Prime Minister Jacinda Ardern immediately raised the issue of donations law. Photo / Mark Mitchell
Prime Minister Jacinda Ardern immediately raised the issue of donations law. Photo / Mark Mitchell
OPINION:
Jacinda Ardern's knee-jerk response to the news that a donation to her own Labour Party has led to Serious Fraud Office charges against six individuals was "let's look at the law".
The Prime Minister was right when she said that New Zealanders want to have confidence in the system.
And the fact that 12 individuals are facing Serious Fraud Office charges in relation to donations to three political parties may have undermined confidence in something. But not necessarily "the system".
"The system" spent several years investigating the donations – and "the system" has laid charges.
Notwithstanding the fact that the trials have yet to be held, there is every reason, for the first time in a long time, for New Zealanders to have confidence that the system might actually be working.
Until the past few years, it was rare for the police to do anything other than investigate and then do nothing.
The Serious Fraud Office has built up an expertise over three years of intense work on donations relating first to the National Party, then New Zealand First's donations vehicle, the New Zealand First Foundation, and the Labour Party. It is also investigating donations to the Māori Party.
Ardern resisted calling for a look at the law when charges were laid in relation to National and New Zealand First donations. That suggestion arose only after charges were laid in relation to Labour.
The law is clear. The Electoral Commission does a good job of explaining who can give what to whom and what needs to be disclosed. It produces easy-to-understand material directed to donors, to political party secretaries, and to candidates, all on its website.
It explains whether giving parties a gift or discount is a donation (yes if it worth more than $1500), whether charity auctions are treated as donation (yes) and whether you can avoid disclosure rules by breaking up big donations into smaller amounts (no).
Anything over $15,000 to a party and over $1500 to a candidate must be declared within a specified time. If you give more than $30,000, the party must declare that within 10 days.
If you are wealthy and want to give a large anonymous donation to a political party, there are ways to do that, so long as it is not a nod and a wink affair where you give anonymously but tell someone it was you.
At the very least, any decision by Ardern to "look at the law" should be delayed until the three cases before the courts have been completed - unless it is to reduce thresholds.
The first of the current crop to go to trial will be in September and around donations to the National Party.
The case relating to National Party donations, and including former National MP Jami-lee Ross, is due to be heard in September; the case in relation to New Zealand First donations in June next year; and the first appearance for the defendants relating to the Labour Party donations is May 24.
The six people charged last week are accused of adopting a "fraudulent device, trick or stratagem" where the donation was paid via an intermediary account before being paid to Labour.
Court papers also allege the group provided five names to "create the illusion" of five donations of sums of less than $15,000 to conceal the amount and identity of the actual donor. The accused six are also further charged with unlawfully obtaining a benefit for the true donor by allowing them "freedom from any public scrutiny".
Major changes were made to the electoral law by the Labour-led Government between 2005 and 2008 in response to the mother of all elections in terms of law breaking; and further changes were made by National in 2010.
The 2005 election had four donations scandals attached to it: Labour busted its election expenses because its taxpayer-funded pledge card was deemed an election expense; the Auditor-General undertook a review and found that virtually all parties had misused parliamentary funding for electioneering; the Exclusive brethren were found to have been behind an anonymous leaflet attacking the Greens and Labour; and National's failing to account for GST in its election broadcasting allowance, giving it $112,000 more in time than it was legally allowed.
Most parties repaid the amount of parliamentary funds they had misused; the Brethren debacle resulted in disclosure rules about third-party advertising being tightened; Parliament changed the law defining what a legitimate expense for MPs was. Neither Labour nor National was charged over the pledge card or GST.
The law was changed again in 2019 to outlaw any foreign donations above $50 or foreign donations being funnelled through New Zealand people.
It was in response to National lawfully receiving a $150,000 donation during its last term in office from a Chinese horse racing mogul, Lang Lin, through his New Zealand-based company.
The law has been refined many times. Now it is time for it to be tested before the courts.
