Foreign Minister Murray McCully says any suggestion a donation to National was a factor in the decision to grant a hotel chain a contract in Nuie is "utterly baseless."
Labour has called for the Auditor General to look into Scenic Hotels Group contract to manage the Matavai resort on Niue after it was discovered the group's founder, Earl Hagaman, gave a $101,000 donation to National the month before the contract was announced in 2014.
Mr McCully said he had no involvement in the tender process or the decision, which was run by Auckland-based consultancy company Horwath HTL in 2014. There were two proposals and Scenic Hotels was the preferred one."I have the total confidence in the way this process was run and had no involvement in the awarding of the contract. Any suggestion that this contract was awarded on anything other than the basis of a rigorous commercial process is utterly baseless."
Since 2011, the Government has put $18 million into the Matavai as part of its efforts to boost tourism to the small Pacific Island country.
That included $7.5 million after Scenic Hotels took over the management to build a conference centre.
Labour leader Andrew Little asked the Auditor General to investigate whether Mr Hagaman's donation to National at the same time his company was tendering for the Niue contract was above board.
"It was Murray McCully's personal appointees on the Niue Tourism Property Trust which awarded this contract. We must have questions answered on how the tender process worked, who knew about links between donations and the tenderer and whether Niuean people will ultimately benefit from the resort's funding. The perception of propriety is key."
Brendan Taylor, the managing director of Scenic Hotel Group, said linking the donation to the tender was "a lot of misinformation."
Mr Hagaman had donated to National and Act in the past. "What he does from a personal perspective is totally up to him. What we do at the Scenic Hotel Group, in a lot of cases, we've got nothing to do with each other."
"I was involved in the whole [process] and I can put my hand on my heart and say I know it was a squeaky clean transaction. There was no favouritism in any way towards it."
The Matavai is owned by the Niue Tourism Property Trust on behalf of the Government of Niue, which owned the resort before then. That arrangement was put in place in 2011 to ensure oversight of the aid investment New Zealand was putting in. Mr McCully appoints the trustees who are Ross Ardern (NZ's High Commissioner to Niue and father of Labour MP Jacinda Ardern), Ministry of Foreign Affairs deputy secretary Jonathan Kings and former High Commissioner Mark Blumsky, who was formerly a National MP and now lives in Niue.