NZ First leader Winston Peters has defended his party's use of loans from the mysterious NZ First Foundation, but refused to shed any light on how it operated or where its funds came from.

There are more questions than answers about the entity, which has loaned money to the NZ First Party.

NZ First has disclosed three loans totalling $194,545 over the past three years from the NZ First Foundation.

The Herald is yet to find answers to questions including why the foundation "loans" money to the party, whether the foundation's money is from donations, and what the foundation's purpose is.

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Peters said the foundation had operated for about three elections and was set up "to assist the party".

Asked where its funding came from, he said that was a question for the foundation, not him as party leader. Pressed further, he said he was not required to say.

"I'm not required to say and the answer is I don't know where it comes from, and if you want me to give you the exact answer, that's the right answer."

Asked if was with the spirit of electoral finance laws, Peters interrupted the question: "I'm sorry sunshine, we don't do the spirit. We do the law. And we are not going to do 50 Shades of Deceit run by you."

The disclosures list lawyer Brian Henry and former NZ First MP Doug Woolerton as trustees.

When the Herald rang Woolerton, now a lobbyist, to ask about the foundation he said he did not know much about it.

"I don't know anything about it, I just know that all political parties have varying accounts under differing names ... I don't know any more than that."

Henry, who is also NZ First leader Winston Peters' lawyer, said it was private business and declined to comment further.

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The party's general secretary, Liz Witehira, who signed the disclosure of the 2019 loan to the Electoral Commission, said the loans had been repaid and the party had no outstanding loans.

However, she did not know where the foundation's money came from or why the loan arrangements were made in the first place. The first loans had pre-dated her time as secretary.

"I was not part of the organisation when that loan was arranged so I don't have full details of the foundation. I understand the loan has been repaid now."

Peters' office told the Herald to direct its inquiries to then acting president Jude Patterson. When contacted, Patterson told the Herald to direct its inquiries to Peters.

Each loan was for a 12-month term, but payable at any time by the party, with the equivalent of commercial bank interest rates charged.

It is unclear whether each loan is a new loan, or the renewal of an unpaid portion of the previous year's loan.

Only donations of more than $15,000 must be publicly disclosed and NZ First has not disclosed any of those since 2008.

Otago University Electoral law expert Andrew Geddis said the donations laws would allow a political party to avoid disclosing donors by using a third party to take those donation, and then loaning the party the money rather than handing it over.

If that third entity simply handed over the money to the party, any individual donations of more than $15,000 would have to be disclosed as usual, but treating it as a loan would avoid that.

It was also possible the money could be repaid over time to sit in the third party's account to be loaned again when needed in future - a sort of money-go-round arrangement.

"If it has been repaid, it might just be sitting in the foundation's account ready to loan back to the party," Geddis said.

"The usefulness is in having the money around election time when you really want it. So if [a party is] essentially running almost a separate set of accounts – party fund accounts – through a foundation and loaning money in and out of the party as and when they need it, well, because the foundation remains opaque, we don't get to see who's putting money into it."

Political parties have only had to disclose loans since 2014, when the rules were changed after Colin Craig loaned the Conservative Party money which was subsequently forgiven.

NZ First is the only party which has since disclosed loans.

The donations disclosures also show that in 2017, NZ First received donations under "protected from disclosure" provisions for the first time.

Those provisions were introduced in 2011 after the law changed to prohibit parties receiving anonymous donations of more than $1500.

They allow donors to donate larger sums anonymously by channelling the donation through the Electoral Commission rather than paying it directly to the party. The party is not told who the donors are.

NZ First received $88,628 through that mechanism in July 2017. The donations are paid out quarterly and it is not disclosed whether the amounts are a single donation or a collection of several.

However, it is likely that was more than one donation because the most one donor can give through that system is $46,822.50 between two elections.

There is also a cap of $312,150 on what each party can take in protected donations in each three-year term.

For donations taken in directly by parties, the party must keep records of donors giving between $1500 and $15,000 but only donors who give more than $15,000 must be publicly disclosed. Each party must now release the figures of how many donations it receives, and the value of them, broken down into bands.