Labour u-turn on $400,000 for pledge card

The Labour Party offered to include the $446,000 it spent on its pledge card in its election expenses after the Chief Electoral Officer questioned the legality of the spending - but recanted after the election, police papers reveal.

Had the spending been included, Labour would have been about $400,000 over its election spending limit and possibly exposed to Electoral Act charges.

National deputy leader Gerry Brownlee claims the offer proves Labour knew it was in the wrong, but retracted when it realised the implications.

Party secretary Mike Smith made and withdrew the offer, explaining then only that it was consistent with his position that the spending was a legitimate use of Parliamentary Service money. The taxpayer funds are meant to be used to communicate MPs' parliamentary business to constituents.

The papers say police legal advice was that if Helen Clark's chief of staff Heather Simpson was charged for authorising the expenditure of Parliamentary Service funds for the card and a pamphlet issued at Labour's election campaign launch "such a charge would be likely to result in a conviction".

But they add that as "all political parties engage in similar use of parliamentary funds for political advertising" it would be inequitable to single her out for prosecution.

Conflicting election spending rules and laws created further legal uncertainty, the police concluded.

The information is contained in a 1500-page file on six alleged breaches of the Electoral Act during last year's election released by the police under the Official Information Act.

The police announced in March that neither Labour nor National would be charged for alleged offences, which also included claims that $1.2 million spent by a group of Exclusive Brethrens on anti-Labour and Green pamphlets should have been authorised by National.

Had that offence been proven, a subsequent charge that National had also overspent its election spending limit would have been likely.

The file includes details of meetings held between the Chief Electoral Office and the Brethren group - who at the time described themselves as a group of Christian businessmen - well before the election.

The men took a series of mock pamphlets to the office - including one with a photo of National leader Don Brash on it, to seek advice on whether they would "compromise National's funding position".

They were advised that several of the mock pamphlets - which among other things suggested Labour was in bed with "communist China" - would breach the act.

They were invited to re-run any revised pamphlets past the office but did not do so.

The papers reveal some police officers were frustrated about having to dedicate time to the inquiries.

A note scribbled on a Canterbury police memo asking for the urgent investigation of one complaint - urgent partly because of a six-month limitation for action from the date of the offence - says "this is not a priority, but if a staff member becomes available, please assign it".

An Auckland detective senior sergeant queried by the Police Commissioner's office about progress on other files, again because of the time limit, apologises for inaction but notes he's under pressure to complete robbery and assault investigations.

The papers also cover the investigation into whether National should be charged for spending $112,500 more than it was entitled to on broadcasting publicity.

Warnings were issued to both Labour and National and the files show police were clearly of the view - as is the Electoral Commission which has previously tried to have the six-month limit for breaches of the act extended - that the election spending laws needed clarifying.

The Parliamentary Services Commission is now considering the issue.

Close scrutiny

* Electoral authorities asked police to investigate laying charges against Labour for two breaches of the Electoral Act.

* The first alleged breach was that it used Parliamentary Service funding for the pledge card, when it was an election campaign advertisement for the Labour Party.

* Election advertising spending is tightly regulated and requires the written authority of the party secretary, which Labour did not obtain.

* The second alleged breach was election advertising overspending as a result of counting the pledge card as an election expense.