Iona Holsted was singled out for criticism in the Royal Commission’s report on redress for being among officials who suggested lawyers were drumming up false or exaggerated claims

Photo: RNZ

The Government appointed career bureaucrat Iona Holsted to lead a unit responding to victims of state abuse, despite a Royal Commission documenting her previous allegations that a lawyer representing victims was behaving unethically and persuading her clients to embellish their claims of abuse.

Holsted, who is currently Secretary of the Ministry of Education, was appointed to lead the Crown Response Unit (CRU), a state entity set up to respond to the Royal Commission of Inquiry into Abuse in Care. It is also responsible for setting up a redress scheme to respond to those who were victims of abuse while they were children in the state’s custody. It was set up in 2018.

Holsted’s appointment is mentioned in a briefing to the incoming Minister of Public Service Andrew Little, who holds responsibility for the CRU. The previous minister was Chris Hipkins, but the portfolio was taken over by Little in February, shortly after Hipkins became Prime Minister.

The briefing explains that the governance of the CRU is provided by a number of chief executives from Oranga Tamariki, the Ministries of Education, Health, Social Development, the Ministry for Disabled People and Crown Law. These chief executives “collectively agreed that the lead chief executive for the Crown Response would be Iona Holsted, Secretary for Education”.

However, Holsted is singled out for criticism in the commission’s report on redress. It mentions that “some officials suggested lawyers were drumming up false or exaggerated claims”.

The report went on to say that “the Ministry of Social Development’s deputy chief executive of the time, Iona Holsted, even reported concerns in a memorandum that lawyer Sonja Cooper was behaving unethically, and speculated that she might have influenced claimants’ memories when gathering evidence, and ‘may deliberately target periods of time when records are poorest’ in the claims she made on behalf of her clients. We find these suggestions entirely unfounded. The ministry’s current deputy chief executive, Simon MacPherson, said the language in the memorandum was ‘inappropriate and regrettable’. However, the memorandum was not an isolated piece of correspondence.”

Little’s office was asked if it was appropriate for Holsted to hold the chief executive position at the unit given her past comments.

A spokesperson did not directly address the question but said “public service chief executives are appointed by the Public Service Commissioner, not ministers. The Public Service Commissioner is responsible for the performance of the chief executives”.

The Public Service Commissioner is Peter Hughes who was formerly chief executive of MSD, with Holsted as his deputy during the 2000s, which is when she made the remarks in question.

At the time, MSD and Crown Law were involved in civil litigation over test cases relating to the abuse of children in state institutions. During the preparation for a case in 2007, the ministry and Crown Law commissioned private investigators to try to undermine the claimants’ case, spending $90,000. This was only exposed over 10 years later after an inquiry into the use of private investigators by government agencies in 2018.

The inquiry found: “The Ministry of Social Development was aware of the potential use of low-level surveillance and a covert approach. The inquiry did not see any evidence that MSD queried this or sought any assurance that individual privacy would be properly weighed and protected. Accordingly, the inquiry found that MSD was in breach of the code of conduct.”

The inquiry also found that ministry staff were kept in the dark about the involvement of private investigators in the case, including interviews of staff by the private investigators. The inquiry’s report found that “in February 2007, MSD raised a concern about the reputational risk for the organisation if MSD staff knew that a private investigator was interviewing them. It was suggested that the investigator be presented as part of the litigation team, rather than as a private investigator”.

The claimant in the 2007 case told the Royal Commission that the litigation process MSD put him through “felt like torture, and in some ways was worse than the abuse I suffered … it just kept going on and on”.

He said when he was given access to his files he was “shocked to see exactly what [the ministry] had known about the abuse, and the comments they had made”.

Regarding the use of private investigators the claimant said: “For me, amongst all the terrible things I was put through, the use of the private investigator was disgusting and unforgivable.”

Some of the relevant records for the case, including staff files, were destroyed by the predecessor to MSD in 1999 despite the government being aware of allegations of abuse from the Lake Alice case, which were first filed in 1993. Many of the children who had gone into the adolescent unit at Lake Alice psychiatric hospital had previously been through social welfare homes and alleged they’d been abused in those institutions as well. A number of government departments, including MSD and the Ministry of Education, were aware of the allegations of abuse relating to welfare institutions and knew that they were credible.

The Ministry of Education has documents showing that children who were in Lake Alice were being put in adult wards with dangerous psychiatric patients where they were sexually abused and raped. Correspondence from the 1970s shows a Department of Education psychologist describing this happening, mentioning that the department’s head psychologist knew about it, as did the head of mental health and the superintendent of Lake Alice.

Many of the agencies involved in Holsted’s appointment to the CRU have been the subject of thousands of allegations of abuse of children over decades, including MSD and the Ministry of Education. Some of the chief executives were involved, directly and indirectly, in defending those allegations, including current Solicitor-General Una Jagose.

A number of survivors of state abuse have been appointed to advisory and design groups that will put forward recommendations on how the government’s redress scheme should be rolled out. The groups are part of the CRU, but the survivors had to go through an application process that has taken months and included approval by an independent review panel and the minister.

By Aaron Smale
Published in Newsroom