.
After taking advice, Mayo and Calder, in consultation with employee Michael Choy, named in court documents in ACE’s legal action against the company, decided to confidentially disclose their concerns to ATEED, and to the Ministry of Business, Innovation and Employment (MBIE).
Although Mayo & Calder had run a series of major events, including a series of stopovers for the Volvo Ocean Race in Auckland, Hong Kong and Melbourne in 2017/18, winning a contract to help deliver the America’s Cup promised to be a career highlight.
During the 2012 version of the race, Team New Zealand took part in the around-the-world race.
There Mayo and Calder got to know Dalton, who was “gruff, but was like any skipper potentially that was involved in the Volvo Ocean Race” Calder said, adding that the boss “was an icon” and the opportunity was a dream.
“It’s what we’d been striving for … we’d always wanted to be involved,” Calder said.
“We’d just come off doing three Volvo Ocean Race events around the Pacific, but the America’s Cup was the pinnacle that we wanted to reach … and we believed in Team New Zealand.”
The challenges of major events are familiar to Mayo & Calder, as are the dangers.
In January 2018, as American-Danish team Vestas closed in on the end of the Hong Kong leg of the Volvo Ocean Race around 2am, it collided with a Chinese fishing boat. One of the fishermen was killed.
Mayo said the experience was devastating, and major events contain countless risks, from fathers taking children out to watch races on kayaks, to mothers desperately looking for missing children on wharfs, wondering if they had fallen into the water or had been abducted.
“You see it, and it scares the shit out of you,” Mayo said. “You know what it takes to look after people.”
Equally, the company saw how events bring cities alive and change them.
Initially, when it pitched for the event, the message to stakeholders was that the 36th running of the world’s oldest international sporting competition could be similar to the 2011 Rugby World Cup.
“What we were left with in those last few weeks before we were fired was vastly different to what we went in with on day one.”
The picture Mayo and Calder paint of Dalton is of one where he does what he can to have absolute control.
This includes, they claim, keeping the organisation in silos. Not only are people working at the Team New Zealand base on the Auckland waterfront not meant to speak to those on the outside about what they see, they are not meant to talk to others in different parts of the organisation, they claim.
They also allege that former colleagues have told them they have been told they will be fired if they speak to Mayo or Calder.
Mayo says initially the company was “caught up in the hubris” of running a major event, but over time it became clear to them that their opinions on how to run the event were being ignored.
“We didn’t think we would be ignored, we didn’t think that we would be, almost, laughed at, to the extent that they’re just not listening to our opinion,” Mayo said, with the company shut out of decision-making.
“The discussions started generally great … it was going to be a world-class event that was going to change New Zealand. It was all very exciting, we had some great goals.
“Over time it just disintegrated into being, in our view [a situation where] we couldn’t even afford to provide the security guards to provide a safe environment.”
At the start of October, the Herald reported that in April 2020, Dalton had written to Mayo & Calder seeking cost-cutting from the budget, including a demand for more staff to multi-task.
Choy sent a lengthy response, which concluded by warning that “saving a few dollars here and there on staff is not worth the reality of what happens when someone gets hit/injured or killed on site”.
Dalton’s response was dismissive.
“We are going to be spending less than this so maybe there will be a few less dunnies, we better hope NZ doesn’t have an earthquake and God can create a few more hours in the day so we can work longer”.
Mayo said they took on the contract believing initially that they would be involved in all key decision making.
Later they would find Dalton would walk into the office and announce that the website contract had been awarded to a Spanish company, or that the television contract for the cup had been awarded to a German production company. We had “no input, no say,” Mayo said.
“No tender,” Calder added.
Court documents show that in the face of attempts to establish spending authorities for different parts of the organisation, Dalton, chief executive of both ACE and Team New Zealand, responded that he was responsible for all spending decisions.
“I must be missing something, not 1 cent gets spent without my sign off. Dalts.”
Mayo said anyone in the organisation who did something without briefing Dalton risked being ridiculed.
Calder: “He needed to know everything, I mean, everything. Right down to the smallest detail.”
From their perspective, attempts to raise concerns with Symmans went nowhere.
Eventually, Mayo said, the situation descended into “screaming matches” with Symmans “because she wasn’t listening” to their concerns.
It seemed, according to Mayo, “she’d given up confronting Grant Dalton as well.”
Calder added: “She reports to him.” In his opinion Symmans is unable to stand up to Dalton.
Mayo and Calder claim Symmans was responsible, at least in part, for finding advertising for ACE and Team New Zealand.
Famous in corporate New Zealand for providing PR advice for companies in difficult situations, by Mayo and Calder’s account, Symmans reverted to her natural role
“She was just trying to problem solve for him [Dalton] in the end”.
In a statement, Symmans denied having screaming matches with Mayo, Calder or any colleagues. “I imagine that should I ever have [to] meet with Mayo and Calder again this would be a likely outcome. I am known for taking very firm positions on matters I consider to be important.”
Symmans said she had a “strong and robust working relationship with Grant and we have worked through some very challenging issues with robust discussion and debate when needed – including the defection of Mayo and Calder”.
Symmans confirmed she had arranged sponsors for ACE and Team New Zealand.
“That is totally appropriate. It does not in any way conflict with my role as chair of ACE which is a sister company of Emirates Team New Zealand established to deliver the event on behalf of the defender.”
Mayo & Calder did raise concerns “centred around being able to work within the event budget parameters,” Symmans said.
“The current event teams are successfully delivering the event within the same budget parameters”.
Mayo & Calder’s initial complaint to MBIE and ATEED was confidential. A copy of it was later disclosed to the Herald accidentally, after ACE’s lawyers, Lee Salmon Long, failed to request that it be redacted from court documents which were being publicly released.
ACE director Greg Horton described the allegations as “in essence fraud and misuse of public money”. ACE hotly denies any wrongdoing.
Mayo and Calder are firmly of the view that MBIE believed what they were telling them; they also believe MBIE already had some kind of review underway into ACE.
They were then asked to speak to auditors Beattie Varley, which reported that they had interviewed and taken materials from the whistleblowers.
ACE appears to have offered little co-operation to the audit, taking what Horton described as a “legalistic and constrained approach” to providing information.
Eventually, ACE refused to cooperate entirely, forcing Beattie Varley to submit a report leaning heavily on the whistleblowers’ claims and the materials provided.
MBIE then asked Beattie Varley to put their hitherto confidential comments on the record, by way of a protected disclosure, setting out their concerns formally, in order for the claims to be put to ACE.
Initially, Mayo and Calder asked if MBIE could guarantee that if they did make a disclosure, the ministry could guarantee they would not lose their contract with the America’s Cup.
MBIE said they could not, as the contract was with ACE, not them. Nevertheless, according to the pair, MBIE did promise “that they wouldn’t hang us out to dry”.
Later, Greg Horton would suggest that MBIE and Mayo & Calder had colluded in an effort to take the event off ACE, but Mayo and Calder this week dismissed this as a “conspiracy theory”.
Mayo and Calder were not prepared for what came next.
Shortly after the interim report and disclosure was supplied to ACE, Dalton went on the attack, giving interviews and issuing statements in which he claimed Team New Zealand had detected “informants” or alternatively “spies” from the team, claiming he had long held suspicions after information about the team had been leaking back from Europe.
Both Mayo and Calder claim the accusations are false and that the only disclosures had been to the Government and Auckland Council, at the request of MBIE.
Their home addresses were quickly posted on a popular sailing blog, which accused the company of being “traitors”. There is no suggestion/evidence that this was done by anyone associated with ACE or Team New Zealand. Abusive emails and letters began arriving at their homes.
Mayo said both he and Calder had young families and he considered getting private security at his home before briefly moving out of Auckland to escape the attention.
“When someone defames you like that, in the public arena and you’re having to move out of home because there’s shit about you all over the internet … What the f***? All you did was make a disclosure about what was going wrong in the event, to the Government.”
Later, when a final report was released, concluding that Beattie Varley had not seen evidence that event funding had been “misapplied”, Mayo and Calder were again given only minutes’ notice of the public release.
Mayo said he firmly believed that MBIE believed the allegations when they were made; no one from the ministry has reached out to check on the company or explain what happened.
Ironically, Mayo and Calder only discovered that MBIE did appear to have battled for the company to keep its contract with ACE in the lengthy complaint Horton made about MBIE.
This revealed, according to Horton, that MBIE had warned that “the absence of Mayo & Calder running the event would give rise to a material adverse effect [sic] allowing the Hosts to assume control”.
ACE is also suing Mayo & Calder, claiming not only breach of confidence, but that they were responsible for a $2.8m payment into a Hungarian bank account, after scammers impersonating a European contractor sent Dalton an invoice.
It also claims they falsely expensed a $1240 Christmas lunch at Ponsonby restaurant Prego as “office expenses”.
Mayo claims the ACE action was “blatant retaliation” for turning whistleblower. “The fact that the court process is dragging us through for a $1000 Christmas dinner, is completely ridiculous,” Mayo said, adding that not only did Symmans attend the lunch, she approved the expense. In court documents, the pair say Prego was chosen as it was Symmans’ favourite restaurant.
“If they had those issues with the $1000 [lunch] and the fraud, why didn’t they raise those issues with us when we were there, because I tell you what, they didn’t. They didn’t. No one raised it with us. Back in November and December, no one raised it with us,” Mayo said.
“We made a disclosure to the Government about the concerns that we had and for having done that, which we think is the right thing, we have been absolutely vilified”.
While MBIE’s chief executive, Carolyn Tremain, has repeatedly said she believes the allegations were made in good faith, it appeared nothing was being done to protect the company.
“There is zero protection for any whistleblower, in practice,” Mayo said. “He’s being funded by the taxpayer at this point in time, and he’s allowed to do this to us, make … allegations and gag us through a lawsuit.”
In a statement, MBIE general manager tourism Iain Cossar said it had “no control” over what actions ACE or Team New Zealand took against Mayo & Calder.
Cossar confirmed that Mayo & Calder were given no advance notice of the release of the final Beattie Varley report.
Asked whether it had taken any steps to check on the welfare of the whistleblowers, Cossar said simply that MBIE had an obligation to act “in a balanced and fair way” without being specific.
“The issues involved are complex, involving commercial sensitivities and disputes to which MBIE is not a party.”
The Government has tried to avoid commenting on the incident. Prime Minister Jacinda Ardern said it was a matter MBIE was handling. Economic Development Minister Stuart Nash has refused to be interviewed.
In a regular appearance on NewstalkZB, Nash said the public deserved accountability over America’s Cup funding, but described both Dalton and Team New Zealand chairman Sir Stephen Tindall as men of integrity. A spokeswoman for Nash said he would not answer written questions on the matter.
Calder maintained that given the risks to safety, they would be forced to take the same course of action, even with the benefit of hindsight. But their plight might put other people off.
“If you’re watching this, and you’ve got the same situation at your work, you’ll say, ‘jeez, I’ve seen how these guys are being treated and they’re being vilified in the media and attacked and gagged, well I might just stay quiet, because that doesn’t look like a good option’. That’s what this says to me.”
Mayo and Calder want Dalton to stop making allegations about them and for the legal action to be dropped.
But Calder also believes the allegations they made have not been substantively addressed or even investigated, with Beattie Varley’s probe an examination of compliance with a contract.
“I just want to see due process. I just want to see a proper investigation into the allegations that we’ve put forward.”