Police say no offence was committed by Gisborne mayor Meng Foon when he placed money on a table at a Father's Day function last week.
Mr Foon is one of just a handful of mayors who have served for five consecutive terms. He is campaigning for a sixth, but local resident Peter Jones made a police complaint against him earlier this week, alleging he bought beer for people at a Gisborne bar a fortnight ago.
Gisborne Police said they had concluded their investigation into the complaint, and had found that no offence had been substantiated.
Mr Foon said today he was happy with the finding.
"I welcome the decision and the thorough investigation from the police. Now I can focus on the election."
Detective Sergeant Kevin Ford said police spoke to "numerous" people identified as witnesses by the complainant.
"There is absolutely no evidence - or in fact any suggestion from anyone other than the complainant - that Mr Foon has in any way been trying to corruptly influence voters."
"There are also no legal issues with the circumstances surrounding $20 given to a person that Mr Foon has had an association with since childhood. Koha in correct legal circumstances and in accordance with Maori custom does not translate into an offence under the Electoral Act."
Mr Ford said it was "disappointing" that Mr Jones had continued to make allegations - and post inaccurate and inflammatory comments - on social media.
"Many of those spoken to as part of the Police investigation have expressed their anger at the allegations being made, and this matter is perhaps a useful reminder for people to be mindful of the information they post online, both in terms of accuracy and legality, and with regard to any subsequent comments others might make in response."
Mr Jones laid the complaint under the "treating" rules, which applied when a person directly or indirectly gave or provided food, drink or entertainment to influence any voter or vote - before, during or after an election.
Mr Foon is fluent in three languages, including te reo Māori, and said he often gave a small koha from his own pocket to acknowledge a birthday or tangi.