David Fisher

David Fisher is a senior reporter for the NZ Herald.

Banks scandal: Lost in the memory banks

It has been a very long week in politics for Act leader John Banks. David Fisher explores the path that led to the scandal

John Banks, pictured with Defence Minister Jonathan Coleman at Waiouru yesterday, has come under fire for not declaring campaign donations.  Photo / Alan Gibson
John Banks, pictured with Defence Minister Jonathan Coleman at Waiouru yesterday, has come under fire for not declaring campaign donations. Photo / Alan Gibson

Critics have had a field day with John Banks' sudden attacks of memory loss in the past few days.

"Oh I don't remember that... I don't recall... I can't recall whether I did or not," he said when asked if he had been flown by helicopter to talk with Kim Dotcom, the German-born internet tycoon living in the most luxurious mansion in Auckland.

And yet an expert on memory loss, Professor Janet Leathem of Massey University, says it is perfectly conceivable.

"If this is normal for him... if it is routine for him then maybe he would forget," she says. "I sure as hell wouldn't forget something like that but it's not usual for me.

"In order to remember an event it has to stand out. The more important something is, the more you remember it as being an important time.

"He might be familiar with helicopters and flash houses and large amounts of money."

Mr Banks, 65, is a millionaire and a helicopter pilot. His own home is extremely comfortable.

"It seems to me one of the things that might have stood out about the visit was how large the man was. He looks extremely large," Professor Leathem says. Dotcom is two metres tall and weighs 170kg. "I'd remember someone that large."

Speaking generally, she says there are other explanations for memory loss. "As people get older you get difficulties of memory associated with normal ageing." There is also encephalitis. "It damages the area of the brain that carries memory."

As with the entire saga over John Banks, Kim Dotcom, and campaign donations, there is a reasonable explanation.

THE FIRST donation to spark a question was $15,000 from Sky City, which runs casinos. His opponent for the Auckland mayoralty Len Brown had also received the money and declared it - how could Mr Banks maintain the donation was anonymous when it was made openly?

We also know now that Mr Banks, received $50,000 from Dotcom, who is facing extradition to the United States on copyright and money-laundering charges.

Mr Banks is accused of asking Dotcom for a political donation, then asking for the $50,000 offered to be split into two payments to better disguise their origins.

There is now a police investigation into the donation. Mr Banks emphatically denies any wrongdoing.

It also emerged Mr Banks had lobbied his "good friend", Lands Minister Maurice Williamson, over the mansion Dotcom wanted to buy. And then, that Mr Banks had briefed Dotcom's staff on the progress of the application.

The Weekend Herald had earlier reported Mr Banks had sought a hotel recommendation from Dotcom's staff and was told to stay where Dotcom lived for seven years - the Grand Hyatt Hong Kong. Dotcom staff even called ahead to ensure he would have a comfortable stay. Mr Banks took the advice and stayed for four nights, along with his wife, Amanda.

By Wednesday, Labour was claiming Mr Banks had received a discount on his Christmas holiday to Hong Kong. Mr Banks denied a discount, releasing bills which showed him checked in as "Honourable John Banks". Then, a day later, he admitted there had been a discount but explained he had struck the bargain himself.

Those were the matters of substance around the John Banks Show, says Otago University political scientist Dr Bryce Edwards.

But it is the sideshows which have captivated the watching public, he says.

As the details merge and blur, voters will be left with the stark incredulity of Mr Banks' extraordinary memory loss over his helicopter ride, references to having not come down the river in the last cabbage boat, his bizarre interview in which he denied a sexual relationship with Dotcom and his faltering performance on TVNZ's Q&A programme. "It's possum in the headlights stuff," says Mr Edwards.

He says politicians facing tough questions sometimes revert to the tactic - dig in heels and struggle with memory.

"He took that strategy to a level of absurdity. People don't understand the whole case but they pick up on things like the helicopter. People just think the whole thing stinks."

THE ODDITY of the scandal is that its seeds were laid well before the last election.

They were planted in the meeting between Mr Banks and Dotcom in Coatesville on or about June 9 2010 and took root a year later when SkyCity was announced as the Government's preferred bidder for the National Convention Centre.

The casino company would fund and build the $350 million centre in return for gaming concessions.

It wasn't until April last year when it emerged the "concessions" might include a further 500 pokie machines that the scandal sprouted into bright sunlight.

Anti-gambling groups began to count the votes, weighing the Government's chances of getting the extra pokies through, if it came to that. A former opponent of the casinos, Mr Banks became of considerable interest, as did the donation he received from SkyCity.

His single vote became pivotal on an issue the Government seemed intent on pursuing, regardless of overwhelming public opinion against it.

By then, everyone was again looking at SkyCity's donation and the election returns Mr Banks had filed in 2010. It turned out there were 44 other anonymous donations, including two for $25,000 which were made by Dotcom.

The list of donations is striking for the regularity with which people post donations of the same amount.

Dotcom's two lots of $25,000 are joined by three other payments for the same amount. There are 11 donations for $5000 and another 11 donations for $10,000.

Of the 45 donations made in total, there are only a handful which are not perfectly round numbers sitting alongside identical numbers on the handwritten donation declaration.

How could anyone know the $25,000 listed on the sheet was Dotcom's $25,000? There were just so many people who were generous to an identical extent.

Otago university law professor Andrew Geddis says there is a law for donations specific to local government elections. It allows donations to be marked as anonymous if "the candidate doesn't know the identity of the donor".

"You don't have to declare people you think donated to your campaign. You only have to declare people you know donated to your campaign."

The problem is local government laws which are ill-equipped to deal with the Super City election.

"There was a lot more pressure on these guys to raise more money than is seen at a local government level."

The money raised and spent - which almost topped $1m for winner Len Brown - was more usually seen in national political contests. The laws for donations to national politics had been tightened after the 2005 Exclusive Brethren scandal.

The creator of the Super City, local government minister and former Act leader Rodney Hide, who mashed together the various local authorities to make the Auckland Council, says there was an awareness of the flaws in the law. It was meant to be fixed this term in Parliament.

Of course, Hide has gone now. He was rolled by Don Brash, who brought in Mr Banks, who elbowed Mr Hide out of his Epsom electorate and out of Parliament. Act's electoral failure in November led to Dr Brash resigning and Banks rising to leader of the party.

And from there, Mr Banks walked straight into the minefield identified by Mr Hide years before. Mr Hide had meant to remove the mines this year but couldn't - Mr Banks had pinched his job.

Mr Hide won't comment. He's out of politics and spent much of last week up a ladder renovating his house.

"The best thing is for everyone to take a deep breath and actually get the facts on the table and get the police investigation concluded so John Banks can get back to work."

THERE HAVE been people focused on getting John Banks back to work since December 2009.

His "mentors group" gathered that month to plot a campaign for the Super City election. Those involved describe the experience as exhausting, frustrating and ultimately fruitless with Mr Banks losing.

From the outset, campaign finances were a key issue. The list of "roles and responsibilities" reflects the reality of a Super City campaign - fundraising is the first ranked item of importance after assigning jobs to everyone.

And, of the 12 people assigned roles, four had direct responsibilities to raise funds and one other had the job of doing the books.

One of the fundraisers was Scott Simpson, elected in November as National MP for Coromandel. His role was "National Party liaison".

It was a campaign in which the foot soldiers struggled with a general - Mr Banks - who wanted to take every footstep of the long march himself. They describe a man whose attention to detail is so minute it is easily mistaken for micro-management.

There was a lack of clarity about what the Super City would look like and what sort of mayor Mr Banks would be. The action sheet lists as a priority "watch interview with Len Brown on TV3 website".

New Auckland councillor Aaron Bhatnagar was the "policy wonk" yet he and Mr Banks had a difference of opinions over strategy.

The names on the initial campaign planning list dropped off as the months went by.

Mr Banks lost. He said on election night that he had "no plans", but it soon became clear he had not finished with politics.

He was soon in discussions with Dr Brash over a new political party, believed to be the vehicle which became millionaire Colin Craig's Conservative Party.

Dr Brash had also been talking to Mr Hide about joining Act, according to those aware of the discussions inside the party at the time. The difficulty for Mr Hide was that Dr Brash thought him a liability - "toxic" was the word used to describe his party leader.

Dr Brash set out his vision for the party, which had Mr Hide gone and Mr Banks as the Epsom candidate. When he took his takeover plan to the Act board, he said they needed Mr Banks in Epsom to win the electorate. Armed with polls showing Mr Banks' high support, and his returning booth results from the mayoral election, he made and won his case.

Act blundered on into the election with a degree of farce - adverts which were offensive but (they hoped) not too offensive. Policy on the run - Dr Brash thought it might be nice if cannabis was decriminalised, which horrified Mr Banks.

Then followed the disastrous "Teapot Tapes", in which Mr Key met Mr Banks in an Epsom cafe as a show of support.

Their conversation was accidentally taped by a media representative, leading to a police complaint and a political platform that gifted Winston Peters a return to Parliament with seven other MPs.

Mr Banks won Epsom but Act's result was awful. It won 23,889 votes across the country. A year earlier, Mr Banks won 161,167 votes in the Auckland mayoral race.

Mr Banks took over leadership as Act's only MP.

During the campaign, Mr Banks said he did not plan on going to Parliament "to watch dead cats bounce". Since arriving back in Wellington, he has produced two press releases and one speech.

He has also embroiled the Government in the donations scandal which has seen him clinging to the Prime Minister for support.

Bryce Edwards says he expected Mr Key to have sacked Mr Banks.

"I would have thought John Key would be a bit more pragmatic. I think John Key has been entirely out of step with the public."

- NZ Herald

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