Cunliffe tries to deflect over his secret trust

April 1st, 2014 at 1:00 pm by David Farrar

On Breakfast on TV1:

DAVID CUNLIFFE:        Absolutely not. In fact there’s a huge difference between what I did, which was to open up a campaign trust that wasn’t even under the Electoral Act, it was an internal party matter, for a trivially small amount of money and said to all of the potential donors through the trustee, you must make yourselves public. The Prime Minister has done none of that. The Prime Minister’s trusts have taken millions of dollars over the last few years and he’s refused to name even a single donor. So I’m afraid the National Party is in absolutely no position to be high minded with me. I have done everything I can to be transparent and frankly, I’ve had about enough of National’s hypocrisy on that matter.

This is a bare faced lie. The Prime Minister, unlike David Cunliffe, does not have any secret trusts for donors.

The National Party used to have trusts for donors to donate through, but they were wound up in 2007 – long before John Key became Prime Minister.

Cunliffe just doesn’t get it. It’s the hypocrisy. He railed against secret trusts and then set one up himself. His party passed a law effectively outlawing the use of such trusts for political parties, and he went and set one up for his leadership contest.

Also the amounts of money are not trivial. The disclosure limit for personal donations and gifts is $500. His secret donors donated ten times the disclosure limit.

And he has not done everything he can to be transparent. He still refuses to name the two remaining secret donors. Rather than face the embarrassment of New Zealanders knowing who his donors are, he refunded the money. That is not transparency.

Tags: ,

Some large donations

March 29th, 2014 at 12:29 pm by David Farrar

The Electoral Commission publishes details of large (over $30,000) donations to parties as they are disclosed. These are the seven large donors since 2012:

Donor Amount Party
Colin Craig  $721,000.00 Conservatives
Brian Dalley (Estate)  $430,259.33 Labour
Laurence & Katrina Day  $100,000.00 Conservatives
Alan Gibbs  $100,000.00 ACT
Xiao Miao Fan  $53,602.65 National
Contue Jinwan Enterprise Group  $49,220.18 National
Graeme Douglas  $42,000.00 National

To put this is context, during the last three months of an election campaign a party that contests all 71 seats can spend up to $4,740,400.  Of that $2,915,700 can be spent on party vote campaign and $1,824,700 on getting electorate candidates elected.

Tags:

Geddis on donations

March 10th, 2014 at 12:00 pm by David Farrar

Andrew Geddis blogs at Pundit:

There’s been a bit of lefty gloating going on around the traps aboutPatrick Gower’s interview with John Key on The Nation, in which he sought to draw an equivalence between David Cunliffe’s use of a trust to receive donations for his Labour leadership campaign and donations that National received back in 2010 and 2011 through a dinner held at “Auckland’s pricey Parnell restaurant Antoine’s”.

The fact that the Herald, Fairfax and TVNZ have all ignored the story is either evidence that, like Geddis, they think it is bullshit (my term) or a vast media conspiracy. I think the former considering they have all been covering the Collins story in a critical way.

But much as I would love to grab a pitchfork and torch and follow in behind the crowd all the way to the door of Key’s castle on a bleak mountain top (which is what he lives in, right?), my goddam conscience just won’t let me do it. So I’m going to have to break ranks and say, “nice try, but not quite.”

The asserted equivalence seems to be that Cunliffe’s trust lumped together a bunch of money and passed it on to him in ways that did not reveal the individuals who donated it, whilst the “Dinner at Antoine’s” likewise generated a bunch of money from individuals that then got passed on to the National Party without anyone getting to see who really gave it. That’s true enough. But it’s a superficial and misleading similarity.

Because the important difference is the intent in each case. 

This is a point I made around 50 times on Twitter at the weekend. A trust hides the identity of the donors, and that is the intent. A dinner does not hide the identity, nor is it designed to. In fact it increases transparency.

Cunliffe’s use of a trust was deliberately meant to enable individual gifts that otherwise would have to be declared to Parliament’s registrar of pecuniary interests (which has a $500 threshold) to remain “faceless”, in that it permitted only the Trust’s gift to Cunliffe to be declared. It’s the exact same strategem that the National Party used for years with its Waitemata Trust donation laundering vehicle – a practice that Labour criticised heavily at the time and enacted the Electoral Finance Act to stop (amongst other things). Which is why Cunliffe’s decision to adopt the same strategy was so very, very silly.

I’d use another word starting with H!

In comparison, none of the individual donations made at the Dinner at Antoine’s (in the form of a $5000 payment to attend) had to be declared to the Electoral Commission, as the threshold for declaring party donations was at that time $10,000 (its since gone up to $15,000). So there was no necessary reason for the donations to be bundled together  and passed over in one lump sum. It just seemed to happen that way because the owner of Antoine’s got the attendees to first pay him for the dinner, then gave a single cheque to National a few days later, rather than the attendees writing out cheques to National directly. If they had done the latter – which would have been entirely legal – then we would not have had any record of the dinner taking place at all.

That is a useful point.  The individual donors were not disclosed, because their donation was below the disclosure limit. And yes if they had paid National directly for the tickets, then the dinner itself would not be disclosed. National could have structured the dinner in a way that it never appeared on the books at all, yet they didn’t. Quite the opposite to Cunliffe.

(Oh, and in case anyone’s wondering how we know how many places any individual person bought, note that National’s financial return for 2010 states that the donation from Antoine’s was made up of “contributions” … so National must have been told who each of the guests at the dinner were. And had any of these guests paid for more than one place at it, their identity would have had to be disclosed under s.210(1)(b) (as the disclosure threshold stood at that time). So the fact that no-one’s name was disclosed tells us that each attendee paid for only one place.)

Yes, and if any of those people had made other donations to National and over a year it exceeded $15,000 they would have been exposed.

That’s why Cunliffe’s decision to use the Trust actually does feed into the whole “tricky” label that National is trying to pin on him. Itwas a strategem to avoid an outcome he did not want, in a way the Dinner at Antoine’s episode was not.

Indeed. The dinner is not a strategy for avoiding disclosure. It is a strategy for getting people to hand over money to the National Party :-)

The rationale for permitting this is that, in the scheme of fundraising for a political party’s campaign, $5000 is such small change that it doesn’t raise any real concern that you’ll get anything in return for it. Indeed, it’s only once someone gives $15000 in a year that we (now) require the political party tell the world who they are. Anything given below that amount is kept strictly between the donor and the party.

OK. That’s fine. But let’s say that the guest list for the Dinner at Antoine’s got leaked. And let’s say that it turned out six of the places around the table were taken by Chris MollerBruce Carter,Peter CullinaneNigel MorrisonRod McGeoch and Brent Harman. (Note to Chapman Tripp or whomsoever may be asked to look at this paragraph – I am not saying that these individuals were at the dinner, but rather posing a purely hypothetical point for the purpose of academic discussion.) Would it not be of considerable public interest to know of that fact? In particular, would it not be relevant to us that (in the purely hypothetical case discussed) members of SkyCity’s Board of Directors had given National $30,000 between them prior to the last election, so that they could spend an evening in private conversation over dinner with the PM? And then let’s say that each of their wives also had chosen to buy a place at the table in their own names – adding another $30,000 to the pot.

I’m not saying that this was what the Dinner at Antoine’s was all about. It probably wasn’t – more likely it was an amalgam of social climbers and old friends taking the chance to hang out with a guy who is (by all accounts) good company. What I am saying, however, is that because New Zealand has set the legal disclosure level for donations to political parties at such a high level, we may never know if and when such a dinner ever does take place. And that, I think, is a problem.

Andrew supports a lower disclosure limit than $15,000. It used to be $10,000 which I supported but National and Labour voted for it to increase to $15,000 in 2010. But as I pointed out yesterday that is still under 0.5% of a party’s allowable spend during the election year.

In the hypothetical case above, I’d point out that each director and spouse would have to pay for their ticket personally. If one person or company was reimbursing them for the ticket or paying for it, then they have a legal obligation to reveal that.

The other thing worth noting is that a dinner is in fact a transparent fundraising device as everyone there sees who everyone else is. Just send a cheque to a political party, and no one knows but them and you. Turn up to a dinner and everyone else there will see. And I’m sure people would notice an entire board of directors there and their spouses :-)

So a very good post by Andrew on this issue. His hypothetical is just that. As it happens I think $10,000 is a better limit than $15,000 but I put this in the context of a party’s likely total spend in election year being between $3 million and $5 million.

Tags: ,

Donation disclosure thresholds

March 8th, 2014 at 3:00 pm by David Farrar

For the excitable out there, let me explain the three different sorts of donations and the thresholds.

  1. A donation or a gift to an MP personally must be disclosed if over $500. That is because it benefits them personally.
  2. A donation to an electorate candidate over $1,500 must be disclosed. The spending limit during the regulated period is $25,700 so any donation over 5.8% of their spending cap gets disclosed.
  3. A donation to a political party over $15,000 must be disclosed. The spending limit during the regulated period for a party that contests all 71 electorates is $2,915,700 so any donation over 0.5% of their spending cap gets disclosed

The reasons we have disclosure is to guard against purchasing undue influence. Personal donations to an MP directly benefit them, hence the low threshold. A donation of say $5,000 to a political party represents probably around 0.1% of their election year expenditure, so isn’t significant. That is why the threshold is $15,000 (I think a case can be made for it to be $10,000 as it used to be), not $500.

Tags:

Will Banks use the Cunliffe defence in court

March 7th, 2014 at 1:00 pm by David Farrar

Claire Trevett at NZ Herald writes:

On Tuesday, he buckled and revealed the names of three donors who had agreed to be named. A further two would not be named, and their donations will be returned to them. He said it was a lapse in judgment but done with the noble aims of respecting the donors’ wishes for secrecy and keeping Cunliffe at arm’s length from it all. Cunliffe claimed the latter aim was achieved – he had not known the identity of the donors. He also admitted at least one of them had approached him directly to offer a donation, but claimed he had referred that person on to the trustee, Greg Presland, so had not known for certain whether the donation ended up being made.

By this stage a neon sign with “John Banks” should have flared in his head. If Cunliffe’s 2013 donations were “historical”, what were Banks’ 2010 donations? And Banks, too, had argued his donation from Kim Dotcom was technically anonymous because his campaign manager had dealt with it after he was offered it, so he had not known for certain if it was made.

This is an interesting point. John Banks got rightly savaged for having the initial discussion with Dotcom over a donation, and then saying it was anonymous because he left the details to his campaign manager. This is what Cunliffe is now also claiming, so Banks in court can now get up and say Cunliffe did it also.

The question also arises as to how Cunliffe declared the donations to the Labour Party. Labour and Mr Cunliffe have both refused to say whether he declared the donations to the party individually, or as a lump sum from the trust. Presumably it was the latter, given Cunliffe has claimed not to know who the donors were. If so, it might not strictly be against the Labour Party’s own rules but it certainly isn’t in the spirit of them.

This is a very intriguing issue. The fact Labour will not say whether Cunliffe declared just the trust to them, or the individual donors, makes me very suspicious. I doubt Labour Head Office would have deemed it acceptable not to be told of the individual donors (in confidence).  But if they were told of the individual donors, then it means that Cunliffe has lied in saying he doesn’t know who they all were. The only possible way out from the contradiction is to do a Banks and claim he didn’t read the form his campaign manager signed.

If his disclosure to Labour did just name the trust, then they would confirm that to kill the story. I think they did disclose individual donors, and they are terrified at having to admit this because it would compromise their leader so badly.

Cunliffe is now talking about changing the rules to make the situation clearer. If any rules are to be changed, it should be those of the leadership contest, not the Register of Pecuniary Interests. Labour may be selecting its own leader, but it is also selecting the person who could be Prime Minister. No MP who is effectively auditioning to be Prime Minister should be exempt from disclosing donations simply because it is an “internal process”. If anything, it is a greater reason for disclosure.

Somehow I don’t think it is their own rules they will seek to change. If they get the numbers in Parliament, they’ll change the rules of the Register of Pecuniary Interests to exempt donations to leadership campaigns.

Tags: , ,

Cunliffe’s secret trust

March 4th, 2014 at 12:58 pm by David Farrar

Just imagine the howls of outrage from left wing commentators if the successful winner of a National Party leadership race was found out to have used a secret trust for donations from businesses to fund their leadership campaign. Their outrage would be massive. As far as I can see, No Right Turn is the only left commentator to have said anything at all on Cunliffe’s secret trust.

The Herald reports:

David Cunliffe has admitted a trust was used to take donations for his leadership campaign, allowing him to sidestep the obligation to disclose donations in the MPs’ register of financial interests.

So the public will never know who funded his successful leadership campaign. These donations were not to a political party, but effectively to the MP personally to pay for their leadership campaign.

Mr Cunliffe said his campaign team opted to use a trust because the Labour Party’s rules for the contest specified donations would be confidential. “That is a decision we made as a campaign team at the time, pursuant to the rules which meant donors could have an expectation of confidentiality.”

Asked if he was trying to hide something he said “not at all. That has been common practice in New Zealand.”

Neither Grant Robertson or Shane Jones used a trust. And while trusts have been used previously in wider political terms, they have been outlawed for general elections and local body elections (can still be used but donors to the trust must be revealed so donor identities can not be hidden). And the party that has campaigned loudest and strongest for outlawing these trusts – Labour. Cunliffe himself has railed in Parliament against the use of secret trusts, yet here he is defending his own one/

By deadline, Mr Cunliffe had not responded to further written questions about whether he knew the names of donors who had given to the trust, or whether he had included individual donations in his return to the Labour Party under its rules.

That’s a fascinating question. I suspect that Cunliffe does know the donors (especially if family members are trustees of the trust, which is what I have heard) and has revealed them to the party. He is just refusing to reveal them to Parliament despite the requirement in Standing Orders to do so.

What surprises me about this is the political idiocy in using a trust to hide donations. When he decided to run for leader and someone proposed setting up a secret trust to launder the donations through, did none of his advisors think or say “Hey, that may not be a good idea, we could look a bit hypocritical”.

Equally surprising is Labour’s response to this is to focus on the legality, not the politics. The brand damage to Cunliffe from having a secret trust for his donations is considerable. It neuters Labour on any issues of transparency. If I was an advisor to Cunliffe I’d be saying “Why don’t we ask the donors if they are happy to be named”. I imagine most donors would be happy to do so. Shane Jones received donations and he has stated his are included in his Register of Pecuniary Interests.

Getting permission from the donors seems the obvious thing to do, to defuse this. The fact they are refusing to do so, despite the political cost, makes you wonder why. I can only conclude that they believe revealing the identities of the donors would do more political damage than keeping them hidden.

UPDATE: Labour are in full retreat now. Cunliffe now says using the trust was an error in judgement. No shit Sherlock. Why did it take so long to work that out. Two donors are refusing to be named, and their donations are being returned. Named donors include Selwyn Pellett (owner of “independent” Scoop News), Tony Gibbs and Perry Keenan. Keenan appears to be a colleague from Boston Consulting Group now based in Chicago. I presume Tony Gibbs is the company director.

UPDATE2: Just returning the anonymous donations doesn’t avoid the need for transparency. Maybe they’ll just donate the money to Labour now instead. At the end of the day the donations were made in the last calendar year and should be disclosed in his Register of Pecuniary Interests – even if refunded this year. And you have to wonder why those two donors are so desperate not to be named? How embarrassing would it be if their names were disclosed.I can only assume the answer is greatly, if they are being refunded.

UPDATE3:

mickysavage

 

This is hilarious. Attack National for secret trusts (which were wound up in 2007 by the way) and then go and set up a secret trust for your own leader to hide the donations to his leadership campaign. Again, how did no one think this was a bad idea?

The number of “errors” by David Cunliffe is growing. Off memory it includes:

  • The secret trust for donors
  • Getting the details wrong for the baby bonus and a false advertisement
  • Claiming he had  a”middle range existence”
  • Breaking the law by encouraging people to vote Labour on the day of Chch East by-election
  • Including details in his CV that were inaccurate

I leave the last word to Danyl Mclauchlan:

 

Imagine what it would be like if they were running the country!

UPDATE4: Idiot/Savant at no Right Turn quotes Cunliffe:

“I don’t think in hindsight that a trust structure fully represented the values I would like to bring to this leadership. Decisions that were made to set up the trust could have been better. I have learned form that and am now making sure I do whatever I can to ensure transparency.”

Idiot/Savant comments in turn:

Which is just sociopathic “sorry I got caught” bullshit. The thing about values is that you live them, and they’re instinctive. Cunliffe’s aren’t. When faced with a choice between transparency and corruption-enabling secrecy, he chose the latter, and then tried to cling to that choice when it was questioned. These are not the actions of an ethical man who believes in open politics – they are the actions of someone trying to get away with something they know is wrong. 

I’m sorry I got caught!

Tags: ,

Will Cunliffe’s donations be revealed?

March 3rd, 2014 at 9:00 am by David Farrar

The Herald reports:

Labour leader David Cunliffe used an “agent arrangement” to take donations to his leadership campaign last November and is refusing to say whether he has disclosed individual donors in the MPs’ register of financial interests or whether they were disclosed as being from a trust.

This sounds too ironic to be true. Surely the “agent” wasn’t one of those secretive trusts that Labour has spent almost a decade railing against and legislated against?

The returns for the Register of Pecuniary Interests were due last Friday, and Mr Cunliffe said his return met both the rules of the register, which requires disclosure of donations of more than $500, and those of the Labour Party, which said all donations would be confidential.

He refused to say how he had met both rules, or whether he had declared donations as being from a trust rather than the original donors.

But he confirmed his campaign was run through an “agent arrangement” rather than taking donations directly. He sought a legal opinion before filing his return and defended the use of trusts.

What this means is that the Leader of the Labour Party used a trust so that we will never know who paid for his leadership campaign – despite Parliament’s Standing Orders requiring all donations of over $500 to be disclosed.

The stench of hypocrisy is massive.

“In the event donations are made to a trust, the trustee will have information about donations which a candidate or campaign team won’t have. So [if] there is a trust involved, it will be the donations of the trust to the campaign that are declared, as per the rules. If there is a trust, trustees owe obligations of confidentiality.”

But who decided to set up a trust? The purpose of the trust was to defeat the transparency requirements of Parliament’s Standing Orders.

I’m also not convinced that Cunliffe can refuse to name his donors, eve if it went through a trust. If he is aware of the ultimate source of the donations, you can argue Standing Orders require him to disclose – or risk a privilege complaint.

Of his rivals for the job, Shane Jones said he had disclosed all donations of more than $500, and the donors, and Grant Robertson said he did not receive any individual donations of more than $500.

So Jones and Robertson have disclosed – it is only their leader hiding behind a trust to protect his personal donors.

In 2005, Labour changed electoral finance rules to stop National filtering large anonymous donations through trusts. Grants made through a trust must now be disclosed separately if larger than the disclosable limit of $15,000 to a party or $1500 for an individual candidate.

Mr Cunliffe said there was “nothing at all” to embarrass him in his return.

That’s because it seems the return will just reveal the trust, and not the actual donors.

Mr Cunliffe also said Labour was likely to raise the issue with the standing orders committee, a cross-party group of MPs which decides on the rules for the register.

“It’s quite clear that having primary-style elections is new and not something that has been explicitly foreseen before in the register rules. It does raise a number of legal technicalities over the match between internal party rules and the rules of the standing orders.

“It would be better for everybody if they were aligned.”

The party can align its rules with standing orders if it so wishes, and drop the confidentially clause around donations. I can only presume that what Cunliffe is proposing is that standing orders be amended to allow Labour leadership candidates in future not to reveal donations to their leadership campaigns.

If any Labour MP or candidate now tries to campaign on better electoral finance transparency laws, they’re going to be laughed at.

UPDATE: Idiot/Savant at No Right Turn comments:

So, as usual, he’s claiming that it was All Within The Rules. But that’s not enough – his behaviour needs to be ethical as well. And by failing to tell us who he owes political debts to for financing his leadership ambitions, David Cunliffe has clearly failed that test and is unfit to be in Parliament, let alone a party leader.

UPDATE2: In 2008 Cunliffe said in Parliament:

Gee, the irony of that man impugning this Government on money issues will not be lost on Kiwis. He is the millionaire that Merrill built, the son of the “Hollow Man”, taking on the Government about transparency. Why does he not tell that to the millionaire brokers of the Waitemata Trust or the millionaire sponsors of the Exclusive Brethren? We believe in one person, one vote; not one dollar, one vote. We do not believe that elections should be bankrolled by big business, which is why the Electoral Finance Act is in place.

So he attacks people using trusts to hide the source of their donations in Parliament, yet uses the same device himself to hide the source of personal donations to his leadership campaign.

Tags: , ,

Labour leadership contenders will have to disclose donations

February 22nd, 2014 at 12:00 pm by David Farrar

Claire Trevett at NZ Herald reports:

Labour leader David Cunliffe and MPs Shane Jones and Grant Robertson could be forced to publicly declare who gave them donations of more than $500 during last year’s leadership contest despite the party’s attempts to keep them confidential.

The rules for the official register of MPs’ financial interests require them to declare all gifts and donations of more than $500 other than donations for an election. Those returns are due by next Friday.

Sir Maarten Wevers, who oversees the Register of Pecuniary Interests, said the rules appeared to cover money received by the MPs in the Labour leadership primary.

“I would expect them to declare it because it is a donation for something other than an electoral campaign.”

Yep it is a donation that benefited them personally.

It could cause some concern for the three Labour MPs if they had assured donors their contributions would not be made public. The MPs would not have to disclose the value of donations, but would have to provide the donors’ names.

Labour’s rules for the contest stated that donations would be confidential, and the party has refused to release a list of them on those grounds.

That will be hugely embarrassing if donors were assured their donations would remain confidential, but they end up being required to be disclosed in the Register of Pecuniary Interests.

What would be hilarious is if it was disclosed that a donor to Shane Jones was Foodstuffs (competitors of Countdown) :-)

Tags: , ,

Have Green local candidates declared their donations

January 14th, 2014 at 3:00 pm by David Farrar

WCC Watch blogs:

During the campaign it was reasonably well known that the Green Party had given somewhere in the region of $5,000 to all of their candidates in the election – there were a few other candidates who were pretty jealous of the fact, particularly after people like David Lee started bragging about it.

Good on Sarah Free for doing the legal thing and declaring a total of eight donations from the Green Party to a combined total of $4880.14 (one of the individual donations – $1916.46 was above the donation threshold on its own!)

However, that then leaves us with a very interesting question – what about the other candidates? David Lee and Iona Pannett both filed in donations returns without mentioning their Green Party donations. Did they not get any, or did they file a false return?

Very good questions.

Both of the Green regional council candidates declared large donations from their head office, with Sue Kedgeley getting $4657 and Paul Bruce getting $4393. It is really starting to look like Lee and Pannett have filed false returns.

If the returns are false, then they could face the same charges as John Banks is.

Tags: , ,

Edgeler on Labour’s undeclared donation

May 13th, 2013 at 1:00 pm by David Farrar

Graeme Edgeler at Public Address blogs:

If these count as donations (and both Labour, and the Electoral Commission appear to accept they do), then each of the sums above created a separate obligation of disclosure, with 10 working days allowed after each to declare it. The failure to do so within that time period, on each of the four occasions is (unless the Party Secretary has a “reasonable excuse”) a separate offence, carrying a maximum fine of $40,000.

So what about the reasonable excuse? Labour claims it was unsure whether or not a bequest counts as a donation. Edgeler points out:

So I do not consider this is as clear as others believe. However, despite my doubts, I have no sympathy for the Labour Party.

I simply cannot accept “confusion” as an explanation. Being confused about this means you received the money and thought about it whether it had to be disclosed, and just couldn’t make up your mind for certain either way. In a situation like this, if you think you may have a legal obligation to do something, and are confused, the thing you do is check. If the reason the two Labour Party Secretaries involved (Chris Flatt at the time of the first three payments, and Tim Barnett at the time of the last payment) didn’t declare these payments as donations was because they were “confused” about whether it was required then what they’ve realised that what they’re (not) doing may be an offence, but have chosen to run the risk.

I call bullshit on the claim they were confused. If you are confused, then you seek advice. Graeme’s advice would have been:

I am happy to provide you with a legal opinion if you really want, but why do you care? Just file a disclosure anyway, and save yourself some money. At the very least, just call up the Electoral Commission and ask. If they say you a bequest doesn’t count as a donation, then don’t file a return, but otherwise, what’s the harm? 

All Labour had to do was e-mail the Electoral Commission and ask them.

Newstalk ZB’s Felix Marwick apparently has confirmation that the Electoral Commission won’t be referring these matters to the Police, which has disappointed a number of people. There is nothing to stop individuals laying complaints with the police, and I suspect a number will, although it seems unlikely police will pursue charges.

Someone should complain to the Police, and if the Police don’t act, then a private prosecution sounds a good idea.

I don’t know the reasons for the Commission’s decision, but the view that it would be wrong to hold an individual responsible for whatever failure happened in this case (when it may have been someone else’s fault) may factor. This possibility shows, I think, one of the flaws in our electoral law. For something like this, there will often be no reason to sheet responsibility to an individual for a failure like this. The law should allow political parties to be charged directly, not sheet home responsibility only to party secretaries.

I agree, it should be Labour facing a fine, not their former or current general secretaries.

 

Tags: , ,

Labour hides $430,000 donation for over a year

May 10th, 2013 at 9:08 am by David Farrar

The Electoral Commission has published the 2012 donation returns from registered political parties. They appear to reveal a major breach of electoral law by the Labour Party.

Donations over $15,000 only have to be disclosed annually, but donations over $30,000 must be disclosed within 10 working days of receipt.

Labour’s return shows they received $430,259.33 from the estate of Brian Dalley (ironically a professional property investor who made his riches from capital gains) between April and July 2012. They were required to disclose this to the Electoral Commission within 10 working days, but the Commissions say they were only notified on 9 May 2013. Their disclosure is 12 months late.

Unless there is an incredibly good reason for this, I presume the Electoral Commission will ask the Police to prosecute Labour. Not only does their Leader forget a massive US bank account for four years, the party fails to disclose a $430,000 donation for 12 months.

Other donations declared are:

  • ACT – John Boscawen $24,000
  • Conservative – Colin Craig $1,618,600
  • Social Credit – Murray Gouk estate $25,000
  • Greens – various MPs totalling $233,487
  • National – Chris Parkin $16,850
  • National – James Crisp Ltd $17,850
  • National – Roncon Pacific Hotel Mgmt $22,000
  • National – Scholar Hotel $24,000
  • National – Graeme Douglas $25,000
  • National – Cyril Smith $29,950

Also of interest is the disclosure of the total amount of donations received under $15,000 in brackets.

For donations between $1,500 and $5,000 National received a total of $255,000 and Labour $27,000. However for d0nations between $5,000 and $15,000 National had $380,000 and Labour $240,000. So Labour gets most of its money from large donors while National receives a fair amount from moderate sized donors (below $5,000).

UPDATE: According to Felix Marwick of NewstalkZB, the Electoral Commission have decided to take no action. I’m staggered.

Can you imagine what would have happened if National failed to disclose a $430,000 donation from a property developer for 13 months. It would be the lead item on the TV news, with opposition parties demanding the PM front up over the issue.

We live in a country where almost no electoral law transgression has been prosecuted in the last 10 years. It’s outrageous.

Tags: ,

Hypcrisy alert

February 16th, 2013 at 10:00 am by David Farrar

Isaac Davidson at NZ Herald reports:

Maori Affairs Minister Pita Sharples has defended his connection to the head of collapsed construction company Mainzeal after their relationship was criticised in Parliament. …

New Zealand First leader Winston Peters has repeatedly questioned the relationship between the Government and Mainzeal since the company went into receivership last week, threatening 200 jobs.

He believed the Government knew of the firm’s difficulties but continued to give it lucrative contracts in rebuilding Christchurch. Yesterday, he highlighted Dr Sharples’ relationship with Richina Pacific chief Richard Yan, whose company owned Mainzeal.

Dr Sharples took a $10,000 donation from Mr Yan before the 2011 election, and has been a strong supporter of the Chinese-born businessman’s proposal to build New Zealand House in Shanghai.

Mr Peters said these actions raised serious questions about the integrity of government negotiations. “This is another example of big business influencing government decisions behind closed doors.”

Excuse me while I vomit. How can anyone seriously report anything Peters says about integrity and donations. Sharples reported the donation from Mainzeal, and as far as I know the Minister of Maori Affairs has no role in allocating construction contracts in Christchurch.

Compare that to Winston Peters who took hundreds of thousands of dollars from racing companies, never declared them despite being legally required to, and pushed policy highly favourable to them through Cabinet – again never having disclosed the donations both NZ First receive and he himself personally (they paid for his damages to Bob Clarkson).

And of course the Owen Glenn case where he arranged for a $100,000 donation to his lawyer to cover his legal fees, lied dozens of times over many months about the existence of the donation, and as Minister of Foreign Affairs tried constantly to gain a diplomatic appointment for Sir Owen.

The conduct of Winston Peters is the classic example of big business influencing government decisions behind closed doors. He and his party failed to disclose donations, he lied about them, and he actually advocated policies and decisions beneficial to his donors without ever disclosing the donations.

This is in stark contrast to Sharples who both disclosed the donation, and as far as I know has had no role at all in decisions affecting them.

The hypocrisy is monumental. This is like Richard Prosser calling for religious tolerance.

Tags: , ,

Geddis on Cosgrove

July 8th, 2012 at 10:56 am by David Farrar

Andrew Geddis blogs on the Clayton Cosgrove issue at Pundit:

First of all, no-one is accusing Cosgrove of accepting a bribe from Independent Fisheries – at least, they are not doing so out loud. Both Cosgrove and the company adamently deny there was any connection between his introduction of a members bill that would financially help the company (as well as a number of other constituents) and its later decision to donate money to his campaign. Not only is this most probably true in fact, the dual denial means that there is no way of proving it to be false.

Personally I don’t think that there was a pre-condition on the donation.

Second, Cosgrove quite rightly declared the $17,500 in donations to the Electoral Commission – from which we all then were able to find out about the relationship a couple of months ago. True, this action tells against any corrupt relationship existing in fact; you’d have to be a pretty silly (or incredibly brazen) person to openly tell the world that you’ve accepted a chunk of money which was paid to you in exchange for trying to get a change in the law. But the point of declaring donations is to let us make those sorts of judgments about what may or may not have been the motives on each side – if we were to say that simply declaring a donation automatically means that, ipso facto, there cannot be a corrupt intent behind it, then that would have a rather perverting effect on the disclosure regime!

Exactly – this is why we have transparency – so people can judge for themselves if they think there is a connection between donations and (for example) specific policies or acts.

Which brings us once again to the third level of protection. What does the decision to accept a considerable donation from a long-term friend whom you have, in your official capacity as an MP, taken steps to help in a quite significant fashion say about Cosgrove’s internal sense of political morality? By this I mean, what does it say about his ability to scrutinise not only his own motives for taking the money, but also understand how taking that money would look to others? And here I mean not those political enemies who would like to see him taken down, but rather the “average voter” who is assessing the behaviour of her or his political masters? Is it a “good look” to them for an MP to be in this sort of relationship, even if all involve protest the purist of motives?

This is the point I made yesterday. Wise MPs do not lobby on behalf of mates, do not push private legislation that provides significant financial benefits to their mates, and do not then accept large donations from a mate whose financial interests would have benefited from your advocacy.

One last point. I note that Cosgrove is alleging that this story has been “shopped around” by Gerry Brownlee in an effort to distract from a court case being brought by Independent Fisheries against his use of CERA powers to rezone their land. That may well be true. And that case also may well reveal what some of us said from the outset – giving Brownlee or any other Minister extensive powers to override existing property rights and legal processes in order to “help Canterbury” carries considerable risks of their misuse.

However, the motives for drawing attention to Cosgrove’s relationship with Independent Fisheries do not touch on its basic rightness or wrongness. Or, to put it another way, the problem isn’t so much that people are noticing the donation to Cosgrove, but rather that the donation was given and accepted in the first place.

It shows how defensive Cosgrove is on this issue, that he is trying to shift attention by alleging that the story has been shopped around by National. The Nation have confirmed that they have had no contact with Gerry Brownlee’s office on this, and the first I know what the story was about was watching The Nation.

The ironic thing is there is an MP who is known to do smear campaigns about donations – even when there haven’t been any. That MP may be behind this “smear campaign” also. It is a Mr Clayton Cosgrove. Back in June 2008 he said:

On June 3, Mr Cosgrove received a letter from a member of the Institute which indicates that deals have been done between some senior industry members and the National Party to wind back this consumer protection legislation. “The letter said the REINZ president Murray Cleland recently told members at a regional AGM that if the National Party won the election it is likely to change the legislation to suit the Institute,” he said.

Mr Cosgrove said this raises serious questions over what deals have been done. “The National Party has confirmed it has met with REINZ representatives so now it needs to come clean on when this happened, who was present and what promises were made. National should tell us if any election campaign funds have been solicited or received by the Party, its MPs and/or its candidate, and whether any contributions have been made by REINZ and/or its member companies,” he said.

So when National advocated something, Clayton went out there and effectively alleged they were doing it due to donations from REINZ or its members (something that in fact was not true – he just made it up, and posed it as a question), while in this case the donation is a matter of record.

But to get this clear, the media asking Clayton questions about a donation from a property company which would have received huge financial benefits from legislation he proposed is a smear campaign, but him alleging National is in the pocket of the real estate industry (whom did not donate to National) is not a smear campaign. It is only wrong if it is not Labour doing it.

Tags: , , ,

Clayton Cosgrove and the Independent Fisheries Donation

July 7th, 2012 at 6:07 pm by David Farrar

The Nation had Clayton Cosgrove on this morning, with the news summary being:

Labour MP Clayton Cosgrove says he is a long standing friend of a property developer who donated $17,500 to his campaign at the last election.

The donation came after Mr Cosgrove drafted a private members’ bill which would have allowed the developer, Mike Dormer, to go ahead with a development stopped by the Christchurch District Plan.

Speaking today on TV3’s “The Nation”, Mr Cosgrove said, he was a longstanding friend of Mr Dormer.

“We go back about 12 years,” he said. 

“He’s a friend of my family, I know his family well. 

“He’s a respected person, I’m proud to say I’m a mate of his.”

In 2008 Mr Dormer’s company, Independent Fisheries, bought 22ha of land at Styx Mill, north of Christchurch Airport and in Mr Cosgrove’s then electorate of Waimakiriri with the intention of developing it for houses.

But the company became frustrated at restrictions on the development imposed at the behest of Christchurch Airport.

Other landowners in the same area were also concerned at the tight noise boundaries around the airport which prohibited residential development.

In June 2009 Mr Cosgrove convened a public meeting about the boundaries and announced that he was preparing a private members’ bill to counter them.

His Bill would have required landowners within the noise boundaries to forfeit any right to object to airport noise. In return residential development would get a go ahead.

Mr Dormer described the bill as “win win” and “outstanding”.

And five months later, in November 2009, Independent Fisheries donated $2500 to

 I had discussion with all landowners.  We set up a group of landowners across the board who had legal support, some who didn’t.  I was leading negotiations on behalf of over a 100 constituents with the International Airport and others, for years on this.

After the Christchurch earthquake in September 2010, Mr Cosgrove withdrew his bill from the private members’ list of bills in Parliament.

In June 2011, Mr Cosgrove got another donation from Independent Fisheries. This time it was for $15,000, making a total of $17,500, one of the highest sums given to any individual MP at the last election.

And in August 2011, Mr Cosgrove issued a press release advocating passage of his Bill as a way of freeing up land for desperately needed sections in Christchurch.

But he vigorously denied that there was any connection between the Bill and its obvious benefits for Independent Fisheries Ltd and the donations.

“I’ve never accepted a donation with any preconditions and I have never been offered a donation with any   preconditions,” he said.

Mr Cosgrove rejected the suggestion that it could appear that he had a conflict of interest.

There would have been a conflict of interest from any person, and I have people donate money to me in support from all political persuasions.” he said.

“There would be a conflict of interest if it came with preconditions, and by the way every MP receives donations. 

“There would be a very bad look and a lack of judgement if those donations were hidden and not declared. 

“There is transparency here, and the reason you can question me is because I declared them.”

Mr Cosgrove claimed the report on “The Nation” had been “shopped around” by Earthquake Recovery Minister, Gerry Brownlee, in an attempt to smear him.

But Nation presenter, Rachel Smalley, said that no one from Front Page, the production company which produces “The Nation” had spoken to Mr Brownlee or anyone from his office.

Independent Fisheries is one a number of parties who have a legal action against Mr Brownlee on this issue currently before the High Court in Christchurch. 

I have included the transcript of the show after the break, so people can see it in context.

I would make four observations.

  1. I accept absolutely that there were no conditions attached to the $17,500 donation (in two parts). I also accept that Cosgrove genuinely sees the change he advocated as desirable. Just to be absolutely clear I do not believe this was a case of “purchasing policy”.
  2. I do think it is somewhat inappropriate for an MP to promote legislation via the member’ ballot which would allow developments, not allowed under a local authority plan.
  3. I think it is unwise of any MP, including Cosgrove, to lobby for something that is of huge financial benefit to someone he describes as a long-standing friend.
  4. Accepting such a large donation from someone whose interests you have promoted legislation for, is also unwise. $17,500 is ten times the disclosure level for candidates and represents over half the $25,000 you can spend on a campaign during the regulated period.  Donations should be based on general support for a party’s policies, or belief that a candidate is the best local representative. When the MP has advocated a law change that your company is the biggest beneficiary of, then I don’t think it is a great idea to donate.

The full transcript is below.

(more…)

Tags: , ,

Some Conservative legal problems

May 28th, 2012 at 2:00 pm by David Farrar

Claire Trevett at NZ Herald reports:

Conservative Party leader Colin Craig loaned $1.9 million to his party for its election expenses, but this month wrote off $1.6 million of that loan as a donation.

A $1.6 million donation was disclosed to the Electoral Commission on May 18 under the law requiring donations of more than $30,000 to be declared within 20 working days.

The party’s election return was also filed with the Electoral Commission on May 18 – about two months late – and it listed no donations over the disclosure threshold of $15,000 and only $11,791.50 in smaller sums.

There are numerous issues here, which may have some legal consequences. For a start one could dispute whether the loan was even a loan, when there was obviously no capacity to repay. So the first issue is was it a genuine loan, or should it always have been treated and disclosed as a donation.

The second issue is the interest on the loan. Let’s start with what the Electoral Act says on interest free loans. S207 defines a party donation as including:

where credit is provided to a party on terms and conditions substantially more favourable than the commercial terms and conditions prevailing at the time for the same or similar credit, the value to the party of those more favourable terms and conditions

So how big is the value of a $1.9m interest free loan?

Mr Craig said his company, Centurion Management, had paid the bills for the Conservatives’ campaign totalling $1.55 million during 2011, and subsequently billed the party for the amount.

We’ll come back to the legality of having a company pay bill on behalf of a political party.

The auditor’s report with the donation return said it was possible that Mr Craig’s $1.6 million should be listed in the donation return for election year – rather than now – if it was deemed to be a donation on the date the bills were originally paid by way of a loan, rather than the date the debt was forgiven.

And if it was a donation at the time the bills were paid, it was not disclosed when it was meant to.

Mr Craig said the party had treated the bill payments by Centurion on its behalf as credit on favourable grounds and declared interest on that at a rate of 12 per cent, which totalled a $10,590.50 donation in its return.

This is where the numbers do not add up. An annual interest rate of 12% is equal to a daily rate of 0.033%. Which means from the day the $1.6m bills were paid, daily interest of $526 is accrued.

Now if over $15,000 of interest was accrued before 31 December 2011, then a donation should have been disclosed in their donation return. This means that if the bills were paid before 3 December 2011, then the Conservatives have failed to disclose the donation in their annual return. The Electoral Commission needs to determine when bills were actually paid, to determine this.

However the larger problem may be the requirement to immediately disclose any donation over $30,000. Once that $1.6m had been paid for more than 57 days, then it needed to be disclosed. Now the overall donation was disclosed on 17 May 2012. S210C(6) states:

A return must be filed under subsection (1) or (2) within 10 working days of the donation being received by the party secretary.

This means that if the value of the foregone interest exceeded $30,000 by 03 May 2012, then it should have been disclosed before 17 May 2012. Now when is the latest the expenses should have been paid. S206E states:

A claim that is sent to the party secretary in accordance with subsection (1) must be paid within 40 working days after the day on which the declaration required by section 193(5) is made.

The declaration referred to is the declaration of election results. This was on 17 December 2012. So the bills must be paid within 40 working days. But a working day excludes any days between 25 December and 15 January. So 40 working days after 17 December is the 5th of March. This is the last possible day the advertising bills were paid. Personally I would be surprised if they were not paid in December, as people get grumpy if not paid.

The interest that would accrue between the 5th of March and the 3rd of May is $31,000 approx. So even under the most favourable legal timings I would say they also breached the continuous disclosure rule.

But on top of this we have the murky fact that the bills were paid by Centurion Management. One can either treat Centurion as an agent of the party, or as an outside entity. If it was an outside entity, then Centurion should have billed the Conservatives by the 5th of February and been paid by the 5th of March. It appears they were not paid until the mid May, when Craig repaid them. So that arrangement is also legally suspect.

If they were acting as an agent of the Conservatives (like an ad agency would), well was this documented. Of importance is that Centurion is not the private company of Colin Craig. He owns 55% and his wife 40%, but 5% is owned by a Stephen and Sarah Plummer.  Mr Plummer is a director. Did the Board formally approve the use of Centurion to act on behalf of the Conservatives and pay all their bills for them?

So I’d say there are a huge number of issues for the Electoral Commission to gets its head around. At a minimum they need details of when actual bills were paid, and then calculate foregone interest from those dates.

It is worth noting that Craig was open about the fact he was bankrolling the campaign for the party he leads. However that doesn’t mean one can ignore the rules. What Colin Craig should have done is set up a bank account for the Conservatives from the moment it was registered, donated the money to them upfront, and then have the party pays bill directly and disclose his donation within 10 working days. The way he has gone about it, has not been clean. Private companies should not be paying bills on behalf a registered political parties, and the loan should have been treated as a donation from the start as there was never any possibility of significant repayment.

It will be interesting to see what the Electoral Commission determines.

Tags: , , , ,

2011 Party Donation returns

May 2nd, 2012 at 3:55 pm by David Farrar

The 2011 party donation returns are now online. This is the first time that the returns have not just included details of individual donations over the disclosure limit – but also summary information on their total level of income from donations. This gives us a fuller picture of their revenues.

I’ve broken down for the major parties, their donations by size:

$1.5 – $5k $5 – $15k >$15k
ACT 10% 46% 38%
NZF 4% 40% 0%
Labour 29% 46% 24%
Greens 40% 23% 37%
National 24% 41% 27%

National and Labour have similar profiles (but National got 2.5 times as much).  Note that these figures do not include the income from donations below $1,500 and membership fees etc. For National that can be greater than a million dollars a year.

Significant Donors are (those over $30,000 were declared last year):

ACT

  1. Louis Crimp $125,520
  2. Alan Gibbs $116,000
  3. John Boscawen $79,468
  4. John Banks 75,980 (includes through a company)
  5. Don Brash $25,980
  6. John Harrison $25,025
  7. Fletcher Building $20,000
  8. Talleys $20,000

Maori

  1. Bruce Piested $25,000
  2. Fletcher Construction $20,000

Labour

  1. Todd Corp $50,000
  2. EPMU $40,000
  3. Cao Jun $30,000
  4. Dairy Workers Union $27,200
  5. Road Transport Trust $20,000
  6. Fletcher Building $20,000
  7. SFWU $20,000
  8. Meatworkers Union $18,000

Greens

  1. Fletcher Building $20,000
  2. Seven Green MPs – $15,000 to $17,500 each
  3. Christoper Marshall $16,500
  4. Bryan Forde $15,200
  5. Forbes Elworthy $15,035

National

  1. Susan Chou $100,000
  2. Gallagher Group $86,005
  3. Antoines Restaurant $60,000
  4. Oravida 56,600
  5. Chris Parkin $55,000
  6. Todd Corp $50,000
  7. Citi Financial Group $50,000
  8. Team McMillan $35,000
  9. Graeme Douglas $30,000
  10. Road Transport Trust $30,000
  11. Garth Barfoot $22,000
  12. Contue Jinwan Enterprise Group $21,600
  13. The 123 Mart Ltd $20,000
  14. Fletcher Building $20,000
  15. Xiao Miao Fan $19,413
  16. Janette Brocklehurst $16,685
  17. Grant Biel $15,500
  18. Yaxun Zhang $15,113

 

Tags:

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.

Tags: , , ,

Electorate Campaign Returns

April 10th, 2012 at 10:00 am by David Farrar

Claire Trevett at NZ Herald reports:

Donations towards MPs’ election campaigns came from diverse sources, ranging from artists to fisheries companies and Australian unions and some disclosed donations well in excess of the $25,000 spending limit.

This is  because the $25,000 spending limit only covers advertising expenses, and also is for the last three months only. The total cost of an electorate campaign is usually in excess of this.

In the three months before an election, candidates can spend up to $25,000. However, there are no limits on spending on election material before that.

And again only certain types of expenditure counts towards the limit.

Labour MP Andrew Little’s disclosure of $29,975 in donations included $2500 from Crafar Farms receiver Michael Stiassny, who is a partner at KordaMentha and chairman of the board of Vector. Mr Little said he first met Mr Stiassny when the pair worked on the collapse of Ansett. They had stayed in touch ever since and were “good mates”.

A former EPMU secretary, Mr Little also disclosed two $1500 donations from Australian unions, including the coal miners’ union which he said had been supportive over the Pike River disaster. The maximum donation allowed from overseas donors is $1500. Todd Energy also gave $5000 to Mr Little and his National Party rival in New Plymouth, Jonathan Young.

That is interesting that Andrew and Stiassny are mates. I don’t know Mr Stiassny, but from  various accounts he is not the most popular person in the country – to be fair that sort of goes with being a receiver.

Also interesting the $3,000 from foreign unions to try and help Andrew win New Plymouth.

The returns showed Auckland Central MP Nikki Kaye spent almost twice as much as her main rival, Labour’s Jacinda Ardern, on the battle for the seat – but Ms Ardern raked in the big donations. Ms Kaye spent $21,347 on her campaign in the Auckland Central seat while Ms Ardern spent just $11,365.

This is spending attributed to the candidate. It is worth noting That Labour  also spent around $10,500 in advertising in Auckland Central on top of that $11,365 and National spent around $3,000. Generally how it works is that most advertisement ask for both the party and the electorate vote so you can split the cost 50/50 if you want. Labour split most of their ads 50/50 while National did not (as they did not want the electorates spending too much of the party vote budget.

However, Ms Ardern declared $27,295 of donations for her campaign – including artworks for a fundraiser from artists John Reynolds, Greer Twiss and Karl Maughan, worth a combined total of $10,750. Ms Kaye got just $5525 in donations – most of it from National’s central office.

Again some context is needed here. These are not the total level of donations for each candidate. They are merely the total level of donations above the disclosure limit of $1,500. If a candidate received 30 donations of $1,000 each, none of that would be disclosed. One can not know from the Electoral Commission returns, how much money a campaign received.

Also a minor correction. National’s head office does not donate money to electorate campaigns – in fact it is very much the other way around – electorates “donate” considerably to the central campaign. The error would be based on the fact that the address used in the return was the Wellington head office address – but that is because electorates are part of the overall party, and that is the official office address. However almost certainly any donation from the party to a candidate is from the local electorate.

All candidate donations of more than $1500 must be disclosed. The return of donations to political parties is yet to be released. All party donations of more than $15,000 must be disclosed and parties will now also have to disclose the number of donations they received in bands of between $1500 and $5000 and $5000 to $15000.

The party returns will be interesting. Any donation over $30,000 has already been disclosed, but we will get to see the donors between $15,000 and $30,000 plus see the overall level of donations in bands.

Tags: ,

Shock horror – no law broken

February 2nd, 2012 at 12:23 pm by David Farrar

Former Labour Party General Secretary Mike Smith blogs:

Donations over $30,000 from the same source must be declared to the Electoral Commission within 10 working days. National overstepped the mark in declaring a total donation of $86,005 from Gallagher Industries outside the limit. I can sympathise as I missed a connection once when I was Labour’s Secretary. These days  the Electoral Commission doesn’t get involved – the penalty is a fine of up to $40,000 on summary conviction.

That’s a very serious accusation. As Mike Smith says, a late return can result in a $40,000 fine. So let’s see if National were late.

The Electoral Commission says that National received $66,705 on 20 December 2001 from the Gallagher Group Ltd. This was on top of an earlier $19,300 so exceeded the $30,000 threshold for reporting within 10 working days.

It was declared on 10 January 2012, 21 days later.

But the Electoral Act refers to working days, as quoted by Mike Smith. S210C(6) says:

A return must be filed under subsection (1) or (2) within 10 working days of the donation being received by the party secretary

Now what is a working day? Well the Electoral Act specifies that in S3:

working day means any day of the week other than—

  • (a) Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, Labour Day, the Sovereign’s birthday, and Waitangi Day; and

  • (b) a day in the period commencing with 25 December in any year and ending with 15 January in the following year

The 20th of December was a Tuesday. Friday 23rd December was the third working day and Mon Jan 16th the 4th working day. Tuesday 24 January 2012 is in fact the 10th working day after the 20th of December 2011.

So National made the deadline with a fortnight to spare.

Mike may wish to amend his post.

Tags: , , ,

Union donations

January 20th, 2012 at 7:09 am by David Farrar

Claire Trevett in the NZ Herald reports:

WHAT THEY GAVE
(2008 donation in brackets)
* Engineering, Printing and Manufacturing Union: $40,000 (2008: $60,000)
* Dairy Workers’ Union: $25,000 (2008: $12,000)
* Maritime Union: $18,500 (2008: none disclosed)
* Meat Workers’ Union: $18,000 (2008: $25,500)
* Service and Food Workers’ Union: $15,000 (2008: $20,000)
* FIRST Union (not affiliated): $4000 (2008: nil)

Donations of over $30,000 must be disclosed within 10 days of being made, but those over $15,000 but no greater than $30,000 do not have to be disclosed until the party does its annual return by 30 April 2012.

The unions here have disclosed early in response to inquiries by the Herald, which is commendable.

In total they gave $110,500 of donations above the disclosure threshold in 2011. In 2008 it was $117,500 so not a lot of change.

National’s donations over $30,000 have already been disclosed and commented upon. It will be interesting to see in early May who else donated above $15,000.

Also of interest is a new requirement (proposed by me, amongst others) that for the first time parties have to reveal the number of donations they received below the individual disclosure limit – in bands. This will give us a more holistic look at how parties are funded, and will also be out in May.

Tags: , ,

Two more National donors

December 8th, 2011 at 1:00 pm by David Farrar

NZ Herald reports:

Chinese New Zealand businesses, including one formerly owned by the businessman spearheading Shanghai Pengxin’s bid for the Crafar dairy farms, have boosted the National Party’s coffers by more than $100,000 in recent days.

Recent filings to the Electoral Commission show National received $50,000 on November 22 from Citi Financial Group, a Queen St foreign exchange and financial planning firm owned by Yan Yang and Qiang Wei.

The same day, the party got a $1600 donation from Oravida NZ, which also gave $55,000 on November 30.

Oravida’s directors are Jing Huang, Julia Jiyan Xu and wealthy but reclusive businessman Deyi Shi.

In September last year when it was called Kiwi Dairy, Oravida was bought from Terry Lee, a businessman associated with Shanghai Pengxin, which has applied for Overseas Investment Office approval to buy the Crafar farms.

It is good the disclosure regime is working. Transparency is important and media should report large donations

Turning to the Oravida donation, the key word is former owner. Terry Lee has not owned the company for 14 months, and the new owners have nothing to do with the Crafar farms bid as far as I know. Some people get very excited about former owners, assuming it means they are still in a position of influence with their former company, and/or wanting to advantage them. The prime example of this is how some go on about Steven Joyce being a former owner of the radio stations now owned by Mediaworks. What many do not realise is it was a hostile takeover, and shall we say no love lost there between the former and current owner.

So as far as I know there is no actual link to the Crafar farm bid. Ironically if someone associated with the bid for the Crafar farms did donate a large amount to National, my belief is that it would actually harm their chances as even if the OIO recommended approval, Ministers would be very wary of making a decision that could be perceived as influenced by the donation.

Incidentally what is a Chinese New Zealand business? Both businesses are New Zealand businesses. Oravida has three directors – two of whom live in NZ and one in New York. The ultimate shareholders all appear to be based in New Zealand also. CFG director and shareholders all appear to be New Zealanders also.

There is a difference between a business owned by Chinese living in China and Chinese living in New Zealand. Chinese living in China are foreigners. Chinese living (permanently) in New Zealand are Kiwis.

Tags: ,

Sure we believe you

July 30th, 2011 at 2:19 pm by David Farrar

NewstalkZB reports:

There’s a pledge from New Zealand First ahead of its annual conference that it will follow the rules on disclosing political donations.

The party was forced to correct its donation returns before the last election, revealing gifts which should have been declared.

Returns filed to the Electoral Commission show New Zealand First has lodged nil donations over the past two years.

Party Leader Winston Peters says next year’s contributions will be reported appropriately.

“We will be abiding by the law, as we have always done,” says Mr Peters.

As we have always done? What a blatant lie.

NZ First were never charged or prosecuted – that is correct. But that is because there was a six month (off memory) time limit for charges.

They did not abide by the law. Here is what the Electoral Commission said:

Although the 2007 return was materially false, no offence committed under section 214G(3) or 214G(4) of the Electoral Act 1993 as the Party Secretary had no intention to mis-state or conceal the facts

So the return was false, but no prosecution because only the party secretary can be held liable.

In respect of the 2005 and 2006 returns, the statutory time limit for any prosecution has expired.

And these were not trivial donations unreported. From 2005 to 2007, NZ First declared there had been zero donations over $10,000 when in fact there had been around $235,000 of donations.

And no that doesn’t include the $100,000 Owen Glenn gave to pay Winston’s legal bills. Likewise it does not include the revelation by the SFO that the Velas had also paid Winston’s electoral petition expenses to Bob Clarkson.

Yet Winston still insists they have always abided by the law.

Tags: ,

Large Donations

July 26th, 2011 at 3:53 pm by David Farrar

Just checked out the Electoral Commission page for donations above $30,000 (which must be declared within 10 days) and there have been three this year:

  • ACT – John Boscawen $52,335
  • National – Susan Chou $100,000
  • ACT – Louis Crimp $100,520

Boscawen is of course the parliamentary leader of ACT. Chou has donated previously to both National (2010) and Labour (2008) plus to humanitarian causes.

Louis Crimp is an Invercargill businessman, whom I’ve blogged on previously. He stood for ACT in 1996. He also recently donated $1m to St Johns, and other causes:

When Invercargill businessman Louis Crimp had a car crash he was so touched that the St John staff treating him were volunteers he later decided to give the Southland branch $1 million.

He will hand over the cheque today. The massive donation follows a string of monetary and land gifts the philanthropist has made to the community.

In 2007 Mr Crimp paid more than $1m for a city bungalow which had been renovated as a fundraising project for Hospice House in Invercargill, with almost $800,000 of that going to the hospice.

Mr Crimp has given $200,000 to the Southland SPCA since 2008 while, in May, he gifted a residential section formerly owned by the Mongrel Mob to the Habitat for Humanity organisation.

I applaud people willing to donate their money to support policies or parties they believe will be good for New Zealand.

Tags:

2010 donation returns

May 5th, 2011 at 2:00 pm by David Farrar

Al registered parties had to file their 2010 donations return with the Electoral Commission by 30 April 2011. The returns won’t be up on the Elections NZ website until next week, but they are open for inspection at their offices so I headed on down today to check them out.

Three parties have not filed returns, and are in breach of the law. The New World Order Party and The Workers Party. Technically also the New Citizen Party, but they onlyregistered in November 2010.

Parties have to disclose any donations over $10,000 (plus overseas and anon donations etc). Nil returns were filed by United Future, ALCP, Libz, Alliance, Kiwi, Democrats and Winston First. Of course we know that a nil return for Winston First can actually mean they’ve had hundreds of thousands of donations.

ACT

One donation of $19,000 from Margaret Alldred, who is also the Party’s Administration Manager.

Progressive

They’ve disclosed $$13,000 from the “Wigram Progressive Party”. This suggests that Jim’s local organisation was not a formal part of the overall party, and he kept the funds close to him locally.

Maori Party

Pita Sharples has donated $19,171.50, in fortnightly payments. Interesting that no other MP has donated over $10,000.

Labour

In addition to the already disclosed $25,120 from former party secretary Mike Smith (donations over $20,000 are disclosed as they are made, and don’t wait just for the annual return), they also had $16,500 from Ann Robinson and $15,100 from Karl Maughan.

I presume Ann Robinson is the glass sculptor of that name, and Karl Maughan the painter. I suspect they did not make a cash donation, but donated art works that were auctioned off for the amounts disclosed.

Greens

All nine MPs had to pay a tithe, which totalled $136,786.64. This is an average per MP of around $15,200.

National

National had total donations of $397,820.50. All but $17,820.50 of this had been previously disclosed (and I had blogged them previously). The $17,820.50 comes from Garth Barfoot, presumably the director of Barfoot & Thompson real estate agents.

These disclosed donations are only of the large ones over $10,000 in value. They may represent a small or large portion of a party’s overall funding. For example National raises around $4m over three years just from relatively small membership donations.

The new electoral finance law passed by National, will have some extra transparency around donations made in 2011 and afterwards. As well as disclosing the individual large donations (those over $15,000), parties will also have to disclose the number and total value of donations from $1,501 to $5,000 and from $5,001 to $15,000. But we will not see these until April 2012.

Tags:

Councillor calls for CMPT donation to be returned

December 13th, 2010 at 2:00 pm by David Farrar

Auckland Councillor Jami-Lee Ross has stated:

The Mayor of Auckland has been called on by one of his councillors to return a $3,375 campaign donation back to Auckland ratepayers.

The call comes after recent media reports of a donation to Mayor Len Brown from the Counties Manukau Pacific Trust. The charitable trust has been largely funded in the past by Manukau City ratepayers and continues to receive a $385,000 operating grant each year.

Auckland Councillor Jami-Lee Ross has written to Mr Brown saying he has a “moral obligation” to return $3,375 back to ratepayers. “This donation is highly questionable and, in my view, should never have been made. …

Mr Ross says the Trust’s connection to the city’s ratepayers is too close for it to have engaged in actively supporting election campaigns.

“There are very strong arguments that the donation is in effect public money, if not by definition, then by perception. The Trust’s own financial statements note that the Trust is considered a Council Controlled Entity.

“I have no doubt that the ratepayers of Manukau City would not have expected an organisation that has benefited so generously from Manukau City Council to be contributing to the election campaigns of political candidates. …

“Len Brown has a moral obligation to return the $3,375 back to the people that fund the Counties Manukau Pacific Trust. Doing so would be seen as testament to his honesty and integrity,” says Mr Ross.

The multiple links between the trust and the campaign, with an exchange of personnel, a probably illegal donation, and subsequent board appointments need investigating.

Also there is need of a culture change at the new Auckland Council for refusing to make available the donation and expenses return, unless you physically visit them. They won’t even allow journalists to take a photocopy.

This reinforces my view that the Electoral Commission should be placed in charge of all local body elections also. They have a good commitment to transparency.

Tags: , , , ,