- Date published:
9:29 am, November 29th, 2019 - 24 comments
Categories: election funding, elections, electoral commission, electoral systems, national, nz first, same old national, Simon Bridges - Tags:
The problem with shooting your mouth off and barking at every passing car is that sometimes there will be unintended consequences.
Like when Simon Bridges asked for an investigation into New Zealand First’s handling of donations. Fair call. It looked like NZ First might be rorting the system and if we want transparency then this sort of set up should be investigated.
The Winebox papers leak has revealed the model used for the establishment of the NZ First Foundation. Surprise, surprise it was the National Party’s Foundation.
One of the leaked documents is called ‘Proposal to Establish a Strategic Fund Raising and Management Vehicle for New Zealand First’ and lays out the reasoning for the Foundation.
It says the “generally weak” state of electorates and a “lack of success” at board level in raising funds meant a new business model was needed to bring money into the party.
“The precedent is clear. It is the National Party’s National Foundation. In essence this proposal suggests a cloning of that model into the New Zealand First Foundation,” the document says. “There can be little doubt that the model is legally sound and is operated in a manner that meets all legal and ethical obligations.”
The proposal says the fund would be a “legally established autonomous organisation that would operate independently of and at arms length” to the board.
The idea was to set up a capital protected fund. “This means contributions will never be removed from the fund. Instead they will be invested with the proceeds ensuring a stable and diverse revenue stream to support our activities and the capital will continue to benefit our party for the long term.”
This mirrors the National Foundation’s statement that it will do the same. From its website:
We have established the National Foundation to strengthen the financial future of the National Party. It will operate as a capital-protected fund. This means contributions will never be removed from the fund. Instead, they will be invested with the proceeds ensuring a stable and diverse revenue stream to support our activities, and the capital will continue to benefit our Party for the long term.
One aspect that I do not think has been commented on yet is that it appears to me the arrangement avoids disclosure requirements for contributors. The contributions regime states that where a donation is made up of contributions from different individuals then their identity should be disclosed if the amount given by an individual exceeds the prescribed amount. But in this scenario the contributors are never giving to the party. They are giving to another entity that is investing the money and paying the profits to the party. No sum made up of contributions ever heads the party’s way.
It appears to me the overseas donation rules are also avoided. Again it is not the overseas money that is being paid to the party, it is the profits earned from the overseas money by the Foundation. As long as the Foundation’s identity is disclosed along with normal rules this is the only requirement that has to be met.
So Bridges is right that there should be an investigation. But the National Foundation should be included, to make sure that the Electoral Act donations requirements are not being avoided.
Just in case.