National Party leader Simon Bridges and MP Jami-Lee Ross have both denied having anything to do with a $100,000 donation made to the party which allegedly came in to party coffers broken into smaller amounts of under $15,000 each.
The dispute between Ross and his former leader reared its head again today when, with no warning, police announced they had referred the matter to the Serious Fraud Office.
The police and the SFO issued press releases just minutes before National MPs headed to their weekly caucus meeting.
The news, which neither Bridges nor Ross were told about ahead of time, pleased Ross, who is now the independent MP for Botany, following his ejection from the party.
Ross, who quit and was kicked out of the National caucus last year, lodged a complaint with police in October about what he alleged was a $100,000 donation to the National Party from businessman Yikun Zhang that was then split into smaller amounts to hide it.
There is no suggestion of any wrongdoing by Zhang.
Ross alleged Bridges and party general manager Greg Hamilton knew about the donation being split up.
Bridges said today his hands were clean. He reiterated that he had not instructed anyone to break up the $100,000 donation, nor had he said anything that could have been interpreted that way.
"I've seen the statement (from police). On the face of it, it seems to be about the National Party. The SFO is investigating. I think there's questions for them to answer and you'd hope in due course they'll do that.
He did not have concerns about the National Party as he believed the donation had been handled lawfully.
A spokesman for the National Party said neither president Peter Goodfellow nor Hamilton had any comment at this stage.
Ross laid his complaint with police in a blaze of publicity after he fell out with his party over allegations he leaked details of Bridges' travel expenses. The dispute deepened when he was accused of harassing women, and an affair with fellow National MP Sarah Dowie was revealed.
Today he said he was pleased his complaint had been passed to the SFO.
"I took my concern to New Zealand Police because I felt a $100,000 donation that was offered to Simon Bridges on the 21st of May was not handled appropriately."
He said some media reports that he had broken up the donation into smaller amounts were incorrect.
"The funds, before it entered National Party accounts, came in in amounts smaller than the $15,000 disclosure threshold. The $100,000 donation was offered directly by the donor to Bridges."
Ross said he was unconcerned that he might be liable for prosecution himself.
"Every time that I've been told that I was wrong or baseless, I've come up with some evidence or some information. This just shows that there are some serious issues there around donations in the National Party that should be investigated properly."
Ross said Bridges had to realise he was the party leader.
"I was not there on the 21st of May. [National Party president] Peter Goodfellow was not there on the 21st of May. The donation was made to the leader of the National Party and his involvement, he has to answer," Ross said.
Otago Law Professor and electoral law expert Andrew Geddis said there were several reasons why the police might have referred the case to the SFO and several areas in which wrongdoing could have taken place.
He said the referral itself did not mean the SFO would investigate - it was SFO procedure to assess any such referral and decide for itself whether it warranted further investigation and fell within its ambit.
Geddis said police could have referred it because it was too complex for them to assess whether there had been wrongdoing and they wanted the SFO to analyse it.
It was also possible that the police had uncovered something suspect and wanted the SFO to look into it. The SFO had greater, and quicker, powers to compel the handover of information required.
If that was the case, Geddis said there were several areas in which alleged wrongdoing could have occurred - and not only by the National Party.
One possibility was if somebody had made up false donor names and addresses to split the donation up.
"If it turns out the donations were given under false names or in ways that mean the party was misled as to who they actually came from, then there are a range of potential offences under the Electoral Act that were committed by the person who disguised their identities," he said.