A confused Herald editorial

May 1st, 2012 at 8:49 am by David Farrar

Today’s Herald editorial is rather confused. They mix up the Local Electoral Act and Electoral Act, and also do not know how MMP works with by-elections.

Anonymous donations should not be permitted at all but they have been allowed under strict conditions because political parties say few wealthy or corporate donors would contribute if their names had to be made public.

Anonymous donations are basically not permitted under the Electoral Act, unless they are of relatively small amounts (under $1,500), or are done through the Electoral Commission with strict declarations. However the Local Electoral Act is very very different and does have any strict conditions at all. They have in fact no conditions, except a badly worded definition of an anonymous donation.

This case warrants a reconsideration of campaign finance law to require the naming of all contributors of more than $1000 to a candidate or party. 

Again the Herald seems confused – are they talking the Electoral Act or the Local Electoral Act or both? The reference to parties suggest the Electoral Act.

Again the Electoral Act already bans anonymous donations of greater than $1,500. And candidates must disclose the names of all donors of over $1,500, while parties must disclose donors of over $15,000 (which is a sum which represents around 0.5% of a major party’s revenue).

The Local Electoral Act has no ban at all on anonymous donations, but requires disclosure of donations of over $1,000 already.

His departure would create a byelection in Epsom that National would need Act to win if the Government was to retain its majority.

Totally incorrect. If National won the by-election they would go from 59 to 60 seats in the House and with United Future would have a majority.

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Geddis on donations

April 29th, 2012 at 9:18 am by David Farrar

The HoS reports:

University of Otago Faculty of Law professor Andrew Geddis said candidates were allowed to meet potential donors and advise them how to give anonymous donations.

“If the candidate subsequently learns a large ‘anonymous’ donation was made to her or his campaign in the days after the conversation, the candidate can claim not to know who it came from,” Geddis said.

I made this point yesterday also. You may know they were going to be a donor, but not which donation was their one. However if the donor was thanked by the candidate afterwards for the donation, that would weaken the claim not to know.

University of Otago lecturer Dr Bryce Edwards said allowing anonymous donations was a serious loophole.

“I think from this point on there will be an increasing call for the ability of anonymous donations to be scrapped.

“It’s almost inevitable we will see that loophole close,” Edwards said.

The sensible thing to do would be to apply the the donation provisions of the Electoral Act to the Local Electoral Act.

It is worth noting that Len Brown also had anonymous donations. His were legally funneled through a trust, so they donated to the trust, and the trust donated to his campaign.

Yesterday, Labour leader David Shearer called for Prime Minister John Key to stand Banks down from his ministerial portfolios.

A spokeswoman for the prime minister said Banks had assured him he had complied with local body electoral law.

Any call for a stand down is ridiculous. While I regard the allegations by DotCom as serious, they are just untested allegations, and they in no way relate to to any actions by Banks as a Minister or MP.

If the Police investigate (which is inevitable), and if they decides to lay charges, then there could be a question of “standing down”, but if MPs and Ministers were required to stand down over untested allegations of electoral breaches then a lot of Labour MPs would still be stood down pending resolution of the complaints the Electoral Commission referred to the Police last election.

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Local body donations

April 27th, 2012 at 1:09 pm by David Farrar

The NZ Herald reports:

Labour MP Trevor Mallard has lodged an official complaint about Act leader John Banks failing to disclose a $15,000 donation was from SkyCity during his 2010 Auckland mayoralty campaign.

Mr Mallard lodged the complaint with the Auckland Council electoral officer this week. He also asked the electoral officer to scrutinise “anonymous” donations of radio advertising Mr Banks had included in his return.

SkyCity gave $15,000 each to Len Brown, now mayor, and Mr Banks, his rival, during that campaign.

Although Mr Brown’s donation return listed SkyCity as a donor, Mr Banks’ listed an anonymous donation of $15,000. It did not mention SkyCity.

The penalty for knowingly filing a false return is up to two years in prison or a fine of up to $10,000.

There is a lesser penalty of a $5000 fine if the candidate did not know it was false. MPs convicted of crimes with a penalty of two years or more can not remain in Parliament.

However, Mr Banks said he was not concerned about the complaint, dismissing it as Mr Mallard “up to his old timeless tricks”.

He said he had not known at the time that the donation was from SkyCity and his donations return was accurate as at the date he signed it.

“I signed the document at the said time to the best of my knowledge.” …

Asked how it was that Mayor Brown had known about the SkyCity donation yet he had not, the Act leader said his campaign accountants had dealt with the finances for his campaign and he had based his return on the information they gave him.

Asked if it was possible they had known the donation was from SkyCity, he said it was.

Auckland Council’s electoral officer, Bruce Thomas, said he would consider the complaint and decide whether to refer it to police.

It has been referred to the Police, but that in itself is not of significance. Local electoral officers are basically required to refer every complaint to the Police. The WCC referred to the Police a complaint from a Councillor that I had linked to his official profile without his permission! Yes, seriously.

Anyway let us look at what the Local Electoral Act 2001 says. You need to be aware that it is very different to the Electoral Act, which is much much tighter in terms of donation disclosure.

anonymous, in relation to an electoral donation (as defined in section 104), means a donation that is made in such a way that the candidate concerned does not know who made the donation

So the Act says it is only the candidate who needs to now know the identity. Again this is different from the Electoral Act.

electoral donation, in relation to a candidate at an election, means a donation (whether of money or the equivalent of money or of goods or services or of a combination of those things) of a sum or value of more than $1,000 (such amount being inclusive of any goods and services tax and of a series of donations made by or on behalf of any one person that aggregate more than $1,000) made to the candidate, or to any person on the candidate’s behalf, for use by or on behalf of the candidate in the campaign for his or her election

So a donation of $15,000 definitely qualified.

S109(1) states:

Within 55 days after the day on which the successful candidates at any election are declared to be elected, every candidate at the election must transmit to the electoral officer a return setting out—

  • (a)the candidate’s electoral expenses; and

  • (b)the name and address of each person who made an electoral donation to the candidate and the amount of each electoral donation; and

  • (c)if an electoral donation of money or of the equivalent of money is made to the candidate anonymously and the amount of that donation exceeds $1,000,—

    • (i)the amount of that donation; and

    • (ii)the fact that it has been received anonymously.

So if the candidate knows who made the donation, then they must supply a name and address, while if they do not, just the amount and the fact it was anonymous.

So the test for the Police is simply did John Banks know Sky City donated $15,000 to his campaign. Unless there is proof that he did know (a meeting, e-mails etc), then I can’t see the complaint has any chance of succeeding.

Personally I think the Local Electoral Act should be updated to have similar transparency requirements to the Electoral Act. This would mean:

  • Anonymous donations to a candidate could not exceed $1,500
  • a donation is anonymous where a candidate “could not, in the circumstances, reasonably be expected to know the identity of the donor”

But that is not the current law for local government donations. So I see a very small possibility of the Police taking action.

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Anderton’s anonymous donations

December 21st, 2010 at 1:00 pm by David Farrar

Jim Anderton is one of those who has railed against anonymous donations in politics. So The Press reports:

Big spending did not necessarily translate into success in October’s local body elections, figures show.

Mayor Bob Parker paid for most of his $60,281 campaign to win a second term, but nearly two-thirds of the $62,283 campaign run by his main rival, Wigram MP Jim Anderton, was from anonymous donations and contributions from two Christchurch Labour MPs.

Election expense claim forms obtained by The Press also showed that two new city councillors, Tim Carter and Jamie Gough, both spent more than $20,000, while several sitting councillors who were re-elected spent a fraction of that.

Others who spent a large sum failed to win a council seat. Former councillor Bob Shearing spent more than $15,000 in his bid to retain his Riccarton-Wigram seat, only to lose by 32 votes, while Sir Kerry Burke spent more than $15,000 for a Spreydon-Heathcote seat but was defeated by the two incumbents, who together spent just over half that.

In the US some candidates spent $150 million and lost massively. Spending money gets your message haerd, but doesn’t mean that it gets well received.

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Len’s $500,000 secret trust

December 11th, 2010 at 9:43 am by David Farrar

Just the day after the NZ Herald praised Len Brown as “winning the battle for greater openness”, it is revealed that Len has used a secret trust to launder $500,000 of donations anonymously to his campaign.

Jonathan Marshall at the Dom Post reports:

the former Manukau mayor declared donations totalling $581,900.95, of which $499,000 was to the previously unknown New Auckland Council Trust. That meant he did not have to tell the Auckland Council electoral officer the names of most individuals and companies that contributed to his campaign because the trust was listed on his return as the main contributor.

Labour has spent the last five years railing against the use of secret trusts in politics, and here Labour Party member Len Brown is revealed to have used one. This is another example of the stinking hypocrisy of Labour.

They spent a year attacking Sam Lotu-lliga for being a Councillor and an MP, and then they endorse Jim Anderton to be a Mayor and an MP.

They spent five years attacking secret trusts, and they use one for the campaign for the most powerful directly elected job in New Zealand.

The Herald reports:

Mr Brown’s campaign manager, David Lewis, last night defended using the New Auckland Council Trust to protect donors’ identities.

He said the campaign raised money from hundreds of people from across the political spectrum who supported the mayor’s vision.

Most wanted anonymity “as per the current laws, simply because they are private persons with no interest in being in the media”.

The Electoral Act requires candidates to identify any donor contributing $1000 or more to a campaign, if they know the name of that person or organisation. But Mr Lewis said the mayor had “no idea who donated to his campaign”.

Oh what bullshit. Of course he knows.

The local electoral laws do not outlaw the use of secret trusts, as the national electoral law does. Even worse they on;y require the use of this secret trust to be revealed after the election. Think how many votes would have been lost if it had been revealed before the election that Len Brown had received $500,000 of donations filtered through a secret trust.

Now as I said, Labour and the Greens have spent five years railing against secret trusts in politics. I await those political parties condemning Len Brown for his $500,000 secret trust – so secret they have not even filed its trust deed with the Registrar of Trusts (they are not legally obliged to). Will media demand Len reveal who set the trust up, who the trustees are. How about even a partial amount of accountability and reveal the largest individual donation made to Len through the trust?

The Mayor of Auckland has powers beyond any other Mayor in New Zealand. Do Labour and the Greens not think we should know if someone donated $250,000 to Len?

Phil Goff in Sep 2008 said:

The National Party, at the last election, got $2 million from secret trusts, anonymously—secret donations. The country wants to know who those donors were, what their commercial motivation was in promising you that money, and in giving you that money, and they want to know what the National Party and Mr Key promised in return.

So what we should now hear from Phil Goff is:

Len Brown, at the last election, got $500,000 from secret trusts, anonymously—secret donations. The country wants to know who those donors were, what their commercial motivation was in promising Len that money, and in giving Len that money, and they want to know what the Len Brown promised in return.

Incidentally John Banks disclosed all his donations in excess of $1,000. Some of these were anonymous, and as with national politics there should be a cap on how big an anonymous donation can be – such as $1,000.

How many of Len’s donors have been appointed to his personal staff, to ratepayer funded jobs? How many were appointed to CCOs? We have no way of knowing, due to his secret trust.

I bear little hope that a man who spent six months fighting to keep the names of those invited to a ratepayer funded dinner secret, will reveal his major donors. But, the Government should look to change the law so the finance provisions of the Electoral Act apply to local body elections, to ensure Aucklanders in future know who are the secret funders of their Mayor.

Note that in my submission on the Electoral Finance Bill in 2007, I proposed that the law should require disclosure of donations through trusts.

UPDATE: The hypocrisy gets worse. Here is what Len Brown said a year ago:

“We have seen the dangers of big money entering national politics, with concerns over sources and transparency of party funding, and the emergence of third party campaigns. Local government has avoided these issues, but they could emerge were candidates under pressure to raise large sums in order to be competitive,” he said.

So Len Brown talked about concerns over transparency of funding, and then set up a secret trust which he funnelled $500,000 through.

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Labour’s electoral finance submission

July 8th, 2009 at 4:00 pm by David Farrar

Labour have put online their 41 page submission on electoral finance laws. I have three general points to make on it, and then will go into lots of detail.

  1. They have backed away significantly from their position on the provisions of the Electoral Finance Act, and are not supporting limits on third party expenditure etc or having the regulated period last all year.
  2. Most of what they argue for is reasonably self serving – it is what is good for Labour. In my submission I have argued for many things which I doubt National would find desirable (such as banning anonymous donations over $100 and requiring parties to published audited accounts). So Labour’s submission should be regarded very much as an affected party. That does not mean their arguments have no value.
  3. They make many assertions without evidence or proof. An example if their call for state funding when the evidence of 2008 is that it is not needed as both National and Labour raised enough money privately to spend to the limit.

Now into details.

Election rules should not advantage one party over another, nor should they place inequitable barriers to the formation and entry of new parties into Parliament.

Labour claim this, but the actual details of their submission do not match this. Current parliamentary parties have a huge advantage over those not in Parliament yet Labour proposes they be given even more additional state resources and further that parties not in Parliament be banned from purchasing broadcasting time.

Voter registration is one barrier to participation. From 2002 voters have been able to register up till the day before an election, and this has been an important step in improving participation. However, given that voter registration is compulsory, it should also be available on election day itself provided the normal statutory criteria for residence are met.

Good God. Never before have I heard voter registration be called a barrier to participation. That is like calling school enrolment a barrier to eduction.

Recent New Zealand political history has seen a number of occasions where significant sums provided to political parties across the spectrum have raised questions about their purpose in relation to the purchase of influence.

Yes the most recent was the revelation by the Serious Fraud Office that certain racing interests had personally paids debts on behalf of the Racing Minister in Helen Clark’s Government. Labour slammed the SFO for revealing this, and Helen Clark said she would not read the SFO evidence as she had better things to do.

This gives you some idea of how genuinely concerned Labour is by corporate influence in politics.

To better ensure transparency, the threshold for declaration of donations should be reduced to $1000 for both constituency candidates and for political parties.

The argument outlined in the Issues Paper that lower thresholds would be an unjustifiable imposition on freedom of speech is weak and contrary to the principle of transparency. It confuses the right to say what you think with the right to buy policy outcomes without disclosing your interest.

This is an example of Labour failing to back up their assertions with a shred of evidence. What evidence do they have that the current $10,000 limit allows people to buy policy outcomes? Are they speaking from experience?

They need to justify why the disclosure level should be lowered from $10,000 to $1,000.  In other words why should someone not be able to privately donate $1,500? Do they seriously assert you can buy policies or MPs for say $1,500?

$1,000 represents around 0.05% of a major party’s total election year expenditure. Are Labour really saying funding 0.05% of annual expenditure gets influence?

I’m not saying that $10,000 is the perfect limit – but I want a rational reason why why donors who give less than that should sacrifice their privacy?

The current provisions on protected anonymous donations should remain.

This is very self serving of Labour. Having railed against big undisclosed donations, they now say they want to continue the regime where a major donor can give $36,000 to them anonymously through the Electoral Commission. I advocate there should be no anonymous donations (above a minor level such as $100) as it is near impossible to prove or disprove that the party doesn’t actually get to know who donated the money. The protected anonymous donations regime should bs scrapped.

So everyone should remember this – Labour’s official position is to allow for $240,000 of anonymous donations per political party. They are for anonymous donations – not against them.

Overseas donations should be banned completely (except for New Zealand citizens, residents or voters for the time being overseas).

I have no problems with donations from any legal source, so long as they are disclosed if significant. It is ironic that we will accept $127 million donation of art work from Julian Robertson, but claim it is corruption if he donates $1,100 to a party. People can care about New Zealand without being citizens.

But having said that, I’m not greatly fussed either way. However if one is to ban overseas donations – ban all of them – can anyone not on the electoral roll(and over 18) from donating.

There should there be a limit on donations from a single source of $100,000 over a three year period. This limit should be inflation adjusted every three years.

This is from the party that took $500,000 from Owen Glenn. Think that would be their position if he still liked them?

Again Labour fail to make a case for their preference. What is the harm done by someone openly donating $120,000 (say $40,000 a year) to their preferred party. Transparency is crucial, and these should be publicly disclosed so the public can decide on whether or not they have a problem with said donations. Trust the public I say.

If Greenpeace International wanted to donate $150,000 to the Green Party, I would say let them. We should all know about it – so we can decide what we think that means in terms of desirability of supporting the Greens.

Political parties should be required to provide annual audited accounts with itemised categories of donations income so that actual income can be compared with declared donations.

Now this one I agree on, and in fact am very pleased to see Labour advocating it. After the NZ First funding revelations I concluded some sort of audited accounts with donations grouped by size is desirable. I only want the names of those who donate more than $10,000 (as that is level influence may be a factor) but it would be useful to see how many donations between say $1,000 and $10,000 are received. This allows the public to decide if (for example) NZ First’s claims of being all funded by cake stalls was the reality or not.

In election year, donations received by a party after its last annual return to the Electoral Commission should be publicly declared through the Commission on a regular basis after they are received, and up to and during the regulated election period.

This is one issue I forgot to cover in my submission. I actually think donations should be declared monthly during the whole three yearly cycle, and weekly or daily during the last month – we should know about donations when they are made, and always in advance of an election.

So I agree with Labour here, but think they do not go far enough.

The Labour Party believes that the corollary of tightened controls on private funding of political parties – with the greater disclosure and compliance requirements involved – is some provision of public funds for political parties.

Again Labour have failed to prove there is a problem. The Electoral Finance Act brought in much tighter controls on donations, yet both Labour and National spent to the limit. Both were able to raise all the money they needed privately.

Labour want state funding on the basis, there *may* be a problem in the future with inadequate private funding. Not good enough. The 2008 election has shown that there was no shortage of private funding, and Labour’s attempt to gain (even greater) state funding is sheer opportunism.

Both the registered party and parliamentary party contribute to the formation of policy on which the voters base their choice. The accountability provisions in the Electoral Act also devolve to the registered extra-parliamentary party.

Public funding would contribute to the independence of the extra-parliamentary party by providing a balance and the avoidance of parliamentary capture.

This is hogwash. The opposite is the case. One of the few accountabilities that the main party has over the parliamentary party is that they raise the money. This is why parliamentary parties suffer consequences if they ignore their membership.

You bring in state funding, and it allows the parliamentary party to marginalise even further the organisational party.

In our view, a base level of public funding should be available to parties who meet the statutory criteria of 500 members and contesting seats in Parliament. Currently the only available form of public funding for such parties is provided through the Broadcasting Act 1989, which on its own is clearly insufficient.

Parties outside Parliament are massively disadvantaged. But giving Labour $800,000 a year and the Alliance $2,000 a year is not going to change that – in fact it will make it far worse.

My proposal to help parties outside Parliament, is that the broadcasting allocation be restricted to non parliamentary parties only. The parties in Parliament get three years of broadcasting exposure through the media for free.

Broadcast advertising is the primary means that wealth-based electoral systems use to influence opinion.

What decade are they in? How many people even watch TV ads now? Heard of My Sky. Broadcast advertising is no longer as dominant as it once was.

The limitation of broadcast advertising to allocated public funds is an excellent feature of New Zealand’s political system and should be retained.

Far from being excellent, it is a travesty. If a party registers late in the piece they are banned from broadcast advertising. The current rules not only give National and Labour more money for broadcast advertising – but they ban the other parties from being able to spend as much as them with their own money. This is not a level playing field – it is one that favours the two main parties massively.

It may be preferable for the cost of the time allocation to be added to the broadcasting allocation and the time allocation discontinued and replaced with funding that can be used to buy time as best suits the parties. This would allow for freer use by political parties of the resource for broadcast advertising.

Here I agree. But again the hypocrisy – they are saying a party should not be allowed to (for example) spent $50,000 less on billboards and $50,000 more on radio advertising but they are saying parties should have freer use of broadcast advertising. Inconsistent.

Political parties should not be able to purchase broadcasting time with their own resources. This will only serve to advantage parties with access to money.

Nonsense so long as you still have an overall spending limit. The current law gives National and Labour a bigger spending limit that all the other parties as they can’t purchase broadcasting time beyond the allocation. This is about protecting Labour’s statutory advantage.

It must be made clear in the Electoral Act that no spending authorised for parliamentary purposes by Parliamentary Service rules can be counted as election expenses under the Electoral Act.

And this is what they tried to do with the Electoral Finance Act. They want to have the pledge card not count as an election expense. They want to be able to spend say $1.5 million in the final week of the election on “parliamentary publications” and not have it count as an election expense.

I go the opposite direction. During the regulated period, there should be a ban on parliamentary funding of advertising except essential advertising such as office hours.

You see what I mean about how self serving Labour’s submission is. They want to keep their anonymous donations. They want more state funding. They want to stop competitors from buying broadcasting time and they want to be able to spend thir parliamentary budget as late as they like durign an election campaign and not have it count as an expense.

The current limits for constituency candidates ($20,000) and political parties (a maximum of $2.4 million, if all electorates are contested) should be retained but be inflation adjusted (from the 2008 limits as a base) before the 2011 election.

Again Labour make assertions with no emperical basis to them. Mr argument is that the spending limits should be set high enough to allow an affective communication with the public, yet below the level at which you may be seen as “drowning out” others.

$20,000 is totally inadequate for being able to communicate with 45,000 voters. It doesn’t even allow one direct mail letter.

The 1996 limits should at a minimum be adjusted for inflation and population growth. Ideally though, as I submitted, there should eb an attempt to actually calculate what is a reasonable or desirable amount of communication from candidates and parties, cost it and then set the limit high enough to allow that. Don’t guess at what the limit should be – calculate it.

The extension of the regulated period in the Electoral Finance Act to the beginning of the calendar year in which an election takes place added greatly to compliance requirements.

And whose idea was that? Credit I suppose for admitting it was a disaster.

Considering the pattern of the last 25 years, a reasonable fixed date for the start of the regulated period would be 1 May of election year.

I am not against a fixed start date but 1 May is far too early. You have not even had the budget by then. I like the proposal of 90 days before the term of Parliament expires – which will be a known date. If a fixed date I would never go earlier than 1 July.

Provision would need to be made for where a particularly early election was called. We suggest that in the case of an election date being announced earlier than 30 April, the regulated period begin the day after the announcement.

Yes, The regulated period should never be retrospective.

The atomistic redefinition in the Electoral Finance Act (section 5) of “any form of words or graphics, or both” proved problematic.

And we warned against it.

The true name and address of those who promote election advertising should be disclosed.

Yes, but this need not be on the advertisement. The Electoral Commission could have on its website contact details for political parties, candidates, and registered third parties.

Where the third party campaign is issue based and does not seek to promote a vote for or against a particular party or candidate, we do not propose any spending cap but do propose transparency above, say, $100,000 of spending.

This is a better position than the EFA. Transparency is key I agree.

However they seemed to have not covered what rules should apply to advertisements against a party or candidate? Are they sayign these should be banned?

I think everyone accepts you can’t advertise urging a vote for National without National’s permission. But what say you wish to advocate people do not vote for ACT? Are Labour saying this should be banned?

Consequently, parallel campaigners should be regulated if they propose to spend over a specified threshold, say $100,000. They should be required to register with the Electoral Commission, and a list of all such parallel campaigners should be made public, as should their donors.

As I said this is an improvement on the EFA.

The financial agent provisions from Electoral Finance Act should be
reinstated – accountability is only possible if responsibility is clearly
defined.

I tend to agree. But I also worry that parties often get off the hook by claiming x did this without y knowing, so hence no prosecution. This helped get Labour off the pledge card. I propose that parties themselves can also be held liable for breaches. So if they have crummy systems which leads too a breach, they get pinged.

Consideration should be given to reforming and amalgamating the electoral oversight agencies, and giving the oversight agency power to obtain further information about parties’ accounts. This is especially the case if additional state funding is made available to registered parties.

Amalgamation is well overdue.

The role of the Police should be retained for prosecution referrals.

No no no no no do. They don’t want the job. They don’t dedicate sufficient resource to it. They don’t have the expertise and in 2005 especially they made some appalling decisions.

Wow this is a long post. I am looking forward to the pubishing of the other submissions, or a summary of them.

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Rudman gets it 100% wrong

February 11th, 2009 at 11:00 am by David Farrar

Brian Rudman gets it 100% wrong in today’s Herald column.

At least in the United States, the donors have to declare their contributions. The repeal of the Electoral Finance Act means that Alan Timothy Gibbs of Kaukapakapa will no longer have to declare $200,000 in donations to Act last year, nor will new Act list MP John Boscawen have to reveal he stumped up $100,000. Ditto the rich horse industry brothers Peter and Philip Vela, who gave last-minute donations of $100,000 to Labour and New Zealand First.

Wrong, wrong, wrong.  The Government announced last year that the donation transparency provisions of the EFA would be retained in the Electoral Act. This has been confirmed on multiple occasions since, and is well known and understood. That is part of the reason why the repeal maybe backed by every MP in Parliament.

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All three years were false returns

November 5th, 2008 at 11:13 am by David Farrar

The Electoral Commission has published further documents on New Zealand First, and they confirm that every single erturn they filed in the last three years was false. The 2005 and 2006 returns can not be prosecuuted simply because the time has expired.

The amended returns state the following amount of big donations:

  • 2005 – $87,684.83
  • 2006 – $67,083.33
  • 2007 – $80,000.00

So that is 234,768.16 that never was declared.

So why was 2007 not prosecuted:

The Secretary explained that the omission of the $80,000 donation was as a result of a misinterpretation of the Act. Legal advice received indicated that the Spencer Trust was “a body of persons involved in the administration of the affairs of the party” and as such when donations were made to the Spencer Trust those equated to donations to New Zealand First and the payment of the money from the Trust to the Party did not amount to another donation.

So the defence is she followed legal advice. The legal advice was wrong. I bet you we can all guess where that advice came from. This was the same legal advice that Winston did not have to declare the Owen Glenn donation. Possibly the same legal advice who gave false evidence to the Privileges Committee?

Also interesting that their argument was that the Spencer Trust was an integral part of the Party. This contradicts Winston who claimed it was independent.

The Electoral Commission accepts that the Secretary had no intention to mis-state the facts in respect of the return of party donations. The Commission also considers that under the circumstances it was reasonable for the Secretary to rely on what she had been told by the Party and by the Auditor, who is a professional and also relied on legal advice, in respect of the classification of the donations in question.

This is quite clever. There is no liability for the professional advisors if they give wrong advice, but the party secretary is protected because she got their advice.

I wonder if the law should be changed to have the Electoral Commission appoint the auditors for a political party, rather than the party?

Finally they note:

The matters the Electoral Commission was required to consider are governed by sections 214F to 214L of the Electoral Act. Those provisions apply in respect of the obligations and actions of the Party Secretary only. As a result the Commission has considered, and this decision pertains to, the actions of the Party Secretary only.

I advocated in my submission on the Electoral Finance Act that parties themselves should be able to be prosecuted for incorrect returns etc. The law currently only allows individuals to be charged, and you get situations like this when people can escape liability by not holding the correct role.

At the end of the day the important thing is that the public now know NZ First received $235,000 of donations over three years though the Spencer Trust, and that Winston has personally benefited by a further $140,000+ of large donations. This is the info that they went to such great lengths to keep from us.

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Anonymous Donations starting to flow through Electoral Commission

November 1st, 2008 at 1:00 pm by David Farrar

One of the bizarre elements of the Electoral Finance Act is rather than abolishing anonymous donations, it routed them through the Electoral Commission allowing a party to receive $240,000 that way, with no individual donation bigger than $36,000.

The Commssion has updated its website with details of donations received and paid out:

In September it paid out $15,000, being three donations of $5,000 each to Progressives, National and Labour.

In October it has paid out $76,000 being $72,000 to National and $4,000 to Labour. So I would guess National had two $36,000 donations made as that is the maximum.

I was initially puzzled as to why someone would make a donation of $5,000 anonymously through the Electoral Commission. You see if they donated direct to the party their name would not be disclosed publicly unless it was over $10,000. I then thought of two possibilities:

  1. They had already given $10,000 to the party directly and wanted to give additional money without disclosure. The EFA actually allows a total of $66,000 to be donated over three years to a party without disclosure – $10K a year and $36K through the Electoral Commission.
  2. They genuinely want to be anonymous – even to the party officers and staff. If you donate $5k direct to a party your name is not published publicly but the party president, secretary and a couple of others will know. So if you want total anonymity then a $5k donation through the Electoral Commission makes sense.
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No way back

September 29th, 2008 at 6:26 am by David Farrar

Audrey Young reports on how the posibility of National and NZ First working together has gone beyond the point of no return.

This is a good thing.

Also one has to amused at Winston’s claim he doesn’t know if he can trust Key any more. That’s like Jim Jones saying he is worried about the cleanliness of the grape juice. Mind you he may have a point – he can’t trust Key to cover up for him, as Helen did.

One other issue of note:

Given the way Mr Peters has been able to turn a damning privileges committee finding against him into a political weapon, he could make a serious impact in the polls with a finding of “cleared” during the election campaign.

The SFO investigation has already revealed that NZ First filed at least one and arguably three years of electoral donation returns were false. It is also revealed that Peters and Henry gave false evidence to the Privileges Committee and that his Jan 2007 return to the Registrar of MPs Pecuniary Interests.

Just because there may bo no prosecution for fraud under the SFO Act, does not mean that NZ First has been cleared if they are facing prosecution under other acts for information revealed from the investigation.

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The Privileges Committee Report

September 22nd, 2008 at 8:20 pm by David Farrar

The Privileges Committee report has just been released and is online here.

I will comment on it shortly once I have read it. It is 280 pages long.

By a majority vote, they have recommended Peters be censured by the House. I can not recall the last time an MP was censured.

The majority includes United Future’s Peter Dunne, the Greens’ Russel Norman and Te Ururoa Flavvel from the Maori Party. This is every party on the Privileges Committee except members of Labour First. Note Peter Dunne is a Minister in the Government and the Greens have a co-operation agreement with Labour and the Maori Party abstain on supply and confidence.

They note on the issue of Henry refusing to disclose who suggested Henry approach Glenn for money:

We have received advice that legal professional privilege relates to communications made for the purpose of conveying legal advice and that it does not relate to the identity of a client, particularly when the issue does not relate to the communication of legal advice.

We note that legal professional privilege should not be used as an excuse to withhold information requested by the Privileges Committee, particularly in circumstances where this privilege does not apply.

They make the point that they have required a high standard of proof for their findings, as the allegations are serious – beyond the normal balance of probabilities.

They have determined that there was no debt from Peters to Henry, so no adverse finding there. But they have found the $100,000 constituted a gift as it benefited Peters:

We consider that the payment was of benefit to Mr Peters. Mr Henry’s work on the election petition did not create a direct legal obligation for Mr Peters to pay Mr Henry’s fees. However, Mr Henry told us that Mr Peters “knows that he owes me in the moral sense…”,18 and most clients would acknowledge such a moral obligation to pay a barrister.

A third-party payment to a member’s barrister benefits the member by discharging the moral (and potential legal) obligation to make payment and also by enabling the barrister to provide more assistance to the member in the future. Further, in these particular circumstances the payment contributed to funding an election petition which, if it had been successful, would have been of political benefit to Mr Peters.

They further note:

It is clear that the intent of the donor in this case was not to benefit the barrister. It was the member’s legal expenses that were being contributed to, not the barrister’s wellbeing. Mr Henry’s actions on receipt of Mr Glenn’s money were also unusual. Mr Henry wrote a “pro forma” invoice for GST and income tax purposes. We do not believe this is the normal response of the recipient of a gift. For a GST invoice to have been written, there must have been a taxable supply of services by Mr Henry. The relevant services were received by the member (or his solicitor, Mr Gates, on his behalf).

Together, these elements show clearly that the payment constituted a gift to Mr Peters.

On the issue of whether Peters knew:

The majority of us believe it is extremely unlikely that Mr Peters and Mr Glenn could have had a conversation on that date without the issue of a donation being raised, even if the original contact with Mr Glenn had been by Mr Henry, as claimed by Mr Peters and Mr Henry. The majority of us consider that the sequence of telephone calls followed immediately by an email containing bank account details indicates that the topic must have arisen during one or both of those conversations. It would have assisted our consideration if Mr Peters or Mr Henry had been able to recall more detail of their telephone conversation. Given the evidence before us, the majority of us concluded that Mr Peters had some knowledge of Mr Glenn’s intention to make a donation.

And their conclusion:

The majority of us find that Mr Peters had some knowledge of the $100,000 donation. Further, we find that Mr Peters, having an understanding of the arrangement by which funds were raised by Mr Henry, needed to make an honest attempt to file a correct return. For both these reasons, the majority of us find that a contempt occurred.

The proposed penalty:

Making a false or misleading return is a serious matter, akin to misleading the House. The majority of us therefore recommend that Mr Peters be censured for knowingly providing false or misleading information on a return of pecuniary interests, and ordered to file, within seven days of the House so ordering, amended returns for the years ended 31 January 2006, 2007, and 2008 covering any gifts, debts, or payments in kind that he has not previously registered. We request that the registrar ensure that the amended returns are published, recording that they are made subject to an order of the House.

This could be interesting, as it means any other donation to Peters legal fees, in excess of $500, has to be disclosed – if the House accepts the recommendation.

Now on the part regarding who paid for the $40,000 to Clarkson. Brian Henry is saying that as the cheque was from Wayne Peters’ trust account, he saw this as a reimbursement by Winston personally. Hilarious.

Now onto the letter from the SFO. The Director makes it very clear he got advise on whether to inform the Committee, and he has also bent over backwards to be fair to the donors who paid the $40,000 by redacting their names. He even asks the Privileges Committee not to order him to supply further information, even though he acknowledges a request from the Privileges Committee over-rides the secrecy provisions of the Serious Fraud Act.

The money laundering around the $40,000 is fascinating. Brian Henry did pay the $40,000 but the day before he sent Thompson WIlson (the law firm where two of the Spencer Trustees then worked)  his bank account details.

The Spencer Trust only has $15,400 being left over donations from Donor A. Then Person B (not Winston Peters we are told) lent the Trust $24,600 so they could pay $40,000 to Brian Henry  on 5 April.

Donor A (almpost certainly the Velas) then donated 4 cheques of $9,999 on the 7th of April 2006. Each cheque was from a different subsidiary company.

This allowed Person B’s loan to be repaid on 7 April.

What this means is that Donor A (almost certainly the Velas) personally donated $40,000 to pay off the $40,000 debt Peters owed Clarkson. He has to now declare this on his amended returns.

This raises massive issues relating to the conduct of his portfolios. The whole idea of disclosure is that the transparency it brings to whether Government decisions are affected by donations or gifts to an MP.

So the Minister for Racing in 2006 had Donor A – almost certainly the Velas, pay a $40,000 debt on his behalf. The Velas are multi-millionaires in the racing industry.  And the Minister of Racing convinces the Government – against Treasury advice – to provide lots of money to the racing industry.

Does Helen Clark not think that this gift should have been disclosed as it strikes at the heart of decision making in her Government? And no it is nothing to do with NZ First – this is a personal gift to the Minister of Racing from persons massively affected by the policies he is responsible for in his portfolio.

Helen actually has three decisions to make. They are:

  1. Does she sack Peters as a Minister for breaking the Cabinet Manual and not disclosing a $100,000 gift (let alone the multiple lies Peters has told)
  2. Having the $100,000 gift declared, does she allow Peters to keep it? Probably as it was paid to Henry, not Peters – but here is the big problem for her.
  3. The $40,000 from the Velas (assuming it is them) has to now be filed on the Register by Peters. Clark has to now decide whether she lets him keep the $40,000.

Here is the Cabinet Manual quote from section 2.79:

Ministers who accept gifts worth more than the prescribed value must not only disclose them to the Registrar of Pecuniary Interests of Members of Parliament, but also must relinquish them, unless they obtain the express permission of the Prime Minister to retain them.

So it is clear Helen has to decide whether Peters keeps the $40,000 gift (payment of a debt) from the Velas.

Now how corrupt will she look, if she says it is okay for her Minister of Racing to take and keep $40,000 from a family/company which has benefited hugely from the decisions of the Minister of Racing. He managed to force through millions of dollars of funding of racing prizes, against the advice of Treasury.

Clark has to make a decision on this. Peters has to relinquish the gift unless she gives her express permission he can keep it.

No wonder Winston wanted the SFO evidence suppressed. It was bad enough that NZ First had benefited by huge donations from the Velas, but to have it revealed that Peters personally was gifted $40,000 from them is hugely damaging.

Now it is possible the donations were not from the Velas but read the SFO letter and it looks highly likely. We should know more when Peters does his amended returns.

And as you consider all this, consider what depths the ethical standards of the Clark Government have descended to. Clark condones a Minister who:

  1. breaks the rules of the Register of Pecuniary Interests
  2. breaks the rules of the Cabinet Manual
  3. fails to disclose a $100,000 gift
  4. tells multiple lies about it
  5. gives false evidence to the Privileges Committee
  6. benefits with $100,000 towards his legal fees from a billionaire whom he then lobbies to be made Consul to Monaco
  7. has a $40,000 debt paid off by a company/family that benefits greatly from policy decisions he makes as Minister of Racing
  8. has filed false donation returns to the Electoral Commission

Any one of these should be enough for dismissal arguably. But Clark is keeping him on despite all of the above. Could standards possibly get any lower?

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So what really happened

September 18th, 2008 at 9:00 am by David Farrar

I blogged yesterday on what Winston claims happen. It is fit only as a bedtime story for five year olds, or the Prime Minister.

Today I am going to blog what I think actually happened, and how Winston created this trouble for himself. This is based on the evidence to date, and some guesswork.

He started off only being hypocritical, but in hiding that hypocrisy he eventually told a lie, and then to cover that lie up, he had to tell many many more. Here is my timeline of events:

  1. In August 2005 Peters asked for a meeting with Glenn. They met, and then his staffer Roger McClay asked for a donation to NZ First which was declined. It is fascinating that NZ First tried to solicit money from Labour’s largest donor prior to the 2005 election. One can speculate on why they thought this would be productive and whether this indicated they had already decided to back Labour, but that is not germane.
  2. In late November 2005 a staffer (probably Roger McClay) approached Glenn again for a donation to the petition. That staffer probably had the discussion with Glenn, that Henry claims he had. They do not want to reveal that it is probably Roger McClay as the thought of Winston not knowing the fundraising details of his own staff is even more unlikely than their other stories.
  3. In December 2005 Peters directly solicited a donation for the Tauranga electoral petition, pretty much the way Owen Glenn describes it with a phone call on 5 December, another call after that, and then the 14 December call. All the evidence supports this. The reason Glenn now said yes is because he saw it as helping Labour, and he checked with Mike Williams who said it would not be unhelpful.
  4. Peters obviously took the call from Glenn, and then told Henry to send the bank account details.
  5. The request to Glenn to keep the donation confidential was important. The NZ First brand was built on anti big business donations, and accepting $100,000 for legal expenses would weaken their brand.
  6. If Glenn had said yes to the original request to donate to NZ First, then that would have been paid to the Spencer Trust I am sure. It was vital that the public never know of the funding from big business. Peters and Henry had constructed things very carefully so they could avoid disclosure (arguably) legally. At this stage nothing has been done wrong, save the hypocrisy and maybe the failure to disclose on the Register of Interests (the way they structured it gives them an arguable case though).
  7. Then on 15 February 2008, Owen Glenn revealed he had donated to another political party (which is how he saw it). That got some minor interest in the media as to which other party.
  8. Even worse on 19 February 2008 he revealed he was in line to become Honorary Consul to Monaco, that Helen had already approved it, and he was just waiting for Winston to “get off his arse and do the paperwork”.
  9. At this point Peters would have realised it would be a bad look if the public realised Glenn had donated $100,000 to benefit Peters, and he was under consideration for Consul. Plus it undermines their no big donor brand. So he would be worried. But as long as Glenn kept the confidence it was al okay. Only Peters and Henry (and maybe McClay) knew of the donation. The media could guess but could not prove.
  10. But then disaster struck in the form of Dail Jones on 20 February 2008. He revealed to the media that there had been a large mystery donation to NZ First in December 2007 and that it was closer to $100,000 than $10,000. Owen Glenn also refused to rule out donating to NZ First, saying through his PR firm that people should speak to the party. This created huge media interest.
  11. Now people (including me) started adding 2+2 together to get 5, and thought the December 2007 donation was from Owen Glenn. Peters furiously denied it. Peters was right ironically.
  12. Peters was furious as the allegation was wrong. There were two secret donations – not one. And Dail Jones had accidentally come close to exposing both of them. The allegation that the Nov 2007 donation was from Owen Glenn was wrong, but to prove it wrong would have meant revealing the Spencer Trust. No wonder he was furious at Jones (to be fair to Jones he just told the truth and if you run a secret trust without your Party President in the loop, you run the risk he may blunder into it)
  13. Now again at this stage no lies had been told. It was all hypocritical but Peters denials had been correct.
  14. The next day Helen talks to Owen Glenn and he informs her of the donation. She rings Peters and he denies it to her. Now probably in Peters’ mind he did not lie, only deceive. He would have been careful to use language which ruled out a donation to the party or to him, but not to his legal fees.
  15. The fact he doesn’t contact Glenn to ask what this is about, is incidentially proof he obviously knew. If he did not know, he would have asked. Now again at this stage no major lie, just some deception.
  16. On 24 February he does another half lie denying there was any mystery donation at all. In fact there was – from the Spencer Trust. Peters probably justifies this because the Spencer Trust is not a mystery to him, and he knows the $80,000 was made up of individual Vela cheques of $10,000 into the trust, so in his mind there was no big anonymous donation.
  17. On 28 February 2008 we have the infamous “No” press conference. In hindsight this was a fatal mistake. By going so over the top, he cut off his wriggle room for later. He thought he was on safe ground denying Owen Glenn donated to NZ First, but he also said No to Guyon Espiner saying “Can I just clarify with you. Are you saying you have never received one dollar from Owen Glenn or any associate of Owen Glenn” and that was right on the edge of being a lie. The trouble with having a big No prop, is you can’t suddenly stop using it, so he waved the No sign again. A big mistake.
  18. Now at this stage Peters has not told a fully formed lie – many half lies, but he looks to have got away with his denials as no one asked exactly the right question. Again it is because Peters knew exactly what the donation was about, that he could so carefully deny it.
  19. Then in July 2008 someone leaked to Audrey Young the e-mails between Owen Glenn and Steve Fisher where Glenn says “Steve – are you saying I should deny giving a donation to NZ First?? When I did?”. She published these on 12 July 2008.
  20. Peters responds that Glenn did not donate to NZ First. This is technically true. Glenn referred to NZ First when he should have said Winston’s legal bills. Winston is a great nit picker and puts huge reliance on the difference. At this stage again no outright lie from Peters.
  21. But he again becomes his own worst enemy when on 14 July he attacks the NZ Herald can calls on Tim Murphy and Audrey Young to resign. He offers them a look at the party books. He does this because he knew the donation went into Brian Henry’s account. But he is most unfair in attacking the Herald. He knows that email is from Owen Glenn, and they reported it in good faith. It is not the Herald’s fault that Glenn used loose language around his donation. His attack is over the top and Peters at his worst. It is one thing to deny the accuracy of the e-mail by playing semantic games, but it is another thing to try and take the moral high ground as Peters did.
  22. On the 16th of July he again reassures Clark again there has been no donation to NZ First. Still not lying (but certainly deceiving) as the donation was to his legal fees.
  23. Around this time Peters and Henry would be terrified that Glenn will eventually speak to a journalist and reveal details of his donation.  The Herald also prints a further leaked letter from Glenn to Peters and they must wonder what else is still to emerge. I have little doubt phone records will show them in constant communication that week. So they decide to pre-empt it by announcing it on 18 July 2008.
  24. That day Peters’ mother dies. I do not think so badly of them that they choose to announce it that day because of her death. I think they had already decided on that day (Peters had been overseas and they wanted to do it when he was back in NZ) and decided to carry on, even after she died. That’s still pretty low though. With the NZF conference starting the next day they needed to get it out of the way.
  25. Peters and Henry had a big big choice ahead of them. Do they reveal that Peters knew of the donation? They could argue that he had never denied a donation to his legal fees. Technically he had never lied until then – only deceived. But Peters would know that having waved that no sign around at the press conference and called on the Herald staff to resign and apologise, he would get somewhat crucified if he revealed he was playing at semantics and he did know of a donation – but it was to his legal fees, not him or his party (as he saw it). Ironically in hindsight that would have been the path of less pain.
  26. So they made a fatal mistake. They told a bare faced lie. They both did. On 18 July 2008 they announced that Brian Henry only informed him of this at 5 pm that day. Peters explictly said that up until then he had been “unaware of the source of any of the donations for legal expenses”. That was the start of the end. Up until then they were only half lies, or deceptions (in politics there is a difference).
  27. They had to ten resort to further lies, to back up the big lie. How did Henry get in touch with Owen Glenn?  On 20 July they claimed a tip off from someone whose name Henry could not recall, but was not Peters or Mike Williams. Another deception which turned into a lie. They probably mean McClay, and he probably was involved at first but as the e-mails and phone calls prove Peters was in the loop the whole time. It was not a case of McClay or Peters knowing – they both did.
  28. Incidentially on 21 July the Vela donations came to light, but that is a story for another day.
  29. Peters lied again on 25 July when he said in a written statement “The Glenn contribution went to my barrister Brian Henry. As soon as I learned of it I informed the Prime Minister and alerted the media.” Once you tell one lie, you have to keep lying.
  30. Peters and Henry both lied again to the Privileges Committee on 19 August 2008, saying again he never knew of the donation. Note neither of them gave testimony under oath, so they can not be done for perjury.
  31. Henry also claimed on 19 August “I phoned Owen Glenn and he forwarded $100,000 which was paid to me on account of my fees”. This has been proven false. Glenn phoned Peters.
  32. Owen Glenn’s letter was published on 26 August 2008, along with one from Peters’ respomding to it. Peters again lies repeating that he had no knowledge of any donation.
  33. On 28 August Helen Clark reveals she knew back in February 2008 of the donation, from Owen Glenn.
  34. On 4 September another Glenn letter is published. He details the phone call and e-mail. Peter Williams tables a statement claiming Brian Henry spoke to Owen Glenn on two occassions.
  35. On 9 September Glenn testifies and provides proof of the phone call from him to Peters and the e-mail seven minutes later from Brian Henry.
  36. On 10 September, Peters testifies again. Peters admits to conversation with Glenn but denies money discussed.
  37. On 16 September Henry testified again. He admits that the client in the e-mail was Peters but still insists somehow Peters never knew of the donation. Phone records also prove Peters called Henry straight after the Glenn phone call.

I am pretty confident that this is close to what happened. It explains everything. Peters at first did not lie but he then realised he had gone too far in playing semantic games with the media to reveal he knew of a donation to his lawyer. So on 18 July he told a lie. And that one lie on 18 July led to dozens and dozens more lies as they tried to concoct a story about how Glenn could have donated without Peters knowing. I suspect they also exchanged conversations with McClay for conversations with Henry.

The moral of the story is the same as for Richard Nixon – it is the cover-up that gets you in the end!

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Winston’s story

September 17th, 2008 at 10:07 am by David Farrar

Poor old Helen. Just like Chris Trotter, she can’t work out what happened. She needs more time.

As a public service to Helen, and all readers, I am summarising Winston’s position below. Winston keeps insisting that he never had any idea at all of the $100,000 donation until 18 July 2008 when Brian Henry told him. So below are all the elements you have to believe, for Winston to be telling the truth.

  1. Laura Ede is lying when she says Peters called Glenn on 5 December 2005.
  2. Laura Ede is also incompetent as she sent Owen Glenn an e-mail asking him to phone Peters back, when Peters never called.
  3. Brian Henry did call Owen Glenn in late November 2005, and Owen Glenn is lying when he says he never spoke to him.
  4. Brian Henry can not prove this call because he was staying in a motel at the time, and he can not remember which one it was.
  5. Brian Henry as a barrister, does not keep receipts of his expenses, as that would tell him which motel he made this disputed call from, and the bill would have details of the calls made.
  6. Owen Glenn is wrong when he says he spoke to Peters after that alleged 5 December call, and they discussed the electoral petition.
  7. Owen Glenn is a liar when he says there is no way he would have ever donated $100,000 to Winston’s legal fees, without the request having come from Winston.
  8. Owen Glenn did call Peters on 14 December 2005, but they never discussed a donation. Owen Glenn is lying when he says beyond doubt they did, and the fact they even discussed it in enough detail that he upped the donation from $70,000 to $100,000.
  9. By pure coincidence Peters called Brian Henry one minute after that phone call, but they never discussed money or the donation.
  10. Also by pure coincidence Brian Henry e-mailed Owen Glenn 40 seconds later his bank account details, as he had his memory jogged about the earlier conversation with Glenn (the one Glenn and Ede deny and Henry can not providence any evidence of).
  11. It is normal when asking for a donation to just send bank account details.
  12. The reference to “Further to the call between you and my client at 1.30 pm” did refer to Winston, after claiming it did not, but no donation was discussed with Winston. Brian Henry mentioned the call by accident, and in reality it had nothing to do with the donation.
  13. Even though Henry now says the reference to “my client” must be Peters, there is still a mystery second client who originally put Henry onto Glenn, and this mystery client will not reveal their identitiy even though doing so would exonerate both Peters and Henry. Their need to remain secret is so powerful that it outweighs the fact he or she could clear Peters and Henry from potential disgrace.
  14. Paul Moroney (brother of Labour MP Sue Moroney) is lying when he did an affidavit witnessing Peters thanking Glenn after Glenn asked if he got the money. Glenn is also lying when he recounted the thank you at Karaka.
  15. Owen Glenn donated $500,000 to Labour, $100,000 to Winston’s legal bills and lent Labour another $100,000, but then turned on them because they did not make him Consul to Monaco and because his lawyer once testified on behalf of Fay Richwhite, his lawyer coached him to perjure himself at the Privileges Committee.
  16. Glenn never ever mentioned to Winston Peters in all their other meetings and conversations that he had donated, as Glenn is of course known as the soul of discretion.
  17. When the media reported Owen Glenn in February 2008 as having donated to another party, Brian Henry never clicked that he was referring to the $100,000 Glenn gave Henry for Peters’ legal fees.
  18. Winston Peters never thought to check with Brian Henry if he had received money from Owen Glenn and that this is what he could be referring to.
  19. Even after the Prime Minister rang him and told him that Owen Glenn said he had donated money, Peters still didn’t think to check with Henry.
  20. Peters also had no curiousity about why Glenn would tell the Prime Minister he had donated money, and never thought to ask Owen Glenn (whose number he had). Despite being genuinely in the dark about the donation, he never thought to check with Glenn.
  21. Brian Henry let Winston go into a press conference and deny that NZ First had received any money at all from Owen Glenn – not even a dollar, and did not feel he had an ethical, moral or professional duty to tell him of the personal donation to Peters’ legal expenses.
  22. Brian Henry was aware the Winston Peters was considering appointing Owen Glenn as Consul to Monaco, and did not think the fact Glenn had donated $100,000 to Peters’ legal expenses was something that should be disclosed.
  23. After the NZ Herald on 12 July printed the e-mail from Owen Glenn, Brian Henry still said nothing to Peters despite it being glaringly obvious what he was referring to.
  24. Winston Peters genuinely believed the e-mail was fake, even though the Prime Minister had told him of her personal conversation with Owen Glenn where Glenn stated he had donated to Winston.
  25. Winston Peters was not denying the e-mail’s accuracy because he knew the donation was to his legal fees, and not NZ First itself. He still at this point in time had absolutely no knowledge of any assistance from Glenn in any form.
  26. Winston Peters never thought of doing the obvious when the e-mail was printed and contact Owen Glenn to ask him if the e-mail was real, and what the hell he was on about?
  27. Winston Peters never wondered why Steve Fisher was so desperate to make sure Owen Glenn did not contradict what Peters said?
  28. Even after Brian Henry saw Winston denying everything, claiming the e-mail is fabricated and calling Audrey Young a liar, he still didn’t think he needed to urgently inform Winston that the e-mail was referring to the $100,000 donation for the Tauranga electoral petition in Peters’ name.
  29. It took Brian Henry seven days to manage to talk to his close personal friend and long standing client, to let him know that he had information which verified the e-mail in the Herald, which is why they waited until 18 July 2008 to announce the existence of the donation.
  30. Winston Peters at no stage ever knew of the donation until 18 July 2008.

This is an update on a earlier list I did on19 July.

And as I pointed out them, to beleive Winston’s story you have to believe not some of the above, but pretty much all of the above.

This is basically the story that the Prime Minister finds so compelling she can not make her mind up whether or not it is true or not.

UPDATE: As the Prime Minister is still striggling with this very difficult decision, she may like to also read John Armstrong’s column.

Just as the Moon is made of cheese and fairies live at the bottom of the garden, Winston Peters’ lawyer, Brian Henry, wants to believe that the now notorious phone call from Owen Glenn to Peters never discussed a donation from the business tycoon to pay the legal bills of Henry’s client.

I think this indicates a degree of scepticism. John is obviously finding it difficult to believe the story above.

However, the rest of us don’t live on Planet Winston where black is white, white is what you want it to be and the story changes as fast as the shop-until-you-drop former Philippines first lady Imelda Marcos changed her shoes.

It’s a funny thing. When you tell the truth there is normally no need to then change your story.

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Pathetic

September 10th, 2008 at 11:01 pm by David Farrar

I didn’t attend tonight’s hearing as I correctly predicted Peters would bluster, and even at the very end refuse to tell the truth. The universal reaction from those who did attend (and thanks for all the texts and e-mails) who briefed me was that Peters was pathetic, and produced no relevant evidence at all apart from a fanciful story.

Having looked at the video, and read his tabled statements I have to say that a very dim five year old could have managed a better defence.

Essentially Winston argues that yes Owen called him on the 14th of December but they never ever talked about money. And oh yes he probably did phone Brian Henry to say send your contact details to Owen, isn’t sure if he did but if he did that is because Owen asked for them, and he had no idea at all what it was about, and Brian somehow decided to send his bank account details instead.

Clark may wait for the Privileges Committee to formally report, but her language indicates she may move tomorrow.

Stuff reports:

“I believe now that Mr Henry had called him on December 5 to solicit the funds and I believe Mr Glenn is aware of this which is why no evidence has been produced.

Yet no record of such a call has been tabled by Mr Henry. They have had several weeks to furnish any proof of Brian Henry having ever phoned Owen Glenn. They have produced none.

Responding to questions from Napier Labour list MP Russell Fairbrother Mr Peters said he had no knowledge of Mr Glenn having donated money to NZ First until July 18, 2008.

“I thought at the time why would Mr Glenn be giving money to me? Mr Glenn is a Labour man. Why would he be giving money to NZ First?” Mr Peters asked.

Now recall that after he met with Owen Glenn in Sydney, his parliamentary staffer, Roger McClay, wrote to or e-mailed Owen Glenn asking for a donation to NZ First. So this mock surprise, is of course mock.

The NZ Herald reports:

Mr Peters again denied any prior knowledge of a $100,000 donation to NZ First or to himself from Monaco-based billionaire Owen Glenn.

And he maintained the allegations were a conspiracy against him.

Owen Glenn’s lawyer yesterday represented Fay Richwhite 15 years or so ago at the Winebox hearings. So obviously it is all a conspiracy sting operation masterminded by the lawyer and Sir Michael Fay.

“This is an attempt to undo the people’s will, bring down a government and govern alone,” said Mr Peters.

Hmmn, so National arranged three years ago for the donation to Winston, hoping he would be stupid enough to lie about it, so they could use it to undermine the Government. My God, how cunning.

Mr Peters said Mr Glenn also made mention he had a horse running in the Melbourne Cup and may have asked for lawyer Mr Henry’s contact details.

So Peters says he asked for Brian Henry’s contact details, he then immediately told Brian of this request, and Brian e-mailed Owen Glenn, and instead of sending his contact details, he accidentally sent his bank account details!

Anyway for those who want a laugh, here are the three documents tabled by Peters.

  1. winston-peters-statement
  2. brian-henry-letter
  3. memo-to-peters-re-2006-meeting-with-glenn
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Glenn on Labour

September 10th, 2008 at 1:03 pm by David Farrar

There are multiple stories from the Press Conference. First on Stuff re Helen Clark:

“She’s very self serving … I am expendable. I wouldn’t want them in the trenches next to me. It’s not the money, its the way you are treated, then you turn the dogs on me … toothless dogs.”

The last straw would have been Mallard and Cullen casting doubts on his mental fitness.

He said Mr Williams visited him on his luxury yacht off the French coast in mid-year.

Mr Williams asked him for a job as an “administrator”, he said.

Mr Williams told him that he was a good administrator and he was “articulate”.

Mr Glenn turned him down.

But Mike is earning almost $200,000 a year from his board appointments. Why would he need a job?

And who paid for his trip to Europe to target donors? Did taxpayer money fund it through one of his boards?

Glenn described Labour Party chairman Mike Williams as a liar and a bagman for the party.

“Mr Williams is wrestling with the truth,” he has told a press conference.

It is harsh to call someone a liar, but Mike Williams has a track record. He told nine lies on Agenda about what he said at the Labour Party Conference. If you are willing to lie about what you said in front of 500 people, why wouldnt you lie about what was said at a private lunch?

In another story, Williams says:

Mr Williams said he did not discuss the donation with Prime Minister Helen Clark.

“There is never any discussion between me and Helen Clark about any political donations except those that are public.”

Now I could accept this is true for donations to your own party. The two big parties do try and shelter the leaders from this. But it would be quite another matter concerning a donation to an allied party. You see the question being asked isn’t one of money as much as one of relationships. What Glenn wanted to know is does helping Winston help Labour. Now that is very much a question for the political wing, and the Leader. And Glenn has testified that Williams and Clark speak several times a day.

How credible is it that Williams would not have mentioned to Clark in 2005, that Glenn was interested in donating to Winston?

Last night he disputed Mr Glenn’s version of events. “Mr Glenn asked me [in December 2005] whether I thought Mr Peters had any chance of winning the Tauranga petition and I said that I thought he did.

“I have no recollection of being asked or offering any comment on whether or not Mr Glenn should provide financial assistance to Mr Peters, and I certainly did not discuss that possibility with anyone else.”

Well the meal with Williams took place immediately before Glenn phoned Peters to say okay. Regardless of what Williams claims (and he is a proven liar) Glenn obviously placed huge significance on checking with Williams, and was crystal clear that he only donated because Williams said it would be helpful.

The Herald has a collection of quotes from Glenn:

“I don’t think people with forgetful memories should be Minister of Foreign Affairs.”

To be fair to Winston, I don’t think his memory is in any way flawed.

“I think people in elected positions and privileged positions need to act ethically and be trusted and I doubt he can be.”

Except with Helen, still hanging on waiting for the innocent explanation. Never mind she has known the truth for six months and could have had the facts established back in February with a phone call.

On Deputy Prime Minister Michael Cullen

“He’s a bully. I don’t have a warm and fuzzy feeling about him. He’s not the sort of guy I’d want to spend a weekend with on an island but he’s just following orders.”

What can one say.

And then the main Herald story:

Mr Glenn said by February this year the Prime Minister was fully aware of his donation to Winston Peters.

When asked if Helen Clark knew what the money was used for Mr Glenn said “she already knew that, Mike Williams would have told her”.

Asked what he thought of the Prime Minister, he described her as “very self-serving”, while Mike Williams, he said, “wrestles with the truth” .

And it is a myth that the PM had no choice but to accept Winston’s word. Says who? She could have asked Glenn to substantiate his claim he donated to Peters. He could have done so within hours. The fact is she chose deliberately not to inquire further, because she knew what the answer would be.

Basically Clark’s position is that she does not mind having a Minister who she is almost certain has lied to her, she just doesn’t want to have it proven he lied to her. So she just sat on it and said and did nothing.

Mr Glenn said he decided to fight back after a New Zealand First MP called him a liar in Parliament.

He said prior to being attacked, he would have “slid away quietly”

This morning he told Radio New Zealand that Labour might not have been in government without his $500,000 donation to it; “and here they are attacking me, and frankly attacking my credibility and my integrity.”

Mr Glenn said the Prime Minister had behaved out of self interest and wanted to keep Mr Peters on-side to get legislation through “and I was expendable”.

They have done more than attack his integrity and credibility. They attacked his mental sanity through backroom whispers to journalists.

And finally we have Monaco:

Earlier today, Owen Glenn told Radio New Zealand he was vetted for the position of honorary consul to Monaco and that Winston Peters supported his bid.

Mr Glenn said he had met New Zealand’s ambassador to France Sarah Dennis in Paris at her invitation where she had told him she was vetting him for the position.

“I said OK what’s your decision, she said `you seem to be alright”‘, Mr Glenn said.

In February Mr Peters rang him the day he was leaving for a trip to South Africa, Mr Glenn said. Mr Glenn was in Raglan at the time and says he has a witness to the call.

“He (Mr Peters) said; `I’m still supporting this, I want to push it through, I need a letter from you confirming that you are going to live in Monaco…”

And this is where Clark and Peters have both made huge errors of judgement. Helen Clark knew that Owen Glenn had donated to Winston Peters – he had told her. Winston was pushing for his appointment within Government. MFAT staff were vetting Glenn. And Clark did not disclose the donation to anyone – to MFAT. to the Cabinet Secretary, to the Electoral Commission, to her own colleagues who sign off on appointments, to the Registrar of the Register of Pecuniaryinary Interests. That was a huge conflict of interest. Clark as PM is meant to uphold the integrity of Government, and instead she stayed silent and set a new low.

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And don’t forget the Spencer Trust

September 10th, 2008 at 6:40 am by David Farrar

The Herald reminds us:

Mr Peters said he was aware in May that the party had sought “legal advice” before deciding not to declare the $80,000 donation from the trust.

“I said you must go ahead on the legal advice that you’ve got, this is not a matter for the party parliamentary organisation, it is a matter for the organisation itself, and that is what happened,” Mr Peters told Radio New Zealand yesterday.

This is the same organisation whose President, Secretary and Treasurer have never heard of the Spencer Trust?

Despite being asked, Mr Peters has never said when he became aware of the Spencer Trust. On July 29, he told a press conference that he had no knowledge of what the trust was used for.

The Herald has learned from informed sources that Mr Peters knew about the trust, how much money was kept in it at certain times, and that he directed staff to get it to pay party expenses.

So Winston says it was a matter for the organisation, and he had no knowledge of what the trust was used for. No knowledge that is, except what its bank balance was and what bills to get it to pay.

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The short version

September 9th, 2008 at 8:50 pm by David Farrar

What happened today is very simple.

  1. Owen Glenn proved that he made a phone call to Winston Peters at 1.26 pm NZST on 14 December 2005. The call ended at 1.33 pm.
  2. At 1.40 pm on the same day – just seven minutes later – Brian Henry sent Owen Glenn the details of the bank account the $100,000 was paid into.
  3. A Paul Moroney swore an affidavit that Winston Peters and Owen Glenn did meet at Karaka in January 2006, that Owen Glenn told him of the donation to Peters, and that Peters thanked Owen Glenn for his help. Incidentially Paul Moroney is the brother of Labour MP Sue Moroney.

Anyone who thinks that somehow Winston Peters was not aware of the donation is not just naive or misguided, but fundamentally dishonest. The attempts by Labour to suggest that someone else may have answered Winston’s mobile phone, pretended to be Winston, arranged the $100,000 donation, passed the details onto Brian Henry – all without telling Winston – are so far fetched that journalists were having trouble not laughing out loud.

The big new information that got revealed is that Owen Glenn met with Mike Williams the day of the donation, sought his approval for the donation and is adamant he would not have made the donation without permission from Williams. It is almost inconceivable that Williams would not discuss such an issue with Helen Clark. We already knew she knew about the donation in February 2008 – she may in fact have known as early as December 2005. It will be impossible to prove what Williams told Clark, but regardless we do know that Mike Williams knew all about this from day one.

Whale Oil has the affidavits online.

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The Glenn hearing

September 9th, 2008 at 3:38 pm by David Farrar

We are all queued outside waiting to be allowed in. Huge amount of media here. No sign of Glenn yet.

Glenn has arrived and we are now in the room.

Glenn has just named Williams as having agreed helping Peters would help Labour.

Also tabled an affidavit from a witness to Peters thanking Glenn.

Glenn has confirmed again he would not have donated without having the ok from Mike Williams.

There is also a phone record showing a call to or from peters office phone around the time of the donation.

My God how desperate. Russell Fairbrother is suggesting he was accidentally talking to Wayne Peters who had borrowed Winston’s cellphone and sounds like him!!

Glenn says that Mike Williams was going to clear his donation with colleagues. It is unthinkable that would not include Helen. So she may have known since 2005.

Glenn says he likes Winston who is a great character. This is about telling truth.

Cullen also pushing the notion that someone else answered Winston’s cellphone and pretended to be him.

Has just said Peters is very skilled at asking for donations. Remember Peters says he nevers solicits donations.

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Lie #9,087,425

September 9th, 2008 at 8:00 am by David Farrar

From the NZ Herald:

Mr Peters did not return calls last night. Despite being asked, he has never said when he became aware of the trust. On July 29 he told a press conference that he had no knowledge of what the trust was used for.

So he said he had no knowledge of what the trust was used for.

The Herald has learned Mr Peters was aware of how much money was kept in the trust at certain times, and that he directed staff to get it to pay party expenses from 2005 onwards.

This is no surprise.

But the trust’s existence was kept so secret it paid over $100,000 in bills that senior party officials did not even know they had.

The Spencer Trust’s bill payments for the party included $87,648 in 2006 – but the party’s president, secretary and treasurer from that time yesterday said they had no idea the bills even existed, yet alone that they were paid.

The Deputy Leader is also on the record as saying he had never heard of The Spencer Trust. So that doesn’t make it hard to conclude who did. Meanwhile Helen says that Winston should not be held liable for the mistake of the staff in the party head office. First of all the party head office is his Ministerial bauble suite, and secondly no Officer except Peters even knew about it.

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Owen’s phone records

September 8th, 2008 at 8:42 am by David Farrar

The Dominion Post suggests phone records could turn up the heat on Winston Peters. And indeed they could, but not Owen’s.

Owen as the recepient of the call from Peters would not have the call turn up on his phone records. It is possible he phoned Peters, but the more likely scenario is that Peters phoned Glenn.

The phone records of Peters or his staff are going to be more productive to search, but sadly for Winston they can only confirm if a call was made, they can not prove a call was not made – as it may have been from an unknown phone.

Ministerial Services pay the bills for Minister’s cell phones, landlines and staff cellphones also. As a parliamentary agency they will of course co-operate with the Privileges Committee. So I suggest they be asked to supply the call statements for the dates in questions.

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More Spencer Trust details

September 6th, 2008 at 10:26 am by David Farrar

Firstly remember this quote:

When NZ First leader Winston Peters was asked in July if the party was funded by a trust that sometimes paid party bills, he said through a spokesman it was “a lie”.

Now read the latest details:

  • $50,000 donation in 2005
  • $17,000 of NZ First bills paid in 2005
  • $87,648 of NZ First bills paid in 2006
  • $80,000 donation in 2007

The Spencer Trust says it has paid $234,000 to or on behlf of NZ First since 2005. And during that time NZ First has filed three nil donations returns.

Helen presumably still says it was an innocent administrative error.

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A useful timeline

September 5th, 2008 at 12:00 pm by David Farrar

Now this is excellent. The NZ Herald has done a timeline of the developments in the NZ First funding saga, and it has links back to dozens of original stories. A great resource. Worth bookmarking. Hopefully they will keep it updated.

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Dail Jones was right

September 5th, 2008 at 6:55 am by David Farrar

The last pieces of the New Zealand First funding mystery were solved today, as the Herald reveals that the “close to $100,000 than $10,000″ mystery amount referred to by Dail Jones in December 2007 was a $80,000 donation from the Spencer Trust.

No wonder Peters was furious with Jones. He had accidentially revealed the existence of the Spencer Trust. As Party President Jones wasn’t even aware of the Trust – it was all Peters.

And what did Peters say at the time:

Asked if that meant “there was no big anonymous donation”, Mr Peters said “precisely”.

$80,000 is not big of course.

And in that infamous press conference:

“We have a treasurer in the party and he says it’s a consolidation of amounts around the party. He should know. One can get confused when you look at documentation and perhaps he [Mr Jones] should have spoken to the treasurer.”

Now this is fascinating. Peters refers to ti being a consolidation of amounts “around the party”. This is implying that the Spencer Trust is part of the party.

Where the $158,000 came from to “repay” NZ First’s unlawful spend at the last election:
“We’ve had anonymous donations at $10, and $20, and $50 for a long, long time because some people used to think – and it’s an attitude that still permeates New Zealand as a democracy – that one day the communists might take over and they will be all in the firing line.”

Yep all those small donations of $10, $20, $50 and oh yeah $10,000 and $25,000.

Incidentally we still don’t know where the $158,000 that should have been paid to the taxpayer went.

Now there is an interesting scenario. What if the $80,000 was made up of seperate donations each under $10,00.01? Would that have to be disclosed?

Unless the Spencer Trust is literally part of NZ First – as in an additional suffix to their main bank account – I believe the answer is yes. And it seems its money was kept in a solictor’s trust fund so the answer is they are separate. The donation is from the Spencer Trust or even the solictor’s trust fund, and was $80,000 so should have been declared.

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The second Glenn letter

September 4th, 2008 at 1:06 pm by David Farrar

Stuff has a copy of the second Glenn letter as a pdf. Helen is busy working on a defence for Winston for it.

Some key extracts:

I gave the authority for the payment instructions to be made on 20 December 2005 to Mr BP Henry’s account. Mr Henry supplied the ASB bank account details in an email from him addressed to me on Wednesday 14 December 2005. That email from Mr Henry refers to an earlier telephone conversation between me and a person Mr Henry refers to as “my client” that same day.

Watch Henry and Peters claim it was some otehr client, whom they can’t name.

My recollection is that I was called by Mr Peters to seek financial assistance for his electoral petition challenge. I agreed to that request because I understood that it would be of assistance to the Labour party, which had the confidence and supply agreement with New Zealand First at the time we spoke. I do not recall that I had any conversation with Mr Henry about my donation. There is absolutely no doubt that the request came to me from Mr Peters, I would not have made the donation on any other basis through any intermediary. I did not do so.

Can’t get more firm than that.

I was not at the Karaka sales in early 2007, I was at the sales in early 2006. I believe that the statement I made to you in my letter of 19 August is factually accurate.

So it is Peters, not Glenn, wrong on the details.

Unless Owen Glenn is a pathological liar, Winston Peters has lied repeatedly to the public, the media, and well everyone. There is no “innocent explanation” as Clark desperately suggests.

This also raises some questions regarding Mr Henry’s conduct. I won’t say more than that at this stage.

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The Four Stooges

September 4th, 2008 at 10:00 am by David Farrar

The NZ Herald has a story which reminds me of the Three Stooges, as NZ First officials have given four different reasons for their “administrative error” of not reporting a $50,000 donation in 2005:

  1. Auditor Nick Kosoof issued a letter saying “the office of New Zealand First made an administrative error
  2. MP Dail Jones, president when the return was filed in April 2006, yesterday said it was Mr Kosoof who “saw it [the donation] and forgot about it”
  3. NZ First’s treasurer at that time, accountant Brent Catchpole, pointed the problem back to the party, saying he could not give Mr Kosoof the full records as “a lot of the information wasn’t handed over to me as it should have been”
  4. Kaye Urlich, the treasurer when it was banked, denied Mr Catchpole’s claims that records were missing, saying “he got everything he needed”.

So what excuses will be made for the false 2006 and 2007 returns?

Also Peter Williams continues to show his ignorance of electoral law:

Meanwhile, Mr Peters’ lawyer friend Peter Williams, QC, yesterday revealed that the Spencer Trust had received $80,000 from the Vela family and that New Zealand First had handed over records to the SFO.

Mr Williams told Radio New Zealand he “presumed” the Vela money had gone to New Zealand First in amounts under $10,000.

The Spencer Trust was formed only in 2005 so the Vela family’s $80,000 is different from the reported $150,000 given to the party between 1999 and 2003.

That will be fascinating if the Velas have given $230,000 in total with no disclosure. Someone joked to me that if one of their horses wins the Auckland Cup, does that mean they have got their donations back!

But Williams is wrong in saying that if the money was paid over by the Spencer Trust in amounts under $10,000 it would not have to be legally disclosed (he said yesterday there had been only one accidential law break). The law requires donations from the same source to be totalled up over the calendar year, and if the Spencer Trust is a separate entity to NZ First then money from the Spencer Trust has to be added together over the year (even if the individual donors to the Spencer Trust were under $10k).

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