Emails show Kāinga Ora is unapologetic about covering up the fact it was using a Labour candidate in taxpayer-funded advertising.
Newshub revealed on November 10 that the Government's public housing agency risked political neutrality by running a taxpayer-funded article about Arena Williams - now Labour MP for Manurewa - and later tried to act like it was unaware.
Emails released to Newshub showed the department's senior communications advisor wrote: "She's [Williams] understandably nervous about people perceiving this as her electioneering ahead of her campaign announcement" but "we can just act as though we don't know anything!"
The Public Services Commission confirmed on November 11 that it would investigate after Housing Minister Megan Woods raised concerns.
Kāinga Ora CEO Andrew McKenzie acknowledged it wasn't a good look, telling Newshub at the time: "What's happened here is we've got one incident where a staff member has made some flippant comments. We've spoken to them."
But new emails have emerged showing Kāinga Ora officials unapologetic.
"The judgement call you made was fine, I am happy to stand behind you on it," McKenzie wrote in an email to the senior communications executive on November 11.
"This little maelstrom will pass quickly, I just hope it doesn't make you too risk-averse!"
Prior to that, on November 10, a general manager wrote: "I don't like the implication of apology from us when we did no wrong."
Public Services Commissioner Peter Hughes has reprimanded the public housing agency.
"Kāinga Ora failed to do the right thing when it became aware the person it was to feature in a Kāinga Ora sponsored article was a candidate," Hughes said last week after the findings of his investigation were released.
"The email suggesting the agency pretended it did not know about Ms Williams' candidacy was unacceptable. All parties agree.
"I expect Public Service agencies to consider whether it is appropriate for public funds to be used to give positive exposure to a political candidate in this way. Government advertising must always be impartial and free from partisan promotion of government policy and political argument."
The Housing Minister wrote to Kāinga Ora chair Vui Mark Gosche informing him of her disappointment and Gosche said last week the agency "fully accepts" that its handling of the matter was wrong.
"It wasn't good enough. I have said publicly previously that I was not satisfied with the decision by Kāinga Ora and its subsequent handling of the matters. I have made it very clear that it was unacceptable and I expect that it will not happen again."
But National Party deputy leader and housing spokesperson Nicola Willis, who obtained the new emails, says concerns have not been taken seriously enough.
"I'm also astonished that even after the damning report into this saga was released last week by the Public Service Commission, no one at Kāinga Ora has been held accountable for its failure to meet its duties as a custodian of taxpayer money," Willis said.
"I will now write to the Public Service Commissioner to express my renewed concerns over the comments made in these newly-released emails, as it appears as if he was not privy to these during his investigation."
Woods said in Parliament on Tuesday she still had confidence in the leadership of Kāinga Ora.
"Yes, I do have confidence in the chief executive."
She pointed to the Public Service Commissioner's report that said Kāinga Ora "demonstrated a misunderstanding of the principle of political neutrality in all levels within the organisation" but that it was "no longer the case".
"Kāinga Ora now fully accepts that its response should have been handled better, has provided evidence of improvement in training and processes, and has acknowledged there is further work to be done, which it is committed to following through."
Woods said she took the conclusions of the investigation "seriously".
