The secret $80,000 in 2007
Audrey Young has details of the $80,000 from the Spencer Trust to NZ First in 2007, that was never declared.
The Spencer Trust in turn had, it seems, eight $10,000 cheques from eight different Vela companies.
Now the irony is that if the eight Vela companies had donated directly to NZ First, then (as they had done in the past) they may legally not have to be disclosed.
But by having the donations go through the Spencer Trust, the donation from the Spencer Trust does have to be disclosed, in my opinion. I don’t think you can look at who donated to the Spencer Trust.
Even if they had donated directly, there may still be issues. Generally a seperate company is a seperate donor as they have their own legal personality. However if each company has identical shareholders and directors, then a Judge could possibly find an issue with that – especially if they were sole shareholder and director companies.
What is interesting is that the NZ First Auditor had access to the books of the Spencer Trust. This indicates how close the two entities were. Also of interest is the fact they paid almost $90,000 of invoices on behalf of NZ First in 2006. The Party President says he had never heard of the Spencer Trust. So who handed over the invoices for payment?
My guess is the Leader. The same Leader who was making speeches railing against secret trusts.
September 8th, 2008 at 12:08 pm
Gluttony, avarice, blagging, and to quote Dire Straits. “Money for nothing and your chicks for free”
WRP, it’s over. you are dead in the water.
Just hope that the enquiry takes ages, and you sweat, and never sleep. You precocious bastard.
September 8th, 2008 at 12:23 pm
Hmmm not sure. Would the IRD’s Associated Persons definition apply there?
Associated persons
In certain situations, if the parties to a transaction are closely related to each other , the Income Tax Act 2004 deems them to be associated persons. This applies to:
Controlling interest over a company by another company
- A person who holds a 25% or greater voting interest in the company
- Two persons who are relatives (blood, marriage or adoption). Blood – to the fourth degree of relationship (first cousins); marriage includes within a blood relationship to one’s spouse; adoption includes adopted children of a person within the third degree of relationship to another.
- Members of a partnership, and a person associated with the partnership under any of the other three tests.
September 8th, 2008 at 12:26 pm
Or may the Spencer Trust is “any person or body of persons involved in the administration of the affairs of the party” making any donations “received …on behalf of the party” by it a “party donation” under the previous s214F definition. I’m not convinced by this, but then an interpretation like this does make sense of some of the previous odd explanations from NZF about the donation-splitting or lack thereof.
(BTW – I think your crude attempts to lift the corporate veil on this one is don’t have any foundation. There’s nothing in the legislation that suggests any interpretation other than the usual approach to legal entities: each one is different.)
September 8th, 2008 at 12:30 pm
“..Now the irony is that if the eight Vela companies had donated directly to NZ First, then (as they had done in the past) they may legally not have to be disclosed.
But by having the donations go through the Spencer Trust, the donation from the Spencer Trust does have to be disclosed, in my opinion. I don’t think you can look at who donated to the Spencer Trust..”
isn’t that what national do/have done..?
..(ahem..!..your ‘hypocrisy-slip’ is showing..)
phil(whoar.co.nz)
September 8th, 2008 at 12:35 pm
If the legislation doesnt allow for the linkage to be made then it should Its clear as the nose of your face that a series of companies with either the same or a majority of the same directors making a series of donations is simply circumventing the intention of the law.
This is yet another example of the sloppy legislation and regulation in NZ. Idiots lacking a grain of common sense trying to close up every possible loophole and in the process leaving a gap that a coach and four can ride thru.
We need principles based laws that are clear in their intent and that Judges can interprete to cover that intention rather then the anally retentive legislation that we are forced to endure.
September 8th, 2008 at 12:36 pm
doh, phil. national filed returns. winston first filed nothing.
September 8th, 2008 at 12:37 pm
Phil. You’re a fucking idiot.
September 8th, 2008 at 12:39 pm
Philu, are you Greek?
Are you an adonis, like you claim?
What job do you do?
September 8th, 2008 at 12:44 pm
we need state funding of elections..
..why are we putting our sytem at such risk of corruption..
..which..as we all know..can take many forms..
..(including the corruption-of-neglect..cf…labours’ inaction on the environment for nine years..)
..so..all this peters’ business is emphasising..
..is the need for clear/open state funding of elections..
..phil(whoar.co.nz)
September 8th, 2008 at 12:46 pm
Interesting post DPF
You have accurately identified a significant problem that was one of the reasons why the Electoral Finance Act 2008 is so necessary. Can I take it that you are now supportive of the legislation?
Section 24 of the EFA requires a donor, eg the Spencer Trust, to disclose that its donation is made up of contributions and to then disclose the identity of the donor if the amount is over $1,000. This is a vast improvement on the previous law under which NZF and National and the other parties operated.
September 8th, 2008 at 12:54 pm
Is that the master plan, Phil? They couldn’t get the public to swallow the “we need state funding because big business is buying elections” argument by associating the ‘secret funding’ to National, so Labour aranged for NZFirst to be the recipient. End justifies the means, and all that.
September 8th, 2008 at 12:56 pm
Micky – you really should read the Act. The Velas could donate $10,000 per company direct to NZF under the EFA.
Dean – I tend to agree the corporate veil would not be lifted. Do you agree then that someone who is the sole shareholder is 25 different companies could have each of them donate $10,000 to a party, and that under the EFA and EA this would never be disclosed?
September 8th, 2008 at 12:58 pm
mickeysavage – sledgehammer. nut. go figure.
September 8th, 2008 at 1:09 pm
Well clearly big business has been buying elections Spam.
For Helen and Winston.
September 8th, 2008 at 1:10 pm
“..# Spam (341) Vote: Add rating 1 Subtract rating 0 Says:
September 8th, 2008 at 12:54 pm
Is that the master plan, Phil? They couldn’t get the public to swallow the “we need state funding because big business is buying elections” argument by associating the ’secret funding’ to National, so Labour aranged for NZFirst to be the recipient. End justifies the means, and all that..”
you’ve rumbled us..!
i’d better get on the hot-line to vlwc hq…!
phil(whoar.co.nz)
September 8th, 2008 at 1:10 pm
mickysavage
Reading the Act is possibly a waste of time, even Labour who wrote and voted for it don’t seem to be able to work it out. However Labour get a free pass when they breach it – unlike others.
However the best way to work out what the Act achieves is think of everything that the Labour-led govt have accused all other parties of – now that stuff is legal now and the stuff that was legal is now illegal. If that sounds confusing just apply the law of common sense.
September 8th, 2008 at 1:13 pm
DPF
They could but their identity would have to be disclosed. Otherwise they would have to send a cheque to the Electoral Commission for the balance over $1,000. There is a cap on the amount of secret funding a party can receive from the Electoral Commission.
Section 30 seems clear, “If an anonymous party donation exceeding $1,000 is received by a party’s financial agent, the financial agent must, within 20 working days of receipt of the donation, pay to the Elect oral Commission the amount of the donation, or its value, less$1,000. ”
[DPF: Wrong they can donate $10,000 directly to the party without disclosure under the EFA. And that is per company. It costs $50 to set up a new company so a few hours online and a few hours at a bank and one can donate $250,000 through 25 companies to a party without anyone knowing you donated - and all under the EFA]
September 8th, 2008 at 1:18 pm
Definition of stupidity – forming a special trust to channel electoral funding (and maintaining the anonymity of donors) – and then not operating it within the law. Why bother creating it in the first place? Can you just imagine how WP would have described such ignorance. ….. Got it now Sunshine?!!
BTW DPF – you must be popular. Error message received today when accesing kiwblog – “The page cannot be displayed
The request cannot be processed at this time. The amount of traffic exceeds the Web site’s configured capacity.”
September 8th, 2008 at 1:19 pm
Splitting large amounts of cash into smaller parcels sounds suspiciously similar to money laundering.
Why would you go to all the difficulty when you could just transfer a single amount – unless the purpose is to conceal and deceive.
Winnie is turning into the King of secret donations, and Helen the queen of slipperiness.
I doubt this will rub off too much on Helen. Her main voter support tend to be more concerned about maximising social welfare payments and when the pub is closing.
September 8th, 2008 at 1:38 pm
Nothing to see here DPF – move on. The Prime Minister has decided that New Zealand is “over” the Winston Peters donations saga. Tomorrow the PM will decide that New Zealand is “over” elections…
September 8th, 2008 at 1:42 pm
I2
“The Prime Minister has decided that New Zealand is “over” the Winston Peters donations saga.”
The scandalous truth is that now she has uttered those words most of our media will comply.
September 8th, 2008 at 1:54 pm
And that big bruv is a big worry! But I don’t think that Audrey Young will be over it until she gets an apology from the underemployed Foreign Affairs Minister (‘E’s not dead’ ‘e’s restin’!).
September 8th, 2008 at 1:57 pm
DPF:
No I don’t. We’re on the same page on this one – my comments were about the old Electoral Act. I think our electoral laws should focus on the substance, not the form, of the donation.
But to a certain degree, that’s exactly what the EFA tried to do. See, for example, the definitions of “contribution” and “donation funded from contribution” in section 21(2).
September 8th, 2008 at 3:20 pm
Dean – they have tried to, but left massive loopholes.
September 8th, 2008 at 3:51 pm
DPF:
Maybe you (and John Boscawen) can identify them – I (and others) are not convinced that there are such “massive loopholes”? That’s a serious – not rhetorical or flippant – challenge…
[DPF:
1) An anonymous donation of $1,000 a day can allow $250K a year to be donated anonymously
2) The ability to donate $10,000 per company without disclosure even though they are owned by same shareholder
3) The ability for an overseas donor to donate $1,000 a day or $250,000 a year as the restriction is per donation and does not provide for aggregation
4) The fact it applies to party donations only and not donations to MPs
5) The uncertain status of parliamentary parties and whther donations of staff to a parliamentary office would count as a donation
6) The ability for a party to set up a company and have donations made to that company and have the company pay dividends (not a donation) to the party
That will do for a start!]
September 8th, 2008 at 4:20 pm
DPF and Dean Knight
Do I take it that DPF is arguing that the EFA did not go far enough and should have been stricter. I do not necessarily disagree with that proposal …
We are getting into legalspeak here but the Act does require donations to be aggregated. Section 54 requires the party to aggregate the total of donations from one donor if they total more than $20,000 in a 12 month period. Candidates and parties are required to aggregate donations under sections 46 and 51 of the Act.
The only time that the $10,000 limit is mentioned is in section 39. It does not prevent large donations from being made, but requires them to be reported.
So DPF and John Boscawen support strengthening of the EFA?
[DPF: I am on record as having submitted to Parliament for stronger donations control than in the EFA. It is worth remembering the initial EFB had almost no additional controls - it was all about just shutting down criticism.
Having said that, the actions of NZ First have exposed how flawed both the EA and EFA are, and how they may give us a false sense of security in transparency. I am unsure that making the laws tighter and tighter will produce better outcomes - the evidence from the US is it makes the system more dirty. Money will go from parties to individual politicians for example.
So fixing the system is not as easy as a bland statement as tighter controls. I actually think we need a fundamental rethink of approach. I think there should be more transparency over total funding of a party (maybe make them publish summarised annual accounts) to avoid the situation where NZF has had hundreds of thousands from big business but has managed to pretend it is a poor struggling party with no money. A total income statement would achieve someof that.
But really after the election, there will have to be a huge amount of work on identifying what "ills" we are trying to fix, and what approach will work best to do so. Bryce Edwards makes some excellent points about the Northern European approaches]
September 8th, 2008 at 5:56 pm
PhilU
re
>
>>we need state funding of elections
I have tried mightily to be nice since you came back on this blog after your reticent absence. However, this is just too much! IF AND WHEN you become a contributor to the state’s funds, as opposed to a non-contributing drain, THEN and ONLY THEN should you feel it appropriate for you to comment on what the state should and shouldn’t fund. Until then you are as entitled to your opinion on these matters as my cats are entitled to an opinion on what brand of food they get fed.
September 8th, 2008 at 7:53 pm
Do those advocating for state funding of parties actually think that this will stop secret donations? Instead of needing to withdraw funds from trust into party account for election said funds will simply be used for other things like I dunno seafood dinners and change.
September 8th, 2008 at 8:03 pm
strings..can i ever so politely suggest you just blow it out your butt..?
but seriously..
..no political voice for those not in paid work..?
..eh..?
..(in your own word..eh..?..
..showing us all once again..
..how the right is just a breath away from fascism..)
..phil(whoar.co.nz)
September 8th, 2008 at 8:05 pm
phul
“..no political voice for those not in paid work..?”
You got it!, buldgers should not have a say in how our money is spent, you want the right to vote then get a fucking job.
September 8th, 2008 at 8:09 pm
q.e.d..
phil(whoar.co.nz)
September 8th, 2008 at 10:33 pm
Glutaemus (12.05pm)
I’m always happy to find new unflattering descriptions of the Minister of Baubles, but why “precocious”?
September 9th, 2008 at 10:16 am
PhilU
I doubt you would recognise politeness if it bowed in your face,
To answer your question . . . . . . .
I have no problem with people who are temporarily out of work excercising their franchise. You, however, are not ‘out of work’. You have taken a ‘life-style decision’ to be a single, stay-at-home parent for your teenage son, and have further decided that your life-style should be paid for by society’s tax contributors. You complain that you are not given a large enough stipend, and constantly chip in with things that you believe “the state’ or ‘the government’ should pay for in a ddition to those things already in the budget.
As a determined non-contributor by choice, I believe the franchise should be withdrawn from you (and all others like you).
Indeed, I would be interested in seeing either a thread, or a side-band vote on this concept. What say you DPF?
September 9th, 2008 at 12:00 pm
DPF:
Just a holding response. I want to come back on the list of purported “massive loopholes” you have suggested – but it’s going to take a couple of days…