Many on the left (and some journalists who should know better) have been pushing a theme (started by Helen) that all this nasty non-transparent stuff done by NZ First is due to the old Electoral Act, and could not happen under the Electoral Finance Act.
Now it is true the EFA does tighten up things in some areas, but it makes little difference to the three funding controversies that NZ First has had exposed. Let’s take them one by one.
The Owen Glenn $100,000 donation
As we now know, Owen Glenn donated $100,000 towards Winston’s legal bills – which made it effectively a donation to Winston personally as he would have had to pay $100,000 more if Glenn had not donated.
Now the Electoral Finance Act only deals with donations to parties, not to MPs personally.
So foreign billionaires could continue to make large donations to MPs, while seeking favours from them, and it would all be legal under the EFA, and there would be no requirement for it to be made public.
So the EFA in no way affects repeats of the Owen Glenn donation.
And here is the sad reality. The EFA probably makes such donations more likely and more common. If donations to parties have to be disclosed but donations to trusts which pay off bills for MPs do not have to be disclosed, then more and more donors may choose to donate to MPs personally instead of their parties.
And no the Register of Pecuniary Interests will not have much effect here either, if they do it through a trust.
The Vela $150,000 donations
Now what it appears the Vela did was make a series of $10,000 donations from different people and companies. Now surely this could not happen under the EFA?
Well yes it could. Every company and every adult is treated as a seperate donor under 21(2)
donor means a person who makes a donation
And even if the companies are all owned by the same individual, each is a separate donor as they are separate persons in a legal sense..
Now the EFA does have some provisions which tighten things up. For example if I have $30,000 I can’t give $10,000 to my secretary and $10,000 to my cleaner for them to donate to a party. If I supply the money to them for a donation, they need to disclose whom they are donating on behalf of under s 26(1).
But in the case of the Velas, each company and each adult has their own money so they can easily arrange to donate $50,000 or $100,000 in a year with none of it ever getting disclosed.
The Bob Jones $25,000 donation
As we know Bob paid $25,000 to the Spencer Trust, thinking it was going to NZ First. Now as the Spencer Trust was never disclosed as a donor itself, it is highly unlikely under the EFA Sir Bob would end up being listed as a donor.
The Spencer Trust may have made a series of anonymous $10,000 donations to NZ First under the old Electoral Act, and this would have been legal. They could still do this under the EFA but would have to make a series of $1,000 anonymous donations instead.
Under the EFA the Spencer Trust could donate $36,000 anonymously through the Electoral Commission to NZ First and not have this disclosed.
If the Spencer Tust pays expenses of behalf of Winston personally, then that is like the Owen Glenn donation and not something disclosed under the EA or EFA.
And even if the Spencer Trust pays for expenses of behalf of NZ First, then it is just as likely that would be illegal or legal under both the EA or EFA. Their definitions are pretty similiar. First the old EA, s214F:
party donation, in relation to a party registered under Part 4,-
(a) means a donation (whether of money or of the equivalent of money or of goods or services or of a combination of those things)-
(i) which is received by or on behalf of the party by any person or body of persons involved in the administration of the affairs of the party; and
(ii) which, either on its own or when aggregated with all other such donations made in the same year by the same person exceeds $10,000 in sum or value (inclusive of goods and services tax); and
(b) includes, where goods or services are provided to the party under a contract at 90% or less of their reasonable market value, the amount of the difference between the contractual price of the goods or services and the reasonable market value of those goods or services; but
(c) does not include the labour of any person which is provided to the party free of charge by that person;
So the old EA made clear donations include goods or services, and any discounting beyond 10%. And the EFA, s 21(2):
party donation means a donation (whether of money or of the equivalent of money or of goods or services or of a combination of those things) that is made to a party, or to any person or body of persons on behalf of the party who are involved in the administration of the affairs of the party, and-
(i) where goods or services are provided to a party, or to any person on the party’s behalf, under a contract or arrangement at a value less than their reasonable market value, the latter being a value which exceeds $1,000, the amount of the difference between the former value and the reasonable market value of those goods or services; and
(ii) where goods or services are provided by a party under a contract or arrangement at a value that is more than their reasonable market value, the amount of the difference between that value and the reasonable market value of those goods or services; and
(iii) where credit is provided to a party on terms and conditions substantially more favourable than the commercial terms and conditions prevailing at the time for the same or similar credit, the value to the party of those more favourable terms and conditions;
Some change and tightening up, but overall its is likely that the legality of how the Spencer Trust “assists” NZ First without disclosing it is a donor, is unchanged under the new law.
So don’t believe what Helen says about these are all problems of the old Electoral Act, and can’t happen under the Electoral Finance Act. Absolutely everything NZ First has been doing, could continue under the Electoral Finance Act. And in fact there is now a greater incentive for people to donate personally to MPs, rather than to their parties. And that would be a very bad thing indeed.