Week in Politics: NZ First's 'slush fund' dominates the week

7:21 pm on 22 November 2019

By Peter Wilson*

Analysis: Claims that New Zealand First used a secretive foundation to hide donations lit a fire that blazed all week but there's still no conclusion as to whether the party has broken the rules.

Deputy Prime Minister Winston Peters during a stand-up interview after attending a Police cadet graduation 21 November 2019.

Deputy Prime Minister Winston Peters. Photo: RNZ / Patrice Allen

One story dominated politics this week. It started with a report that New Zealand First had set up a trust fund, the New Zealand First Foundation, which made loans to the party.

Since then thousands of words have been written and spoken, numerous experts have had their say and the Electoral Commission is investigating, but the key question hasn't been answered.

Has NZ First broken the rules? During the week, opinion swung from one extreme to the other and ended up with it probably hasn't.

What's clear is that the party set up a complex legal framework to make the loans, which are not covered by disclosure laws.

Party leader Winston Peters' personal lawyer Brian Henry and former party president Doug Woolerton are the trustees of the foundation.

Mr Peters said it was nothing to do with him. He told reporters the foundation was separate from the party, he ran the political side of things, not the administrative side.

By the end of the week, it had become clear that the relationship between the foundation and the party was a critical issue.

Professor Andrew Geddis, a constitutional and electoral law expert, explained how he thought the set up worked in an

excellent interview with RNZ's Nine to Noon on Thursday.

He reached the conclusion that nothing illegal had occurred, and writing in The Spinoff he put it this way: "The only reason for structuring a party's funding in this particular way would seem to be to stop the public seeing who originally donated the money which is, while technically legal, a complete undermining of the purpose of our disclosure laws."

He wrote that for a party of NZ First's size and pedigree, there was "a curious lack of any reported donations exceeding the legally disclosable $15,000 threshold. The only such gifts reported in the past decade occurred in 2014".

Stuff, which has been leading the pack on this story, has a number of documents covering NZ First's financial matters and donations. It has reported money was coming in from wealthy investors, racing industry figures and property developers.

Some donors interviewed said they felt they had been duped, others said it didn't matter how the money reached the party as long as it got there.

Some donors said the party solicited their donations, and MP Clayton Mitchell has been identified by Stuff as its bagman. That could be crucial to the relationship between the party and the fund.

Simon Bridges and Jacinda Ardern

Simon Bridges and Jacinda Ardern. Photo: RNZ

In Parliament, the National Party did what it always does and tried to get Prime Minister Jacinda Ardern tangled up in NZ First's web.

She has so far avoided it, and Simon Bridges doesn't seem to be sure about what he thinks she should be doing apart from "showing leadership".

He has suggested she should seek advice from her department - which she probably has - and make sure there's an independent inquiry. It has been pointed out that the Electoral Commission is independent, and has asked for more documentation.

Mr Bridges is trying to create the impression that Ms Ardern really should do something, whatever that might be. "She's washed her hands of it, she's sitting it out," he told Morning Report.

In the debating chamber, Mr Bridges and National's electoral spokesman Nick Smith let fly with what they thought NZ First had done, in plain terms.

The next day Mr Henry threatened to sue them for $30 million if they repeated what they had said outside Parliament. Dr Smith tabled the email in the House, later telling RNZ it was an attempt to gag a Member of Parliament.

Going forward, nothing seems likely to happen fast.

The Electoral Commission has asked the party for more information about the foundation. Mr Peters has said it will take "considerable time" to get all the documents together. That probably means months.

If the commission decides electoral law has been breached or might have been breached, it can hand the case over to the police. It has done this before, even for minor breaches.

Or the Serious Fraud Office could become involved, as it already is in the Jami-Lee Ross complaint about National splitting up a big donation so the donor didn't have to be identified.

On the fringes, another debate has begun.

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Jim Bolger Photo: RNZ/Rebekah Parsons-King

Former Prime Minister Jim Bolger, interviewed on Morning Report, pointed out there was a simple and very effective way to end all the controversies around donations and make absolutely sure that no one could use their money to influence policy or the outcome of elections.

He was talking about state funding for political parties, which happens in many other countries. Mr Bolger put up a very sound argument, and it has been heard before. But neither of the main parties has given it serious consideration. They're afraid it would be a turn-off for voters - "why should we be paying for this lot?" sort of thing.

But something has to be done. Electoral law is so full of holes it's a joke. And NZ First is laughing at it.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as NZ Newswire's parliamentary bureau chief.

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