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Home / Business

Fran O'Sullivan: Full transparency crucial on party donations

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
22 Nov, 2019 04:00 PM4 mins to read

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Too many people remember Winston Peters and his "no" sign. Photo / File

Too many people remember Winston Peters and his "no" sign. Photo / File

COMMENT:

Winston Peters' resort to Trumpian tactics risks trivialising what are serious disclosure issues, which should be treated as such by the Deputy Prime Minister.

By lashing out at "psycho" journalists, Peters simply invites a tsunami of disbelief.

This may have worked for Donald Trump in the United States with his frequent flagellation of "fake news" media. But the pathology is different here.

READ MORE:
• Big Read: Helen Clark weighs in on NZ First donations saga
• Many questions, no answers about 'opaque' NZ First Foundation
• Matthew Hooton: Peters must tell — but Ardern must ask
• Matthew Hooton: The case for a snap election

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Too many seasoned New Zealand journalists remember his 2008 antics — complete with waving a sign saying "No" when questioned about a donation — when there were clearly questions to be answered. The upshot was a damning select committee inquiry.

The problem Peters faces is that a bevy of former New Zealand First party apparatchiks have publicly said they were not across the party's funding sources.

This includes former presidents and a treasurer.

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Again, NZ First officials would not be alone in their ignorance of such matters.

Former National Party treasurer Michael Cox was kept in the dark about a Fay Richwhite donation that was not routed directly to National's coffers in the mid-1990s. Peters was stinging in his attacks on National in Parliament on that score.

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It may well turn out that NZ First has simply exploited loopholes in political party fundraising laws. If so, the party won't be alone. All major parties have skirted close to the edge in recent years through various devices such as fundraising lunches at good restaurants where the restaurateur donates the takings.

In my view, the more serious issue that NZ First faces is that its former party president Lester Gray refused to sign off the party's financial reports for what he said were "moral" reasons.

Gray resigned from the party.

His resignation letter — which was given to media — revealed he took his stand against signing NZ First's 2019 reports claiming he had been kept in the dark over party expenditure and donations.

This meant he could not sign off the financial reports with confidence.

Political parties are required to send their audited statements to the Electoral Commission by April 30 each year.

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President Donald Trump. Peters will not get away with Trumpian tactics over his funding sources. Photo / AP
President Donald Trump. Peters will not get away with Trumpian tactics over his funding sources. Photo / AP

The fact that Gray did not — and made his refusal public — was enough to prompt an in depth inquiry by the Electoral Commission.

Party insiders have since put the skids under NZ First with their leaks to Stuff, which have raised questions over whether the NZ First Foundation — understood to have made loans to the party — had breached the rules.

Foundation trustee Brian Henry has said all is in order.

This will play out. But a politician of Peters' undoubted skills should simply openly disclose just which people and what companies have provided additional backing for NZ First via a little-known foundation. Or invite those who actually run the foundation — such as Henry — to do so, if Peters has not been directly provided with names of those who contributed to the foundation.

There is huge hypocrisy over political party funding.

Party presidents and corporate bagmen will mouth the usual cliches that major election donations come untagged or are made purely "for the good of the country" or to ensure a "healthy democratic debate".

But the way in which political funding is often disguised by a raft of trust structures — or anonymous donations — enables key influencers to make their contribution to democracy without fear of publicity and news media molestation.

CEOs sent a clear message in the Herald's recent Mood of the Boardroom survey — 75 per cent of them agreed the Government should legislate to tighten foreign donation laws to remove the taint of backdoor funding through the use of New Zealand companies.

Many also said the change should not stop there.

Chorus CEO Kate McKenzie said all donors expect to obtain some influence as a result of donating, though she was "not sure 'foreign' donors are any better or worse — transparency and awareness of who is donating and why are the important things to focus on".

The chair of the NZ Local Government Funding Agency, Craig Stobo, agreed, suggesting that all political donations should be transparent, which would allow "the fourth estate to then do its forensic job".

It is obvious many of those contributing do so believing they are buying future access or influence.

It is time donations were made fully public — and if that results in a drop in donations, introduce public funding of parties.

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