Primary Industries Minister Nathan Guy says he never knew until now that a businessman whose citizenship he approved in 2010 later donated $22,000 to the National Party.
Mr Guy approved Donghua Liu's citizenship when he was Internal Affairs Minister, a position he lost in a Cabinet reshuffle last year.
Mr Liu is an Auckland property developer whom the New Zealand Herald reports developed a $70 million project in the suburb of Newmarket.
Officials from the Department of Internal Affairs had recommended against his getting citizenship because he did not meet English-language criteria or spend enough time in New Zealand.
Building and Construction Minister Maurice Williamson and ACT MP John Banks, who was Auckland's Mayor in 2010, have both confirmed they advocated for Mr Liu to be granted citizenship despite officials' reservations.
In 2011, his company Roncon Pacific Hotel Management Holdings Ltd donated $22,000 to National.
Mr Guy says he considered, on balance, that the potential benefits to New Zealand warranted the granting of citizenship to Mr Liu, who had had permanent residency since 2005.
Mr Guy says he never met Mr Liu and was unaware of the party donation until now.
Prime Minister John Key says it's not unusual for ministers to intervene on citizenship matters and the law has been followed. "Clearly the party's been extremely transparent about that. It's got nothing to hide."
Mr Key points out that Mr Liu was granted residency under the last Labour Government.