Questions have been raised about New Zealand First’s party financing arrangements after it was disclosed that the party was receiving loans from a party aligned foundation. From Guyon Espiner at Radio New Zealand:
A mysterious foundation that loans money to New Zealand First is under scrutiny, with a university law professor saying although it’s lawful, it fails to provide the transparency voters need in a democracy.
Records show New Zealand First has disclosed three loans from the New Zealand First Foundation. In 2017, it received $73,000. Then in 2018, it received a separate loan of $76,622, in what the Electoral Commission says was a loan executed to “replace the first loan”. In 2019, it received another loan for $44,923.
Those giving money to the foundation are able to remain anonymous because under electoral law, loans are not subject to the same disclosure requirements as donations.
Both of the foundation’s trustees refused to answer any questions about what the foundation did and how it operated, and New Zealand First’s party secretary, Liz Witehira, said she knew nothing about it.
“I don’t know and I don’t need to know,” Mrs Witehira told RNZ.
“I understand there was a loan prior to my time but I didn’t have anything to do with it. I have not been involved in any loans since I have become the secretary general.”
Under electoral law, only the party secretary can enter into a loan on behalf of a political party.
Electoral Commission records show Mrs Witehira signed an Electoral Commission document – Return of Party Loan Exceeding $30,000 – on 26 April.
That document says New Zealand First received a loan of $44,923 from the New Zealand First Foundation on 24 April 2019.
RNZ asked Mrs Witehira for an explanation and she responded by text: “I haven’t signed any loans. Get your facts right.”
After being provided a copy of the Return of Party Loan document with her signature on it, she said, “There’s nothing further to explain. One entity provided a loan to another entity. It was documented, declared and repaid.”
The report notes that the foundation is the only entity that has provided funds to the party in the past couple of years.
Then this morning further details were released by Matt Shand at Stuff:
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.
A New Zealand First spokesperson said on Monday the foundation had been in existence across several election cycles. “There has never been any suggestion that it is anything other than lawful,” she said.
Records uncovered in a Stuff investigation show a complex web that appears to be designed to hide donations to the NZ First Party via The New Zealand First Foundation.
Graeme Edgeler was quoted as saying the following:
“If the foundation and party are separate, it is likely a corrupt or illegal practice occurred because donations from the foundation were not declared,” he said.
“If the foundation is part of NZ First, then the party secretary has likely committed offences around declaring donations or failing to keep records.
“If some donors were under the impression they were donating to the NZ First political party when making payments to the foundation, then there are possible breaches of the Electoral Act relating to party donations and ensuring proper records.”
More information would be helpful. But I wonder if the situation is as clear cut as Edgeler thinks.
The Electoral Act provisions relating to loans are separate to those relating to donations. And unlike contributions requirements for donations there is no requirement for contributions to a loan to be separately identified.
Are the payments party donations? Maybe not. A party donation is defined as “a donation (whether of money or of the equivalent of money or of goods or services or of a combination of those things) that is made to a party, or to any person or body of persons on behalf of the party who are involved in the administration of the affairs of the party“. I am not aware that the trustees of the Foundation, former NZ First MP Doug Woolerton and well known lawyer Brian Henry are current office holders. If not payments to them are not party donations.
As far as I can ascertain the foundation has not advertised in which case it does not have to be registered as a promoter.
Obviously there is further information floating around but from what I have seen so far I would suggest that the arrangement is cute rather than illegal.
But it is not a good look. Full disclosure is and should be the norm.
While we are on the subject there was that recent example where a $100,000 donation was partitioned into seven donations of $14,000 with a $2,000 donation on top to complete the sense of feng shui clearly to avoid disclosure requirements. Cases like this should be investigated fully and promptly and if something illegal has happened then prosecutions should be taken.
Winston spent most of 2008 defending himself against claims relating to the donation by Owen Glenn to New Zealand First. I get the feeling it could again be a long 12 months for him.