Q&A: NZ First donations saga

New Zealand First leader Winston Peters says that there is nothing illegal about the NZ First Foundation or its activities. Photo / Mark Mitchell

What is the NZ First Foundation?

It appears to be a trust that loans money to New Zealand First, allegedly for purposes that benefit the party and its MPs.

Questions have been raised about whether the party is in breach of electoral law, in particular provisions around disclosing donations and record-keeping.

What the law says

Each party must make an annual return that includes:

• Every donor who donated over $15,000 during the year
• Every anonymous donation over $1500; the number of anonymous donations under $1500 must be recorded, as well as the total amount of these donations
• Every overseas donation over $1500; the number of such donations under $1500 must be recorded, as well as the total amount of these donations
&bull: The number of all party donations over $1500 but less than $5000, as well as the total amount of these donations
• The number of all party donations over $5000 but less than $15,000, as well as the total amount of these donations
• All payments from the Electoral Commission of donations protected from disclosure
• Loans over $15,000 during the year
• The number and amount of other party loans entered between $1500 and $15,000.

If a donation is made to a political party, it should be disclosed according to the rules.

If a donation is made to an independent organisation, which is then loaned to a political party, the loan must be declared if it is over $15,000, along with the organisation but not the donor's or donors' identity.

If the organisation is not independent but is in fact an arm of the political party, then money given to the organisation should be treated as donations to the party and disclosed accordingly.

If a party declares a loan and the loan is then written off, it should be treated as a donation.

But a loan can be rolled over and there is no requirement for a party to say when a loan will be repaid.

There is no limit on how much money a party can raise or spend, but there are spending limits on advertising within an election campaign period.

What happens now

Following a complaint, the Electoral Commission has agreed to look into the issue, and NZ First has agreed to co-operate.

The commission has limited investigative powers and, if it finds fault, can only suggest an action rather than demand it. But it can refer the matter to the police or the Serious Fraud Office.

The SFO has far-reaching powers, including compelling people to answer questions or produce documents, with heavy penalties for failure to comply.

Act leader David Seymour has said he is considering laying a complaint with police.