Some may think that there is less of an issue for Peters having had the donation go to pay for his private legal expenses, rather than to NZ First itself. I am of the view this makes things much worse for him.
He said that since 1991 he had been involved in 14 legal actions which had been partly funded through donations, and Mr Henry had “a firm policy” of not disclosing the source of donations.
“I have never been told the source of these donations but have personally met the shortfall which has amounted to many hundred thousands of dollars,” Mr Peters said in a statement.
Now this makes very clear that the secret donation was effectively a donation that benefited Winston Peters personally. If they had not received that $100,000 then Peters by his own words would be making up the shortfall.
The first issue this may raise is the tax status of the donation. Peters is not a charity, and the donation is well above the limit for personal gifts. Who exactly was the donation made out to? What account was it paid into? Who controls that account? What is the legal personality that received it? Was tax paid on it if tax is liable?
The next issue is the Cabinet Manual. First some general clauses:
2.52 A Minister of the Crown, while holding a ministerial warrant, acts in a number of different capacities:
- in a ministerial capacity, making decisions, and determining and promoting policy within particular portfolios;
- in a political capacity as a member of Parliament, representing a constituency or particular community of interest;
- in a personal capacity.
2.53 In all these roles and at all times, Ministers are expected to act lawfully and to behave in a way that upholds, and is seen to uphold, the highest ethical standards. Ultimately, Ministers are accountable to the Prime Minister for their behaviour.
So the question for the Prime Minister is has her Minister of Foreign Affairs acted in a way which has upheld the highest ethical standards in not just their ministerial capacity, but also their political and personal capacity.
2.55 All members of Parliament are required to disclose certain assets and interests in an annual Register of Pecuniary Interests of Members of Parliament. This register, administered by the Registrar of Pecuniary Interests of Members of Parliament, is designed to promote accountability and transparency by identifying personal financial interests that might influence members of Parliament.
We will come back to the Register of Pecuniary Interests.
2.56 Additional requirements apply to Ministers’ interests. Conflicts of interest may arise between Ministers’ personal interests and their public duty because of the influence and power that Ministers exercise, and the information to which they have access, both in the individual performance of their portfolio responsibilities and as members of the Executive.
In other words the bar for Ministers is even higher than for MPs.
2.59 Ministers themselves are responsible for proactively identifying and reviewing possible conflicts of interest and ensuring that any conflicts of interest are promptly addressed by taking one or more of the measures set out in paragraph 2.70.
Note the requirement to be pro-active in identifying conflicts. This may mean things like asking your lawyer who donated $100,000 to you.
2.78 The Standing Orders require members of Parliament to disclose to the Registrar of Pecuniary Interests of Members of Parliament any gift accepted over a prescribed value, currently $500. This declaration includes hospitality and donations in cash or kind.
So a donation is a gift, and must be declared if over $500.
2.79 Ministers who accept gifts worth more than the prescribed value must not only disclose them to the Registrar of Pecuniary Interests of Members of Parliament, but also must relinquish them, unless they obtain the express permission of the Prime Minister to retain them.
Now it gets interesting. The PM gets to decide if you get to keep the gift. So Helen has to decide whether or not Winston can keep the $100,000 that was donated towards his legal expenses.
Now let us look at Standing Orders, namely Appendix B:
4(1)(d)Every return of pecuniary interests must contain the following information as at the effective date of the return: the name of each trust in which the member has a beneficial interest, and
And also let us look at the Register as at 31 January 2007,
4 Beneficial interests in trusts
WRP Family Trust
So if the bank account it was paid into is an actual trust fund that helps pays Winston’s legal bills – it is not listed as required.
Now let us look at Section 7(b)
a description of each gift (including hospitality and donations in cash or kind but excluding any donation made to cover expenses in an electoral campaign) received by the member that has an estimated market value in New Zealand of more than $500 and the name of the donor of each of those gifts (if known or reasonably ascertainable by the member),
Now even if (and it is a big if) Peters did not know the name of the donor, he did know there was a $100,000 donation towards his legal expenses and this was not declared. He should have declared an anonymous donation towards his legal expenses. He actually did not have to disclose the amount – but he did need it disclose the existence of it.
Now maybe you argue he did not receive the donation himself so let us turn to 7(c)
a description of all debts of more than $500 that were owing by the member that were discharged or paid (in whole or in part) by any other person and the names of each of those persons,
And we have been told these donations were to pay his legal bills and expenses. So it should have been declared under either 7(b) or 7(c). Unless you argue that the money went into a trust with a separate legal personality – but if that is the case then the trust should have been disclosed in Section 4(1)(d).
So who should sort this out. Here is one possibility:
15 Auditor-General’s review and inquiry
(1) The Auditor-General will review the returns provided under clause 14 as soon as is reasonably practicable.
(2) The Auditor-General may inquire, either on request or on the Auditor-General’s own initiative, into any issue as to whether—
(a) any member has complied, or is complying, with his or her obligations under this Appendix
So the Auditor-General could investigate. There is also another option:
Without limiting the generality of Standing Order 399, the House may treat as a contempt any of the following:
(h) as a member, knowingly providing false or misleading information in a return of pecuniary interests:
So an MP could ask the Speaker to refer the issue to the Privileges Committee. My suggestion would be both avenues – ask the Auditor-General to investigate and ask the Speaker to refer the issue to the Privileges Committee.
People may claim Peters did not know about the donation. Even if one accepts he did not know Owen Glenn made the donation, he did know that his legal expenses shortfall had suddenly reduced by $100,000 and failed to disclose it.
But also to the point, his lawyer Brian Henry would beyond any reasonable doubt be very very aware of the requirements placed on Peters by the Cabinet Manual and the Parliamentary Standing Orders. As his lawyer he would I suspect have professional and ethical obligations to make sure returns filed were correct and that Peters was in possession of the necessary information to make correct returns. I think there are as many questions for Mr Henry as Mr Peters about this.
So the issues are:
- Does Helen Clark think her Minister of Foreign Affairs has upheld the highest ethical standards in his ministerial, political and personal capacity?
- Will Helen Clark allow Winston Peters to retain the $100,000 gift from Owen Glenn – it is her decision as Prime Minister.
- Can the PM explain why the Government has reversed or is reviewing its position from 2003/04 on not needing a Consul in Monaco?
- Will an MP file a matter of privilege with the Speaker before the next sitting of the House on Tuesday?
- Will the Auditor-General investigate on his own initiative?
- Will the Inland Revenue Department investigate the tax status of the donation?