Thursday, July 24, 2008

Another NZ First slush fund

The interesting news in the Dominion Posts's story this morning that Bob Jones gave $25,000 to NZ First is not that he donated; rather, it's that it was never declared, instead being diverted into a party slush fund. Despite having written out the check directly to the fund, Jones seems to have been under the impression he donated to the party, and is reportedly concerned that it was used for another purpose.

(In his RadioNZ interview [audio], he makes it quite clear how corrupt the pre-EFA money laundering arrangements were; "every party" used trusts, but everyone involved knew that the donation was for the party. So, the trusts were purely there to circumvent disclosure and hide influence from the public).

The trust was "used sometimes to pay NZ First’s bills". None of this was declared either, either as an anonymous donation or an open one. While it is possible that bills paid by the Spencer Trust came to less than $10,000 in any one year, but if it didn't (and remember, Jones was unlikely to be the only donor), then it should have been declared. While Winston Peters may quibble, paying a party's bills is a donation (albeit in a roundabout fashion), and it needs to be declared. And that has always been the case - the old Electoral Act defined a candidate or party donation as including "money or of the equivalent of money or of goods or services or of a combination of those things", and this definition has been carried over into the Electoral Finance Act.

Unfortunately, the Electoral Commission can't do anything about any breach, as they have a six-month limit on prosecutions. But you'd hope that they would take this as a warning, and go over NZ First's annual return with a fine-toothed comb.

The good news is that if NZ First is still carrying on like this, it is illegal. Now, if money is passed on by a trust, the identity of the donor must be identified; if they don't disclose it, it must be treated as anonymous, and is capped at $1,000. If it is funded by multiple contributions, then the contributors must be identified as well. Failure to do either carries a penalty of a $40,000 fine. Deliberately colluding to make large anonymous donations is now a corrupt practice. If the trust wants to spend large amounts of money for electoral purposes in its own right, it must register as a third party (it hasn't) - which means it must likewise disclose its donations. So, either way, they're going to have to come clean. And given what we've been hearing in the last few days, it's about bloody time too!