The Serious Fraud Office has cleared Christchurch mayor Lianne Dalziel of any criminal wrongdoing over election expenses.
The SFO launched a probe earlier this year after getting a referral from police.
It came after defeated mayoral candidate John Minto laid a complaint with the Christchurch City Council's electoral officer and asked to investigate why Dalziel had only revealed the identities of six people who each donated more than $1500 to her campaign.
They donated through an auction that her husband Rob Davidson ran.
Dalziel only declared the amount that came from him and only declared the other contributions after pressure from Minto.
The SFO investigation focused on campaign donations made to Dalziel, who is currently the mayor of Christchurch, in 2013, 2016 and 2019.
But the Herald understands that the SFO has now completed its investigation after finding no evidence of criminal conduct.
"The decision not to prosecute Lianne Dalziel is a disappointing outcome," Minto said this morning.
SFO Julie Read said it is in the public interest that allegations of electoral funding fraud be treated seriously and given due attention.
"In a representative democracy, voters must have confidence that those who make electoral donations do not unduly influence government decisions.
"While there was no evidence of corrupt conduct in this matter, the SFO believes further guidance is required at the local government level relating to donations made at fundraising auctions and how they are publicly disclosed."
In a statement, Dalziel said she welcomes the SFO findings and says she was "always confident in my case".
"However, they are required to investigate any complaint they receive thoroughly and they have done so. I am grateful they were able to clear the air before what will be a difficult Christmas for me.
"I agree with the SFO that further guidance is required relating to donations made at fundraising auctions and how they are publicly disclosed, and I would support a law change to provide for that.
"I will be making no further comment."
Davidson, a well-known Christchurch lawyer, died in August after a two-year battle with cancer.