Non-disclosure an “administrative error”

September 2nd, 2008 at 8:54 pm by David Farrar

To say NZ First’s latest explanation fails the Tui test, is putting it mildy. Before we totally dismiss it out of hand, let us look at what they say:

The New Zealand First Party has admited they made a mistake by not declaring a donation they recieved from Sir Robert Jones.

The party is putting the non declaration down to an administrative error which happened at a time when they say there was an extensive changeover in administrative staff, who were new to their responsibilities.

They say the $25,000 donation was correctly banked into the New Zealand First account, along with other donations which were unfortunately overlooked when it came to declaring anything over $10,000.

The latest revelation comes after the Serious Fraud Office obtained records.

The letter from auditor says New Zealand First made an administrative error by not declaring the money.

It says the amount was banked into the party’s bank account in September 2005, and unfortunately went overlooked by error, along with other donations.

This fails the credibility test on so many levels, it is not funny.

  1. The TV3 item on the Spencer Trust showed a payment of $50,000 not $25,000 paid to NZ First.
  2. NZ First has never ever declared a single donation from the Spencer Trust, so are we to believe that in three years of existence it has only received and passed onto NZ First a singular donation from ?
  3. NZ First claim to have only had a couple of donations over $10,000 in the last decade, so how one could overlook your largest ever donation since 1996 is beyond belief.
  4. Since the Jones donation was exposed a couple of months ago there has been speculation that the NZ First 2005 return may be inaccurate. Why did no one in NZ First check until today?
  5. Why is the auditor, not the accountant, explaining the error? Are they the same person as suggested in the NZPA report?

There is a constant pattern here with NZ First – deny the donation until it is no longer credible to deny it, and then suddenly discover it somewhere. They do not deserve any benefit of the doubt. Thank God the is investigating.

Even though they can not be prosecuted under the for the breach, it doesn’t mean that the SFO shouldn’t disclose how many other donations were illegally not declared to the .

This also poses a challenge for . She has said she will act if there is evidence of illegal behaviour. We now have an admission from NZ First that it broke the Electoral Act 2003 in April 2006 (and maybe again since then). And filing a false donations return is not a minor or technical breach – it is incredibly serious.

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39 Responses to “Non-disclosure an “administrative error””

  1. Spam (597 comments) says:

    Isn’t there something fundamentally wrong with a 6-month statute of limitations on failing to declare donations? Is it 6 months from the date of the donation, or 6 months from the point at which the return is filed?

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  2. reid (16,111 comments) says:

    DPF: “…filing a false donations return is not a minor or technical breach – it is incredibly serious.”

    Is it as serious as being “kidnapped, stripped, oiled, manacled, licked, nibbled, chained, taunted, humiliated and very nearly having a round, knobbly thing the size and shape of a Mexican agarve cactus jammed up where only Customs men dare to probe.”

    Let’s hope so.

    Courtesy of Rimmer from Red Dwarf

    [DPF: Superb!]

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  3. francis (712 comments) says:

    HC knew this on the way in to Parliament today and chose to stonewall rather than take the necessary next step. The news hadn’t filtered out yet to the Nats so they couldn’t press her on it.

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  4. vto (1,128 comments) says:

    what on earth is the reason behind only a six month limitation?

    Every other punter on our wee planet has to suffer for years with no limitation anything like that.

    Is it yet another case of one rule for the politicians and one rule for the rest of us?

    anyone know?

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  5. deanknight (263 comments) says:

    But – based on the same standards – can the Nats never let themselves form govt given they forgot that their broadcasting allocation was supposed to be GST inclusive?!?!

    [DPF: You can do better than that Dean. National did not forget - they always knew it was GST inclusive - they just failed to instruct the agency in writing. And really your comparison is almost offensive. National alerted the EC of the error the day it realised it. NZ First has only admitted to the omission after the Serious Fraud Office flushed the truth out three years later]

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  6. scrubone (3,090 comments) says:

    Then consider the further point that by not declaring this donation, they were able to claim that they one up on other parties (National) who where using trusts, AND that they were not funded by businessmen.

    Too convenient. Way too convenient.

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  7. metcalph (1,410 comments) says:

    Legally even if it was an administrative error, they are still guilty because the offense is one of absolute liability, that is it doesn’t matter how the criminal act occurred. That sort of provision was put there in order to ensure that people take exceptional care in preparing their return and not leave off stuff and claim “administrative error”.

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  8. olives99 (4 comments) says:

    So who is donating the money to NZ First? Presumably lots of small donations to the Spencer Trust have been tallied up until they reached the second tranche of $25,000. The Spencer Trust then appear to have turned around and donated that money to NZ First. So just remind me why that doesn’t have to be declared.

    [DPF: Actually any donations of $10K or less can be made direct to NZF and not be disclosed. Only those wishing to donate more than $10K would have a reason to do it through the Spencer Trust]

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  9. Glutaemus Maximus (2,207 comments) says:

    As Spam requested.

    Who decided that 6 months limitation was a good idea? In most cases it would be 6 years. Maybe it is a typo on the orders?

    Should be 6 months from the date of discovery of electoral fraud

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  10. PaulL (5,983 comments) says:

    metcalph – true, but since the statute of limitations has passed it becomes a question of moral culpability. And “it was an administrative error” isn’t going to upset the public half as much as “yeah, you’re right. We’ve been lying to you for years so we can keep our little guys image, and play up how all the other parties are in the pocket of big business.”

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  11. Monty (966 comments) says:

    Liars

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  12. bustedblonde (138 comments) says:

    i was just as intrigued by guyons statements around what was coming from Glenn tomorrow – seems he aint backing down and has some more stuff to add…

    bring it on ….. roarprawn.blogspot.com

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  13. vto (1,128 comments) says:

    ever tried to post on winston bjeikle-peterson’s blog http://www.winstonpeters.com ?

    I have tried several times, with even the most innocuous comments, but just cannot get through.

    its just a huge campaign billboard and should be investigated as one of those EFA breaches. It certainly isn’t any form of blog or commentary. It is full blown advertising – no dissenters allowed.

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  14. Paul Marsden (990 comments) says:

    ‘Moral culpability’??? Steady PaulL. You’ll have HC reaching for her dictionary with big words like that.

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  15. Strutta (67 comments) says:

    David,
    I know you make an effort to give reasoned analysis to the pronouncements of the politicians. However, this time I believe you could have better analysed NZ First’s auditors’ reply in one word….BULLSHIT!!!

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  16. Patrick Starr (3,675 comments) says:

    In the space of 20 minutes, How many times did Winston mislead the house last Wednesday? – or in the words of Bob Jones “He didn’t mislead the House, He lied to the house”:

    Volume 649, Week 83 – Wednesday, 27 August 2008
    Wednesday, 27 August 2008
    General Debate

    Rt Hon Winston Peters: I raise a point of order, Mr Speaker. No, we are not; we are going straight to the nub of the matter: “Wayne Crapper told TVNZ …”. That is what TVNZ repeated in its documentary, and that is what it is being sued for. I am asked by members over there how I know; well, because I have put enough time into it, enough effort into it, and a lot of money into it, as well.
    [#1 funny that, I recall Winston previously said he had no idea of the legal fees or that he pays them]

    Rt Hon WINSTON PETERS: …………….What did the New Zealand Herald say on 12 July? It stated that Mr Glenn, in an email that it will not show anybody, claimed that he gave money to New Zealand First. Mr Glenn, in the letter before the committee right now, claims he did not. So we have disposed of the first lie from the New Zealand Herald. Down goes one.
    [#2 NZ Herald reprinted an email that stated Glenn thought he was donating to NZF]

    The second thing that the New Zealand Herald claimed was that there was fraud. Mr Glenn, in his letter before the committee right now, stated that there was not. So down goes the second allegation, which is the core of the issue that these people over here were relying upon. Now here comes the third one.
    Rt Hon WINSTON PETERS: Thank you, Madam Assistant Speaker—another win! Now here comes the third one; the critical one on which the alligators who are out there relied upon Mr Hide to come to this House and, somehow, fight their case for them, because, of course, we all know where this is going in the end.
    Let me just say this. When one talks about those issues of personal experience, one needs to know what the travel diary for people and what their schedules might be. One has to know what events are important. One has to know which witnesses are important. ………………………..
    [#3 (minor) Winston cant remember when or if he met OG, he cant remember what the Spencer Trust was but claims his memory is good]

    Gerry Brownlee: Story No. 3.
    Rt Hon WINSTON PETERS: It is not story No. 3, I say to Mr Brownlee; it is the same story that I told in respect of Mr Bob Jones, who admits now that there was no fraud and that my version was right.
    [#4 Bob Jones denies that he has admitted anything to Winston]

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  17. godruelf (55 comments) says:

    Time for John Key to add a few more names to the list of those in NZF he won’t deal with I think.

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  18. voltaire (45 comments) says:

    At the risk of shamelessly self promoting my blog I repeat what I said earlier today on http://watchingbrief.blogspot.com/
    Genuine Mistake or Distorting the Truth

    WB notes that Peter Brown is saying that NZ First’s not declaring the Spencer Trust donation of $50,000 was a genuine mistake http://www.stuff.co.nz/4678140a6160.html

    WB also notes Peter Mistake Brown’s point of order during Nick Smiths’ speech on the Second Reading of the Climate Change (Emissions Trading and Renewable Preference) Bill and I quote from Hansard “I raise a point of order, Mr Speaker. The member is distorting the truth to the degree that it is unethical. By implication he is alleging corruption by either individuals or political parties. I take strong exception to that.”

    The sanctimonious Brown needs a big lesson in humility.

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  19. noskire (835 comments) says:

    Heard of Google-bombing?

    This technique should be applied to Winston’s blog? Anyone have some ideas for the phrase?

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  20. Glutaemus Maximus (2,207 comments) says:

    As I drove towards the crowd on the pavement, I suddenly realised that my WOF was overdue. An administrative mistake by me, anyway

    I pressed the Pedal, as everything seemed to be working ok!

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  21. getstaffed (9,189 comments) says:

    Did I hear correctly… The NZ First ‘discovered’ the ‘administrative error’ and then instructed their auditors to write a letter explaining said error?

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  22. Turlough (18 comments) says:

    Every day, another butt-saving piece of misinformation from the Peters camp digs NZ First further into the hole.

    The latest is the assertion by their auditor today, that the other $25,000 from the Spencer Trust to NZ First, because it was made up of smaller amounts, did not need to be declared in the electoral return.

    This can only be true if the “Spencer Trust” is in fact not separate from NZ First at all, but just the name of one of its bank accounts.

    If the Spencer Trust is a separate body, then all its contributions to NZ First must be declared.

    But Peters until now has been insisting that it was quite separate from NZ First, and that he had nothing to do with its operations, and indeed knew nothing about it.

    On the other hand, it has now been revealed (or claimed) by one its trustees, that the Spencer Trust was set up solely for the purpose of channelling funds to NZ First, in which case Peters’s claims that he knew nothing of its workings, and NZF’s president George Groombridge’s assertion that he had never heard of it, must be seen for the fiction they are.

    Which new and contradictory claims will the Peters camp invent tomorrow?

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  23. bringbackthebiff (106 comments) says:

    I have tried VTO, and it seems all comments to Luigis website are vetted. INZ time.

    It may take time as winnie may be a bit busy atm. Will let you all know

    bbtf

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  24. Rex Widerstrom (5,330 comments) says:

    Whose “administrative staff, who were new to their responsibilities”?

    NZF has no administrative staff (or head office, or branch offices, or infrastructure of any kind), other than those entirely paid for by Parliamentary Services. And while the rules are stretched to allow staff from all parties to do a bit of political work for their nominal employers (the parties) it certainly does not run as far as totting up donations and doing the banking. If it’s party staff, then that’s an admitted clear breach of the rules surrounding the expenditure of their allocation.

    If it’s the staff of the auditor / accountant / maybe-both-at-once then that is a level of service to its client that would surely see any reputable accountancy firm liable for damages and its partners liable for censure and even possibly deregistration by their professional body.

    Is the accountancy firm taking the rap on this? And if so, isn’t it odd that Mr Litigious, hung out to dry by their supposed incompetence, is in such a forgiving mood?

    noskire: appropos of nothing in particular, the words “fraudulent old drunkard” just suddenly sprung to mind. Nothing whatsoever to do with the topic of this post of course. I wouldn’t even know what a Goolge bomb was.

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  25. bringbackthebiff (106 comments) says:

    On topic,

    I guess all NZ taxpayers can make horrendous erroneous tax declarations, and having deprived the same body of leeches Winston bludges from, funds to feed his ilk, and the move to take action, say whoops, administrative error.

    bbtf

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  26. NeillR (350 comments) says:

    So it was an administrative error! Well that clears it all up then. Jeez, you’ve got to hand it to Winston Peters, he said that it could be explained to the SFO in five minutes and so it was. But if NZ First is that careless that they couldn’t even work out that it was an administrative error until they were accused of fraud, then i think it’s behoven on the SFO to check every financial transaction of theirs to ensure that they haven’t “overlooked” anything else.

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  27. Buggerlugs (1,609 comments) says:

    I woke up from a terrible dream a few minutes ago and thought to myself “Oh, thank fuck! It was just an administrative error! And yet it seemed so real…”

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  28. Glutaemus Maximus (2,207 comments) says:

    Luigi and his blood brothers, are really looking weak and feeble now.

    Really they should be ‘Mario Brothers’

    Only thing is Mario1 doesn’t look so SUPER NOW!

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  29. Shunda barunda (2,972 comments) says:

    I will get seriously depressed if Kiwi’s buy this pathetic excuse, then again maybe I could try it with the IRD!

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  30. Insolent Prick (417 comments) says:

    Dail Jones didn’t know about the Spencer Trust. But he did discover an anonymous donation, closer to $100,000, made to the Party in December 2007. It sounds to me likely that the so-called “consolidation” of the various NZ First accounts, in which the $100k appeared, so mysteriously to the NZ First Party president, was likely a transfer from the Spencer Trust in December 2007. In which case, that transfer wasn’t declared to the electoral commission, either.

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  31. penny svoreiz (5 comments) says:

    Pure madness, administrative error? Pfft! they’re not even trying! …honestly, recent years have made me jealous of most other countries where the politicians at least treat the public with some respect and put a bit of effort or creativity into their deception and lying. (i acknowledge our politicians are a little more subtle than, say, mugabe, but are we going to let it get that bad before we kick up a fuss?)

    (I must say it would be a lovely situation to be in to have $50,000 float into one’s account and not even notice it …. in contrast to the life of a student eh? http://www.trademe.co.nz/Art/Art-supplies/auction-174075669.htm)

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  32. burt (8,036 comments) says:

    The administrative error line is going to get very very tiring if the SFO release details one at a time and there are dozens of them. Somewhere between now and the 75th revelation I think the PM should do something. But hey, perhaps 100 illegal actions that cannot be prosecuted is her limit – who knows.

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  33. Turlough (18 comments) says:

    An interesting thought: when Peters finally got his Commission of Inquiry into his Winebox allegations underway, those he was charging engaged a battery of QCs to keep the Commission at arms length from the truth.

    Now his own financial dealings are being investigated, hey! Bingo! he has engaged a QC himself. Now why would that be?

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  34. goodgod (1,363 comments) says:

    Joke for the morning:

    “If Helen had even a shred of moral integrity, she’d sack Winston now.”

    ahhhhahahahaaa

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  35. adc (582 comments) says:

    if it’s an “honest” mistake, why does it take an SFO inquiry to bring it to light?

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  36. slightlyrighty (2,499 comments) says:

    If she had a thread of moral integrity, Labour accounts would have been 800k short in “05 and Brash might well be PM!

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  37. deanknight (263 comments) says:

    DPF: I think my point is that errors happen. And haven’t NZF also “alerted the EC of the error the day it realised it”?!? Yes, the political context within which the errors have been exposed are different, but fundamentally when examining the culpability of the errors in their own right, pretty similar? Hardly an “offensive” point.

    [DPF: I'm sorry Dean but the comparisons are desperate. The issue of no donations from the Spencer Trust has been a public issue for two months. Winston insisted in July the law had been complied with.

    National's error was disclosed willingly, and full details provided. To even try and compare that to six months of lies and untruths is offensive IMO. Did National attack media for reporting the GST error? No. How did the media find out? By National voluntarily disclosing it. Not forced after months of effort to get the truth]

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  38. mara (752 comments) says:

    Look on the bright side Winnie. At least it was just an “administrative error” and not a “wardrobe malfunction”. Gasp !!

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  39. deanknight (263 comments) says:

    DPF: I think you’re conflating issues. That allegations against Winston and NZF have been a series of consquential ones. Much like peeling an onion. We’re gone from non-reporting of Glenn donation / gift. To Jones donation didn’t get to NZF. To Vela donations. Etc. Now we’re dealing with non-reporting of Jones donation.

    I’m not particularly defending NZF but asking that we keep a perspective on the individual issues raised. It might be that, collectively, they deserve greater condemnation. But, individually, we’re talking about a reporting error. Important but small, esp in the context of the previous Electoral Act provisions.

    Of course, the Nats’ team also made an error. On the one hand, no more or less accidental. On the other hand, it’s one that arguably had a more significant impact because it resulted in greater expenditure thereby affecting the “equality of arms”.

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