Kim Dotcom says he will produce financial records to back up his allegation that he gave $50,000 to Act leader John Banks' 2010 mayoral campaign after Mr Banks yesterday said the Herald's report of those claims was "mostly BS".
Mr Banks yesterday refused to answer questions about two $25,000 donations to his mayoral campaign from Dotcom which were made the day after the two men met in an April 2010. Mr Banks later signed off on campaign finance returns recording the money as coming from anonymous sources.
Opposition MP Trevor Mallard says he will today lay a complaint with police over Mr Banks' failure to disclose the donations in his finance returns. Mr Banks is already the subject of a complaint over failure to disclose the source of a $15,000 donation from casino operator SkyCity.
Labour leader David Shearer says Mr Banks must stand down as a minister while the matter is investigated, but Prime Minister John Key says he accepts Mr Banks' assurances he has not broken electoral finance rules.
Mr Banks yesterday said "most" of the Weekend Herald's front page story reporting Dotcom's claim that Mr Banks asked for the $50,000 political donation to be split into two parts so it could be made anonymously was "BS".
However he refused to say which parts of that report were incorrect. "Everything that needs to be said has been said," he told the Herald. "I'm very happy to talk to any inquiry about this. Nothing to fear, nothing to hide."
He told Q+A's Paul Holmes that "when I signed my declaration for the mayoralty I signed it in good faith".
Dotcom yesterday told the Herald he would go through his financial records in coming days to identify which accounts the funds came from and into which of Mr Banks' accounts the money was paid.
But Wellington lawyer and electoral law commentator Graeme Edgeler said local government electoral finance law meant that if there was any doubt as to the source of particular donations, politicians were entitled to say they were anonymous.
"You're not declaring donors, you're declaring donations."
Dotcom has said one of the two cheques paid to Mr Banks was made out in his own name, or the name of his company, Megastuff. The other was in the name of his bodyguard, Wayne Tempero.
The Herald last night spoke to a former Dotcom employee, who said they had personally deposited the cheques into Mr Banks' campaign account.
The former employee said, "They were deposited just through a normal bank process. It would have just come up as a $25,000 deposit."
However, Dotcom says Mr Banks rang him to thank him for the money after it was paid.
Through a spokeswoman, Mr Key said Mr Banks had assured him "that he acted in compliance with local body electoral law at all times. If people have concerns about Mr Banks' mayoral campaign, those concerns should be taken to the relevant authorities".
But Mr Shearer said, "John Banks cannot continue as a minister while this issue is under investigation. He is a minister with considerable influence on upcoming debates in Parliament and the Prime Minister must hold him to account."
With Mr Banks' vote crucial to Mr Key's Government progressing controversial policies, including the partial asset sales programme, he will be targeted by the Opposition when Parliament resumes tomorrow.
However, it will be difficult for the Opposition to attack Mr Banks directly and their efforts are likely to be directed at Mr Key.
Meanwhile, former Act MP David Garrett has claimed Dotcom went public with the matter after Mr Banks spurned his plea for help while he was being held in Mt Eden Prison.
Commenting on the Kiwiblog site on Saturday, Mr Garrett said he had it "on good authority that the Dotcom donation(s) have emerged because Banks didn't want to know the fat man in his hour of need in Mt Eden".
"Apparently Dotcom was being badly treated in some way and asked who the MP for the Mt Eden Prison area was ... but said MP was most ungracious to his beneficent donor, and didn't want a bar of him ... didn't even know him ... Said beneficent donor took great umbrage at this ... as you would ... and decided to tell all."
Dotcom was held in Auckland Central Remand Prison after he and three others were arrested in a January 20 raid by local police after a request from the US Department of Justice. He was bailed to a $5 million home north of Auckland after about a month.