'Looks to be in contravention of the Electoral Act': Law professor weighs in on NZ First donations

Prime Minister Jacinda Ardern has refused to be drawn on claims that an electoral slush fund run on behalf of NZ First may have breached the Electoral Act.

Stuff this morning reported a body called the New Zealand First Foundation appeared to have hidden political donations worth almost half a million dollars.

The foundation was controlled by advisors of Deputy PM Winston Peters, including Peters' lawyer Brian Henry, with money used to fund NZ First's electoral campaigns and legal advice for an MP, Stuff reported.

The Stuff article said foundation records suggested the Electoral Act had been breached.

A New Zealand First spokesperson told Stuff the foundation had existed for several election cycles and there had "never been any suggestion that it is anything other than lawful".

Law professor at Otago University Andrew Geddis told Newstalk ZB's Mike Hosking that on the surface the foundation's actions appeared to contravene the Electoral Act.

It was already previously known the foundation was loaning money to NZ First as that had been disclosed to the Electoral Commission, Geddis said - although not who had funded the loans.

The NZ First party, headed Deputy Prime Minister Winston Peters, is under fire for apparently receiving undisclosed donations from the New Zealand First Foundation. File photo / Mark Mitchell

"That was outside the spirit of the law but within its strict wording. Now that we're hearing that the foundation was actually paying for the party's activities that then becomes donations that the party should have disclosed and never were disclosed, and that looks to be in contravention of the Electoral Act."

It was not known who had given the money to the foundation for the loans.

"As soon as money is given to the party that doesn't need [to be] repaid, that becomes a donation that needs [to be] disclosed and it never was."

In 2017 the party declared 13 donations of $5000 - $15000, adding up to $135,994.

But according to documents seen by Stuff, over five months during the same period the New Zealand First Foundation had received at least 26 donations worth a total $325,900.

Geddis said one question would be whether the foundation was part of NZ First or a separate entity.

Records seen by Stuff showed one donation of $50,000 had been split into four smaller amounts of $12,500, which would not require disclosure to the Electoral Commission. There would be no requirement to do so unless the foundation were part of NZ First, Hosking suggested.

Geddis agreed those transactions looked "odd". But he said whether or not laws had been broken, people should not lose sight of the "bigger picture".

"NZ First has set up this entity for no other reason than to try and escape the transparency that we require of political parties."

He said the Electoral Commission should "start sniffing around" but because it had no independent investigative powers, if NZ First declined to assist the commission could not push further.

However at that point the commission could ask the police to investigate.

"Whether the police would want to touch this, I guess we can wait and see."

Prime Minister Ardern told Hosking this morning she would not cast judgment "based on one news story".

Ardern said she did not know much about the foundation.

"I'm sure that I'll get a bit more information because I get asked questions about these things."

It was not for her to determine whether any rules were broken - that was up to the Electoral Commission.

"I'm not going to be drawn into that aspersion before of course that is proven."

However, she would not say that she had no concerns.

Her assumption was that parties were operating within the law until proof was given that they were not, she said.