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Home / New Zealand

Election 2020: Secret drop-offs, rich-listers and a $30m threat: The mysterious case of the NZ First Foundation

By Guyon Espiner
RNZ·
15 Oct, 2020 06:51 PM12 mins to read

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NZ First leader Winston Peters told Newstalk ZB's Mike Hosking he didn't agree with Justice Palmer's decision and there appeared to be 'one law for NZ First and there's different applications of law for everyone else'. Audio / Newstalk ZB
Vote2020

Three courts have now decided the public does not have the right to know the names of the two people charged in the New Zealand First Foundation fraud case ahead of the election. As Guyon Espiner reports for RNZ, secrecy has been at the heart of the foundation from the start.

I had been told to expect a call and just after midday my phone, switched to silent at a truck stop cafe, began flashing: No Caller ID.

"You arranged to pick up a package?" It was a statement phrased as a question. Anxiety or urgency? The tone was difficult to judge. No names were exchanged. I just had time to scribble down the instructions before he hung up.

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The address he'd given me was a courier pick-up bay on the industrial outskirts of town. Yes, I had the right place, the woman at the counter told me. But there was no package, only a note.

NZ First leader Winston Peters called a press conference as the Serious Fraud Office announced it would charge two people with obtaining by deception. Photo / Nate McKinnon; RNZ
NZ First leader Winston Peters called a press conference as the Serious Fraud Office announced it would charge two people with obtaining by deception. Photo / Nate McKinnon; RNZ

This time the instructions led me to a post shop in a suburban mall. I gave my name and the teller skulked off to the back of the shop, disappearing from view for several minutes.

She re-emerged and slumped the parcel on the counter, a box, sealed with brown tape, with my name scrawled across the top.

Whoever left the package didn't know me. That much was clear from how badly they'd mangled my name. I didn't know them.

But I did know, when I ripped open the bright green box and found it stuffed full of New Zealand First Foundation documents, that I had been handed the very definition of news: something that someone powerful doesn't want you to know.

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New Zealand First did not want the public to know that super wealthy business interests were secretly funding a party that has railed against super wealthy business interests.

The party, which had veto power over just about any government policy and ministers right up to number two in Cabinet, did not want voters to know who was paying the bills.

The story of the New Zealand First Foundation is ultimately a story of secrecy - of trying to keep the lid on the box.

Photo / Claire Eastham-Farrelly; RNZ
Photo / Claire Eastham-Farrelly; RNZ

Nearly a year after I received that package, they are still fighting to close the box.

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On Thursday the country's major media organisations - RNZ, Stuff, NZME, MediaWorks and TVNZ - failed in their third attempt to have name suppression lifted for two people charged by the Serious Fraud Office in relation to the foundation fraud case.

The District Court and the High Court had already ruled name suppression should continue. A final bid to lift the secrecy before the election was made to the Court of Appeal on Wednesday but the request for an appeal was declined.

The legal fight is the latest chapter in a story that I started working on in November 2019.

From the outset it was obvious the foundation had secrets no-one wanted to give up. "It is not something that I am able to talk about," Doug Woolerton told me in the very first phone call I made about the foundation. "It is not something that you talk about at all," he said. He was making the foundation sound like Fight Club.

Woolerton wouldn't even say what the foundation was, or what his role as a trustee involved. This wasn't because he was some political greenhorn. Woolerton was a New Zealand First MP between 1996 and 2008 and as president of the party between 1993 and 2005, he had signed off on party donation returns.

The extreme secrecy had piqued my interest, but I only had a sliver of information to go on.

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Because the foundation had been loaning the party money, the names and addresses of its trustees were printed on an Electoral Commission document recording loans of more than $30,000.

One document was signed by Liz Witehira who, as party secretary, was the only person who could legally enter into a loan on behalf of New Zealand First.

Perhaps she could tell me why the foundation was loaning the party money, or at least what the foundation was and what it did. "I don't know and I don't need to know," she said.

I had even less luck with foundation trustee Brian Henry. "There is nothing to talk about. That is the end of the conversation." Henry hung up.

On November 13, 2019, I ran my first story. It was headlined "Mysterious foundation loaning New Zealand First money".

Within a week, Stuff journalist Matt Shand was also reporting on the foundation, alleging nearly $500,000 in political donations appeared to have been hidden inside what he described as a "secret slush fund".

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On November 20, National MP Nick Smith made a speech heavily criticising New Zealand First's use of the foundation. He made it in Parliament, where MPs are free to speak without fear of being sued for defamation. New Zealand First leader Winston Peters has used Parliamentary privilege many times to eviscerate his opponents over the years.

Foundation trustee Brian Henry was clearly becoming increasingly concerned as politicians and the media grew more interested in the foundation.

On November 21, Smith tabled a letter in Parliament. It was written by Henry and threatened defamation action against Smith and me. It asked Smith to apologise, or to repeat what he had said in the House outside of Parliament, where parliamentary privilege wouldn't apply.

"Please note if you oblige with this request [to repeat the comments outside the House] I will sue you for defamation for general damages together with special damages which from the consequences of your and Mr Espiner's action could be as high as $30,000,000."

A $30 million threat. That escalated quickly.

As well as the bright green box full of New Zealand First Foundation documents, I also have a white envelope. Someone - to this day I have no idea who - folded New Zealand First Party board minutes up, stuck them inside that envelope and sent them to me.

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The minutes take us right back to when the foundation was established. They also show the key role played by Winston Peters, despite his attempts to distance himself and the party from the foundation.

Peters was right there at the beginning. The minutes show Peters was there on March 13, 2017, when the New Zealand First board of directors agreed to establish the foundation.

It was John Thorn, the New Zealand First vice president for the South Island, who moved the motion that night. Thorn had laid out how the foundation would work in a paper titled "Proposal to Establish a Strategic Fundraising and Management Vehicle for New Zealand First".

The paper said the foundation should be set up to seek donors who would then be offered a "tiered donation structure with benefits adhering to each tier".

It was supposed to be a capital protected fund, meaning "contributions will never be removed from the fund", mirroring the National Party's foundation. But it never worked that way. Instead, the money was spent as quickly as it arrived.

There was a shredder and a coat rack for the campaign HQ. There was $5000 for a day at the Wellington races and even $14,000 for an IRD bill.

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There was $9346 to pay boxer Joseph Parker to be guest speaker at the New Zealand First conference in September 2018. There was $10,000 for senior party whip Clayton Mitchell for travel expenses and another $12,000 for legal advice on Electoral Act compliance.

Boxer Joseph Parker. Photo / Dean Purcell
Boxer Joseph Parker. Photo / Dean Purcell

More than 20 invoices for tens of thousands of dollars worth of costs, including rent, electricity and other expenses for a campaign HQ were addressed to Peters himself.

Several of the storage costs were addressed to "NZ First Foundation - the Rt Hon Winston Raymond Peters".

In September of 2017, the foundation paid more than $2500 to a consultant to "recompense him for airfares for himself and camera crew to make video of WP for farming audiences".

There was plenty of money to go around, but where was it all coming from?

*

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Peters has crafted an image of New Zealand First as the party for the little guy: struggle Street versus Queen Street. Battlers standing up to the corporate raiders of neoliberalism.

This conjures up a vision of a party funded by little old ladies buying lamingtons at weekend fundraisers and weathered tuskers handing over a $20 note for a meat raffle ticket at the RSA.

And how would you have known any different? "NZ First's finances are pretty opaque," electoral law expert Andrew Geddis wrote to me in an email when I first started investigating the foundation.

"The only two disclosed donations since 2010 (i.e. amounts over the threshold) are from [New Zealand First MPs] Tracey Martin and Darroch Ball. Otherwise they (apparently) haven't been given any donations above $15,000 ... which makes them unique for all the parliamentary parties," Geddis wrote.

Professor Andrew Geddis. Photo / Claire Eastham-Farrelly; RNZ
Professor Andrew Geddis. Photo / Claire Eastham-Farrelly; RNZ

Of course, once I got my hands on that bright green box, a very different picture emerged.

Some of the richest people in New Zealand, with major interests in fishing, horse racing and primary industries, were depositing money into the New Zealand First Foundation.

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The owners of Windsor Park and Cambridge Stud, the apartment development company Conrad, the fishing company Talleys, entities owned by rich-lister Graeme Hart and companies owned by the Van Den Brink family, which owns Van Den Brink Poultry.

So the list went on. A lot of my background reading on the foundation donors came from the NBR rich list.

Their donations were kept from the public - and purposefully so.

The Spencers, one of New Zealand's richest families, donated $50,000 to the foundation in July 2017 and used a law firm to make the payment in four amounts, below the level at which donations are made public.

Rich-lister Graeme Hart. Photo / Getty Images
Rich-lister Graeme Hart. Photo / Getty Images

A solicitor from Martelli McKegg wrote to foundation trustee Doug Woolerton saying that under the firm's understanding of electoral law the donors would be disclosed to the New Zealand First Party but not publicly declared.

"We understand that as the donations are individually less than the threshold of $15,000 the details of the donors will not be disclosed to the public or the Electoral Commission."

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*

There was no doubt about what the photos were designed to do.

On February 5, a day after RNZ published that story naming foundation donors, photographs of me, the Stuff reporter Matt Shand and former New Zealand First president Lester Gray appeared on the BFD website.

They were taken paparazzi-style. Was the photographer hiding behind a bush, a post? Who knows? I never saw them and had no idea I'd been snapped talking with Gray.

The BFD is closely linked to Cameron Slater and Whale Oil, the subject of Nicky Hager's 2014 book Dirty Politics. The Whale Oil website closed in 2019. Its parent company had gone bust, defamation cases were flying around and Slater was in poor health. His name is on the BFD site now.

The photos didn't worry me too much. The BFD had been running stories trying to belittle reporting about the New Zealand First Foundation and defending New Zealand First for weeks.

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The real surprise came a few days later when Winston Peters said Shand and I were photographed with Gray, "to prove that was the sort of behaviour going on". In an interview with Peter Williams on Magic Talk, Peters said: "We took the photographs."

Questioned by the media, he walked back his comments, issuing a statement saying it was a New Zealand First supporter who took the photos and the party had no interest in following journalists. "No private investigators have been engaged to follow Mr Espiner or anyone else," Peters said.

When the day of reckoning came, the Serious Fraud Office, an independent law enforcement agency which investigates and prosecutes financial crime, gave the New Zealand First party a heads-up.

At 10.25am on September 23, 2020, the SFO told New Zealand First that by the middle of that afternoon it would issue a press release saying that two people would be charged with obtaining by deception.

The party scrambled its legal jets and just after lunchtime had filed an application in the High Court to try to suppress the SFO media release. They wanted the charges kept secret not just until people had cast their votes in the October 17 election, but right through any coalition negotiations, until a government was formed.

Ultimately, High Court Judge Matthew Palmer, the son of former Prime Minister Sir Geoffrey Palmer, had little truck with the New Zealand First argument.

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"I consider the public interest in transparency outweighs the inconvenience of the announcement to New Zealand First. I do not consider the court is justified in inhibiting the value of that transparency for the New Zealand public."

But New Zealand First kept trying to slam the lid on the box.

When the gagging order lapsed and the court allowed the SFO to at least say that two people had been charged, Peters timed a press conference for the exact moment of the SFO announcement.

He said the fraud office had "exonerated the New Zealand First Party of any electoral law breaches", and that the two people charged were neither ministers, sitting MPs, candidates, staff members or current members of New Zealand First.

Furthermore, "the foundation is an entirely separate entity from the New Zealand First Party", he said.

How do those claims stack up against the facts? The trouble is the public doesn't have all the facts. We know the SFO has charged two people, but we are legally prevented from naming them.

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The District Court, the High Court and now the Court of Appeal have determined the public will not know the defendants' connections, if any, to the New Zealand First Party, before the election.

From the bright green box right up to the ballot box, the story of the foundation has been a story of secrecy, a story that powerful people do not want you to know.

- RNZ

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