Fran O'Sullivan: Donations rules must be tightened

John Banks is the latest politician to be caught out by the mismatch of expectations between a high-profile business donor and a political recipient. Photo / Herald on Sunday
John Banks is the latest politician to be caught out by the mismatch of expectations between a high-profile business donor and a political recipient. Photo / Herald on Sunday

The John Banks imbroglio highlights the need to sharpen the rules around business donations to politicians' election funds.

It doesn't do New Zealand's reputation any good to have another high-profile businessman dumping over an MP in a fashion that sends a message to the outside world that top-level access can be bought in this country.

Banks is just the latest politician whose career is rapidly coming undone due to an obvious mismatch of expectations between a high-profile business donor and the political recipient of supposedly anonymous funds.

The Herald has exposed how Banks went to bat for the flamboyant Kim Dotcom to try to secure him ministerial approval to buy the country's most expensive home - the Coatesville property which was made famous by the recent police raid.

Banks wasn't an MP then. He wasn't even Act's latest - and possibly last - leader. So, why would he have spent so much time pressing the Megaupload boss' case to Land Information Minister Maurice Williamson unless he felt he was under a personal obligation due to his earlier request to the German millionaire to pony-up funds for his Auckland mayoralty campaign?

Any other explanation just doesn't compute.

It's obvious Dotcom believed Banks could deliver the result he wanted. Banks repeatedly advocated the Megaupload boss' case to his long-time political mate Williamson. But the approval process came undone when former National Cabinet Minister Simon Power drew a very clear red line through Dotcom's application.

Now Dotcom is dropping bucket loads of the "proverbial" right over the object of his former affection.

The whole affair smacks of a table-turning exercise.

Rather like the way in which ex-pat Kiwi multi-millionaire Owen Glenn hung NZ First leader Winston Peters out to dry after the politician failed to secure him the role as consul to Monaco.

Both businessmen will be praised for exposing their respective MP targets. But once the sportive phase is over (either when Banks gets his own comeuppance as a result of a police inquiry or from Epsom's voters) there will still be damage to NZ's reputation.

Let's recall here how the 38-year-old German-born Finnish national Dotcom bought his New Zealand residency despite a string of foreign convictions.

As the Herald on Sunday reported, the immigration authorities waived good character requirements because Dotcom invested $10 million; was a high net worth individual; his conviction was more than 16 years earlier and didn't involve harming anyone; wanted to buy NZ's most expensive home which no one else wanted; and would contribute to New Zealand through investment, consumption and philanthropic endeavours.

Worse still, the very same authorities tried to hide their iniquitous deal.

Fundamentally this is such desperate stuff that you have to wonder how many other dubious characters have paid their way into this country.

In Peters' case he strenuously promoted Glenn for the consul's role after the expat doled out a $100,000 donation to the MP's legal cause and a similar sized loan to help Labour's 2005 re-election fund. But wiser heads in the Helen Clark government refused to play ball.

New Zealand's credibility as a business destination will again come under question next week when the "Bill Liu" case gets underway in the High Court at Auckland.

The Chinese-born businessman now known as Yong Ming Yan is up on four charges of using an immigration-related document with intent to defraud and one of making a false statement to obtain citizenship.

But the most embarrassing factor is the way in which former Immigration Minister Shane Jones approved his citizenship despite official advice not to do so because of his criminal convictions and many aliases.

And that former Labour MP Dover Samuels presented him with his citizenship certificate in Labour's caucus room. What is most embarrassing for politicians on both sides of the fence is the $5000 donation he made to former Labour Cabinet Minister Chris Carter's Te Atatu electorate committee. And the $5000 he gave to the National Party.

Most established NZ companies' political donations are above board. Many "blue chips" disclose political donations within their annual reports. They will argue that they are simply supporting the democratic process.

But when donations are made "anonymously" it is usually because either the donor or the recipient of the donation does not want any sunlight shed on the money trail.

So, it is right to "follow the money" and ask whether undue influence is being brought to bear in Banks' case. Banks also received a donation from SkyCity for his mayoral campaign. He did not disclose this (it was "made anonymously"). But the formerly strident opponent of gambling is now remarkably silent over the proposed SkyCity convention centre.

Glenn does not have criminal convictions and is a credible businessman.

He is also a New Zealander and also the largest ever known donor in NZ politics.

But there are parallels in the Dotcom and Liu cases.

Each had expectations that politicians would deliver results for them.

Fundamentally, there needs to be a clear rule around this to prevent any recent immigrant business person from pressuring politicians to deliver results for them.

The best way to ensure this is to prevent them from donating to political parties or prospective MPs whether openly or anonymously.

If a time bar is imposed to prevent new immigrants such as Dotcom or Liu from paying for influence, the dreadful taint our political system is getting will be removed.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

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