Prime Minister John Key's initial response in the Dotcom donations scandal has been to stand by Act leader and minister John Banks - but it may not be his final response.

Key also stood by former Cabinet minister Nick Smith ... until eventually he didn't.

Act's importance to the Government as a support party gives Key a large incentive to give Banks the benefit of the doubt initially.

But Banks' credibility has been hammered over claims by Megaupload founder Kim Dotcom that Banks solicited a donation from him for the 2010 Auckland mayoral campaign, that Banks asked him to split it into two lots of $25,000, and that Banks rang and thanked him for it after it was deposited.


Banks signed a declaration stating that all four $25,000 donations he received for the campaign were anonymous.

Banks' defence is simple - he believed he was within the law when he signed his declaration.

Key's defence is simple - he accepts that Banks believed he was within the law.

It is the sort of defence you have when you don't have a defence.

It is also reminiscent of Helen Clark's defence of New Zealand First leader Winston Peters in 2008. Businessman Owen Glenn privately told the Prime Minister he had given Peters $100,000 after Peters denied it publicly.

Clark just accepted there was conflicting evidence between the two and did nothing.

Banks has not denied Dotcom's claims. But he is refusing to answer direct questions about it despite saying he has nothing to hide.

Whether evidence emerges to support Dotcom's claims may well depend on any police investigation.


The police have a woeful reputation when it comes to investigating apparently significant breaches of electoral law.

After the 2005 election, they did not prosecute National over unpaid GST, and they did not prosecute Labour over mega-overspending on its pledge card.

They have a chance to redeem themselves by putting in at least the same effort on the complaint against John Banks as they did on the complaint by the Prime Minister over the taping of his pre-election "teapot" cafe conversation with Banks last year.

On March 26, no less than an assistant commissioner held a press conference to announce the results of that investigation.

One legal expert suggested yesterday that the law might allow Banks to have declared the Dotcom donation to be anonymous.

Under the Local Electoral Act 2001, an anonymous donation "means a donation that is made in such a way that the candidate concerned does not know who made the donation".

It could boil down to a case of form over substance. Can a candidate who has thanked a donor then in all honesty declare the donation to be anonymous, or can he get away with it on a technicality?

A proper inquiry by the police and a possible court case would go a long way to determining what, or who, is the ass.