Tuesday, November 19, 2019



A corrupt practice

Last week RNZ broke the news on NZ First's mysterious "foundation" and its dodgy-looking loans. The arrangement seemed to be designed to evade the transparency requirements of the Electoral Act, by laundering donations. But now Stuff has acquired some of their financial records, and it gone from dodgy to outright criminal:

Almost half a million dollars in political donations appear to have been hidden inside a secret slush fund controlled by a coterie of Deputy Prime Minister Winston Peters' trusted advisers.

The secretive New Zealand First Foundation collected donations from wealthy donors and used the money to finance election campaigns, pay for an MP's legal advice, advertising, fund a $5000 day at the Wellington races and even pay an IRD bill.

[...]

Stuff has seen records for the foundation that suggest there have been breaches of the Electoral Act and that the foundation is being used to obscure political donations to the NZ First Party.

Donors to the foundation are primary industry leaders, wealthy investors and multi-millionaires.

One legal commentator, public law expert Graeme Edgeler who also saw the records, believes there would be different consequences under the Electoral Act depending on whether the party and foundation are separate entities or connected.

In either scenario, Edgeler concluded the Electoral Act had likely been broken.


The big offence here is making a false electoral donation return - a corrupt practice if done knowingly, but merely an illegal practice if the result of negligence and other people's lies. And with that on the line, you can see why their party president suddenly quit rather than sign the financial statements.

Stuff appears to have evidence that funds were given to the foundation as "donations", and then used to directly pay party expenses. Some of these donations were split up to avoid the declaration threshold - suggesting a belief they were going to a political party (not to mention corrupt intent on the donor's part). Which suggests other criminal offences as well. But because politicians write the law to suit themselves, there's an extraordinarily short time window for prosecution, and many of the offences may not be able to be prosecuted. Still, the Electoral Commission needs to investigate, and bring charges if it finds anything. Anything less would simply be a betrayal of our democracy.