Written By: - Date published: 8:50 am, July 24th, 2008 - 53 comments
Categories: election funding, national, nz first -
Tags: Electoral Finance Act
Bob Jones confirmed on Morning Report that he gave $25,000 in 2005 to New Zealand First. The money was to be funnelled to NZF through the Spencer Trust but, according to the party’s declaration of donations the money was not passed on (parties’ declarations of donations are supposed to include any donations from a legal or natural person totalling over $10,000 in a financial year, NZF reports no donations over $10K since 2004 and none from the Spencer Trust).
Now, we have what appears to be proof of wrongdoing in New Zealand First. Either the money donated by people like Jones through the Spencer Trust was used to pay NZF bills and it wasn’t properly declared or the money was not used to pay the NZF’s bills but for some other reason, which is not why the money was donated. It may be that Peters was not aware that this was happening but something is rotten inside NZF.
The only way to clear all this up now is for all parties to open the books of their secret trusts so that Kiwis can finally be certain of who has been donating to parties and that the money has been used as donors intended. Here is a list of all secret trusts, the party each gave to, and the totals of declared money funnelled through them since 1996.
National:
NZ Free Enterprise Trust – $635,000
South Free Enterprise Trust – $17,999
Waitemata Trust – $2,100,188
Ruahine Trust – $318,948
Holland Memorial Trust – $152,168.71
NZF:
Spencer Trust – ?
(some parties, mostly National, also received money funnelled through law firm trust funds but there is no way those could be opened to scrutiny)
Fortunately, these trusts are now illegal thanks to the Electoral Finance Act but that’s useless if money from them is simply not declared. Now, parties must prove they’ve been honest. So, how about it National and NZF? Restore our faith; open up the trusts.
[Update: To be clear. I would love to see all large (say $200+) anonymous donations banned but it's not possible to open the lawyers' trust accounts or name past anonymous donors, whereas it is possible to open up the books of the trusts. For the record, since 1996 declared donations through secret trusts, lawyers trusts, or given anonymously have totalled: Nats-$4.3mil, Lab-$2.1mil, Act-$0.8mil, Greens-$20K, UF-$37.5K, Progs-$40K, NZF $6.3K]
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Camryn. thanks for that. I would “love to see all opened up, but a[m] resigned to settling for just what is possible”
I have had a bee in my bonnet about these trusts for a while though and I’m not alone in that. One of the cornerstones of the Coalition for Open Government’s proposed finance reforms was getting rid of funnelling. It seems to me that they are an invitation for corruption and this instance just proves it. Of course, it may be somewhat academic (sorry, Bryce) since donations from them to political parties are now banned but it would restore some faith to get it all out in the open.
Clinton- can you explain how the National Party (one legal entity) can force xyz Trust (another legal entity) to disclose who has given money to it?
I think what you mean is: the trustees of the various trusts, should disclose who the beneficiaries of the trusts they are the trustees of.
In some cases, this may involve breaching the trust deed and thereby committing a breach of fiduciary duty and reneging on their legal obligations – opening themselves up to civil legal action.
Is this what you really want?
It is unfortunate that, as in most things, the standard don’t understand how the law works.
[these trusts do nothing other than funnel money for the parties, they are usually controlled by senior party members (eg. the NZ Free Enterprise Trust was run by an ex-Nat President, the Spencer Trust is run by Peters' brother). If they want to, National can hide behind legal fictions, hell that's why they set up the trusts in the first place. However, I'm sure if National asked nicely, their trusts would open their books. SP]
Bryce. I’m not sure if it will work perfectly, I guess we have to see what the first set of donations declarations entirely covered by the EFA look like but it’s better to try to ban them than allow these mechanisms which seem to have no purpose other than to enable corruption and dodgy dealings to exist unfettered.
Unless it is believed that those trusts that were set up could be used so that large donors could influence the party policy without being known. That, of course, is the problem with anonymous donations and why they should be banned (down to around $100 because anything less than that would be impractical).
SP other than ease of identifying who is behind trusts vs anon donations… whats the difference between them in terms of what they achieve?
lukas. Nothing.
Where is COG these days? They seem to have disappeared in a puff of “all care no responsibility”.
They were very good at pushing the EFA and now don’t seem to be interested in dealing with the consequences at a time when open government seems a major issue. Funny that.
SP then why no mention of the vast amount of $$ Labour has received by anon donations throughout the years?
lukas. for the reasons given in the update and earlier comments
insider. Graeme Edgeler of the COG is with the EC now and Steven Price is regularly in the media on EFA issues.
It should be remembered that the COG’s proposals were more akin to the Canadian system – more public funding, lower anonymous limits etc – than the one adopted
but lukas we really need to discuss this rather irelevent diversion from the very real problems the government is now having to face with NZF.
Sack Winston?
Election looming?
Or pretend it’s business as usual?
Draco – but the anonymous donation part isn’t the issue here. It’s whether the anonymous donation actually made it to the party.
sorry…hadn’t seen that updated bit of your post
If I were a Nat strategist right now I would
1) Publicly write to the trusts asking them to ask their donors if they are willing, in the name of transparency, to be publicly named.
2) Release letters from the trusts saying “Yes”.
3) Wait a week.
4) Release a small list of entirely innocuous names, and say the Trusts are still following up the rest.
5) Smile, take the moral high ground.
High risk strategy, Anita. Even the Tracy Watkins and Audrey Youngs of the world would start asking questions if they give names to a few hundred thousand of donations through the trusts and over $2mil is still unanswered for.
I believe this blog need to get back to what do Helen Clark & Heather Simpson do with Winston.
obviously he is the one under the gun at the moment. Even though it may be a good time for the rabid left to come out and have a go at National its not them in the firing line
The chief Baubleeater the man whiter than white on Election spending appears to have some very creative accounting going on. It also appears that quite a bit of the money never reached NZ1 where did it go?
If you were the Prime Minister of an open and Honest Government wouldn’t you want to know? Especially as this man is acting as a Foreign Minister for her Government.
I think Clark has to make a stand and the longer it goes on the more damage it will do for Labour!!
Clinton – once again talking out of your ass.
“these trusts do nothing other than funnel money for the parties”
Are you a trustee? How do you know this?
“they are usually controlled by senior party members”
So?
“If they want to, National can hide behind legal fictions, hell that’s why they set up the trusts in the first place”
A trust is not a legal fiction.
SP,
Or it would give them a great chance to talk about National transparency and turn the spotlight on Labour and NZF.
National could claim rock-and-a-hard-place – genuine commitment to openness vs commitment to privacy (not to mention, it’s the trusts’ decisions).