The referral of NZ First, first by the Electoral Commission to the Police and then by them to the Serious Fraud Office over potential breaches of Electoral law is likely to have profound implications for New Zealand politics.
In the short term, it leaves a huge question mark over NZ First which was hinted at by the Prime Minister’s enigmatic answer when asked whether she still trusted Winston Peters.
And within NZ First, there will be questions over the role played in the party by the shadowy Auckland lawyer, Brian Henry, who is close to Winston Peters but remote from everybody else.
And then, whatever happens, the Prime Minister says she will reform the country’s political donation laws if she forms the next Government.
This has all been triggered by allegations that an entity called the NZ First Foundation has been soliciting donations from businesses and then lodging them with the Foundation which in turn has passed them on as loans or grants to the party.
The effect of this process has been to hide who is donating to the party.
This contrasts with the National Party Foundation which declares its donations.
In 2008 when Winston Peters and NZ First were subject to another investigation by the Serious Fraud Office over party funding, Peters stood down after a meeting with then-PM Helen Clark.
Asked at her post Cabinet press conference yesterday what the difference was between then and now and why he wasn’t standing down, she said: “My job is to deal with the circumstances in front of me, not to draw reflections on what someone else did ten years ago. And this is the judgment I have made.”
But her willingness to allow Peters to stay in his portfolios did not seem to extend to trust.
Asked specifically if she trusted him, she said: “I have an excellent working relationship with him. We have proven that we can deliver a strong, stable government and ultimately, the issues that have been raised today is not a matter for any of us to simply give a word. (sic) It’s actually for these things to be properly investigated. “
Within NZ First, the spotlight is likely to turn on to Auckland lawyer, Brian Henry, who is one of the trustees of the NZ First Foundation and who has appeared at NZ First conferences over the past two years as the party’s “Judicial Officer”, an unelected position but which saw him oversee a rewrite of the party constitution. That included chairing numerous meetings of party members at the electorate level.
Henry has been close to Peters since the Winebox revelations and Commission of Inquiry of the early 90s and once, in 2009, told Parliament’s Privileges Committee that he and Peters were “blood brothers.”
He is thought to have been the architect of the Foundation.
However, Peters said yesterday in a statement that he had been advised that “in all its dealings the Foundation sought outside legal advice and does not believe it has breached the Electoral Act.”
The Prime Minister hinted at what may be much deeper concerns about the way NZ First has gone about its fundraising with her promise to change the electoral donation laws if she wins power after the election.
“It’s my strong view that we should have a proper look at our electoral finance laws,” she said.
She referred not only to the NZ First investigation but also the charges that have been laid by the Serious Fraud Office against Jami Lee Ross and three other unnamed individuals over donations to the National Party.
She said that she would wait for the investigation and the cases to be completed before she undertook her “proper look”.
“But I think that’s the right thing to do.
“We need all New Zealanders to have faith in our system and our regime.
“It may well be that this is a demonstration that our laws are working but let’s ask the questions and make sure we are confident that our system works.”
Ironically a Parliamentary Committee reported on December 10 last year with a report on the 2017 election which included a section on campaign financing written by the National Party members on the Committee.
Though it was included in the report, it did not form part of recommendations.
The section focussed on NZ First and said the party was concerned about aspects of NZ First’s financial returns..
“The first is a declaration of a $73,000 loan from the NZ First Foundation,” it said.
“It was the only party to declare a loan, and the public has no transparency over the source of this funding.
“It is publicly alleged that over $500,000 was received by the Foundation in corporate donations.
“This is inconsistent with the intention of the electoral law that all funding over $15,000 is publicly disclosed.
The Committee also received reports from the Ministry of Justice and the Electoral Commission on the volume of anonymous donations.
NZ First reported $342,199.27 in anonymous donations in Election 2017.
The total for other parties combined was $59,290.60 with National receiving $28,270.69 and Labour $26,385.86.
“A motion was moved by National on October 1, 2019, for officials to inquire further and report on the scale of NZ First anonymous donations.
“Labour members voted against this resolution, and the committee was not able to acquire any additional information.”
National MPs said they did not believe New Zealand First had met the spirit or intent of disclosure for the 2017 election.
“We are frustrated that the Committee was blocked by Labour members from being able to properly inquire into these issues.
“It is difficult to recommend appropriate reforms in this area when Labour members blocked further inquiries.
“It is not acceptable New Zealanders have no transparency on who funded the party that became pivotal to the 2017 election result.
“New Zealand cannot pretend its electoral laws provide for a high standard of transparency when a party, through such significant sums from loans and anonymous donations, can avoid the disclosure requirements.”
National will be well aware that after the 2008 investigation into its funding by the Serious Fraud Office, NZ First lost all its seats in Parliament.
Beacuase their chances of forming the next government are much higher if New Zealand First does not make it back, they will believe that yesterday’s announcement will be a big boost for them.
Labour will try to contain any fallout from the donation affair to NZ First.
Though the Prime Minister is not standing Winston Peters down, her failure to say she trusts him and her call for a reform of the electoral donation laws suggests she is already preparing to put some distance between Labour and NZ First on this matter.