7 Sep 2022

Defendants were unaware of electoral disclosure rules, courts hears in political donations trial

5:51 pm on 7 September 2022
Entrance to the High Court in Auckland

The trial at the High Court in Auckland is expected to draw to a close tomorrow. Photo: justice.govt.nz

The High Court in Auckland has heard how several defendants in a trial over alleged concealed political donations claimed not to be aware of electoral disclosure rules.

Seven people including former MP Jami-Lee Ross are defending charges laid by the Serious Fraud Office of obtaining by deception.

The Crown alleges three separate donations to the Labour and National parties were split into smaller amounts among "sham donors" to avoid triggering the disclosure limit and keep the public in the dark about the identity of the true donor - businessman Yikun Zhang.

Businessman Colin Zheng, described during the trial as Zhang's right-hand man, is among those defending charges of obtaining for deception.

In closing, Zheng's lawyer Paul Dacre QC, told the court his client - who is a Justice of the Peace - was not aware of the Electoral Act requirements.

"There's another way of looking at this and that is to say well look it's such a shambles nobody seems to know how these donations are done."

Dacre said the SFO had got it wrong in attempting to cast Zheng as a criminal.

"Should the Serious Fraud Office have looked at the evidence through a different prism, through a different telescope and looked at it from a cultural point of view it may much more readily have understood the relationship between Mr Zhang and Mr Zheng."

The SFO searched Zheng's business address in September 2019 and seized devices, and a few months later was voluntarily interviewed by the SFO for close to five hours.

Dacre said the Crown's claim that his client had knowingly asked his family and friends to be alleged "sham donors" was tantamount to "throwing his good name away".

The trial merges two cases, one concerning a $35,000 donation to the Labour Party in 2017 and another case concerning two $100,000 donations to the National Party - one made that same year and another in 2018.

For the National Party donations, the Serious Fraud Office has charged Jami-Lee Ross and three businessmen Yikun Zhang, Shija (Colin) Zheng and Zheng's twin brother Hengjia (Joe) Zheng.

The three businessmen also face charges related to the Labour Party donation, alongside three others with name suppression.

The defendants deny all charges.

Earlier on Wednesday, the lawyer for a man with name suppression who the Crown alleges put his name and others forward as sham donors to help conceal a large donation to the Labour Party closed his case.

Sam Lowery said his client did provide names of people whom the Crown alleges were sham donors but was not in on the alleged scheme to conceal a large donation by avoiding the disclosure limit.

"Proper analysis suggests he was in the dark and therefore cannot be guilty," he said.

"There's no mention of the alleged strategy which is the sham auction involving paintings which is how the Crown opened and there's no mention of wanting to keep YZ name hidden or the skirting of electoral disclosure rules."

The Crown alleges the man put his name forward as the purchaser of a painting in an auction that was a ruse to split a large donation into smaller amounts.

The court heard how the man told SFO he had given the painting to his mother in China, which Lowery described as an "embellishment".

The trial is expected to draw to a close tomorrow with Jami-Lee Ross's defence team closing their case.

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