Former Prime Minister Helen Clark, seen here in 2006 with then-Foreign Minister Winston Peters, says that the NZ First donations scandal in 2008 did not taint her own reputation. Photo / Glenn Jeffrey
Former Prime Minister Helen Clark is rejecting any suggestion that she or her Government were tainted by the New Zealand First donations scandal in 2008, when Labour lost the election.
"I do not believe that the events concerning NZ First were of any particular significance in the 2008 election result and do not accept any inference that the actions of others impacted on my reputation," she told the Herald.
The parallels with 2008 have been brought into sharp focus this week, following questions about donations and the secretive NZ First Foundation.
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Documents obtained by Stuff appear to show just shy of half a million dollars has been given to the foundation, which has allegedly used the money for the benefit of the party and its MPs - such as legal advice, advertising and bills.
Electoral law expert Graeme Edgeler, who has viewed the documents obtained by Stuff, has questioned whether the Electoral Act has been broken, in particular provisions around disclosing donations and record-keeping.
According to returns provided to the Electoral Commission, the party declared $87,689 in donations in 2018 and $546,253.77 in 2017, including no donations above $15,000, which must include the identity of the donor.
The foundation loaned NZ First $76,622 in 2018 and $73,000 in 2017. The party's judicial officer Brian Henry said the 2017 loan covered a shortfall after the 2017 election and was repaid over two years.
The Electoral Commission is now investigating, and Act leader David Seymour is considering a complaint to the police.
NZ First leader Winston Peters has said that nothing illegal has occurred, and the party will cooperate with the commission.
National Party leader Simon Bridges has sought to pull Prime Minister Jacinda Ardern into the saga, saying she cannot wash her hands of the issue as it reflects poorly on her Government.
It has invited comparisons with the lead up to the 2008 election, when scandal-embroiled NZ First crashed out of Parliament and the Labour-led Government lost the Treasury benches to National and John Key, who had ruled out working with Peters.
But Clark said that the issues around NZ First did not damage her or Labour's electoral chances.
"There appears to be a rewriting of history going on in comparisons being made by some with 2008," she said.
"Labour lost the election in 2008 after being in government for nine years - the outside point at which New Zealanders in recent decades have voted for change. The last three governments have lasted nine years."
Ardern has repeatedly stressed that dealing with other parties' issues was part of the MMP environment, but she was not responsible for any other party but Labour.
That view has some sympathy from Mike Williams, Labour Party president from 2000 to 2009.
"It has utterly nothing to do with the PM," Williams said.
"And there's nothing she can do about it and nothing she should do. It's a party matter, not a Cabinet matter."
But he said the issue could push the public into having a poorer opinion of Ardern and her Government.
"That's the price you pay when you get into bed with other political parties. They have the ability to embarrass you and there's nothing you can do about it. That's MMP."
Williams even applauds the National Party for trying to drag Ardern into it.
"It's a strategy that worked very well for the party in 2008 and they're trying it again. It's given me a sense of déjà vu."
In the lead up to the 2008 election, NZ First was plagued by claims about donors and donations that were not initially disclosed to the public.
There was the $100,000 that billionaire Sir Owen Glenn gave to Peters' lawyer Brian Henry to pay the legal fees for challenging the 2005 Tauranga result, which Peters lost to National's Bob Clarkson.
Questions around the donation led to Peters brandishing a "NO" sign in a press conference whenever he was asked if he or his party received a donation from Glenn.
Peters later said that Henry had solicited the Glenn donation, but a letter from Glenn contradicted this, saying Peters had asked for it.
The party also received donations via the Spencer Trust, including $25,000 from Sir Robert Jones and about $150,000 from the wealthy horse racing-linked Vela family.
Peters this week reminded media that he had been cleared of wrongdoing in 2008 by the police, the Serious Fraud Office and the Electoral Commission - but it was far from a complete exoneration.
The SFO said that no fraud had taken place but other laws may have been broken, specifically that the party's returns for 2005 and 2007 did not appear to line up with the party's audit reports.
The Electoral Commission said that donations made to the party in 2005, 2006 and 2007 were not included in the party's annual returns, and asked the party to amend its 2005 and 2006 returns.
Police said that the time limit for prosecuting for 2005 and 2006 had expired, and no offence had been committed for 2007 because there was no evidence of the party secretary deliberately filing a false return for 2007.
The Electoral Act specifies that only the party secretary, not the party or the party leader, can be found liable, and only if the offence had been deliberate.
Meanwhile Parliament's privileges committee looked into the Glenn donation and found, by a majority, that Peters had knowingly filed a false return to Parliament.
The use of a third party to funnel donations to NZ First was news to Ross Meurant, a former advisor to Peters who brokered donations to the party from the Vela family - as well as the use of a helicopter - for the 1999 election.
Meurant told the Herald the Velas had no intention of funnelling the money through the Spencer Trust, or any trust.
"All of the cheques I conveyed from Vela Group to Winston were addressed to NZ First. [Senior family member] Philip Vela was clear in his intention and belief where the cheques were going. Never did I convey a cheque addressed to the Spencer Trust or any other associated entity.
"As one who has endured odium which emanated from me taking the flak for Winston over a range of not dissimilar disclosures that currently clutter the media, I'm inclined to the view that Winston should, in these circumstances, accept that the buck stops with him."
Mike Williams said that NZ First appeared to have replaced the Spencer Trust with the foundation, and donations with loans, so that it could still hide the identities of donors.
Loans can be funnelled through a trust to side-step the disclosure rules that usually apply to donations.
Williams said there were perfectly legit reasons for parties to receive loans, but questioned whether the type of loan from the foundation was one of them.
"For a party's budget, you have two years when you make money and one year when you lose money, but what you can do in election year is borrow [from a bank] against the next year.
"I used to do that."
Edgeler, speaking in general terms, said that if a loan to a party was not repaid, then it was a donation and had to be declared as such according to the law.
But he conceded that it was "legally arguable" to call it a loan, even if it was really a donation, and say it will be repaid without saying when.
Williams agreed: "As far as I know, the definition of a loan is if you say it's a loan. It's a hole in the law you can drive a bus through."
It remains unclear if that is the purpose of the foundation.
Current and former NZ First members told the Herald that many in the party knew about the existence of the foundation, but its activities were closely guarded.
Neither former party treasurer Colin Forster nor former party presidents Kevin Gardener or Lester Gray knew about it, nor did Gray mention the foundation when he quit because he had a moral objection to signing off the party's financial statements.
Williams said it was absurd for the party president to be kept in the dark.
"NZ First, the way the party actually works, is opaque. I've never understood it.
"I think the Electoral Commission will look at the foundation and say it's prefect legit under the current law. It may be outside the spirit of the law, but if the parliamentarians want to fix it, they can."
Justice Minister Andrew Little said a "wholesale" review of electoral law was needed, but that would not happen until after the 2020 election as it required a lot of work and cross-party consultation.
"It's actually a very old piece of legislation where round parts have been shoved in square holes and vice versa. It needs to be gutted and refurbished."
Edgeler said one way to improve the Electoral Act would be if all loans were treated as donations, along with all the disclosure requirements that entailed.
That way, the public would see certain details about certain loans, regardless of whether the loan was repaid.
Lowering disclosure thresholds for donations to parties and making a party liable for breaches - rather than just the party secretary - would also improve the law, he said.
The Electoral Commission wasn't the ideal body to look at alleged electoral law breaches, he added.
"Have someone with the power to look through bank accounts and obtain search warrants, like the SFO.
"The commission can refer to police or the SFO, but it has to decide whether it is likely an offence has been committed - how do they know there's been breach if they don't have copies of documents?"
Police could investigate potential breaches, but Edgeler said they have been reluctant to prosecute.
"The most obvious one was Labour's pledge card [in the 2005 election], where there was a clear breach of Labour's spending limit.
"The law is mostly good. There aren't many holes anymore. The main thing to do is to enforce it."
'Police cannot rule out the possibility of further arrests and charges.'