Fran O'Sullivan: Gutless police give up on party spending rorts

What a gutless lot our police are when it comes to prosecuting their masters over political crimes and misdemeanours.

Despite finding a "prima facie" breach of the Electoral Act against the Prime Minister's right-hand woman - Heather Simpson, otherwise known as "H2" - in their investigation into claims Labour had exceeded election campaign spending caps, Police HQ opted not to throw the book at her.

Evidence which could have been used to build a case against Labour - and some other political parties - for spending rorts during last year's election was conveniently swept under the carpet because police were worried about the consequences of not ramming a case home against the Labour Party.

A trawl through several thousands of pages from files released by the Chief Electoral Office and Police HQ indicate the charges could have been a safe bet.

But Detective Inspector Harry Quinn - the chief police officer on this task - opined that a proven breach could ultimately impact upon the "integrity of last year's election".

It was concerns over the "integrity of last year's election" that prompted then Chief Electoral Officer David Henry to call police in to investigate what appeared to be (and still does) flagrant Electoral Act breaches by Labour and National after the parties ignored pre-election warnings against exceeding their publicity funding limits.

In Labour's case it was alleged the party had boosted its legal spending limit by $418,603 by raiding the "Leaders' Office Budget" administered by Parliamentary Services to publish a tranche of leaflets with Helen Clark's 2005 "Pledges".

In National's case it was alleged the party had exceeded its budget by failing to include GST within the advertising spend it contracted with media outlets during the campaign.

Police investigations pinpointed Simpson - who is Helen Clark's chief of staff - as the political adviser who authorised the publication of the leaflets using Leaders' Budget funds.

Labour Party secretary Mike Smith, who was earlier put in the frame, indicated to Henry during the election that he would count the $418,603 in Labour's returns. But he appears to have changed his mind.

The Parliamentary Service rules are clear that the Leaders' Budget should not be used for election advertising or publicity purposes but this was flagrantly overlooked by Quinn. Instead he parroted the politicians' line that the law and parliamentary rules were "unclear, confusing and contradictory".

"I do not believe we should commence a prosecution without a certainty of outcome - and with the confused state of the law and the rule to commence a prosecution which has such serious constitutional outcome may be a little reckless."

Even more concerning was the way in which one investigating officer read the Electoral Act: "While it is not exactly clear what illicit purpose section 221 is trying to dissuade, it seems to be trying to restrain the publication of scurrilous electioneering propaganda as well as to provide some basis for controlling election campaign expenditure."

You might expect NZ First leader Winston Peters to scourge the two main parties over this affair. But the politician who has mercilessly attacked National leader Don Brash all week over an alleged American-sourced campaign funding influence, for which he has yet to furnish any concrete evidence, has been silent.

Not surprising, perhaps, when the "H2 defence" relied on illustrations that NZ First had also used parliamentary funds (stamped with the crest) to publish election pamphlets showing Peters walking on waves, and on examples of Act and the Greens similarly raiding its Leaders' Budget.

Such niceties didn't stop the Serious Fraud Office from throwing the book at seven dairy industry executives claiming they had used fraudulent means to bypass the Dairy Board's export monopoly in the 1990s.The scandal was swept under the carpet when six defendants pleaded guilty to lesser charges.

That didn't stop Justice Rodney Hanson from observing that he accepted the defendants' arguments that the practice was widespread. "I have the uncomfortable feeling that others involved in similar operations may have escaped prosecutions."

In National's case, its former campaign manager could not turn up any contract which spelled out to its media buyer that the party could spend just $900,000 including GST for its campaign.The media buyer furnished an invoice before the election which ought to have indicated she would exceed the $900,000 limit as she had not included GST. But somehow this missed Steven Joyce's attention.

You might expect the police to have lighted on this pretty quickly. But no - the police investigator instead bitched about having to deflect his attention from robberies and the like to deal with a "national interest issue".

Frankly, this is an appalling testimony to the ability of New Zealand authorities to ensure politicians do not "buy the election".

Police, though, did throw the book at TVNZ for screening a National Party advertisement during the Maori Party's launch -the only breach the police had the courage to pursue.