Kiwiblog

The week before the election saw the Velas donate $200,000 to Labour First, or more formally $100,000 each to the constituent Labour and NZ First parties.

The donation was made on 31 October. The EPMU also donated $60,000 that day. Labour revealed the EPMU donation on 5 November, but held off revealing the Vela donations until after the election. They were able to do this legally as you have two weeks to declare large donations.

This reinforces to me the need for a Commission of Inquiry into the matters alleged in the Meurant papers. I hope the Greens keep pushing for it, and that the new Government agrees.

The EPMU has announced its donations:

• $60,000 to Labour
• $5,000 to Greens
• $4,000 to Maori Party
• $1,000 to Progressives

This makes the EPMU the third biggest donor in this election, to date.

Roger Kerr commented on yesterday’s blog post about big money on politics. I think this is Roger’s first comment on a blog post!

Roger made a few observations:

(i) Representative business organisations today typically take a national interest perspective, not a narrow, self-interested business perspective as in Fortress New Zealand days. The rationale is that what’s good for New Zealand is good for business in the long run, not the other way round. (Of course whether their advocacy conforms with that perspective should always be open to challenge.)

Thankfully it has been a long-time since business groups have demanded special favours for this sector, or that sector.

(ii) Consistent with (i), they routinely both support and criticise policy positions taken by all political parties.

Indeed, and groups like Business NZ have worked closely with the Labour Government on many issues – some might even say too closely!

(iii) It’s hard to fathom why some unions (eg EPMU) are so overtly partisan. Can this really be in the interests of their members? Governments change, as they should in a healthy democracy. How can they expect a sympathetic hearing for their members’ interests when they have publicly campaigned against a party that ends up in government?

Well the EPMU is a member of the Labour Party and hence can only be partisan. It does raise the question of how should a National-led Government deal with unions who have said their job is to get National kicked out of office regardless of what their policies are.

And as amusing as I find the CTU ads, I do wonder about the wisdom of being quite so partisan, that their influence with a new Government could be greatly reduced.

(iv) Unions in other countries seem less partisan and more willing to criticise the policies of ‘their’ parties, eg US unions in manufacturing industries on climate change issues.

Yes, some of the Australian unions also have been critical of ALP policies.

(v) Donations by corporates now seem to be very small, and are often split between parties.

So far the largest reported donation to National is $30,000. And I agree they are split between parties.

(vi) It would appear that the largest reported donation to a political party in recent years from a business source was that by Mr Owen Glenn to the Labour Party.

$500,000 to Labour plus $100,000 interest free loan plus $100,000 to Winston’s legal fees.

(vii) The most blatant case of business cash-for-favours in recent years would appear to be from racing industry sources to New Zealand First, whose leader Winston Peters has railed against ‘big business’ influence on politics.

I’m not sure ironic covers this situation adequately. I’m not even sure gross hypocrisy covers it.

The Government did not use to give money to the racing industry like they now do. Before Helen appointed Winston Minister of Racing, Vote Racing was just $300,000 a year which paid for a couple of policy people in the Department of Internal Affairs.

He then introduced a number of policies that were of great benefit to the racing industry, and to companies active in the industry. I’ll take them in turn:

Aligning duty rates

The New Zealand Racing Board used to pay duty at around 18% and Winston got the rate reduced in the 2006 budget to 4% which is the rate paid by casinos. The cost of this is $33.6 million a year.

Now this policy was not opposed by Treasury. They said it was good policy, and I think National even supported this move. It did seem silly to have different rates. Having said that there is a difference between supporting a policy because you think it is a good policy, and supporting a policy because you think it will attract money from the affected industry or are in their pocket.

Accelerated depreciation for bloodstock

In the 2006 budget, Winston also proposed accelerating the depreciation period for purchases by New Zealand taxpayers of stallions that have not previously been used for breeding in New Zealand at a cost of up to $1.5 million per annum.

Treasury also supported this.

Further depreciation for bloodstock

Winston then tried to get accelerated depreciation extended to shuttle stallions in 2007. Treasury said:

Treasury does not support funding for this initiative, as it is low priority and represents low value for money. The depreciation rate for shuttle stallions is already concessionary relative to their economic life, and approving the request would represent an even greater concession. Furthermore, the depreciation rate for shuttle stallions should be lower than that for stallions not previously used in New Zealand, as the latter have a higher risk profile. Approving the request may also increase the risk of tax avoidance and set a precedent for wider extensions.

Further, there is also a risk that approving the request could increase the risk of these assets being used in tax avoidance schemes. In the 1980s there were significant tax avoidance schemes incorporating inflated values for bloodstock, which took advantage of the accelerated write-down rates available. In addition, approving the request may set a precedent for further extensions to the new depreciation rules.

But Dr Cullen ignored his officials to keep Winston happy so he could deliver to his funders. The cost for this was an extra $1.5 million a year also.

Racecourse Facilities

In the 2007 budget, Winston started to really deliver directly for his funders. He got Helen and Michael to agree to $1 million a year for the establishment of a contestable fund to enhance workplace safety and to raise the quality of facilities at racecourses.

You might wonder why we do not have a Vote Skiing to raise the quality of facilities on ski fields and improve skifield safety?

Again the officials were not convinced. Treasury showed they were not against all spending – they supported the accelerated depreciation and the reduction in duty. Treasury said:

Treasury does not support funding for this initiative, as it is low priority and represents questionable value for money. In particular, it is unclear as to the extent of under-maintenance of racing facilities and why clubs cannot raise sufficient revenue for improvements on their own, e.g. through increased entry fees, sponsorship and community fund-raising.

There is little information provided beyond the anecdotal about the extent of under-maintenance of racing facilities and why racing clubs cannot raise sufficient revenue for improvements on their own, e.g. through increased entry fees, sponsorship or community fund-raising. This makes it difficult to gauge the potential value for money of the proposed contestable fund

But once again Michael and Helen gave Winston his baubles.

Race Money

Then came the most outrageous policy for his benefactors. The Government would stump up millions of dollars every year to be used as prize money in races or to quote the proposal “the establishment of a fund to promote feature horse and greyhound racing carnivals and to increase stake money in feature races”.

And again Treasury tried their best to stop Winston looting taxpayer money to pay back his financial backers. But again Michael and Helen agreed to back Winston and gave him $3 million a year.

Treasury does not support funding for this initiative, as it is low priority and represents questionable value for money. In particular, there is insufficient supporting information around why and to what extent racing clubs are unable to generate sufficient revenue through traditional sources, or the extent to which feature race stakes need to be bolstered to increase the racing industry’s profile and encourage greater investment. There would also be potential precedent implications across other industries from creating such a fund.

So how much does this all total up to? Well over a three year electoral cycle it is $121.8 million.

That’s what you call a good return on investment for $250,000 or so of donations.

Personally I think Winston sold himself too cheap.

Just seen an additional story in the Dom Post. The timeline. Damning. And remember as you read this, Helen has personally granted permission for Peters to keep the $40,000 the Velas gifted him. Some extracts:

October 5 report: Mr Meurant records that Mr Vela met Mr Peters and indicated a promise of a board appointment on a state-owned enterprise.

December 1 report: Mr Meurant says Mr Peters is devastated by the party’s loss in the November elections. He tells Mr Vela that, if Mr Peters or Doug Woolerton ask for the promised $30,000, he should tell them they had agreed to put Mr Meurant on a government corporation board but could not deliver on that now.

Nor could NZ First get its policies that Mr Vela liked introduced. Remind them it had been agreed that Mr Meurant would head NZ First’s research unit on a taxpayer salary.

Tell them: “I have delivered. Two lots of 10 grand and the provision of a helicopter. I think it is time for you to produce something engage him [Mr Meurant] as your research manager.” Mr Meurant says: “If Winston does engage me, I still want to work for you and will give your projects priority.”

December 10: Mr Meurant writes to Mr Peters applying for NZ First policy adviser job (and sends a job application copy to Mr Vela). He says Mr Peters suggested a salary of $60,000 with a “top-up” from the private sector, which he has found. He says he will obtain donations for NZ First and suggests he be responsible for policy development in fishing and thoroughbred industries and “taxation”.

He says he will rebuild NZ First as a “sector interest (ie fishing, thoroughbred) party” and obtain corporate funding by producing “industry sector-friendly policies”. “Providing NZ First reflects the concerns of the sector groups it targets, financial contributions from the corporate groups will be forthcoming.

“Deliver on what you promise and the corporates I have exposure to will stay with you.” He tells Mr Peters to start with the commercial fishing and racing industries.

And he did deliver – once Helen Clark appointed him Minister of Racing.

The integrity of decision making in the Clark/Peters Government has been seriously undermined by two stories in the Dominion Post today. Firstly from the first story:

Money was paid to NZ First through former National MP Ross Meurant – who later accepted a job as a policy adviser to Mr Peters, private papers obtained by The Dominion Post show.

Mr Meurant brokered donations from Philip Vela, a senior member of the wealthy Vela family, before the 1999 election, when NZ First was in a coalition government with National, and after that time.

Mr Vela was told by Mr Meurant that he would have an opportunity to frame friendly policy in business areas to which Mr Vela was connected. The Vela family, worth an estimated $180 million, is involved in the fishing and horse racing industries.

So these documents detail the understanding that the Velas would donate to NZ First and in return have the opportunity to frame friendly policy in business areas of interest to them.

Some documents have parliamentary letterheads and include notes from a meeting at which Mr Peters said he had saved Vela interests “millions in tax liability”.

And in return they have donated hundreds of thousands it seems.

At the centre of the saga is Mr Meurant, who worked for Mr Vela and then worked as an adviser to Mr Peters from 2000 to 2004. In this job he received a taxpayer-funded salary – but he also sought a “top-up” from the corporate sector, including from Vela interests.

Mr Meurant told Mr Vela that he had “direct access” to Mr Peters “at all times”. His work included “major input” into Mr Peters’ speeches and he was “principally responsible for policy development in fishing and thoroughbred industries and `taxation’,” the documents show.

OK let us be clear on this. The staff member who wrote the party’s fishing, racing and taxation policies was being paid directly by corporates who happened to benefit from those fishing, racing and taxation policies.

When The Dominion Post revealed the scale of Vela donations to NZ First in July, Mr Peters said the money had no bearing on his party’s racing policy, which he said was written in 1993.

NZ First sources said the policy was introduced in 2006 – after Mr Peters successfully sought the racing minister portfolio in a support deal with Labour – and was substantially written by Mr Meurant while he was advising Mr Peters.

The Dominion Post revealed in July that the Vela family has donated at least $150,000 to NZ First or the Spencer Trust.

It is also worth remembering that $40,000 of that money paid off Winston’s debt to Bob Clarkson. This happened while Peters served as a Minister on Helen Clark’s Government. He needed her express permission to keep this donation. By not refusing permission Clark stands implicated as condoning this.

A box of documents sent to the newspaper this week shows that Vela interests made donations to NZ First as early as 1999. Mr Meurant suggested to Mr Vela that this provided the opportunity to give “input” into policy areas in which the family had business interests.

Mr Meurant sought money from Vela interests to travel as required in his taxpayer-paid job to liaise with Mr Peters, and for when he was “required to provide NZ First with material for debates in Parliament”.

He wanted help from Mr Vela “when required to show my face in Parliament to thrash out policy positions which I will have already developed with your people on taxation, fishing, thoroughbred with Winston’s bunch”.

The relationships between the Velas, Meurant and Peters sounds extraordinary. These documents make it sound like NZ First was the political arm of the Velas business empire.

In their second story:

Winston Peters repeatedly demanded that the Vela family provide him with a free helicopter to use for campaigning during the 1999 election, documents show.

And what if they did not obey?

On October 28 and 29, Mr Peters called Mr Meurant wanting the helicopter, the documents show. They include a transcript Mr Meurant made of the second call.

Mr Peters: Meurant, tell those bastards I need a helicopter. Don’t give me this crap about the machine needing repairs.

Mr Meurant: Come on, Winston, he has offered you his pilot. That’s a grand a week … he has personal reasons for not giving you his machine. He socialises with people who hate you.

Mr Peters: You gotta do better than that, Meurant. Don’t these people know how dangerous I can be [laughs]. [Mr Peters then says something to effect of Mr Vela having been saved millions in tax liability by Mr Peters.]

“Don’t these people know how dangerous I can be?” Sounds like a scene from the Godfather.

Mr Meurant: Come on, he is the only guy to give you funding.

Mr Peters: I have other funding. Don’t you worry about that.

But I thought Winston knew nothing about funding issues?

In December, after NZ First’s poor election showing, Mr Meurant advised Mr Vela to tell Mr Peters: “I have delivered. Two lots of 10 grand and the provision of a helicopter … it is time for you to produce something … make good on your commitment on Ross and engage him as your research manager.”

Which Winston then did.

Now remember that not only has Helen Clark not sacked Winston for any of his multiple misdeeds to date, she has explicitly said she will have him back in Government if NZ First makes it. Never mind the overwhelming evidence that he solicited the $100,000 from Owen Glenn, lied about it, and tried to get Glenn made Consul. Never mind the personal and party donations from the Velas and these documents showing the influence on policy it gained them.

Are there any people of conscience left on the left who think that putting Peters back into power would be a betrayal of everything they have railed against when it comes to money and politics? If so, how can you be voting Labour?

And once again the Greens refuse to say anything stronger than “we would have problems working with Winston” using the excuse their members would decide their bottom lines. That doesn’t stop them going much stronger and saying “The Greens Caucus has resolved to unanimously recommend to our members that we will not give confidence and supply to any Government that has Winston Peters in it”. They are keeping their options open because they will happily trade all their lofty rhetoric over political donations for some baubles of their own. By refusing to rule Peters out as strongly as they can, the Greens will be hypocrites if they ever try to lecture on political finance again.

John Key has ruled out Peters in Government. No ifs and no buts. As individual voters we can not affect whether or not 5% of the population will vote for NZ First and put Peters back into Parliament. But you can affect whether or not he gets to be a Minister again, by voting only for National, ACT or United Future. Any other vote may put Peters back into the Ministry.

The NZ Herald reports:

A Chinese man granted citizenship against the advice of officials and wanted in his homeland for “large-scale misappropriation and embezzlement” was given a VIP citizenship ceremony at Parliament.

Yang Liu, also known as Bill Liu, was granted his citizenship in August by ministerial prerogative.

He became a New Zealander at a private citizenship ceremony in the Maori Affairs select committee room, officiated over by Labour MP and former Cabinet minister Dover Samuels.

And who is Yang Liu?. The latest TGIF from Ian Wishart reveals:

His real name, confirmed for the first time in this country by TGIF Edition, is indeed Yongming Yan

Even worse, an informant resource report to the Immigration Service last year, but apparently ignored by Associate Immigration Minister Shane Jones, provides detailed information on Yan’s involvement at the head of an Asian organised crime syndicate, which “paid large cash sums to various ministers and delegates indirectly through secret anonymous accounts

Now whether this is correct or not is one issue. But what is not in dispute (it seems) is that Shane Jones knew of these allegations, as the were part of the file officials had who fought against citizenship. So why did Jones ignore this?

Tonight, TGIF Edition can also reveal that one of Yongming’s former associates in this country – Shane Phillips – was a Labour Party campaign manager, and his brother Daniel Phillips works in the office of Associate Immigration Minister Shane Jones – the man who gave ‘Bill Liu’ citizenship against the recommendations of officials who’d investigated his background.

Shane Phillips is also known as Shane Te Pou, and in 2000 Helen Clark vetoed his appointment to a ministerial job. Also:

There are fresh allegations this week, including that ‘Liu’ (in reality, Yan Yongming) may have donated cash to the campaigns of Rick Barker and Dover Samuels.

And Wishart has unearthed some interesting aspects of donations to Dover Samuels:

A further $5,000 was given to Dover Samuels by the oddly-named ‘Tamaki ki te Paki Wu’, apparently residing at a house in Derrimore Heights in Manukau City.

So, according to the official documents, two separate Wu’s slipped a total of eight grand between them into the Dover Samuels campaign fund. But who was this mysterious Mr Tamaki Wu? A check of the Manukau address Dover had given for him provides an added twist to this story: it was registered not to Mr Wu but to Daniel Phillips – Dover’s former private secretary now working for Associate Immigration Minister Shane Jones. So $5,000 had come to Dover from the address of a man whose brother was involved with Chinese
businessman ‘Yang Liu’ (real name Yan Yongming), yet the money was not in Daniel Phillips’ name, but a person or entity named Tamaki Wu.

There is also a suggestion that an anonymous $5,000 donation to Rick Barker was from Yan.

The issues raised here can not be dealt with by a departmental inquiry. Departments can not investigate their own Ministers. A fully empowered commission of inquiry should be set up to investigate this. The key tasks should be

1. To verify the real identity of the man granted citizenship by Labour Ministers over the protests of officials
2. Does he have a criminal record, and what is the nature of that
3. Determine the full extent of his donations to all parties and candidates
4. Why Ministers both refused to revoke his residency and further granted him citizenship against the strong advice of officials

The Electoral Commission has done three things in response to NZ First’s 2007 donations return:

1. It has found the party secretary did not break the law with the 2007 donations return, but is not releasing the full decision as it may compromise the police investigation. They EC point out carefully “The determination is in respect of the actions of the Party Secretary for New Zealand First only, as considered under Part 6 of the Electoral Act.” This suggests that others are under investigation by the Police.
2. It has published amended returns for 2007 showing $80,000 of donations from the Spencer Trust. At this stage amended returns for 2005 and 2006 have not been published or possibly even received.
3. It has published a letter from the NZ First Auditor, Nick Kosoof.

No (1) is not a big surprise. The party administrators tended to be kept ignorant of the Spencer Trust. Both the Party President and the Party Deputy Leader have said they were unaware the Spencer Trust even existed.  So I guess the Party Secretary was also unaware of it.

The letter from Kosoof is interesting. He says:

We were advised that the sums totally $80,000 paid to the Spencer Trust were paid not for the credit of that trust but for the credit of the NZ First Party, and were received by the Spencer Trust as an agent for the NZ First Party. As each of the component parts of that sum were from different entities and each was $10,000 or under, they did not require to be returned under the Electoral Act 1993.

This raises many questions:

1. Who advised Kosoof of this?
2. Did he have access to the Spencer Trust accounts to verify that each component part was under $10,000?
3. Did he seek any legal advice on the situation or just take the word of the organisation he audits?

I wonder if NZ First wll file amended returns for 2005 and 2006? I suspect they may choose not to, even though they have acknowledged the 2005 return was false. The EC doesn’t actually have the power to force them to do this.

The Electoral Commission has updated its register of big donors – those who have given over $20,000 in the last 12 months. The donors in size are:

1. ACT – Alan Gibbs – $100,000
2. ACT – John Boscawen – $100,000
3. Greens – Stuart Bramhall – $57,276
4. Greens – Christopher Marshall – $44,571
5. Greens – Jeanette Fitzsimons – $34,611
6. National – John Key – $30,000
7. National – Road Transport Trust – $30,000
8. Greens – Sue Kedgley – $21,792
9. Greens – Bryan Forde – $24,750

Interesting that along with ACT, the Greens are the party of big money – not just small $50 donations. That is $180,000 they have had in from just five donors. They are fortunate to have such wealthy party members.

The NZ First funding scandal got me interested in the overall picture of declared donations and expenses for our major political parties. More specifically I was interested in the linkages between declared donations and declared election expenses.

I had no expectation that there would be 100% correlation. Because a party generates much income that isn’t declared – only donations over $10,000 tend to be. And likewise only campaign expenses are declared, not the total costs of running the party.

But do most of the parties have some consistent ratio of declared donations to declared campaign expenses? Did any party have a very low ratio which might suggest a deliberate strategy to (legally) conceal large donations by breaking them into bits or having them never put through the party’s accounts?

Now it is important to stress that it is not bad per se to have income from non declared sources. National for example brings in up to $1 million a year just from membership subscriptions and donations. That is a good thing.

Now to the data, which is taken from the Electoral Commission website. Records only started in 1996. I have excluded 1996 as we don’t have donation returns for the full 1994 – 1996 period (law was only changed in 1995). So I have covered the periods 1997 – 99, 2000- 02, 2003 – 05 and 2006 – 2008. We don’t yet have expense returns for 2008 but I have included 2008 as we now have continous disclosure for amounts of over $20,000. This means everyone’s ratio is higher than would normally be the case, but as I am looking at the differences between them, it isn’t a huge factor. I wanted it to be as up to date as possible.

The Maori Party have only had expense returns for one election, so they are artifically high. If you exclude post 2005 their ratio is 52%.

National and Labour are very close to each other. If you exclude post 2005 elections National are at 80% and Labour 67%.

The Alliance is the only non current party in there. I included them as they are probably the closest to NZ First as a larger third party. Over the last three elections they have both spent similar amounts – $884K for the Alliance and $827K for NZ First. And during that time the Alliance has declared $711K of donations (including donations to Democrats when they were part of Alliance).

Then in order we have the Greens, United, Progressive and ACT at 54%, 47%, 42% and 35% respectively. A reasonable degree of difference, but all within that one third to one half range.

Finally we have NZ First. Since 1997 they have declared $827K of expenses but declared only $45,000 of large donations – a ratio of 5% – just 1/7th of the next lowest party ACT at 35%.

So what conclusions can one draw from this? Well remember the data is not complete. But there would seem to be two main conclusions one can draw – but competing conclusions. They are:

1. That NZ First is the only party that has never ever attracted large donors. That they are entirely funded by small donors and have had only one quarter as many large donations as the miniscule Progressive Party and one sixteeneth as many large donations as the Alliance.

   OR

2. That since 1997 NZ First has had a deliberate strategy of concealing large donations by means such as having had them broken up into smaller parcels, or channelling them through associated trusts who do not pass them onto the party but spend them at the discretion of the unknown trustees.

I will leave it to readers to decide which conclusion they think is most likely.

There is an explosive story in the NZ Herald, with confirmation directly from Own Glenn that he did donate to NZ First – despite Winston Peters denying it, and NZ First filing a donations return which said it received no donation over $10,000.

There must be an inquiry into this. The e-mail from Owen Glenn to his PR agent is prima facae evidence of a serious breach of the Electoral Act and Electoral Finance Act. This has to be investigated to determine the true facts. If the Electoral Commission does not have the powers to investigate, then it should be referred to the Police who do. Arguably the involvement of MPs could make it an issue for the Serious Fraud Office.

The authorities should demand copies of financial records for NZ First, to determine whether any laws have broken. They should also interview Mr Glenn, his PR agent and key NZ First officials.

Other political leaders should insist this matter be investigated. Helen Clark and John Key need to put aside their desire to keep WInston happy in case they need him post-election and call for the facts to be fully investigated by a competent authority. All of Helen Clark’s calls for transparency in political funding will be hollow and hypocriticial if she refuses to comment or call for action on this.

Now having said that it must be investigated, it is possible no laws have been broken. Let us look firstly at what we do know:

1. Owen Glenn has donated to NZ First
2. NZ First has filed a return saying that they received no donation over $10,000 in 2007
3. Owen Glenn has sought the role of Honorary Consul to Monaco, and has met Winston Peters to discuss this
4. The then NZ First President Dail Jones say they received a donation in December 2006 which was between $10,000 and $100,000 – and more at the upper end

Now is it possible these can all be reconciled? Possibly – but with difficulty.

First of all it is in theory possible that Owen Glenn did donate but donated less than $10,000, thus not needing to be disclosed.

Secondly it is possible he donated up to $20,000 – $10,000 in 2006 and $10,000 in 2007.

Thirdly it is possible his donation was treated as an interest free loan. The interest waived would be under the $10,000 donation threshold.

I have long suspected scenario three. However for it to be a loan not a donation there would need to be documents supporting this and dated at the time the money was paid. I am unsure you can retrospectively convert a donation to a loan after publicity about it leaks out. Also the e-mail from Glenn talks about donating or giving money – not loaning it.

NZ First may well have an explanation for the conflicting statements. But it will have to do better than Winston holding up a “No” sign at a press conference. The e-mail from Glenn is primae facae evidence of a breach of the Electoral Finance Act and it can’t be ignored.

I also refer people to the NZ Herald article from 29 February:

Asked if he was saying he had never received one dollar from Owen Glenn or any associate of Mr Glenn, he hauls a sign out from under his table.

“NO”, it read.

“Got that?” Mr Peters asked. “N-O. To every one of the allegations you have made.”

The word “No” made frequent appearances. Every now and then a variation was given. A question of whether NZ First ever asked for money from Mr Glenn drew an “Oh, get lost”.

And also:

Q: Has [Glenn] ever offered you money?

A: “No.”

Have you ever asked for it?

“Oh, get lost, Barry.”

Have you ever asked for it?

“We don’t go and ask anybody for money. That’s a fact.”

Has he ever loaned you money?

“In those two nos you get a third no if you put your mind to it.”

So Winston said Owen Glenn never offered money and they never asked for it yet Owen Glenn says he did give money. And Winston also appears to have ruled out a loan.

I blogged serveral weeks ago that it appeared the Greens had broken the Electoral Finance Act by not disclosing donations in time.

The Electoral Commission has let them off by accepting their explanation that a temporary administrator was unaware of the requirements for continuous disclosure if aggregated donations from an individual exceed $20,000, and that this was a “reasonable excuse”.

I’m not convinced that having your acting party administrator unaware of the law is a reasonable excuse. Especially from a party that spent months and months campaigning on the need for better donation disclosure laws.

Issues I would have asked if I was the Electoral Commission are whether the Party had provided a written guide to the acting administrator as to his or her duties. It is a standard practice to have a list of duties which include legal obligations. Just saying “Whoops forgot to mention that” isn’t good practice.

The continuous disclosure requirement is well publicised on the Electoral Commission website, and in material provided by the Commission.

NZ First has now filed its 2007 donation return, and have declared no donations over $10,000.

1. Why did it take four and a half months to file a zero return?
2. Why did NZ First break the law and refuse to file on time, saying the Leader had to be in the country before they filed, when it is a zero return?
3. As Party President Dail Jones claimed they received a close to $100,000 donation in December 2007, what is the explanation? Did Jones imagine the bank statement showing the deposit or did he confuse it with something else?
4. Could the mysterious amount received in December 2007 now be classified as an interest free loan, not a donation?
5. Who is the Party Official and the Auditor that signed off the donation return?
6. As Owen Glenn has refused to deny he has assisted NZ First, should one assume he has not assisted NZ First, or that any donation was under $10,000 or that it was an interest free loan?
7. Is the reason NZ First has not paid back the $158,000 it owes because they had to refund a large donation?
8. How did they raise $158,000 without any large donations? Lots of bingo evenings?
9. When will NZ First reveal the charities they claim to be donating the $158,000 to or are we expected to just take their word for it?
10. Again, why did it take four and a half months to file a nil donation return?

1. Why has Steve Maharey not resigned as MP for Palmerston North, now he can do so without triggering a by-election? Does anyone think you can be Vice-Chancellor and an MP?
2. Has NZ First paid back its $158,000 yet?
3. Have United Future finished paying back the money it owes to Parliamentary Service?
4. Why have NZ First and ACT not yet filed their 2007 donations return, 16 days after the deadline?
5. Would Rod Donald have approved of manipulating MMP rules so that Russel Norman becomes an MP (scheduled for end of the month) with less than 30 house sitting days before the election? Is this not just an outrageous rort to allow Russel to use taxpayer funds to travel around the country for the campaign?
6. Why would Labour’s website not list a single candidate who has been selected of the election? Is it because that is the only way they can get the taxpayer to fund 100% of it. Should Labour pay me for listing their candidates for them?
7. If Winston is back in NZ now, why hasn’t any journalist asked him why they have broken the law by refusing to file their donations return, and why does it need the party leader to file a donations return?
8. Has the Crown Law Office yet decided whether a balloon is an election advertisement?
9. How big a mistake was it for Dr Cullen to cancel in last year’s budget the tax cuts he promised in 2005?
10. How much damage did that conference song on John Key do to Labour? Was it more or less than the global economic slowdown?

UPDATE: For (4) The Electoral Commission has now received and published the ACT and NZ First returns.

The Greens have disclosed a large donation from Bryan Forde, but appear to have done so later than required, and also broken the law.

Forde appears to be an Audiologist in Invercargill and he donated $300 in May 2007 and $20,000 on 3 April 2008. A further $4,450 was donated on 28 April 2008.

Now as at 3 April 2008 he had donated $20,300 over a 1 month period. s54 of the Electoral Finance Act says:

54(2) says:

Every financial agent must file with the Electoral Commission a return in respect of every party donation that—

(a) the financial agent knows is from a donor who in the 12 months immediately preceding the date of receipt of the donation (the last 12 months) has made 1 or more previous donations; and

(b) when aggregated with all previous donations received from the donor in the last 12 months exceeds $20,000.

54(6) also:

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

Now the Greens were required to file a return within 10 working days, which was Thursday 17 April 2008. The Electoral Commission say they will publish them within three working days so if it went up today it appears to have only been filed on or after Tuesday 29 April 2008. That would suggest the Greens were 12 days late with disclosing the aggregated donation.

Curious minds may like to inquire as to why they appeared to have broken the law they so passionately defended and insisted on. Also why does a donor make an additional $4,450 donation a few weeks after a $20,000 donation?

The Electoral Commission must prosecute (or ask Police to do so) NZ First, and sadly probably ACT, for their late donation returns. A failure to do undermines the law.

There are some situations where prosecution for a late return is not warranted. Parties that didn’t make it into Parliament I would treat somewhat more leniently. They have no MPs, probably no office and no staff and probably no donations.

Likewise if the return is simply a nil return, then again I would not be so worried.

And if the return is just one or even two days late, not the end of the world. However the 30 April deadline is four months after the time period they cover, so there is little excuse for lack of time.

ACT appear to have simply been tardy and say it is with the Auditor.  They really should be asking some hard questions of the person responsible for the tardiness, because it might get them into court.

NZ First’s situation is far worse. They are simply refusing to comply with the law, saying they can’t file their return until their Party Leader is back in NZ on the 16th of May. This is totally unacceptable to say the least, for the following reasons:

1. This is a simple compliance task. The Party Secretary just fills in the form stating how many donations over $10,000 they got and who they were from. It is not rocket science. There is no role for a party leader in this task.
2. The suspicion is they do not wish to file until Winston is here to handle any media spin on their donations return. Again totally totally unacceptable. Statutory deadlines are not there to be ignored for the benefit of media management.
3. It is in the public record that there has been wildly contrasting accounts from the (former) President and the Leader regarding a large anonymous donation in December 2007. The former says they got one and the latter says no they did not. This makes the official audited donations return of even greater public interest.

If the Electoral Commission do not prosecute NZ First especially (I think they should also prosecute ACT, but they at least do not appear to be deliberately flouting the law) then what incentive is there for the parties that do comply with the Electoral Act and Electoral Finance Act?

44 Labour MPs donated over $10,000 to help bail out their illegal pledge card and other associated spending. But they had 50 MPs last year. So who did not donate or donated under $10,000. By process of elimination they are:

1. Taito Philip Field (left them mid year)
2. Damien O’Connor
3. Shane Jones
4. Charles Chauvel
5. Lesley Soper
6. Paul Swain

It is possible they did donate, but it was just under the $10,000 disclosure limit.

The Electoral Commission has just published the donations returns of parties for 2007. Up until December the old Electoral Act applied. Only donations to a party of over $10,000 get disclosed.

The totals for each party are:

1. Maori Party $70,000
2. Labour $1,030,446.39
3. National 704,100
4. Greens $181,046.23
5. United Future $0
6. Progressive $0
7. ACT – not received as at 5 pm
8. NZ First – not received as at 5 pm

Now who were the disclosed donors to each. In order:

Maori Party

Susan Cullen donated $70,000. Susan (who I have met) is probably best known for her work with Te Wananga o Aotearoa and according to the Herald is worth $30 million.

Labour
Do you remember how Mike “confused” Williams told us fundraising to repay the $800,000 was going so well, and in fact having to pay the money had given people the incentive to raise more money.

Well in fact they have effectively levied their MPs to bail them out. Looks proportional to salary. Clark gave $29,099.04 and 42 MPs gave a total of $661,568.40 which is an average of $15,035.65. So the MPs personally paid for around 80% the money the Auditor-General identified as illegally spent.

Other Individual donors were Chhour Lim Nam for $25,000. Steven Wong for $19,000 and Thomas Wang $14,188. Chhour appears to be involved in the Cambodian community, Wong is President of the Chinese Association, runs a potato chip manufacturer and was a potential Labour candidate in 2002. Wong also gave $23,000 in 2006. Wang is an Auckland businessman also.

Corporate donors were Toll NZ for $25,000, Fletcher Building for $20,000, Griffin Property for $20,000 and Westpac for $15,000.

But here is the big story. Despite spending all year railing against anonymous donations, and pledging they will stop them – they were at the same time accepting $150,000 from one anonymous donor and $50,000 from another. (and another $30,000 I missed earlier so that is $230,000)

But really the hypocrisy of spending all year railing against anonymous donations and then pocketing the largest anonymous donation a party has received since 1999 is breath taking.

NZ First

Their donation return is not yet public. It may have just come in today (the due date). I am very very interested in that return.

National

Corporate donors are DMH Developments for $50,000, Fletcher Building for $20,000, Toll NZ for $25,000 and Westpac for $15,000. One individual donated $41,000 – Susan Zhou.

Two anonymous donations – $25,000 and $15,000.

Finally there were three Trust donations – $424,100 from the infamous Waitemata Trust, $69,000 from the Ruahine Trust and $20,000 from the Nationalist Trust. These are presumably the final donations from the Trusts, as the Electoral Finance Act (one of the few good parts of it, and not a part that was in the original Bill) removes any point in donating through a Trust. Generally the trust donations will be a collation of several or many individual donations the Trust has received – Waitameta could represent 21 $20,000 donations or seven $60,000 donations etc. Of course no one knows bar the Trustees, so it is good this will be the last return where one won’t know at least the size of any donations over $10,000.

I actually thought National would have received more donations than this, considering it was logical that some people would donate before the law changed.

Greens

The Green MPs had to dig deep also. Their six MPs donated an average of $19,812.71 for a total of $118,876.20. Jeanette gave most at $34,045.28.

Also big donations from Stuart Bramhall for $30,500, Christopher Marshall $18,670 and Cliff Mason for $13,000.

Bramhall is the contact for the New Plymouth Greens. Cliff Mason is a Pathologist who stood for the Greens in 1999.

ACT have announced today that they have received a $100,000 donation from Alan Gibbs.

This is one of the few laudable aspects of the Electoral Finance Act, that significant donors are identified. It helps removes the suspicion around political financing. Transparency is a good thing.

However it is worth remembering this is not why the Electoral Finance Bill was introduced to Parliament. Helen Clark stripped the draft bill of almost any provisions changing the law around donations. It was only after there was a public outcry that such provisions were put in, and even then the law was written to protect Labour’s anonymous donors by still allowing $240,000 of anonymous donations per election.

I was one of those who submitted to Parliament in favour of not allowing anonymous donations over $10,000. Labour’s law still allow anonymous donations of $36,000 at a time and a combination of anonymous and undisclosed donations allows someone to donate $66,000 in an electoral cycle and not be identified publicly.

So it is good to see some greater transparency due to the EFA, but that is despite Labour not because of them. They had no such provisions if the EFB which Cabinet signed off on.

The Electoral Commission has released its quarterly report of anonymous donations received by them, to be passed onto parties.

No donations have been received.  Also no donations of over $20,000 have been filed with them which means since 1 January 2008 there have been no donations at all to parties of over $20,000 – either directly or indirectly.