KEY POINTS:
Winston Peters knew about the Spencer Trust that has funnelled $234,171 of undeclared donations into his NZ First party, say informed sources.
The Herald has learned Mr Peters was aware of how much money was kept in the trust at certain times, and that he directed staff to get it to pay party expenses from 2005 onwards.
But the trust's existence was kept so secret it paid over $100,000 in bills that senior party officials did not even know they had.
The Spencer Trust's bill payments for the party included $87,648 in 2006 - but the party's president, secretary and treasurer from that time yesterday said they had no idea the bills even existed, yet alone that they were paid.
It is not known what the bills were for.
Mr Peters did not return calls last night. Despite being asked, he has never said when he became aware of the trust. On July 29 he told a press conference that he had no knowledge of what the trust was used for.
Police yesterday began investigating NZ First's failure to declare an $80,000 donation from the trust and Mr Peters' knowledge of the trust's workings will make it difficult for him to plead ignorance.
The president of NZ First when the 2006 bills were paid, MP Dail Jones, said the Spencer Trust "had no authority from the board to make any payments on behalf of NZ First, because the board never knew they existed".
Mr Jones said the payments "were going on totally behind my back". He had since tried getting details from the trust, but was refused because he was not president any more.
The then-treasurer, former MP and accountant Brent Catchpole, said he had no knowledge of the bills, the trust and therefore the payments despite being in charge of the books. Secretary Edwin Perry also said he had no idea.
The Spencer Trust was formed before the 2005 election. Two of its trustees are Mr Peters' brother Wayne Peters and fellow Whangarei lawyer Grant Currie. The Herald has learned that the third trustee is former NZ First adviser Roger McClay, who was previously a National minister and Children's Commissioner.
Mr Currie released details of all the trust's payments to NZ First yesterday. He would not say what bills it had paid, but said a list was recently sent to the party at its request. NZ First's current president, George Groombridge, said he knew nothing of the list.
Police yesterday began investigating Act MP Rodney Hide's complaint about NZ First's failure to declare an $80,000 donation from the Spencer Trust in its 2007 return to the Electoral Commission.
Under electoral law, all donations over $10,000 must be declared. A successful prosecution could result in a fine of up to $20,000 and/or a year in prison.
The commission also wrote to NZ First asking it to explain why nothing was declared on its returns in 2005 and 2006 despite receiving a donation or bill payments in both years exceeding $10,000.
These breaches cannot be prosecuted because under old electoral law they had to be investigated within six months.
The Serious Fraud Office is investigating whether a $25,000 donation from Sir Robert Jones to the Spencer Trust made it to the party. It has also been looking at whether money from the Vela brothers, known donors to the Spencer Trust, made it to its intended destination.
Secret donations from the Spencer Trust to NZ First:
2005: Gave $50,000 donation, paid $17,083 of NZ First's bills.
2006: Paid $87,648 of NZ First's bills.
2007: Gave $80,000 donation.
2008: Nothing so far.
TOTAL $234,171
