New Zealand First leader Winston Peters has accused his former party president Lester Gray of having "mental health problems" - a claim strongly denied by Gray, who has previously raised questions about the party's finances.

The accusation emerged after National's electoral law spokesman Nick Smith told Parliament that Labour MPs on the justice select committee refused a request for Gray and former treasurer Colin Forster to appear before it in a private session during their inquiry into the 2017 election.

Peters then suggested outside the House that Gray had mental health issues and it would not have been appropriate for him to give evidence to a select committee.

Smith said it was "appalling the lengths to which the Deputy Prime Minister is going to silence anybody that raises questions".


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Labour is thought to be considering a privileges complaint against Smith to the Speaker for revealing closed business of a select committee - although MPs have absolute privilege in the House.

Gray and Forster made their request to appear in the wake of revelations about large donations to the New Zealand First Foundation, which funds party activities from donations that don't have to be declared.

The pair wrote to the committee last week asking to be heard in its inquiry.

Specifically they cited "the recent serious revelations over the failure to disclose major donations, the significant expenditure on unauthorised campaign activities and the inappropriate running of a separate foundation without proper oversight of elected party officials."

"The inquiry is a safe place for us to disclose our knowledge of what has taken place."

Gray resigned in October two weeks before the party convention and according to Stuff, his resignation letter said he was unable to sign off the party accounts.

"I refuse to sign off the 2019 Financial Reports with the information I have been provided," he wrote.

Former New Zealand First president Lester Gray. Photo / John Borren
Former New Zealand First president Lester Gray. Photo / John Borren

"As president, the limited exposure I have had to party donations and expenditure leaves me in a vulnerable position.

"This type of operation does not align with my moral and business practice values, and I am therefore not able to support the Party any longer."

Peters outside the House questioned why Smith wanted to hear Forster and Gray.

"The reality is he wants to hear evidence from somebody who is no longer treasurer of the party and knew nothing about anything because he wasn't there at the time so why would he be an expert witness on something he could not possibly know anything about?"

Asked about what would be wrong with Lester Gray giving evidence to the justice committee, Peters said: "Lester Gray's lawyer wrote to me and my board and asked if we would have regard to his current then mental health problems and I have respected that letter and never said a thing about it but we are not going to sit here and take that sort of behavior hereon in.

"In short, if his lawyer pleads with us to give some understanding on his mental health problems, then perhaps the corollary should be that she should not try and think that some select committee because of his present state of mind is the proper place for him to make submissions."

When contacted by the Herald today to relay what Peters had said about him, Lester Gray said: "There is absolutely nothing wrong with my state of mind.

"I just did the round Taupo bike ride in 5 hours and 16 minutes in the weekend and I don't think you'd do that if you're sick or ill.

"I'm in full-time training for ironman in March which I have been for three months now. There is nothing wrong with my physical or mental state of mind and never has been."

National's electoral law spokesman Nick Smith. Photo / Mark Mitchell
National's electoral law spokesman Nick Smith. Photo / Mark Mitchell

Asked if the lawyer's letter did not exist or whether he did not want to comment on it, he said he did not want to comment on it.

"If there was a letter, it was confidentially sent and not to the media."

According to the Otago Daily Times, Gray went on medical leave in mid-September.

"The board of New Zealand First has accepted a medical leave request from the president, Mr Lester Gray, and has appointed Mrs Jude Patterson as acting president until Mr Gray recovers,'' emails to the board said.

"The board members extend our best wishes to Mr Gray for a speedy recovery.''

In a Facebook post on September 20, a day after the email was sent to board members, Gray said on Facebook that he had recently found himself at the doctors "experiencing something I never believed a strong wiĺled, strong minded, upfront, honest person could suffer from".

"Thank you Mike King, John Kirwan and all the people working in this area! You helped me ask for help!"

Forster told the Herald he had been treasurer of New Zealand First from about 2007 to 2016.

It was correct that he wasn't on the board when it set up the New Zealand First Foundation.

He said Peters had told the board that money would be rolling in for the 2017 election because he had acquired some IT gear similar to what Barack Obama had used in his campaigning.

"When I queried as to whether monies were going to be banked, that's when I was told not to get involved."

He said he and Lester Gray had not intended to make trouble by appearing at the select committee but had wanted to make sure democracy worked.