ACT Party leader John Banks admits he regrets not being up-front about donations made to his campaign for the Auckland mayoralty.
Police are investigating claims that Mr Banks declared $65,000 of donations from SkyCity and two donations of $25,000 from internet millionaire Kim Dotcom as anonymous when he knew who they were from.
Mr Banks said he took legal advice not to say anything about the matter that might jeopardise any future investigation. However, on Tuesday Mr Banks told reporters at Parliament he now regrets that.
"In hindsight, I regret taking it because I've always been with you and everybody else and the public absolutely up-front in all my dealings.
"And one of the problems that I've put myself in is the obfuscation of questions, because I took literally the legal advice that you should not say anything that would jeopardise an inquiry."
Kim Dotcom has said John Banks rang to thank him for the two $25,000 donations to the mayoral campaign.
Mr Banks says he lobbied hundreds of people to make donations during the 18-month campaign and on Tuesday directly addressed speculation that he knew about the donations from Mr Dotcom.
"There's some suggestion that I received two cheques from Mr Dotcom and somehow deposited them myself. I did not receive any such money at all. It now transpires that two cheques for $25,000 were deposited in a bank account in Queenstown anonymously."
Mr Banks said he never rang Mr Dotcom to thank him for the donations, but did thank him for contributing $500,000 to the cost of Auckland's New Year's Eve fireworks display in 2010.
He said the submission he filed with the Auckland Returning Officer in 2010 was correct and within the law.
Banks lobbied minister over Dotcom
John Banks also confirmed on Tuesday that he lobbied the Land Information Minister in 2011 about a property purchase Kim Dotcom wanted to make through the Overseas Investment Office.
Mr Banks says Maurice Williamson was the only minister he approached on Mr Dotcom's behalf.
Mr Williamson said he received a phone call from Mr Banks around the middle of last year about Mr Dotcom's application to the Overseas Investment Office.
"He told me that Kim Dotcom had funded a very large fireworks display for Auckland City and he hoped we would give it favourable consideration.
"I made it clear that it didn't work that way, we had to follow through a very careful statutory process, which is what we did."
Mr Williamson initially approved the purchase, but it was later turned down when he and Associate Finance Minister Simon Power made the final decision.
Prime Minister John Key said John Banks was not an MP or a minister at the time, so there is no issue with lobbying a minister. "As we can see, it wasn't successful anyway."
Meanwhile, former Immigration Minister Jonathan Coleman said he was not lobbied by John Banks about Kim Dotcom's application for New Zealand residency.
Banks will stay as long as law not broken - PM
The Prime Minister has been under pressure to stand down John Banks as a government minister, but on Monday said he had been assured by the ACT leader that there had been no breach of the law.
"If he's complied with the law, some people might not like it but he's complied with the law, and you wouldn't sack a minister for complying with the law of New Zealand."
John Key said there might be case to tighten local government electoral laws on political donations, as they are not as robust as those for general elections.
Labour Party leader David Shearer says people have lost confidence in Mr Banks and the Prime Minister should ask him to step down until the police investigation is complete.
Mr Shearer told Morning Report on Tuesday the party has formally lodged a complaint with police to investigate donations to the mayoralty campaign.
New Zealand First leader Winston Peters says a Serious Fraud Office investigation would be appropriate. Mr Peters said Mr Banks received $600,000 in anonymous donations - well above the threshold of $500,000 required for an SFO investigation.
Former ACT party leader Richard Prebble said the controversy is a storm in a teacup and no one is suggesting that the donations to Mr Banks are illegal.
Former Labour Party president Mike Williams said Mr Banks is in trouble and that is starting to reflect on the Prime Minister.
The law requires candidates to declare the source of a donation if it is known to them.
Candidates face a two-year prison term for filing a false declaration; if convicted, a sitting MP would have to vacate their seat.