It has been revealed the company signed to transport Cook Islanders to the outer islands after the Maeva Nui festival did not legally exist at the time.
Pacific Schooners Ltd got an advance of about US$130 thousand from the Cook Islands Government to return people to the outer islands but its boat has failed to arrive in the country.
The broken down vessel, Tiare Taporo, is moored at the Pacific side of the Panama Canal - where it has been for more than a month.
Photo: 123RF
Our correspondent says it is clear the Government had not conducted due diligence.
Florence Syme Buchanan says when the Cook Islands Financial Secretary Richard Neves signed the contract the company didn't exist because it had been struck off the register for failing to file an annual return.
She says the money was paid before the boat's owners had shown their vessel could operate in Cook Islands waters.
And Ms Syme Buchanan says Pacific Schooners Ltd is majority owned by Canadians, which does not fit with the Government's commitment to use local companies first.