Two men accused of fraud over donations to the NZ First Foundation have been found not guilty by the High Court.
The verdicts were delivered in a written decision this morning by Justice Pheroze Jagose, who presided over the pair's judge-alone trial last month.
It comes as another political donations trial involving the Labour and National parties is due to begin on Monday.
Today's judgment also follows Justice Jagose's decision two days ago to permanently suppressed the identities of the two men charged by the Serious Fraud Office (SFO) in the NZ First Foundation (NZFF) case.
The judge said the identities of the accused were "less important" than the role they played and "open justice largely has been met" in the case.
The pair were charged just before the 2020 general election and each denied two Crimes Act charges of obtaining by deception for what the SFO alleged was a fraudulent scheme to conceal nearly $750,000 in NZ First donations.
"I am not satisfied beyond reasonable doubt [the defendants] 'retained control' of the money against a better claim to it," Justice Jagose said in today's decision.
The judge found the payments to NZFF were not "party donations" as defined under the Electoral Act.
If the money was classed as party donations, Justice Jagose said: "... there is comprehensive evidence [the defendants] deployed the dishonest scheme in order to deceive the party and party secretary as to their better claims to the money paid into [one of the defendant's company's] and NZFF's bank accounts."
During the trial, lawyers for the SFO alleged — over a more than four-year period to early 2020 — some 40 donors believed their donations were going directly to the NZ First, many of whom were supporters of leader Winston Peters.
The donors, none of whom made complaints to authorities, included those in the horse racing industry and business world, such as New Zealand's wealthiest person Graeme Hart.
The motivations for donating, the court heard, varied with some stating they were supporters of NZ First's policies on immigration, Peters' support for the horse racing industry, or were just fans of the former deputy prime minister.
But, prosecutors claimed, the money was deposited into accounts linked to NZFF and one of the defendant's private companies.
Several statements from donors suggested most did not know the difference, if any, between NZ First and NZFF, which was reported to have bankrolled the party.
"I became aware of the existence of the New Zealand First Foundation once the Serious Fraud Office started their inquiry and I heard the name in media outlets," one said.
"I had no knowledge of the New Zealand First Foundation at the time of the donation."
The need to create a greater stream of funds was one of the reasons NZFF was established in 2017, the court heard.
The SFO alleged the defendants' stratagem was to deceive the NZ First party secretary and the Electoral Commission and maintain control of the donation money.
The funds were then "spent it as they saw fit" on a range of party expenses and endeavours, including leasing and furnishing office space on Wellington's Lambton Quay for "NZ First Party headquarters", prosecutor Paul Wicks QC said.
Other expenses included a guest appearance fee of nearly $10,000 for Kiwi boxing champion Joseph Parker to attend a party conference and a $25,000 video of Peters touring New Zealand on a bus.
Former NZ First list MP Clayton Mitchell, who served as the party's whip, also recalled in court a trip, funded by NZFF money, to the UK to observe the European elections after an invitation by Nigel Farage's Brexit Party.
"This case is not about the use of the money but the exercise of control over that money," Wicks, who prosecuted the case alongside John Dixon QC, told the court.
"It was for the party to decide and control how it wanted to spend its money, not for the defendants to do so."
However, Justice Jagose said: "... plainly the defendants did believe they had a possessory right to the money — that was the essence of their defence: from the point of the money's payment to them, they were entitled to retain it for the party's benefit."
The Electoral Act requires a political party secretary to submit an annual return of donations to the Electoral Commission. Wicks said none of NZFF donations over about the four-year period were accounted for.
For donations greater than $15,000 in a calendar year, the identity of the donor must also be noted.
The Government has proposed changes to donations law, including lowering the limit for public disclosure of donors from $15,000 to $5000 by the 2023 election.
Political consultant Apirana Dawson, who was NZ First's former director of operations, told the court he would often fund party expenses himself. He said Peters was frustrated at a lack of fundraising efforts.
The tensions were discussed at an August 2015 NZ First board meeting, at which Peters identified the party's need for "magnesium, a tool to make this Party glow", Justice Jagose's decision reads.
"There wasn't a consistent level of support [at NZ First], things would get delayed or postponed," Dawson said when giving evidence. "I was frustrated because the MPs wouldn't go off and put effort [into] fundraising in their electorates."
Dawson, who also worked for the Labour Party between 2008 and 2011, said he would regularly pay for party expenses before seeking reimbursement, including for a new computer software system to be used as a fundraising database.
The court was shown several emails between Dawson, the two defendants and Peters requesting payment for the management system NationBuilder. Most of New Zealand's major parties, the Australian Labor Party and political campaigns in the United States have used the software.
Peters' absence from the trial was also a topic of discussion in the courtroom, with defence lawyer Tudor Clee arguing the NZ First's hierarchy was not deceived and the leader was "significantly" absent from the Crown's witness list.
"This is akin to the police charging a shopper and his friend with the burglary of his friend's shop. There's no evidence of a broken window, no evidence of a broken door, no evidence of any entry, there's nothing missing and the police do not call the shopkeeper to give evidence," he said.
Peters has distanced himself from the foundation and has denied any wrongdoing after it first came under scrutiny in media reports during November 2019.
When the SFO's allegations became public, Peters also claimed he and the party were "exonerated" and was critical of the agency's decision to lay charges near the time of the election.
After today's verdicts, Peters again lashed out at what he called "spurious allegations".
A consortium of media organisations, including the Herald's publisher NZME, have long fought to name the accused men.
Before the 2020 general election, media took legal action in an ultimately unsuccessful attempt to inform voters before the polls opened.
The NZ First Party also failed in a bid to stop the charges from becoming public until after a government was formed.
A decision on whether the media organisations will seek to revoke Justice Jagose's suppression decision is yet to be made.
"Except for publication of any particulars tending to identify [the accused], open justice largely has been met in this proceeding," the judge's suppression ruling read.
"Media attendance at and reports and accounts of trial did not observably lack for publishable information. [The accused's] identity is less important than the role he played in the conduct at issue under the charges."
Justice Jagose forbid publication of the accused's occupations.
Emergency services were called to the scene about 8.30pm.
