"The independence of police investigations is a fundamental part of our country's legal framework," he said.
"Mr Williamson's actions have been very unwise as they have the potential to bring that independence into question."
Williamson said yesterday people shouldn't question their trust in him as a candidate.
He said he wasn't sure at the time if Liu was a National Party donor and described him as someone he knew from "down in Pauanui".
Williamson was appointed New Zealand's consul general in Los Angeles by the then National government in 2017 and returned to the country last year after four years in the role.
He said he decided to stand for the council last month after being asked to run by former constituents.
He only planned to stand for one term and his sole goal was to rein in Auckland Council's spending, he said.
"We can't keep spending money we don't have and keep including new programmes without taking it out of existing spending. And we can't keep racking up debt."
Bryce Edwards, a political commentator and researcher who runs Victoria University's Democracy Project, said a lot of people might not remember the details around Williamson's resignation in 2014.
But he said the announcement was "bad timing" as an unrelated Serious Fraud Office trial, concerning political donations to the National and Labour parties, started this week.
He said Williamson's resignation could come back to haunt him.
"The public has become increasingly suspicious of wealthy individuals donating to political parties and he was the ultimate backroom politician, connecting people with the party."
Edwards said some politicians who had spent time in parliament saw local government as a "part-time job" in their retirement.
"But someone who has years of political experience, like Williamson, might be seen as a spent force and part of the old boys' network."
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