The extraordinary decision by the Serious Fraud Office to announce yesterday that it was laying charges against two NZ First Foundation directors four days before advance voting begins must be a fatal blow to the party.
The party obviously fears that even though none of its MPs is to be charged.
Its lawyers told High Court Judge Matthew Palmer last Thursday that if the SFO were to proceed with the charges against the directors, that would “in the minds of the electorate, adversely impact on NZ First’s electoral campaign irrespective of the legal and factual merits of that allegation.”
In a media conference last night, Party leader, Winston Peters referred to the damage done to Hilary Clinton’s presidential campaign in 2017 by the FBI Director James Comey who sent a letter to Congress 10 days before polling day about her use of a private server for State Department emails.
“The letter upended the news cycle and soon halved Clinton’s lead in the polls, imperilling her position in the Electoral College,” said the website, “FiveThirtyEight” which is regarded as an authority on US political polling.
As POLITIK has previously reported, NZ First has been concerned for some time about the potential of the SFO to derail the election campaign by dropping the news of the charges in the middle of it.
There were concerns about how long the investigation was taking.
It began seven months ago in February when the Electoral Commission referred allegations to the Police that the NZ First Foundation had fraudulently solicited donations on behalf of NZ First. They then directed them to the SFO.
The office of Brian Henry, NZ First Judicial Officer and NZ First Foundation trustee was raided in March and a large quantity of documents reportedly seized by the SFO.
In April the SFO said it expected to have its investigation completed before the election which was then scheduled for September 19.
“We’ve been through months and months and months of all sorts of people being grabbed and interviewed and examined and all sorts of difficulties and time-consuming at that,” Peters said yesterday.
“And at the end where the party was concerned, there was absolutely nothing.
“And this has gone on for months.”
But the investigation seemed to slow after the first Covid lockdown came into force.
Media questions to the SFO were responded to with a repeat of the April statement promising that the investigation would be over by the date of the election.
In recent weeks though, one source told POLITIK the investigation apparently resumed with some intensity and it became the .top priority within the SFO’s Auckland office.
However, it was not until last Wednesday that NZ First became aware that the SFO was to proceed with charges against two people associated with the Foundation.
The party’s first response last Thursday was to seek an injunction prohibiting the SFO issuing a statement about the charges until after a government had been formed following the election on October 17.
NZ First’s lawyer, Fletcher Pilditch, had argued in a letter to the SFOI that was presented to the Court that an adverse prosecution decision would in the minds of the electorate, adversely impact on NZ First’s electoral campaign irrespective of the legal and factual merits of that allegation, which would not be tested at trial until 2021 or 2022, and could not be addressed publicly until after a trial.
“It is a smear, and one that NZ First could not respond to due to the proceedings being sub judice,” he said.
Furthermore, publicity in the sensitive time close to an election could influence voters’ decisions and needed to be considered carefully.
“Publication of the outcome of the SFO’s investigation and/or this application is likely to impact on the outcome of the election because the election campaign is underway and early voting and the election itself will be held soon,” his submission said.
Justice Matthew Palmer rejected the application.
He said he had difficulty with the claim that the Director’s decision must take into account the impact of the announcement on the election.
“The political neutrality of the public service is an established constitutional convention in New Zealand,” he said.
“Political neutrality seems likely to mean that a department must approach investigations into issues that are relevant to politicians in the same way as it approaches investigations into issues that are not.
“Both counsel accept the SFO has a usual practice of making public announcements about the outcomes of investigations.
“The SFO website suggests it is a very common practice.
“For the SFO not to adhere to that practice because the subject of the investigation is political, as NZ First’s foreshadowed ground of judicial review might suggest, could well be at odds with the principle of the political neutrality of the public service.”
Palmer said he accepted that there was a risk of confusion from the SFO’s announcement.
He suggested that a public statement by the SFO that it is not charging any Ministers, sitting MPs, candidates or their staff might assist NZ First’s electoral prospects.
“But there is little time in which to get that message through and, no doubt, explaining is often losing in politics,” he said.
“ Ultimately, I consider the public interest in transparency outweighs the inconvenience of the announcement to NZ First.
“I do not consider the Court is justified in inhibiting the value of that transparency for the New Zealand public.”
Peter wanted to know why the statement clarifying that neither he nor any of the party’s MPs were being charged could not have been made earlier.
“I had to demand that they go public and clear us,” he said.
“And I’m asking, why did you not do that a long time ago?
“When did you know?
“Why did you leave us out here, to within 20 days of the campaign.”
This has been a body blow to NZ First’s already stuttering campaign.
Peters is now going to pursue the Serious Fraud Office through the Courts to seek a declaratory judgement that the Serious Fraud Office “has amounted to an abuse of its statutory powers and has been unreasonable.”
Whether that will change anything on the campaign trail would seem unlikely.