Banks, now the Act Party's sole MP, told police he signed the electoral return, which was prepared by campaign treasurer Lane Hutchison, after asking Mr Hutchison if everything in there was correct.
Mr Dacre said Banks "sought to insulate himself" from knowledge of the donations by seeking Mr Hutchison's assurances and not checking the donations section of the return himself.
To get around the fact he knew where the SkyCity cheque came from, Banks passed it to another campaign staffer to give to Mr Hutchison, Mr Dacre said.
In June 2010, Banks visited Mr Dotcom's Coatesville mansion. There, Mr Dotcom said he offered to donate $50,000 to Banks' campaign but Banks asked for the money to be split so it could be recorded anonymously.
Banks later confirmed he received the money, Mr and Mrs Dotcom told the court
Here Banks engineered a situation where Mr Hutchison had no information about the source of the donation, Mr Dacre said.
And then, in "compelling evidence" he knew of the payments, Banks told Mr Dotcom's lawyer Greg Towers in 2012 he couldn't help the internet mogul after his high-profile arrest on suspicion of copyright infringement incase the mayoralty donations became public knowledge.
Mr Dacre dismissed as "conspiracy theories" suggestions Mr Dotcom, his estranged wife Mona Dotcom and other former Dotcom employees.
But defence lawyer David Jones, QC, said Mr Dotcom, who had criminal convictions for hacking and insider trading, had every reason to orchestrate lies as he looked to bring down a National-led government he hated and of which Banks was an important part.
"That in my submission is a compelling motivation for this man to fabricate evidence and manipulate those who he can to go along with what he had devised."
Mr Jones pointed out inconsistencies in prosecution evidence ? Mrs Dotcom said she was present when donations were discussed, Mr Dotcom said she was not.
Now the pair were separated, Mr Dotcom couldn't rely on her to support him so took her out of the picture, Mr Jones said.
But Mrs Dotcom went along with the earlier agreed version of events and that "proves the lie".
And former Dotcom accountant Grant McKavanagh originally said he travelled down to Queenstown and posted the cheques there, when they were actually deposited into Banks' account at a North Shore Westpac.
When that was pointed out Mr McKavanagh couldn't explain his "fairytale" evidence, Mr Jones said.
SkyCity boss Nigel Morrison has said he had a short meeting with Banks in May 2010 where he handed him a $15,000 cheque in an envelope.
Mr Jones said it was accepted that Banks knew the envelope likely contained a donation, but there was no evidence he was aware of the amount. There was "nothing sinister" in Banks handing the cheque to another worker to give to Mr Hutchison.
The Dotcom donations, meanwhile, were made in such a way they were correctly recorded as anonymous.
The Crown had failed to put forward a motivation for Banks to falsely declare donations and Mr Dotcom wasn't even on the public radar in 2010.
Mr Jones said Banks' campaign was financially transparent.
His team had chosen not to use a secret trust to channel payments, as was allowed, and on one occasion when Banks was handed a cheque, he banked it and informed Mr Hutchison of the situation.
Banks called a number of character witnesses and they were unanimous in backing his honesty and integrity, Mr Jones said.
"The defence, in a nut shell, is Mr Banks has acted properly and appropriately throughout."
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