Kiwiblog

Duncan Garner blogs the questions he wants answered:

1. Who set up the Spencer Trust?
2. Who donates to it?
3. What is the money spent on?
4. Does New Zealand First receive money from the Trust?
5. How much?
   
6. Why isn’t it declared? (Donations to parties over 10k must be declared)
7. What else does the Trust spend its money on?

And none of them answered.

But Winston will not answer these questions. He can’t. Answering them will only confirm what he and his party are up to. His MPs are in the dark – they know nothing. They trudge to Parliament each day – grasping some pre-written patsy question to ask their leader.

Like, why did Condi Rice come to New Zealand and would it have happened under any other Foreign Minister? How embarrassing for them. What sycophants.

They owe their jobs to Peters. None would make it under their own steam. Barbara Stewart. Ever heard of her? Now Peters is making his MPs look like the hopeless docile poodles that they are. And these people call us meercats!

I understand several gallery offices now have pictures of meerkats up on their walls. One journalist told me of an e-mail they got complaining on behalf of the meerkats with the comparisons to the media!

A member of the press gallery, taken from Wikipedia.

Peters now has no credibility. He does not believe in being accountable. His only defence is attack. He has promised on three occasions this week to ‘clear things up’. He hasn’t. What are you so embarrassed about Winston?

Journalists are asking legitimate questions. Peters hopes his loyal 5% still agree with him. And unlike Helen Clark, Winston doesn’t need to appeal to the masses. He needs 5% percent. This will be hurting him in Tauranga. I don’t think he can win the seat. Can he get 5% – perhaps not, though it’s too early to write him off.

I think Peters is now toast in Tauranga. Their chance of survival is making 5%. It is possible that there are enough stupid people to get a boost in the polls from his antics. But will he retain that support (if he even gains it) through until the election?

And Duncan concludes on trusts:

Trusts by their very nature are set up to hide things – established to protect people, their money and assets. National has the Ruahine and Waitemata Trust. The Labour Party also declares a legal trust fund for those who want to give to the party on the quiet.

But all these trusts are declared. They have been for years. Peters has kept his quiet. Even from his own people. Only a select few knew about it.

The point here is 25K was solicited from Sir Bob Jones by Winston Peters and his party hacks. Jones has a right to know if it ever went to the party. And so does the NZ public.

The Spencer Trust looks like a secret slush fund. And the Right Honourable Winston Peters doesn’t deserve the title.

I do not think the media will stop asking questions on this, even though there is no chance Winston will ever usefully answer them.

Oh I do love journalists who do research. Fran O’Sullivan has found these quotes:

Where’s the audit trail? Precisely into which account went this cheque?”

“On whose behalf was the cheque to be held and what happened to this money? Is there any significance that … was in serious financial trouble?”

“Why is the Serious Fraud Office taking so long to find the answers to these questions?”

“I say the whole thing stinks.”

Fran tells us that we might expect these to be quotes from Bob Jones or Rodney Hide asking about the investigation of NZ First finances. But in fact they are quotes from the Rt Hon Winston Peters in 2002 demanding the SFO get to the bottom of National’s funding.

Fran notes:

This is the real reason why Peters should be judged guilty by his political peers of the “H” word – hypocrisy.

By failing to publish a clear audit trail showing just how Sir Robert’s $25,000 donation found its way from the Spencer Trust into NZ First’s coffers, or the way in which the amount was disbursed on NZ First’s behalf, Peters invites a tsunami of disbelief which might easily be turned back by a simple disclosure.

As to whether the SFO will investigate:

The SFO, which is now deciding whether it should formally investigate Hide’s complaint, will tread carefully.

But it must be consistent.

It launched a formal investigation into National Party donations in 2002 after a former official – assured of anonymity – revealed the party still had unanswered questions over discrepancies between the amount its fundraiser had expected from Fay Richwhite interests and what arrived in the party’s accounts in 1996. …

The SFO ultimately cleared the National Party of any wrongdoing.

If Peters, his party and his lawyers have nothing to hide they should demand answers to the questions.

Otherwise they lay themselves open to new claims that “the whole thing stinks”.

The SFO decision will be pivotal.

The Dom Post has been trying to track down the nine charities NZ First claimed it donated $158,000 (identified by the Auditor-General as illegally benefiting NZ First) to. All 45 big national charities talked to have said they never got a cent.

I imagine someone has checked this out, but there is no chance the Spencer Trust is a charity is there?

Many on the left (and some journalists who should know better) have been pushing a theme (started by Helen) that all this nasty non-transparent stuff done by NZ First is due to the old Electoral Act, and could not happen under the Electoral Finance Act.

Now it is true the EFA does tighten up things in some areas, but it makes little difference to the three funding controversies that NZ First has had exposed. Let’s take them one by one.

The Owen Glenn $100,000 donation

As we now know, Owen Glenn donated $100,000 towards Winston’s legal bills – which made it effectively a donation to Winston personally as he would have had to pay $100,000 more if Glenn had not donated.

Now the Electoral Finance Act only deals with donations to parties, not to MPs personally.

So foreign billionaires could continue to make large donations to MPs, while seeking favours from them, and it would all be legal under the EFA, and there would be no requirement for it to be made public.

So the EFA in no way affects repeats of the Owen Glenn donation.

And here is the sad reality. The EFA probably makes such donations more likely and more common. If donations to parties have to be disclosed but donations to trusts which pay off bills for MPs do not have to be disclosed, then more and more donors may choose to donate to MPs personally instead of their parties.

And no the Register of Pecuniary Interests will not have much effect here either, if they do it through a trust.

The Vela $150,000 donations

Now what it appears the Vela did was make a series of $10,000 donations from different people and companies. Now surely this could not happen under the EFA?

Well yes it could. Every company and every adult is treated as a seperate donor under 21(2)

donor means a person who makes a donation

And even if the companies are all owned by the same individual, each is a separate donor as they are separate persons in a legal sense..

Now the EFA does have some provisions which tighten things up. For example if I have $30,000 I can’t give $10,000 to my secretary and $10,000 to my cleaner for them to donate to a party. If I supply the money to them for a donation, they need to disclose whom they are donating on behalf of under s 26(1).

But in the case of the Velas, each company and each adult has their own money so they can easily arrange to donate $50,000 or $100,000 in a year with none of it ever getting disclosed.

The Bob Jones $25,000 donation

As we know Bob paid $25,000 to the Spencer Trust, thinking it was going to NZ First. Now as the Spencer Trust was never disclosed as a donor itself, it is highly unlikely under the EFA Sir Bob would end up being listed as a donor.

The Spencer Trust may have made a series of anonymous $10,000 donations to NZ First under the old Electoral Act, and this would have been legal. They could still do this under the EFA but would have to make a series of $1,000 anonymous donations instead.

Under the EFA the Spencer Trust could donate $36,000 anonymously through the Electoral Commission to NZ First and not have this disclosed.

If the Spencer Tust pays expenses of behalf of Winston personally, then that is like the Owen Glenn donation and not something disclosed under the EA or EFA.

And even if the Spencer Trust pays for expenses of behalf of NZ First, then it is just as likely that would be illegal or legal under both the EA or EFA. Their definitions are pretty similiar. First the old EA, s214F:

party donation, in relation to a party registered under Part 4,-

(a) means a donation (whether of money or of the equivalent of money or of goods or services or of a combination of those things)-

(i) which is received by or on behalf of the party by any person or body of persons involved in the administration of the affairs of the party; and

(ii) which, either on its own or when aggregated with all other such donations made in the same year by the same person exceeds $10,000 in sum or value (inclusive of goods and services tax); and

(b) includes, where goods or services are provided to the party under a contract at 90% or less of their reasonable market value, the amount of the difference between the contractual price of the goods or services and the reasonable market value of those goods or services; but

(c) does not include the labour of any person which is provided to the party free of charge by that person;

So the old EA made clear donations include goods or services, and any discounting beyond 10%. And the EFA, s 21(2):

party donation means a donation (whether of money or of the equivalent of money or of goods or services or of a combination of those things) that is made to a party, or to any person or body of persons on behalf of the party who are involved in the administration of the affairs of the party, and-

(a) includes,-

(i) where goods or services are provided to a party, or to any person on the party’s behalf, under a contract or arrangement at a value less than their reasonable market value, the latter being a value which exceeds $1,000, the amount of the difference between the former value and the reasonable market value of those goods or services; and

(ii) where goods or services are provided by a party under a contract or arrangement at a value that is more than their reasonable market value, the amount of the difference between that value and the reasonable market value of those goods or services; and

(iii) 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;

Some change and tightening up, but overall its is likely that the legality of how the Spencer Trust “assists” NZ First without disclosing it is a donor, is unchanged under the new law.

So don’t believe what Helen says about these are all problems of the old Electoral Act, and can’t happen under the Electoral Finance Act. Absolutely everything NZ First has been doing, could continue under the Electoral Finance Act. And in fact there is now a greater incentive for people to donate personally to MPs, rather than to their parties. And that would be a very bad thing indeed.

Bomber Bradbury Tim Selwyn at Tumeke has done this nice little slush fund diagram to help people understand how it all works. Good job.

If there is a second edition, one could add on Ross Meurant next to Roger McClay as a collector of money, and also the Vela family as funders.

The Herald picks up a shift from Clark:

Prime Minister Helen Clark distanced herself from Foreign Minister Winston Peters last night, implying he could be judged to be hypocritical if his New Zealand First Party accepted donations from secret trusts.

And she also offered the bare minimum in terms of expressing confidence in him.

Clever Helen. She must be very worried about the revelations to date.

Asked if she viewed Mr Peters as hypocritical given his long-time railing over big political donations from secret trusts, Helen Clark said it was a political issue that would be judged in the court of public opinion.

“Stands have been taken over a period of time which could be read as being in contradiction to what is emerging in the public arena.

That means yes.

Meanwhile, a former New Zealand First staff member said yesterday that in a discussion about Sir Robert and donations in the 1990s, Mr Peters asked for Sir Robert to be referred to as “X” in case the offices were bugged.

The staff member, who did not want to be named, said Mr Peters also had the office swept for bugs.

Another former staff member, Rex Widerstrom, said he recalled discussions of a $50,000 donation from Sir Robert in 1995 and the Spencer Trust being used “like a code word” for Mr Peters’ litigation fund.

One wonders just how much has gone into the Spencer Trust over the years, and how much has gone into NZ First itself?

A witness to a 2005 discussion between Sir Robert and Mr Peters about the donation, Professor Malcolm Wright of the University of South Australia, said yesterday that Mr Peters had tried to get $50,000. But he had got only half of that after the property magnate caved in out of “mateship”.

Mr Wright, who was working for Sir Robert, said they met Mr Peters and his “offsider” – understood to be former National MP and former Children’s Commissioner Roger McClay – “over a few drinks”.

Mr Wright said Mr Peters was out of the room when the donation was first discussed and came back and “quite aggressively asked who raised it” before having a long discussion that included Mr Peters trying for $50,000.

Professor Wright’s recollection seems excellent.

Roger McClay is going to need to speak up at some stage. The simple question is why was he soliciting money for the Spencer Trust while employed in the parliamentary office of Winston Peters?

The questions for Winston are simpler. I use a famous quote:

What did the president he know and when did he know it?

The Press reports:

Rather than answer questions about the Spencer Trust however, Peters is expected to highlight large corporate and personal donations to the National Party’s Waitemata Trust and to “name names” under Parliamentary privilege.

This is to be expected. I doubt Peters has any knowledge of donors to the Waitemata Trust, and suspect he will just name all the businesses and businesspeople he doesn’t like.

Peters fails to understand there is a difference between him making an allegation under parliamentary privilege, and the media reporting on documents which prove donations (such as the Glenn e-mail and the Vela cheque) and of course direct testimony from donors such as Sir Robert Jones.

The other issue of course is that the Waitemata Trust’s donations to National have been declared every year on their donations return.

Now don’t get me wrong. I am a supporter of closing down trusts as a way to hide identity of donors. My submission on the EFA said as much. I think anyone who gives over $10,000 a year should be disclosed (note the EFA allows up to $46,000 in one year without disclosing identity).

But if Winston thinks his issues will go away, by making some allegations under parliamentary privilege, he may be surprised.

Two editorials saying it is time for proper answers from New Zealand First. First The Press:

… in the present row, Peters’ reputation is being severely eroded by his refusal to give a clear and full account of the large sums paid to his party.

The circumstances of those transfers are so suspicious and the issues so significant that few people other than his most one-eyed followers would doubt that an explanation is needed. Without it, the impression is left that an important party and a main participant in the Government has been the beneficiary of secret payments, large in amount and made for unknown reasons and with unknown consequences.

We don’t even know what the Spencer Trust spends it money on. At least with the Waitemata Trust there is a clear paper trail that it makes donations to National and discloses them. There are no donors to the Waitemata Trust saying “Hey we though this money would get passed on and it wasn’t”.

Doing that will depend on Peters addressing fundamental issues: how much has been paid by various donors and which entities associated with the party have received it; who were the donors; to what purpose has the money been put; have the donations and their dispersal been legal?

It is probably unrealistic to expect the identity of donors to the Spencer Trust to be disclosed, but someone has to front up on why Winston and his personal staff were soliciting money for it, and how has that money been used.

Events, though, may be conspiring to derail his plans. The sense is that more disclosures will be made and the survival of the Government has been brought into play. That latter issue means the Prime Minister is a participant in the business, and she has it in her power to be decisive in deciding its outcome.

Helen Clark has managed to distance her party from the row, but the longer it continues, the more likely is Labour to be damaged. New Zealand First is a main coalition partner a connection that risks guilt by association in a nation already suspicious of Labour’s conduct of electoral matters.

Labour often attacks National on its former secret trusts. It will never be taken seriously on such issues again if it continues to sit there saying it has no issues with the NZ First arrangements which are far far less transparent.

And the Dom Post:

The labyrinthine funding affairs of NZ First need to be publicly unwound, The Dominion Post writes.

NZ First leader Winston Peters has campaigned long and hard against secret trusts and the role of big business in funding political parties, and for transparency. Now, when it is his own behaviour that is being questioned, he favours stonewall and bluster, rather than revelation and explanation.

And the notion that he knows nothing at all about a trust he solicits money for, named after his namesake, his staff collect money for, and his brother runs is insulting our intelligence

Mr Peters has, in the past, called for an investigation of a trust that gave the National Party $50,000, railed against the non-disclosure of donations and proposed legislation requiring that all donations above $500 should be disclosed.

As recently as last year he fulminated against the role of covert money in politics.

And it appears no party has more covert money than NZ First – in two weeks we have learnt of two secret trusts or funding sources which benefit either Peters personally or his party.

It also means doing more than simply calling the claims “unsubstantiated rubbish,” offering the view that Sir Robert’s memory is failing and protesting that he has no involvement with the Spencer Trust. These are serious issues that deserve a serious response, rather than the aggressively delivered but content-free dismissals that have been offered so far.

The people who should have the most pressing questions are in fact the NZ First Board and Caucus. It appears none of them had any knowledge of the Spencer Trust despite the fact the Leader’s staff was collecting money for it, and donors to it think by donating to it they are supporting NZ First.

Surely at least one of them is concerned enough about their own integrity and credibility that they want a decent explanation? Are they not concerned that possibly hundreds of thousands of dollars has gone into a private fund they know nothing about, and not under the party’s control? What if Peters died suddenly? Would any money in the Spencer Trust go to the party or go elsewhere?

Mr Peters argues that none of the claims made so far contain evidence that NZ First has acted outside the law, but he, more than any other politician, should know this issue is not just about the letter of the law.

It is also about whether a party with a leader who last year warned a Nelson audience of the dangers of “huge funds of secret money seeking to distort our democracy” and argued for “transparency and spending limits” on political spending is prepared to back its rhetoric with its actions. Unfortunately, Mr Peters so far has shown little sign of doing that. Instead his actions suggest he regards transparency as a virtue best practised by others.

Indeed do as I say, not as I do.

Nor can Prime Minister Helen Clark continue to treat the issue as one solely for NZ First. She must accept that Mr Peters is a minister in her administration, as well as the leader of a rival political party, and that it is not possible to fully separate the two roles. The questioning Mr Peters deservedly faced over the funding issues as he held a press conference with United States Secretary of State Condoleezza Rice simply underlines that.

Her message to him today must be explicit: if you wish to continue as a minister, clear this up honestly, openly and quickly.

If Clark allows this to just carry on and on, them more fool her.

The HoS quotes former NZ First staffer (and commenter here) Rex Widerstrom:

Peters has said he has “no involvement with that trust” administered by his brother, but former NZ First staff member Rex Widerstrom told the Herald on Sunday he was prepared to swear an affidavit stating the trust was set up around the time of the Winebox Inquiry to funnel anonymous donations from people who wanted to support Peters’ various legal battles.

He said he had the opinion that during his time with Peters there were occasional discussions in the NZ First parliamentary offices about the Spencer Trust, and he was absolutely convinced Peters had knowledge it existed and what its function was.

He recalled one conversation between Peters and ex-staffer Sarah Neems when Neems asked Peters if a donation should go into the Spencer Trust and Peters agreed it should.

So Winston has nothing to do with the Spencer Trust apart from the fact his brother runs it, his staff collect money for it and he decided if donations get paid into it or not?

If it is for legal expenses rather than party expenses, then this calls into question even more his declaration of pecuniary interests. If this is a second secret trust to pay his legal bills, it should have been declared.

Another former NZ First staff member – who did not want to be named – said it was his understanding the name “Spencer” was decided on because of Peters’ great admiration for his namesake Winston Churchill. Churchill’s middle name was Spencer and for years his photograph hung in Peters’ Wellington office.

I’ve had many people pint this connection out to me. Of course the mere possibility Winston may have named the Trust doesn’t mean he has anything to do with it!

Radio NZ has talked to Professor Malcolm Wright who worked for Sir Robert in 2005. They report:

Professor Malcolm Wright, who worked for Sir Robert three years ago, says he recalls Mr Peters and a staff member visiting Sir Robert for drinks in 2005, where the issue of a donation was discussed.

“Sir Robert was opposed to making a donation. In the end, though, he agreed that he would. There had been a higher sum asked for, and Sir Robert said: ‘Well, I’ll give you $25,000 for mateship’, which Winston agreed to, and they shook hands on that.”

Professor Wright says he was told some days later by one of Mr Peters’ staff members to make a cheque out to a trust, although he cannot recall its name. He says Sir Robert thought the money was going to New Zealand First.

Now it is worth remembering that Professor Wright was a first hand witness to this. Peters has made it clear he is going to attack Jones’ credibility and recall. But Professor Wright seems very clear on the salient details.

The failure of Peters to close these issues down was obvious on TV One last night. Their political editor, Guyon Espiner, is usually reluctant to be categorical on an issue, but he made it very clear that he saw the press conference as avoiding all the relevant questions.

Young and Trevett in the Herald report:

Serious credibility questions remain for Foreign Minister Winston Peters after he failed yesterday to throw any light on what happened to a $25,000 donation given by Sir Robert Jones in 2005 for Mr Peters’ NZ First Party.

Sir Robert said he was dismayed at what Mr Peters said yesterday and believed a police complaint will follow shortly – although he said he would not be making it.

If the Spencer Trust will not tell Sir Bob what they did with his money, he should demand it back as it was given on condition of helping NZ First’s election campaign.

He predicted that Mr Peters was “going to die on his own sword on this matter”.

Mr Peters said the police would not be “so naive or uninformed or unprofessional” to investigate the matter.

That sounds like close to a threat to me?

He also said that Roger McClay – a former adviser to Mr Peters – asked for the cheque to be made out to the Spencer Trust.

Wayne Peters had sent Sir Robert a receipt from the Spencer Trust.

So Winston’s staff member asks for the money to go to the Spencer Trust and his brother recepits the money yet WInston claims like Sergeant Schultz to know nothing.

Mr Peters protested his ignorance of the Spencer Trust yesterday and said Sir Robert was wrong.

“Bob’s memory is failing him here.”

Mr Peters said he had not solicited the donation, as Sir Robert claimed.

So who did? Can Peters explain why Jones would donate to the Spencer Trust?

He said he had no involvement with the Spencer Trust, that he did not know what the trust had used the money for, and that he had not spoken to his brother about the trust.

There are so many people he does not speak to. His lawyer over his legal fees, his staff over their fundraising activites on his behalf and his brother over the trust set up to support his party.

Maybe next he will deny even knowing his brother?

The NZ Herald Editorial:

Rather than answer that or any other question yesterday, Winston Peters said he was “not required” to disclose anything about the Spencer Trust. “New Zealand First is not going to subject itself to demands not required of any other political party or leader.”

That is nonsense. If any other party or leader had asked for a cheque to be made out to a mysterious trust and never accounted for it, Mr Peters would be scandalised.

Exactly.

Corruption is a word seldom heard in political debate here except from him – often, ironically, on the subject of undisclosed contributions. It rolls off his tongue much too readily when other parties’ dealings are under discussion.

We do not propose to treat him as he treats others. We will not believe there is wilful dishonesty unless it is proven beyond doubt. The very suspicion of corruption is poisonous to public confidence in government and politics. To spread such poison without proof does almost as much harm as corruption itself.

What is becoming clear to me is we need a very powerful investigative body that can deal with suspected wrong-doing by the powerful.

John Armstrong:

Trying to bring Peters back into the real world – rather than the fantasy world he has been inhabiting for the past fortnight – is not an act of kindness. It is an act of necessity to stop NZ First’s downward spiral taking Labour with it. …

This time Peters’ usual response to crisis – the bluster, the diversions, the smokescreens and games over semantics – are not going to suffice. …

But Clark holds all the cards, not Peters. Were she to sack him, Peters technically could pull NZ First out of its support arrangement with Labour. But the only loser from that would be NZ First. Jumping ship would make it look like NZ First put Peters’ ego ahead of stable Government. It would demonstrate that NZ First can never be trusted to stay the course. It would be electoral suicide. …

The question is how mant weeks will Clark let this carry on for?

Kitchin and Watkins in the Dom Post:

Sir Robert Jones has accused Winston Peters of “lying” about a $25,000 political donation.

Will Winston sue Sir Robert for defamation? I suspect not.

Mr Peters lashed out yesterday at what he labelled a campaign of “innuendo and character assassination”. He insisted he had done nothing wrong after revelations by The Dominion Post that Sir Robert’s $25,000 cheque for NZ First was not disclosed to electoral authorities.

In response, Sir Robert accused Mr Peters of talking “rubbish”. “I’m very sad that Winston has now resorted to blatant lying,” Sir Robert told The Dominion Post.

It really was a mistake for Peters toget into a scrap with Jones.

But his version of events, in relation to the circumstances in which the $25,000 cheque was given, is completely at odds with Sir Robert’s.

The tycoon said Mr Peters had approached him seeking money for NZ First a month before the 2005 election. Sir Robert said he signed a blank cheque and one of his staff later made it out for $25,000 to the Spencer Trust.

Sir Robert said: “I would have been happy if he [Mr Peters] had spent the money on what it was intended for – NZ First … but this Spencer Trust, I’d never heard of it till it was drawn to my attention this week.”

I think people would be shocked to learn exactly how much money the Spencer Trust has had donated over the years – and with never a cent of it declared as having been donated to NZ First. So either the Trust is sitting on a huge bank balance or it has been spending the money in some way to benefit NZ First.

And that expenditure may constitute an effective donation in kind which should have been declared. If they paid for advertisements on their behalf it certainly would. If they paid the wages of campaign staff members then less clear cut. The issues of legality are almost impossible to determine without actually knowing what the Spencer Trust has spent its money on.

This latest issue is coming down to a credibility test of Peters vs Jones. Now whenever two people are giving contradictory statements that can not be reconciled, I look at motivations. If one of them is lying, then why?

I just cannot see a logical reason for Sir Robert to not be telling the truth. What does he have to gain? Plus his version of events has been backed up by Professor Malcom Wright, his former General Manager, who now lives in Australia. Sir Robert says he had donated up to $250,000 to Winston/NZ First/Spencer Trust/Brian Henry Legal Fund over the years. This doesn’t seem like the actions of someone who would try to destroy Winston’s career by lying about said donations.

The Dominion Post has revealed that Ross Meurant collected cheques from the Vela Family for Winston/NZ First/Spencer Trust/Brian Henry Legal Fund and Sir Robert (plus other sources) have confirmed Roger McClay also collected money for Winston/NZ First/Spencer Trust/Brian Henry Legal Fund.

Now both these men were close friends of Winston’s, but more to the point were employed in his parliamentary office. The rules over what you can do as a parliamentary staffer are open to some interpretation – but there can be no doubt you should not be going around meeting potential donors and picking up cheques off them. Maybe someone will argue they did this in their spare time. But the significance is they worked for Winston personally – not the party. The Party President and Party Deputy Leader both say they have never heard of The Spencer Trust. Are we to believe that staff in Winston’s private office somehow magically found out about it, from someone other than Winston, and on their own initiative decided to go around soliciting money for it?

NZPA reports on Winston’s response:

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

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

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

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

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

He has issued a press release:

1. The Glenn contribution went to my barrister Brian Henry. As soon as I learned of it I informed the Prime Minister and alerted the media.

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

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

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

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

See earlier post for differing views on this.

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

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

5. The Vela cheque is lawful.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Frog better get onto this!

Also interesting stuff on the money Brian Henry solicited:

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

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

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

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

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

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

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

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

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

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

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

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

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

How many more secret trusts are out there?

UPDATE: Extracts from the transcript are after the break:

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