Len’s $500,000 secret trust

Just the day after the NZ Herald praised Len Brown as “winning the battle for greater openness”, it is revealed that Len has used a secret trust to launder $500,000 of donations anonymously to his campaign.

Jonathan Marshall at the Dom Post reports:

the former Manukau mayor declared donations totalling $581,900.95, of which $499,000 was to the previously unknown New Trust. That meant he did not have to tell the Auckland Council electoral officer the names of most individuals and companies that contributed to his campaign because the trust was listed on his return as the main contributor.

Labour has spent the last five years railing against the use of secret trusts in politics, and here Labour Party member is revealed to have used one. This is another example of the stinking hypocrisy of Labour.

They spent a year attacking Sam Lotu-lliga for being a Councillor and an MP, and then they endorse Jim Anderton to be a Mayor and an MP.

They spent five years attacking secret trusts, and they use one for the campaign for the most powerful directly elected job in New Zealand.

The Herald reports:

Mr Brown’s campaign manager, David Lewis, last night defended using the New Auckland Council Trust to protect donors’ identities.

He said the campaign raised money from hundreds of people from across the political spectrum who supported the mayor’s vision.

Most wanted anonymity “as per the current laws, simply because they are private persons with no interest in being in the media”.

The Electoral Act requires candidates to identify any donor contributing $1000 or more to a campaign, if they know the name of that person or organisation. But Mr Lewis said the mayor had “no idea who donated to his campaign”.

Oh what bullshit. Of course he knows.

The local electoral laws do not outlaw the use of secret trusts, as the national electoral law does. Even worse they on;y require the use of this secret trust to be revealed after the election. Think how many votes would have been lost if it had been revealed before the election that Len Brown had received $500,000 of donations filtered through a secret trust.

Now as I said, Labour and the Greens have spent five years railing against secret trusts in politics. I await those political parties condemning Len Brown for his $500,000 secret trust – so secret they have not even filed its trust deed with the Registrar of Trusts (they are not legally obliged to). Will media demand Len reveal who set the trust up, who the trustees are. How about even a partial amount of accountability and reveal the largest individual donation made to Len through the trust?

The Mayor of Auckland has powers beyond any other Mayor in New Zealand. Do Labour and the Greens not think we should know if someone donated $250,000 to Len?

Phil Goff in Sep 2008 said:

The National Party, at the last election, got $2 million from secret trusts, anonymously—secret donations. The country wants to know who those donors were, what their commercial motivation was in promising you that money, and in giving you that money, and they want to know what the National Party and Mr Key promised in return.

So what we should now hear from Phil Goff is:

Len Brown, at the last election, got $500,000 from secret trusts, anonymously—secret donations. The country wants to know who those donors were, what their commercial motivation was in promising Len that money, and in giving Len that money, and they want to know what the Len Brown promised in return.

Incidentally John Banks disclosed all his donations in excess of $1,000. Some of these were anonymous, and as with national politics there should be a cap on how big an anonymous donation can be – such as $1,000.

How many of Len’s donors have been appointed to his personal staff, to ratepayer funded jobs? How many were appointed to CCOs? We have no way of knowing, due to his secret trust.

I bear little hope that a man who spent six months fighting to keep the names of those invited to a ratepayer funded dinner secret, will reveal his major donors. But, the Government should look to change the law so the finance provisions of the Electoral Act apply to local body elections, to ensure Aucklanders in future know who are the secret funders of their Mayor.

Note that in my submission on the Electoral Finance Bill in 2007, I proposed that the law should require disclosure of donations through trusts.

UPDATE: The hypocrisy gets worse. Here is what Len Brown said a year ago:

“We have seen the dangers of big money entering national politics, with concerns over sources and transparency of party funding, and the emergence of third party campaigns. Local government has avoided these issues, but they could emerge were candidates under pressure to raise large sums in order to be competitive,” he said.

So Len Brown talked about concerns over transparency of funding, and then set up a secret trust which he funnelled $500,000 through.

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