4 Feb 2020

Donations and declarations: The NZ First Foundation explained

6:09 am on 4 February 2020

Money flowed into the New Zealand First Foundation and money flowed out - but did any of it need to be declared?

Winston Peters and Shane Jones outside their party's bus.

Design costs associated with New Zealand First's campaign bus were among bills paid by the New Zealand First Foundation. Photo: RNZ / Benedict Collins

Between April 2017 and August 2019, nearly $500,000 was deposited into the Foundation's bank account by donors, including from some of New Zealand's wealthiest businesspeople.

Over the same period, the Foundation spent more than $425,000 paying bills for the New Zealand First Party, including campaign advertising expenses, political consultants' fees, renting and setting up a campaign HQ in Wellington, and running the party's website.

Documents reviewed by RNZ show a mismatch between the Foundation's accounts and the New Zealand First party returns filed to the Electoral Commission.

The party declared 13 donations between $5000 and $15,000 in its 2017 return, but the Foundation's bank statements for the relevant period show 23 such donations. The returns do not name those donors, as any donations of $15,000 or less are able to remain anonymous to the public.

However, in some cases, successive donations to the Foundation connected to the same person or entity have added up to more than $15,000 in a calendar year but have still not been declared on the New Zealand First returns.

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Otago University law professor Andrew Geddis, who specialises in electoral law, said the way New Zealand First was operating was "very different" to how other political parties in New Zealand handled their finances.

"We're seeing large amounts of money that are flowing not to the New Zealand First party directly, but into an entity that is very closely connected to the New Zealand First party."

The money was then used to pay bills for the party.

"None of the details of where that money's coming from, or even how much money is flowing in, is being disclosed to the New Zealand public, which means that when it comes to New Zealand First party, we really have no clue whatsoever as to how it gets its money where it gets its money from."

Geddis said that information was "very important for the public to know" in a democracy "where we're entrusting political parties and their representatives with a great deal of public power".

Whether or not the New Zealand First Foundation was a separate entity to the political party was at the heart of questions around what financial information it should be disclosing, Geddis said.

A proposal to set up the Foundation, approved by the New Zealand First board in March 2017, says the fund would be a "legally established autonomous organisation that would operate independently of and at arm's length" to the board.

Its two trustees are former NZ First MP Doug Woolerton and NZ First's current judicial officer, Brian Henry. The position of judicial officer means Henry gives legal advice to the board of the party, serves as a member of its constitution committee and chairs the disputes committee.

Brian Henry and Winston Peters entering the High Court in Auckland

Brian Henry, left, serves as one of two Foundation trustees and is the New Zealand First party's judicial officer Photo: RNZ / Dan Cook

Geddis said a party donation was money given to a political party "or that is given to a body or group of persons who are involved in the administration of the affairs of the party".

If that did apply to the New Zealand First Foundation, "then all the money given to the Foundation is subject to the same disclosure requirements as is money that is given directly to the party itself," Geddis said.

Alternatively, if the Foundation could show it was a separate entity, that meant the money it had spent paying New Zealand First's bills became donations from the New Zealand First Foundation to the New Zealand First party and needed to be disclosed as such, he said.

RNZ reported last year that the party had disclosed three loan amounts from the Foundation, but the Foundation has never been listed on electoral returns as making party donations.

The Foundation could not claim to be one thing for one purpose and another thing for another purpose, Geddis said. "The upshot of it is, either structure required some sort of disclosure about the money flowing either into the New Zealand First Foundation or out of it."

Doug Woolerton declined to comment for this story.

Current New Zealand First party secretary Liz Witehira has previously told RNZ she knew nothing about the Foundation.

"I don't know and I don't need to know," Witehira said.

Neither she nor former party secretary Anne Martin responded to RNZ's latest requests for comment.

New Zealand First leader Winston Peters declined to comment.

Mr Peters has previously distanced himself from the Foundation. Asked about the Foundation's role last November, he said: "I look after the political wing of the NZ First party. That's an administrative matter and you've got to ask somebody else."

Party documents show Peters was present at the March 2017 meeting where the NZ First Party board of directors agreed to the concept of establishing the Foundation.

The documents contained a recommendation that Peters "select an appropriate legal advisor to develop the Foundation".

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The Zealand First Foundation was set up in 2017 Photo: RNZ / Claire Eastham-Farrelly

Despite Peters claiming a separation between the Foundation and the party, RNZ has seen documents showing dozens of party bills were paid for by the Foundation and invoices were often addressed to him and his MPs.

More than 20 invoices, for tens of thousands of dollars worth of costs, including rent, electricity and other expenses associated with a campaign HQ in Wellington are addressed to Peters himself. Those bills were paid for by the Foundation.

Several of the invoices for storage costs are addressed to "NZ First Foundation - The Rt Hon Winston Raymond Peters".

One invoice for $13,959 sent in August 2017 for "website, digital presence & communications advice" is addressed to the "Chief of Staff NZ First Leaders Office" at Parliament.

Professor Andrew Geddis

Professor Andrew Geddis Photo: RNZ / Claire Eastham-Farrelly

Another invoice from November 2017 for $22,301 worth of expenses and "overtime worked during the election" is also addressed to Peters as NZ First leader.

Both those bills were paid for by the Foundation.

On September 12, 2017 the Foundation paid $2566 to a consultant "to recompense him for airfares for himself and camera crew to make video of WP [Winston Peters] for farming audiences".

The Foundation also paid a bill for NZ First MP Clayton Mitchell to get legal advice on the Electoral Act.

Law firm Russell McVeagh sent an invoice for $12,081 to Mitchell at his Parliament address for legal advice between May 23 and June 14, 2018.

The services included meeting Mitchell, considering Electoral Commission guidelines and "drafting and finalising advice on Electoral Act compliance".

The Electoral Commission is already investigating the New Zealand First Foundation after revelations by RNZ and Stuff last year.

Geddis said if, after the investigation was completed, the Electoral Commission found no breach of the law, "then that shows that our Electoral Act simply just isn't fit for purpose".

"The way in which this has been set up has effectively avoided giving the New Zealand public the sort of information that we ought to have in order to be happy that our political parties and those who get elected by our political parties are operating in a fair, transparent, above-board manner."