What is the NZ First Foundation?
It was set up as an autonomous organisation to be independent of the New Zealand First party board.
The board approved it in March 2017, and its trustees are former NZ First MP Doug Woolerton and Brian Henry, the party's current judicial officer.
But now the foundation and its activities are under scrutiny because it appears to loan or provide money to the party for purposes that benefit the party and its MPs.
According to documents reviewed by Radio NZ, donors contributed about $500,000 to the foundation between April 2017 and August 2019.
During that period, the foundation spent more than $425,000 on campaign advertising expenses, political consultants' fees, renting and setting up a campaign HQ in Wellington, and running the party's website.
Apparent discrepancies between the foundation's accounts and the party's annual donation returns have raised questions about whether electoral law has been breached, in particular around disclosing donations and record-keeping.
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The Electoral Commission this week said that the foundation had received donations which should have been treated as donations to the party.
"In the Commission's view, the donations were not properly transmitted to the party and not disclosed as required by the Electoral Act 1993," the commission said in a statement.
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The commission referred the matter to the police, which referred it to the Serious Fraud Office.
What's the problem?
The 2017 party return declared 13 donations of between $5000 and $15,000, but according to documents seen by Radio NZ, the foundation received 23 such donations during that period.
In 2018, the party declared five donations of between $5000 and $15,000, but records seen by Radio NZ show at least six such donations to the foundation in that year.
Many donations fall below the $15,000 threshold where the donor's identity needs to be disclosed, but questions remain over whether multiple donations connected to the same person or entity and which add up to more than $15,000 have been properly declared.
NZ First leader Winston Peters has said that he believes nothing illegal has occurred, but the party will review the way it handles donations.
Who has donated to the foundation?
According to documents seen by Radio NZ, companies owned by Graeme Hart donated nearly $30,000 to the foundation last year in two amounts that each fell just shy of the $15,000 threshold.
Hart is New Zealand's richest man who is estimated to be worth $10 billion.
Entities linked to the Van Den Brink family, estimated to be worth $110 million, made three separate donations totalling $36,000 in 2017.
In 2018, the foundation received $40,000 from entities linked to real estate developer Conrad Properties.
What the law says
Each party must make an annual return that includes:
• Every donor who donated over $15,000 during the year
• Every anonymous donation over $1500; the number of anonymous donations under $1500 must be recorded, as well as the total amount of these donations
• Every overseas donation over $1500; the number of such donations under $1500 must be recorded, as well as the total amount of these donations
• The number of all party donations over $1500 but less than $5000, as well as the total amount of these donations
• The number of all party donations over $5000 but less than $15,000, as well as the total amount of these donations
• All payments from the Electoral Commission of donations protected from disclosure
• Loans over $15,000 during the year
• The number and amount of other party loans entered between $1500 and $15,000.
If a donation is made to a political party, it should be disclosed according to the rules.
If a donation is made to an independent organisation, which is then loaned to a political party, the loan must be declared if it is over $15,000, along with the organisation but not the donors' identity.
If the organisation is not independent but is in fact an arm of the political party, then money given to the organisation should be treated as donations to the party and disclosed accordingly.
If a party declares a loan and the loan is then written off, it should be treated as a donation.
But a loan can be rolled over and there is no requirement for a party to say when a loan will be repaid.
There is no limit on how much money a party can raise or spend, but there are spending limits on advertising within an election campaign period.
Prime Minister Jacinda Ardern said that electoral laws will be reviewed after this year's election and after the SFO finishes looking into donations made to New Zealand First and National.
The SFO has laid charges relating to a $100,000 donation made to the National Party.
What's with the donation to National?
Winston Peters has said the party's arrangements for collecting donations is the same as other political parties, and the NZF Foundation was based on the National Party's foundation.
But National Party leader Simon Bridges said all donations to National's foundation are treated as donations to the party and disclosed according to electoral law.
Except here’s the difference All donations to the National Foundation are treated exactly the same way as donations to the National Party. We record all donations and fully disclose, where required, in line with the provisions of the Electoral Act.— Paula Bennett (@paulabennettmp) February 10, 2020
Bridges added that the SFO has not charged anyone from the National Party over the $100,000 donation, and the party was working with the Electoral Commission to return that money.