Kiwiblog

I won’t be able to cover this in more detail until this afternoon, but from the media reports to date of the Privileges Committee, it is obvious that Peters has broken the rules of the Register,just not in the way thought.

It was revealed that Brian Henry personally (according to Henry) paid the $40,000 damages/costs to Bob Clarkson. Now one can argue about whether or not the work Henry does for Peters is or is not a debt whether invoiced or not, but there can be no argument that a court judgement directing Winston Peters to pay $40,000 to Bob Clarkson is a debt from Peters to Clarkson. It was not an order for Brian Henry to pay Bob Clarkson or Winston’s solictors to pay Bob Clarkson. It was an order for Peters.

And Brian Henry says he paid that debt on behalf of Winston Peters. Now regardless of whether or not he did so using the money from Owen Glenn (which I will come back to), Brian Henry should have been declared as someone who discharged a debt on behalf of Peters. His 2005 or 2006 returns were incorrect as Henry was not listed as having paid the $40,000 debt.

Now Peters may claim he did not know Henry paid it. Well even if that is true, the issue is should he have known? Surely a man who was Treasurer would know whether or not he made out a $40,000 cheque to settle the costs – a debt which was in his name. You can’t just say I never realised someone else paid my $40,000 debt.

Section 19(1) states:

It is the responsibility of each member to ensure that he or she fulfils the obligations imposed on the member by this Appendix.

There is a lot more analysis to be done of the testimony, including whether Owen Glenn should have been listed also, but there seems little doubt Brian Henry should have been, and Peters breached the rules of the Register in not doing so.

The Dom Post reports that the Privileges Committee is initially calling Winston Peters and Brian Henry to testify.

I am somewhat surprised by this. Winston, by his own words, says he knew nothing about the donation/gift, so I don’t know what value there will be from questions to him.

Surely the most important things is to first establish the facts around the donation – who was the cheque from, who was it made out to, what was it intended for, what account was it paid into etc. Once you have the facts then it would be more useful, in my opinion, to seek explanations.

Rodney Hide is worried that Owen Glenn may not be asked to testify. I can’t imagine how the Committee could expect to have any credibility if they do not invite Mr Glenn to testify, so I’m not that worried. I am sure they will issue appropriate invitations in due course.

For the Privileges Committee to do its job, and reach a fair conclusion on whether the $100,000 Owen Glenn donation should have been declared on the MPs Register of Pecuniary Interests, they are going to need to be able to answer the following question:

1. Who or what was the $100,000 paid to?
2. Why was it donated?
3. Who knew about it?

That is not an exhaustive list. But even off that, what sort of evidence would you want, so one could make a fair conclusion.  Rodney Hide has suggested that Owen Glenn should give evidence – maybe by video conference. It is almost unthinkable that one can resolve this issue without hearing from the donor. I would expect evidence to include the following:

1. Testimony from Owen Glenn on why he donated, who he thought he was donating to, and who did he discuss the donation or the possibility of a donation with?
2. Testimony from Steve Fisher as to why he said it was vital Glenn did not contradict Peters?
3. A full forensic investigation of the money -
   1. Who was the cheque/draft made out to?
   2. Into what account was it paid?
   3. Was it the Spencer Trust?
   4. Was the money passed onto someone else?
   5. What bills were paid with it?
4. Was the $40,000 damages to Clarkson (which is beyond dispute a personal debt) paid for by way of donation – whether Glenn or someone else?
5. Does Peters personally make up any shortfall in the costs for his legal actions?
6. Would Peters have paid over time at least $500 more to Henry, if the donation had not been made?
7. How many donations of greater than $500 have been made towards the legal fees?
8. Expert advice from the Law Society regarding barristers fees?
9. If money was donated to a formal trust (such as the Spencer) is Peters a beneficiary of it, which requires a declaration on the Register?

As I said this is just an initial list.

NZPA reports on Winston’s response:

Television New Zealand News has shown Mr Peters saying he has no involvement with the Spencer Trust, into which Sir Robert Jones paid $25,000 when he believed he was giving a donation to Mr Peters.

Mr Peters also said Sir Robert was wrong when he claimed Mr Peters had asked him for the donation.

Mr Peters told journalists they should ask the Spencer Trust what they did with the money.

“I have been advised by party officials at the time that there is nothing NZ First is required to disclose arising from the Spencer Trust,” Mr Peters said.

The headline is that Peters has suggested Sir Robert’s memory is fading. I suspect that was very unwise of him.

He has issued a press release:

1. 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.

But he never thought to ask Brian earlier if the mystery $100,000 donor was Owen Glenn.

2. The issue of taxation on this contribution is without merit. Legal experts have said so.

Which legal experts? Opinion is divided as far as I can tell. In the end not that big an issue as the IRD will form its own view.

3. No gift duty is payable. Gift duty is based on the laws of the country where the donor is domiciled.

See earlier post for differing views on this.

4. No declaration of pecuniary interest is required. This was made clear by the official advice given to Nick Smith as he revealed in the House this week.

Not at all. In fact Nick Smith did declare a beneficial interest.

5. The Vela cheque is lawful.

I don’t think anyone has suggested it wasn’t. The issue is the hypocrisy of hiding your large donors when you rail against other parties that do the same.

6. The Robert Jones claim that he gave $25,000 to New Zealand First?

- The cheque was made out to the Spencer Trust.
- The cheque was not made out to New Zealand First.

Here is where he just won’t front up, and just states a truism. Everyone knows who the cheque was made out to. The issue is why NZ First representatives are soliciting money on behalf of NZ First and asking for it to be paid into The Spencer Trust.

Is Peters really saying that Sir Robert Jones decided on his own initiative to donate $25,000 to a trust he has never heard of, and that it is unlinked to NZ First?

And never mind the hypocrisy of his attacks on other trusts.

- I have been advised by party officials at the time that there is nothing New Zealand First is required to disclose arising from the Spencer Trust.

Your own President and Deputy Leader say they have never heard of The Spencer Trust so how could they know anything about what the Spencer Trust may have done on behalf of NZ First?

7. Neither I nor my barrister has any involvement with the Spencer Trust.

Note the careful use of language. He says “involvement”. That doesn’t mean he doesn’t know exactly who has paid money into The Spencer Trust and what that money has been spent on. Knowledge is not involvement.

And what Winston doesn’t matter is that his brother runs the Trust. Are we to believe this is a coincidence? And can Winston explain why members of his parliamentary staff were soliciting money for the Spencer Trust?

8. The claim that the 1997 Cushing case settlement of $125,000 was paid by an anonymous donor is untrue. I paid the costs and have offered to show the reporter in question the details. This offer has not been taken up and no withdrawal of the claim has been published.

However it is a mystery who paid the $40,000 costs to Bob Clarkson in the 2005/6 case?

I can’t wait for Sir Robert’s reaction!

A fascinating article in NBR (offline) on what Brian Henry says regarding tax on the Owen Glenn gift:

Mr Henry said last Friday that he had solicited the money from Mr Glenn. He told NBR this money was paid directly to him as accounts for costs – basically an arrangement for fees incurred in a case to date.

As I understand it, it is highly highly unusual for a barrister to get paid directly, let alone to go out seeking donations for his costs.

He said these were treated just as fees would be and so tax had been paid on the amount. “It’s my fees. It goes into my fees bill that goes to the IRD in the usual way.”

This is of course expected. You get your fees paid and you pay income tax. But that is separate to whether there is gift duty.

However, he said that Mr Peters had no legal obligation to pay him fees incurred in the legal proceedings and so there was no donation that was needed to be declared under Parliament’s register of pecuniary interests.

Essentially, Mr Henry said, there was no debt until he issued a final invoice (called a “fee note”) to the instructing solicitor in the case, who would invoice Mr Peters. However, he admitted Mr Peters had paid him directly in the past as a contribution to legal costs.

Brian Henry is arguing that as he had not actually issued an invoice yet, then there was no debt and no gift. But I am unsure if the lack of an invoice means there is no debt- the debt is incurred I would have thought when you contract someone to perform services for you – even if not yet invoiced for it. Otherwise thousands of people could rort the tax system by having someone pay for services on their behalf before an invoice is issued for it.

The substance is would Winston Peters have ended up paying an extra $100,000 to Brian Henry if Owen Glenn had not donated on his behalf. Absolutely. Both Henry and Peters have said he picks up the shortfall.

“There doesn’t have to be an invoice – he can pay on account of costs. He says I can afford to pay you this today and I say thank you.”

However, Bar Association president Jim Farmer QC said interim payments should not be accepted by barristers except for work actually done.

“A barrister must render a fee note if he wants to be paid,” he told NBR.

Sounds like Mr Henry’s practises are highly unusual, to say the least.

Sources close to the litigation in question – where Mr Peters tried to overturn the 2005 election result in Mr Peters‘ former seat of Tauranga – say Mr Peters “really had his bacon saved” when money came in for costs.

That’s because the respondent, National MP Bob Clarkson, had threatened Mr Peters with bankruptcy proceedings after the $40,000 costs order in favour of Mr Clarkson was not met within three weeks.

And that is an interesting aspect. What if some of the $100,000 went to the court costs not just Henry’s expenses. How can you claim that is not a gift?

Also if Peters was in dire financial straits, doesn’t that make it more likely he would have been in the loop?

NBR inquiries have turned up some uncertainty about how the costs award to Mr Clarkson was paid.

“I gave him about three weeks,” said Mr Clarkson. “Since he’s got a lot of rich friends I thought it’d take about three weeks. It didn’t turn up so we sent a note saying that proceedings would be taken if it wasn’t paid. And the money turned up.”

The cover letter with that payment was from Brian Henry, and the money was paid by a bank cheque. But the bank cheque meant the issuer could not be identified. It was not a bank cheque issued under Mr Peters‘ instructing solicitor’s trust account.

So either Owen Glenn or maybe even a second secret donor paid the court costs to Bob Clarkson? This just simply has to be investigated.

For his part, Mr Henry can’t remember where the payment for the costs order was made from. “I couldn’t answer that.”

Mr Peters‘ instructing solicitor in the case, Dennis Gates, would not comment when asked by NBR if the payment was with money out of his solicitor’s trust account.

It just gets murkier and murkier.

Well even though Winston has said it is all lies, Sir Robert went on to Radio NZ this morning to discuss his donations. Extracts from the NZPA story:

Sir Robert today confirmed to Radio New Zealand he made a $25,000 donation to the party for the last election (2005).  He had now written to NZ First president Dail Jones after speculation that money he donated had not got to the party.

I believe a number of donors are now asking where their money went. Owen Glenn thought he donated to NZ First and it went into Winston’s legal expenses. Sir Robert thought he donated to NZ First and it went into The Spencer Trust – the second secret fund we have learnt of this week.

Sir Robert also said he had made large contributions to NZ First in the 1990s when the party was being established.  “I’m not worried about the $25,000, that’s not a lot. I’m worried about the other $150,000 he took off me in the early days,” he said.

And these have never been disclosed. Now before the 1993 Electoral Act was amended in 1995 they might not have to have been. If they were paid into a Trust and the Trust donated to NZ First or paid bills on its behalf, then that should have been disclosed.

Sir Robert said he hated NZ First’s attacks on Asians but the last time he saw Mr Peters “a lot of drinking went on” and Sir Robert begrudgingly gave $25,000.

Note that Sir Robert has said explicitly Winston was directly soliciting the money – something he denies he ever does.

Sir Robert said the cheque was written out by one of his staff members to Spencer Trust — described by The Dominion Post as sometimes being used to pay NZ First bills.

There had been payments of $50,000 “here or there” to other parties, Sir Robert said. He would be concerned if donations to the party never reached the party.

Sir Robert has said he has not voted National since 1981 so unlikely to be National.

“I’ve never been approached by the Greens and Maori Party, I must confess,” Sir Robert said.
He did not like the thesis of the Maori Party and wouldn’t have given them money but asked if he would give to the Greens he said: “I probably would, but I don’t want to say that”.

Frog better get onto this!

Also interesting stuff on the money Brian Henry solicited:

In Parliament yesterday National MP Judith Collins, a lawyer, said Mr Henry could not run a trust account.  “He is a barrister sole, and one of the things about barristers is they don’t have trust accounts,” she said during the general debate.

“They are not audited. They are not subject to Law Society rules about trust accounts and the reason is they don’t hold other people’s money.

“They simply render an account and it gets paid.”  Ms Collins said she had been a lawyer for more than 20 years and had been a member of the Auckland District Law Society and the New Zealand Law Society.

“I have never once come across a situation where a barrister’s job is to ring up people in Monaco and ask them to pay $100,000 into a fees account,” she said.

“I have never once heard of it and I sat for years on the complaints committee of the Auckland District Law Society…not once did we ever hear anything about barristers ringing up trying to solicit money for their clients’ fees.”

It is indeed very unusual for barristers to be involved in the money side of things – that is meant to go all through the solicitor.

Now people may be interested in NZ First’s disclosed donations of over $10,000 since 1996:

1996 Peter McCardle $10,000
1996 Charles Sturt $12,500
2002 WestpacTrust $10,000
2002 Gold Times Sports $15,000
2003 Contact Energy $10,000
2004 Contact Energy $10,000

This is a very low level of disclosed donations. Every minor parties like the Alliance have disclosed far more than this. Now looking at this you would think they have not had any donors of over $10,000 since 2004. And in fact we know there have been significant donations of over $10,000 for the benefit of NZ First and Peters.

There are two issues with The Spencer Trust. The first is NZ First’s of trust funds to hide donor’s identity. This is perfectly legal but something he has railed against in public. So total hypocrisy.

The bigger issue is why there is no record of The Spencer Trust donating to NZ First. Because by not disclosing its relationship to NZ First, it removes the ability of the public to be critical of the use of the trust fund. You see people know National gets large donations from the Waitemata Trust. National then has scrutiny from the media and the public on those donations and their political image gets somewhat tarnished by the use of the Trusts (even though quite legal).

But what NZ First appears to have done is kept the existence of both the “legal fund trust” and the Spencer Trust a total secret, hence removing the ability of the media and the public to pass judgement on their practices. This is of course a lack of transparency that is worse than anything Peters has criticised other parties for.

And if the Spencer Trust has been paying bills on behalf of NZ First, then that could well be seen by electoral authorities as an effective donation which should be disclosed.

How many more secret trusts are out there?

UPDATE: Extracts from the transcript are after the break:

(more…)

No Right Turns blogs on Helen Clark’s see no evil policy:

Despite clear Cabinet guidelines about the declaration of interests and a separate (but sadly confidential) process for Ministers to declare interests, Clark insists that it is nothing to do with her, but instead a question for the Registrar of Pecuniary Interests. This is simply false; the question of whether Peters has failed to properly notify Parliament of his interests and the question of whether he has failed to properly declare and manage his interests as a cabinet minister are completely separate.

Nothing is more squarely a duty of the Prime Minister but to judge how her Minister’s handle interests.

Clark says Peters can keep the money. Under s2.79 of the Cabinet Manual, gifts of more than $500 must be relinquished unless the Prime Minister permits them to be retained. According to Clark, the gift paid for a legal case which served a substantial public interest, and so she has no problem with it being retained. This isn’t unreasonable, given the frequency with which MPs are involved in legal action, and it is nice to have it made clear.

Unfortunately, Clark entirely evaded the question of whether giving a minister $100,000 when you wanted a job from them created a conflict of interest. The answer is obvious, and it is shameful that she refuses to state it and stand up for proper standards in the executive.

This is very significant that Clark has approved Peters keeping the secret $100,000 donation. She knows that Owen Glenn was lobbying Peters to be given a diplomatic appointment and that Peters had discussed the issue with her.

I am surprised people have not wondered why Owen Glenn would decide to donate $100,000 to a secret legal fund for Winston Peters. What was his motivation?

Well let us look at why he donated to Labour. He said he liked their policy of supporting a free trade agreement with China. But NZ First is totally opposed to that agreement, so he did not donate because he likes their policies I presume.

Maybe he just liked Winston, and wanted to help him. Strange though that he never mentioned it in all his meetings with him.

It would be interesting to have someone ask Winston the dates of all his meetings or conversations with Owen Glenn, and when he first raised the issue of Consul.

It would also be interesting to know when Brian Henry received the money and first talked to Glenn about a donation.

I am not saying there is a linkage, but the timings would be useful for people to be able to make a judgement call.

Let us start with John Armstrong:

If that was not enough, there were further shockwaves with yesterday’s Dominion Post making fresh allegations surrounding NZ First’s handling of donations, questions about whether the racing industry source of those donations has compromised Peters as Minister of Racing and claims that taxpayers paid his lawyer’s legal bills through Parliamentary Service funding.

Those allegations were largely unsubstantiated, making it fairly easy for someone with Clark’s experience to bat away the resulting questions. She may have only brief respite, however. The confidence with which the newspaper made the claims suggests it has the documentation to back them up – with maybe more to come.

Indeed, and remember Phil Kitchin here is the journalist who exposed Donna Awatere-Huata and the Police misconduct in Rotorua.

Peters dismissed the article as “a smear campaign of unsubstantiated allegations”. But Clark realises, even if Peters won’t, that such responses are no longer satisfactory given the seriousness of the allegations he is facing.

Well they had a photocopy of a cheque on their frontpage. That seems to have a degree of substantiation. But as Armstrong notes, Peters has problems claiming it is all lies, because he said exacly that about the NZ Herald e-mail. He said they fabricated the e-mail and that they were lying and they were not.

She urgently needs to move this dreadful mess off centre-stage – both for her sake and Peters’. She has accordingly dropped big hints to relevant Government agencies to investigate the claims if they see fit.

Those agencies are an ever-lengthening list – Auditor-General Kevin Brady; the Registrar of MPs’ Pecuniary Interests, Dame Margaret Bazley; the Electoral Commission; Inland Revenue; Parliament’s Speaker and privileges committee; the Cabinet Office; and even – as Clark mentioned – the police.

Ever since the issues of Taito Philip Field, I have believed that NZ now needs an Independent Commission against Corruption that has powers to investigate all aspects of corrupt or highly unethical behaviour from Ministers, MPs and other very senior holders of public office. Having six different inquiries taking place like a fragmented jigsaw is not as good as one competent investigation with full powers.

I would love National to pledge to establish such a Commission. It would be a noble thing for them to do, as their own Ministers would be the first one to be subject to its scrutiny – but it is needed as we have seen in recent years with Field, Awatere-Huata, the various Immigration Service affairs, the Benson-Pope affair etc.

Audrey Young reports:

Questions were also raised in Parliament as to whether Mr Peters declared that his party had received substantial donations from the racing industry, where the Vela brothers are big players, before negotiating the post of Racing Minister with the Prime Minister.

And then proceeding to force Cullen to such generous funding of the racing industry that they ignored strong Treasury advice against it.

Incidentally while the Velas have New Zealand citizenship, like Owen Glenn, I understand they are (or were at least) officially foreign residents and only visitors to NZ for tax purposes . So once again the great crusader againgst foreign investment is revealed as having his major funders being foreign residents.

New Zealand First did not dispute reports that Mr Henry had been paid an amount from the Parliamentary Service last year but that is understood to have been for contracted work on the Electoral Finance Bill, not for litigation.

Jesus Christ – $45,000 for advice on the Electoral Finance Bill. Considering how often NZ First keep breaking their own law, they should ask for a refund.

But she appeared to be thrown by a question from Green Party co-leader Russel Norman on non-declaration of possible conflicts of interest.

He asked: “Can the Prime Minister tell us whether the Minister of Foreign Affairs was involved in negotiating the very substantial tax breaks that this Government has delivered to the racing industry; if so, in those negotiations, did he declare the very substantial donations that New Zealand First had received from the racing industry?”

After over a week of silence, it is good to see the Green Party finding its voice.

Mr Peters’ New Zealand First colleagues all took turns to ask questions focused on an aspect of his achievements as Foreign Minister.

This was so sad, I actually felt sorry for them. Like lemmings, one after another asked a pitifully sycophantic question to Helen lauding the fact Winston had gouged the taxpayer for more money for MFAT or the such. None of them were allowed to even try and engage on the central issue of the secret donations.

What was also interesting is that NZ First asked more than their four allocated supplementaries which means Labour must have donated some of their quota to their good mates in NZ First.

Mark Keating does an op-ed on the taxation issues around the donation. This is a fuller version of what I summarised yesterday. I did find this line very funny:

Mark Keating is a senior lecturer in tax law at (ironically) the Owen G. Glenn Business School of the University of Auckland

Heh.

Finally we have Rod Emmerson:

Just spot on.

The media have started to look at the tax issues around the secret $100,000 donation. It is indeed quite probable that there is an unresolved tax issue around it.

A tax lawyer has helpfully made the following points to me:

• Normally gifts are not considered to be income but it can extend to include “gifts” given for extra services or additional benefits beyond expectation.
• If Owen Glenn gave the $100,000 as a mark of satisfaction with Winston’s past services as an MP or in the expectation of some future benefit to be bestowed, then the money would constitute income.
• It is irrelevant that the money was paid to Brian Henry and not to Winston personally. The Income Tax Act is very clear that, as it was Winston’s legal bill that was being paid, it would be his income.
• Bank and lawyers’ trust account records are not protected by legal privilege. The Tax Administration Act expressly states IRD can have access to all financial records. There is no “privilege” in payments, only in legal advice.
• Even if the secret donation is not treated as income for Winston, and is a “genuine gift” then the Estate and Gift Duties Act applies.
• A gift of $100,000 would attract gift duty of $12,850.
• When a gift is made, the Act requires the person making the gift to pay the duty within three months.
• If the giver does not do so, the liability automatically passes to the recipient who must then pay the gift duty.
• A failure to do so constitutes a criminal offence under the Tax Administration Act.
• Interest and penalties on any gift duty not paid on time would have more than doubled the original $12.850 owing.

Now assuming it is seen as a gift and not income for services provided, it is possible Owen Glenn paid the gift duty. If he did not then it sounds unlikely it has been paid, as Henry and Peters keep arguing it is not a gift. That means the liability would still be resting with Peters.

Yay at long last TV3 Political Editor Duncan Garner is blogging, and he says what he thinks on it:

To believe Winston requires you to believe the unbelievable.

Like;

When Winston Peters held up the big NO sign in February in response to questions about whether Glenn had donated money, Winston’s lawyer Brian Henry didn’t pick up the phone either before and after – and say arrrrhhhh, Winston, he flicked us 100k 18 months ago.

And remember this so called policy of Henry’s is not required by any outside force. It is in fact just a decision made between him and Peters that allegedly he would not tell Peters who donated. Now the reason you would do this is to protect Peters, but when it becomes clear that more damage is being done by not telling him, it is almost unthinkable he would not have told him earlier.

Peters credibility has been damaged. He’s turning defence into attack. It’s all he’s got left. Helen Clark’s silence is remarkable but not surprising. She needs him if her Government is to make it through to the election.

Remember when Phillip Field’s discretions were only “judgement issues” according to Helen Clark. Lets see what the judge says about those “judgement issues.”

Yes Clark has a fine track record here.

Auditor General Kevin Brady should investigate Peters. He’s nailed Labour before. He’s got the guts to nail Peters. The IRD should look at the tax status of the donation. The Privileges Committee should start its kangaroo court – at least it would provide some theatre.

Agreed.

Peters may have used up his nine lives. He voted to end secret and covert funding – yet took it on the side. Indeed, it was so secret, we’re meant to believe he didn’t even know.

He should resign. The saga is a disgrace. And on his way out he should apologise to the NZ Herald Political Editor Audrey Young who broke the story.

That is a big call, but a correct one. If after the revelation he had admitted the public has (as John Key puts it) been misled by him, then maybe it is survivable. But his outrageous continuing attacks on the NZ Herald for exposing his secret donation are the worse form of bully boy politics.

Imagine if the Exclusive Brethren loving Nats had denied getting 100k then coughed up under pressure.

Would Peters go easy on John Key? Would Helen Clark stay silent, muttering, “it’s a party matter”? You know the answer.

And imagine Phil Goff? I think his head would actually explode as he shouted himself hoarse on it!

Winston Peters labelled the NZ Herald Political Editor a liar, and is still calling on her and the Editor to resign. No-one can quite work out what for, but he is insistsing they should apologise to him and resign, despite the fact their work exposed the secret $100,000 donation to pay off Winston’s legal bills.

Now it seems they are also calling the Dominion Post liars. Today the Dom Post reveals:

The Dominion Post can reveal Mr Henry also received at least $45,000 for legal services – paid for by Parliamentary Service funds last year.

They seem very certain of their claim.

Asked to comment on whether taxpayer funds were used to pay Mr Henry, Mr Peters said through a spokesman: “That is a lie.”

Well who is telling the truth?

Incidentally it can be quite legitimate for parliamentary funds to include legal expenses – if they are tied to their parliamentary duties. But NZ First has not claimed that any payments to Henry were for legitimate parliamentary purposes. They have claimed there was never any payment at all.

It would be very unfortunate for them if the Dominion Post has proof to back up their claim!

So much to report today, so where do we start. Say the Herald:

The Prime Minister gave cautious support to Winston Peters last night as fallout from his about-face on his $100,000 donation continued.

Helen Clark also risked a backlash from the volatile New Zealand First leader and Foreign Minister by publicly saying that the Owen Glenn email the Herald published had been “right” in that Mr Glenn believed he had given money to Mr Peters.

The fact Peters is still vilifying the Herald, despite the reality their work led to the disclosure of the secret donation, is very ugly and must be unsettling many of his own MPs, let alone Labour ones.

Asked if Mr Peters’ story was credible, Helen Clark said yesterday: “I’m in a position that Mr Peters is an honourable member [of Parliament] and I must accept his word unless I have evidence to the contrary.”

Well there is considerable evidence to the contrary. Not slam dunk proof, but enough to pose real credibility issues. Does Helen Clark really really think Owen Glenn never ever mentioned his donation (or at least the intention) to donate during one of their many meetings? Does that fit in with the Owen Glenn she knows?

She noted that Mr Henry backed what Mr Peters had said, and he had professional obligations to the Law Society.

Mr Henry is not a party to any private conversations between Glenn and Peters.

National leader John Key has urged Mr Peters to apologise to the Herald and to the public.

“Clearly he has received a donation and he has either misled the public wittingly or unwittingly.

It is good to see National directly criticising the behaviour, and I think the terminology is very wisely picked. Rather than get into semantics about whether Peters told the literal truth, they have focused on the fact the statements were misleading (a true statement can be very misleading).

The Herald has five unanswered question:

1. What did Owen Glenn think he was giving $100,000 to?
2. Did Owen Glenn ever talk to Winston Peters about making a donation?
3. Who told Winston Peters’ lawyer to approach Owen Glenn for a donation?
4. Why did Winston Peters not ask his lawyer if the rumoured Glenn donation had paid legal fees before Mr Peters held up the NO sign?
5. Why did Winston Peters’ lawyer not tell his client about the donation when Glenn was publicly lobbying for the Monaco job in February?

I have many more such as:

1. Who was the cheque actually made out to?
2. What actual bank account was it paid into?
3. When was it paid?
4. Was the close to $100,000 amount in Dec 2007 mentioned by Dail Jones connected to this donation?
5. Was tax paid on the donation?
6. What caused the Government to review the 2004 decision not to have a Consul in Monaco?
7. How often has Owen Glenn and Winston Peters met, and when?

Idiot/Savant at No Right Turn calls for Peters to be sacked:

The Prime Minister responded today to Winston Peters’ admission that, contrary to his earlier denials, he had been $100,000 by Owen Glenn, calling it “embarrassing”. It’s a little more than that. Not only did Peters violate Parliament’s Standing Orders on the declaration of gifts (something which Rodney Hide will be complaining about today) – he also violated Cabinet guidelines. The Cabinet Manual has extensive sections on Ministerial conduct and the acceptance of gifts. The short version: Ministers must clearly distinguish between their personal interests and their Ministerial roles, declare all pecuniary interests, and refuse all gifts except from close family members. This includes both cash and donations in kind: …

He should have declared it, and then relinquished it. He did neither. And this is something no Prime Minister should accept. The Cabinet rules on gifts are there for a real purpose: to prevent corruption, and the perception of corruption. Peters has blatantly violated those rules, and for that he must either offer his resignation or be sacked.

Plus he should be made to pay the $100,000 back. Unless Helen authorises him to keep it as a golden handshake.

Unfortunately, I rate the odds of the Prime Minister having a spine on this about as highly as I rate those of Parliament’s “all powerful” (where do the journalists get that phrase from?) Privileges Committee finding that Peters violated Standing orders. The realities of MMP mean Peters has a gun to the Prime Minister’s head – she can’t fire him, regardless of his egregious behaviour, unless she wants her tenure as PM to end prematurely in a messy coalition collapse. Unfortunately, this means she and her party get to go down with him, because I do not think that the image of a PM permitting Ministers to receive donations in brown paper bags from people who want favours from them is one the public will accept.

Clark will show no spine on this. But I think she will regret this. She should live up to her many words of the need for transparency in political financing.

I have to say I would like National to be somewhat more forceful on this also. I understand targeting Clark (esp as Peters is away) and her responses is the main priority for the Opposition, but they do need to be very very clear that this sort of behaviour would not be tolerated in a National-led Government where it is okay for Ministers to personally benefit by $100,000 from someone seeking favours from them.

I/S is right that one of the weaknesses of MMP is MPs in minor parties can get away with behaviour, other parties could not.

As for the Privileges Committee, let’s look at that. I am assuming that there is absolutely no doubt the Speaker will have to refer the issue to them. The threshold is merely that here is a question to answer, and no one could possibly argue there isn’t at least a question to answer. This is not the same as saying the verdict is beyond doubt. Until we know who the cheque was actually made out to, and which bank account it went into, one can not be conclusive on these things.

So who makes up the Privileges Committee. Let us first look at who is on there will will try hard to make the thing go away:

Labour – Cullen, Dalziel, Fairbrother, Swain – 4
NZ First – Peters (will be a sub for him – any other MP except Dail Jones I predict) – 1
Greens – Turei – 1

Some may argue Turei will show integrity and actually support motions to order copies of the accounts, invite Owen Glenn to testify etc etc. But considering the silence of the Greens to date, I am not optimistic.

Now who on there may reasonably be regarded as likely to vote for a full investigation?:

National – Brownlee, Guy, Mapp, Power (Chair) – 4
United Future – Dunne – 1
Maori Party – Harawira – 1
ACT – Hide (will be Roy if he makes the complaint) – 1

So by a 7-6 majority (or 8-5 if I am pleasantly surprised), the Privileges Committee should be able to exercise some independence from the Government line. Peter Dunne is a Minister of course but I actually have considerable faith that he will be offended by what has happened and want a full accounting.

Because of this the Government will be lobbying Margaret Wilson furiously to find a way not to send it to Privileges Committee. But the problem they have is that this is a near perfect fit as a question of privilege. The paying off of a debt on an MP’s behalf is explicitly listed as an item for inclusion in the register. Winston and Brian Henry have both admitted the debts are in his name and he is liable for any shortfall. And the burden of proof here is not beyond reasonable doubt – just that there is a question to be answered.

UPDATE: Former Chair/Spokesperson of the Young Greens, George Darroch, has blogged. He notes:

David Farrar correctly notes that left blogs have for the most part have ignored the Winston Peters donation scandal. And so far, that has included this blog. I have no ordinary desire to write about that man and his party, they disgust me enough that I feel dirty even mentioning their names.

If you lie with the dogs, you’re sure to catch fleas. Labour made their bed, they shouldn’t expect sympathy.

Now, Labour Party activists will tell me that they had no options after the 05 election. I don’t believe them. The Māori Party talked with the Labour Party after the election about coming to an arrangement, most likely support on confidence and supply.  It would have meant the Labour Party being humble, certainly, and the repeal of the Seabed and Foreshore Act. There would have been other things that were hard to swallow. The relations between Clark and Māori Party in the years previous, and the fact that Labour’s biggest donor Owen Glenn had also patronised the party by offering $250,000 in return for a guarantee of support probably didn’t help.

It is a very valid point. Helen Clark chose Winston over the Maori Party and the Greens. She never even tried to negotiate a deal with them.

The NZ Herald editorial first:

Only Winston Peters knows why he decided to deny receiving a donation from the hapless (and utterly respectable) expatriate benefactor Owen Glenn. As Mr Peters’ admission now reveals, he was in no position to deny it. He may not have been aware of the identity of donors to his legal aid but he was aware that his lawyer has been fundraising for this purpose for many years. That fact alone should have made him more circumspect when asked whether he had received any money from Mr Glenn.

Smart media may want to ask Winston how many times has he met with Owen Glenn, and did he meet with Owen Glenn in Sydney in 2006? And Owen Glenn of course is known as the soul of discretion, so he never mentioned his donation at any of these meetings.

Now he looks very foolish – and worse, in the eyes of many. It was one thing to make a denial without checking all possible sources of his financial support, and flourish a silly sign to news cameras, but Mr Peters did not hear alarm bells even when the Herald discovered an email in which Mr Glenn asked a public relations adviser, “You are saying I should deny giving a donation to NZ First? When I did?”

The logicial response would have been to ask Owen Glenn why he sent that e-mail and what he meant by it. That is the one thing he went out of his way not to do.

A wiser man would have run a quick check on all sources of funds related to his personal political activities and his party. Instead our Foreign Minister descended to baseless and disgraceful allegations of his own – against the integrity of this newspaper, its editor, and our fair-minded political editor, Audrey Young.

Yep. He called Audrey Young a liar, and suggested they had fabricated the e-mail.

“He did not make a donation to the NZ First Party,” he said of Mr Glenn, “he made a donation to a legal action he thought justified”. Later, at his party’s 15th anniversary conference, Mr Peters maintained this desperate distinction. “Not one cent went to NZ First and not one cent went to me,” he insisted. “A donation was made to a legal case which is a massive difference … “

No, it is not. He brought a case against the election spending of the MP who captured his Tauranga seat. The law hears those actions in the name of individuals, not parties. Had the petition succeeded, the beneficiaries would have been Mr Peters, if the seat had been restored to him, and his party, since an electorate gives a party more secure representation in Parliament. Mr Glenn obviously believed he was contributing to NZ First and to all intents and purposes, he was.

I have had a lawyer confirm to me the electoral petition is in the nameof Winston personally, and hence the expenses of that petition are his personal expenses. Winston’s claim this is somehow different to a donation to him is like some sleazy US politician claiming they never took a cent from a major lobbyist – but the lobbyist did buy them a new car, paid off their mortgage and flew their family for a holiday on their private jet.

In a legal sense the money was not a donation to NZ First, but Owen Glenn obviously did not see the difference.

The Press weighs in:

For bellow and bluster as they might, Peters’ admission at the end of the week, after months of denials, that he was in fact the beneficiary of a $100,000 gift from the offshore billionaire Owen Glenn is deeply humiliating. Peters continues to insist that the way the gift was made leaves him entirely blameless. That is a view that not many outside the party will share. …

Peters says he knew nothing about the gift until he was told by his lawyer early this week. This means that all the time Peters was engaging in bullying and offensive abuse of those who were seeking the truth about the matter, he did not engage in the kind of straightforward inquiries that would have revealed it.

And the most obvious inquiry was to ask Owen Glenn what he meant.

The second most obvious inquiry was to ask Brian Henry “Hey Brian you know that $100,000 you got for my legal bills. Was that Owen Glenn?”.

Very interesting to look closely at the words in the media from Brian Henry and Mike Williams this morning. In the Herald:

Winston Peters’ lawyer says a tip-off led him to approach billionaire Owen Glenn for a large donation to the NZ First leader’s legal bills.

Now this tip-off could have been from Winston or from Mike Williams. Also of note if Henry says he solicted the donation while Winston Peters in his February perss conference said that they never approached or asked anyone for money. Of course what Winston meant was they never solicit donations to NZ First but they go hell for leather for personal donations to his legal fund.

Brian Henry said last night he asked the Monaco-based businessman for help after another donor did not deliver.

How many secret donors have there been?

“We made it well known around friendly political circles – or I did – that I was looking for a donor.”

Doesn’t that sounds like a perfect description of Mike Williams?

Mr Henry said he could not recall who had advised him to contact Mr Glenn when the original funder of the legal action fell through, but it was not Mr Peters.

Nor was it Mike Williams, the president of the Labour Party which has also received Glenn donations.

“I can’t off the top of my head remember who it was who told me to call him.”

Oh of course. You can not remember who told you to go hit Owen Glenn up for $100,000 but you can recall it wasn’t Winston or Mike Williams.

Mr Henry said no fund or account for Mr Peters’ legal bills existed.

“The position is that the money is used to pay an existing bill, full-stop.

There is no fund. There is no cash sitting in a balance anywhere. There are bills to be paid.”

Now this is fascinating. Because paying off a bill on behalf of Winston Peters is effectively a donation to him, and there are definite tax implications for that. More on that later.

But let us turn back to the requirements of the Register of Pecuniary Interests:

a description of all debts of more than $500 that were owing by the member that were discharged or paid (in whole or in part) by any other person and the names of each of those persons,

So Brian Henry has just confirmed the Register is incorrect for Winston Peters. And Winston would have been well aware that his legal bills had just dropped by $100,000. Plus it is possible he gets Brian Henry to file his annual return, so any excuses for an incorrect return are shot.

Mr Henry would not discuss why he had not alerted Mr Peters about the donation in February, when Mr Peters denied Mr Glenn had made a donation.

It was of course logical and sensible to let your close friend and client remain in the dark.

Asked about pecuniary gain, Mr Peters told NZPA he did not believe he had benefited personally from the arrangement whereby his legal bills were paid by anonymous donors and he paid the shortfall.

Mr Henry concurred last night.

“There is nothing I am aware of where someone contributing towards a bill you have incurred needs to be declared.”

These men are lawyers? They have to be kidding. They think paying a bill on behalf of someone is not beneficial. Hey let’s pay off Winston’s mortgage for him – that doesn’t count also.

What they say also is directly contradicted by Standing Orders and the Register of Pecuniary Interests.

Henry’s insistence that paying off Winston’s bill isn’t a donation to Winston strongly suggests he did not pay tax on that donation. I suggest a question the nice Peter Dunne, Minister of Revenue would be in order:

“To the Minister of Revenue: What is the position of the Inland Revenue Department as to liable tax if an individual has another individual pay $100,000 debt on their behalf”

Also yet to be resolved is if that $100,000 donation was in any way linked to the large closer to $100,000 than $10,000 sum which appeared in the NZ First bank account in December 2007?

Have had many interesting e-mails on the Winston issue. One of them is from an lawyer and has some interesting aspects:

As a lawyer, I am fully aware of the personal nature of legal expenses / Court costs.  They are a personal liability, which must be satisfied by the client (no different than the personal liability for your mortgage). It is beyond doubt that, by having his personal liability for legal fees and Court costs paid for him, WP has personally benefited from the donation.

Indeed. It will be interesting to ascertain (if one can) the exact legal nature of the fund the donations go into. Is it a legal trust? Is it a lawyer’s trust fund? Is it an unincorporated society?

By definition, lawyer’s trust accounts are NOT subject to legal professional privilege.  So be ready when the media are told that further details are protected from legal privilege – because they are not. For instance, see s 20 of the Tax Administration Act 1994, which expressly states IRD can have immediate access to all legal trust accounts as privilege does not apply to them (there is no “privilege” in payments, only in legal adice).

I am also receiving detailed information on the tax implications, which I will publish when finalised.

There is now no doubt the e-mail published by the NZ Herald was not a forgery. And few would doubt that the publishing of that led to the revelation that Winston Peters had personally benefited by a $100,000 donation from Owen Glenn to his legal costs.

Anyone with has campaigned on transparency would say that the NZ Herald has done nothing wrong in publishing a true e-mail which resulted in the public gaining knowledge about a secret donation.

So I, and others, was wondering about whether Winston Peters would be man enough to apologise to Audrey Young for calling her a liar, and maybe even to her editor Tim Murphy for calling for them both to be sacked.

Alas the Herald on Sunday reports:

Yesterday Peters renewed calls for Murphy and Young to “do their duty and resign”.

Isn’t that incredible? The man literally has no shame.

Anyway NZ First is now officially the party in favour of large secret donations to top up MPs pay. No, seriously. This is what Brian Henry said:

He said politicians were “poorly paid” and needed donations, and he would continue to fundraise.

“They’ve got a temporary job, and they can’t afford litigation. They just don’t have the money.”

Yes Winston is very poorly paid on $200,000 or so a year. And his poor temporary job has only lasted 27 weeks. I’m sorry I mean 27 years (out of the last 30).

And as for being able to afford litigation. Well I’m sympathethic to MPs who get sued doing their job and need help with the costs of defending a lawsuit. But it is worth nothing that of Winston’s 14 law suits – almost all are him suing other people – not getting sued.

Audrey Young blogs yesterday:

Here at the party convention at Alexander Park he has held perhaps the most graceless press conference he has ever held, and that takes some beating.

And No, to the dozens of inquiries: Peters has not apologised for the personal abuse levelled at me last Monday when he employed the bazooka strategy – fire so many missiles at somebody else that people forget what you are supposed to have done. Though I did receive one from a very decent member of the caucus.

There are some decent MPs in NZ First and I suspect they are very distressed to find out that all their railing against secret donations in politics only applies to everyone but their Leader.

I wonder why he was able to find the answer to the Glenn donation question in July when in February after apparently exhaustive questions were asked about the $100,000 Dail Jones thought he had seen in the party’s accounts, no answers were turned up.

This is one of those big unanswered questions. Is the $100,000 donated to Peters’ legal fund in 2006 the same close to $100,000 sum that went into a NZ First account in late 2007. If the money has even temporarily gone through an official NZ First bank account, then there are serious implications.

Bill Ralston has his say:

Winston Peters’ embarrassing admission, despite months of blustering denials, that he had received a $100,000 donation from businessman Owen Glenn poses some real risks, not only for himself but for several other political players. …

Instead, he will be wriggling under reporters’ questions about his party’s murky funding structure and what exactly Glenn may have wanted in return for his generosity.

It is obvious from a leaked letter from Glenn published in the Weekend Herald last week that Glenn clearly believes he is still in the running for the honorary consul-general role in Monaco, a position Peters, as Foreign Minister, has the power to grant.

Peters has said they have not yet decided if they even need a Consul in Monaco. However the Government in 2004 clearly  decided they do not. So why is the Government reviewing a very recent decision, apart from the fact a wealthy donor has said he wants the job?

A good question is what role did Williams play in backing the expensive Tauranga electoral petition after the last election?

It was that legal action, along with 13 cases since 1991, that ran up the legal bill that Glenn helped pay off.

It is understood Williams did a lot of the calculations on election spending by National’s Bob Clarkson that Peters’ lawyers used to try to challenge his election.

There was indeed talk of Williams helping with the unsuccessful petition. Was Mike Williams the person who arranged for Owen Glenn to donate to Winston’s legal expenses?

And finally the Herald on Sunday Editorial:

The trouble with occupying the moral high ground is that the only way out is down. New Zealand First leader Winston Peters has spent the weekend of his party’s 15th-anniversary conference trying to finesse his late, lame admission that expatriate billionaire Owen Glenn did, in fact, make a $100,000 payment, the existence of which Peters has so vehemently denied.

But what is plain is that he did not tell the whole truth about the matter.

Indeed it is only due to the NZ Herald, and other media, that the truth has come out. And Winston’s position is they they should be sacked for having got the truth out of him.

They then post a very valid question:

But why should he know nothing of contributors to funds that assist his personal legal battles? If a Chinese wall is to be erected at all, it would be much more logical that it be around the party accounts, with which Peters appears to have been more familiar than his erstwhile president. And in any case, Glenn’s email makes it plain that he thought he had contributed “to NZ First”.

Yes party leaders should be kept away from the party’s accounts, but it is arguable he actually needs to know who donated to benefit him personally. And make no mistake paying off his legal bills has the same effect as giving him cash directly – a bigger bank balance for Peters.

Brian Henry and Winston Peters have said that until yesterday Winston Peters did not know Owen Glenn donated $100,000 to pay Winston’s legal bills. Now this is impossible to disprove unless someone leaks some more e-mails.

But we can look at how credible this is, so people can make a judgement. For politics is about credibility.

Now if one is to believe that Peters did not know of the donation from Glenn until Friday, you have to believe all of the following. Note – not just one of the following- but all of it:

1. Owen Glenn found out about the “Legal Expenses Fund” from someone other than Winston Peters.
2. Glenn found this out despite almost no one who actually lives in New Zealand knowing about it.
3. Glenn chose on his own whim to donate to the Legal Expenses Fund rather than NZ First.
4. Glenn never ever mentioned to Winston Peters he had donated or intended to donate to his legal expenses fund. Glenn is of course known as the soul of discretion.
5. Glenn managed to get contact details for Brian Henry from someone who is not Winston Peters.
6. The fund which has been running since 1991 has raised a total of $200,000 of which the $100,000 donation constitutes half in one swoop, and he never asked nor suspected who the donor was.
7. 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.
8. Winston Peters never thought to check if the large $100,000 donation his lawyer had received could be the donation being referred to by Owen Glenn in February.
9. 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
10. That 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.
11. 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.
12. There was some legitimate reason Winston Peters did not do 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?
13. That Winston Peters never wondered why Steve Fisher was so desperate to make sure Owen Glenn did not contradict what Peters said?
14. 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 correct (from Glenn’s perspective)
15. That during all this time, Winston Peters never wondered if the mystery $100,000 donation for his legal fees could be from Owen Glenn, and that it all came as a total surprise.
16. 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.

Now if you do believe all of the above, I’d like to take you to San Francisco where I have some real estate to sell you.

Some may think that there is less of an issue for Peters having had the donation go to pay for his private legal expenses, rather than to NZ First itself. I am of the view this makes things much worse for him.

NZPA reported:

He said that since 1991 he had been involved in 14 legal actions which had been partly funded through donations, and Mr Henry had “a firm policy” of not disclosing the source of donations.

“I have never been told the source of these donations but have personally met the shortfall which has amounted to many hundred thousands of dollars,” Mr Peters said in a statement.

Now this makes very clear that the secret donation was effectively a donation that benefited Winston Peters personally. If they had not received that $100,000 then Peters by his own words would be making up the shortfall.

The first issue this may raise is the tax status of the donation. Peters is not a charity, and the donation is well above the limit for personal gifts. Who exactly was the donation made out to? What account was it paid into? Who controls that account? What is the legal personality that received it? Was tax paid on it if tax is liable?

The next issue is the Cabinet Manual. First some general clauses:

2.52 A Minister of the Crown, while holding a ministerial warrant, acts in a number of different capacities:

1. in a ministerial capacity, making decisions, and determining and promoting policy within particular portfolios;
2. in a political capacity as a member of Parliament, representing a constituency or particular community of interest;
3. in a personal capacity.

2.53 In all these roles and at all times, Ministers are expected to act lawfully and to behave in a way that upholds, and is seen to uphold, the highest ethical standards. Ultimately, Ministers are accountable to the Prime Minister for their behaviour.

So the question for the Prime Minister is has her Minister of Foreign Affairs acted in a way which has upheld the highest ethical standards in not just their ministerial capacity, but also their political and personal capacity.

2.55 All members of Parliament are required to disclose certain assets and interests in an annual Register of Pecuniary Interests of Members of Parliament. This register, administered by the Registrar of Pecuniary Interests of Members of Parliament, is designed to promote accountability and transparency by identifying personal financial interests that might influence members of Parliament.

We will come back to the Register of Pecuniary Interests.

2.56 Additional requirements apply to Ministers’ interests. Conflicts of interest may arise between Ministers’ personal interests and their public duty because of the influence and power that Ministers exercise, and the information to which they have access, both in the individual performance of their portfolio responsibilities and as members of the Executive.

In other words the bar for Ministers is even higher than for MPs.

2.59 Ministers themselves are responsible for proactively identifying and reviewing possible conflicts of interest and ensuring that any conflicts of interest are promptly addressed by taking one or more of the measures set out in paragraph 2.70.

Note the requirement to be pro-active in identifying conflicts. This may mean things like asking your lawyer who donated $100,000 to you.

2.78 The Standing Orders require members of Parliament to disclose to the Registrar of Pecuniary Interests of Members of Parliament any gift accepted over a prescribed value, currently $500. This declaration includes hospitality and donations in cash or kind.

So a donation is a gift, and must be declared if over $500.

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.

Now it gets interesting. The PM gets to decide if you get to keep the gift. So Helen has to decide whether or not Winston can keep the $100,000 that was donated towards his legal expenses.

Now let us look at Standing Orders, namely Appendix B:

4(1)(d)Every return of pecuniary interests must contain the following information as at the effective date of the return: the name of each trust in which the member has a beneficial interest, and

And also let us look at the Register as at 31 January 2007,

4 Beneficial interests in trusts
WRP Family Trust

So if the bank account it was paid into is an actual trust fund that helps pays Winston’s legal bills – it is not listed as required.

Now let us look at Section 7(b)

a description of each gift (including hospitality and donations in cash or kind but excluding any donation made to cover expenses in an electoral campaign) received by the member that has an estimated market value in New Zealand of more than $500 and the name of the donor of each of those gifts (if known or reasonably ascertainable by the member),

Now even if (and it is a big if) Peters did not know the name of the donor, he did know there was a $100,000 donation towards his legal expenses and this was not declared. He should have declared an anonymous donation towards his legal expenses. He actually did not have to disclose the amount – but he did need it disclose the existence of it.

Now maybe you argue he did not receive the donation himself so let us turn to 7(c)

a description of all debts of more than $500 that were owing by the member that were discharged or paid (in whole or in part) by any other person and the names of each of those persons,

And we have been told these donations were to pay his legal bills and expenses. So it should have been declared under either 7(b) or 7(c). Unless you argue that the money went into a trust with a separate legal personality – but if that is the case then the trust should have been disclosed in Section 4(1)(d).

So who should sort this out. Here is one possibility:

15 Auditor-General’s review and inquiry
(1) The Auditor-General will review the returns provided under clause 14 as soon as is reasonably practicable.
(2) The Auditor-General may inquire, either on request or on the Auditor-General’s own initiative, into any issue as to whether—
(a) any member has complied, or is complying, with his or her obligations under this Appendix

So the Auditor-General could investigate. There is also another option:

Without limiting the generality of Standing Order 399, the House may treat as a contempt any of the following:

(h) as a member, knowingly providing false or misleading information in a return of pecuniary interests:

So an MP could ask the Speaker to refer the issue to the Privileges Committee. My suggestion would be both avenues – ask the Auditor-General to investigate and ask the Speaker to refer the issue to the Privileges Committee.

People may claim Peters did not know about the donation. Even if one accepts he did not know Owen Glenn made the donation, he did know that his legal expenses shortfall had suddenly reduced by $100,000 and failed to disclose it.

But also to the point, his lawyer Brian Henry would beyond any reasonable doubt be very very aware of the requirements placed on Peters by the Cabinet Manual and the Parliamentary Standing Orders. As his lawyer he would I suspect have professional and ethical obligations to make sure returns filed were correct and that Peters was in possession of the necessary information to make correct returns. I think there are as many questions for Mr Henry as Mr Peters about this.

So the issues are:

1. Does Helen Clark think her Minister of Foreign Affairs has upheld the highest ethical standards in his ministerial, political and personal capacity?
2. Will Helen Clark allow Winston Peters to retain the $100,000 gift from Owen Glenn – it is her decision as Prime Minister.
3. Can the PM explain why the Government has reversed or is reviewing its position from 2003/04 on not needing a Consul in Monaco?
4. Will an MP file a matter of privilege with the Speaker before the next sitting of the House on Tuesday?
5. Will the Auditor-General investigate on his own initiative?
6. Will the Inland Revenue Department investigate the tax status of the donation?

The truth has come out. Winston Peters has announced that Owen Glenn donated $100,000 in 2006 towards the costs of the Tauranga electoral petition.

Peters has said he knew nothing at all about this donation, until he was told today by his lawyer Brian Henry.

Amazing that Owen Glenn would know how to donate to the legal fund, and would never have mentioned at all to Winston that he had done so. And amazing that the legal fund is so robust that $100,000 turns up in it and you never ask your lawyer where it came from.

Anyway for a start Winston Peters owes Audrey Young a huge apology.