Just when David Cunliffe seemed to be in a position to gather some serious momentum, revelations have surfaced about his use of secret trusts for receiving political donations during last year's leadership contest. The scandal is being painted as a major blow for his credibility, and for his chances of leading Labour to victory later in the year.

Major damage to Labour and Cunliffe

Cunliffe's critics are using the donations revelations to challenge the Labour leader's credibility, personality and authenticity. For the harshest version of this, see Duncan Garner's Is David Cunliffe a fake?. He asks an array of challenging questions about what's been going on with Cunliffe's political finances, but even more harshly he suggests that Cunliffe's whole political persona is contrived: 'I'm starting to wonder just who Cunliffe is. What does he stand for? Is he anti-business or pro-business? Does he care about the poor? Or hang out with the rich? My big question really is this: Who is the real David Cunliffe? Is he a fake?' You can also listen to Garner's 5-minute elaboration on this on RadioLive.

Others are pointing to this gaffe as an indicator of Cunliffe's inherent personal flaws. John Armstrong says, 'That he cannot seem to stop his fingers hovering over the self-destruct button is no surprise to anyone who has watched him for any length of time. It is a great mystery why someone overly blessed with essential political attributes gets it wrong with such frequency. Maybe it is overconfidence. Maybe it is an inability to see the line between being bold and being foolhardy' - see: Two Cunliffe mea culpas in four days smacks of clumsiness.

Even more harshly, today's Dominion Post challenges Cunliffe on a number of aspects relating to his gaffes, saying that 'errors of judgment usually reveal deeper issues of character or attitude' - see: It's all a matter of trust. The editorial concludes: 'He needs to decide who he really is and what he stands for.... Above all, Mr Cunliffe needs to be clear where he stands. Does he stand for transparency and openness, or doesn't he? If he does, he should never have had anything to do with the trust'.

Unsurprisingly, Matthew Hooton has gone on a major offensive against Cunliffe, suggesting that the scandal could bring the leader down: 'Were National to press the nuclear button, with a full-scale privileges committee inquiry into this latest issue, this would surely be the last nail in Mr Cunliffe's political coffin. Mr Jones would then be required to step up. But that is almost certainly not going to happen. No one gains more than Mr Key from the disingenuous Mr Cunliffe remaining in his role until the election, now expected in September' - see: Secret trust last nail in the coffin for Cunliffe? (paywalled).

David Farrar has also been applying harsh scrutiny to the issue in blog posts such as Cunliffe's secret trust and Will Cunliffe's donations be revealed?. Farrar says that the 'stench of hypocrisy is massive', and that 'If any Labour MP or candidate now tries to campaign on better electoral finance transparency laws, they're going to be laughed at'.

Of course, that's the line we expect rightwing commentators to take, but crucially this minor scandal really does have the potential to damage Cunliffe's reputation with the left. This is because it challenges his leftwing credentials, as well as his authenticity. His use of the plutocratic-friendly blind trust mechanisms is completely at odds with the left's view of how political funding should be carried out.

This is best illustrated by the fact that the harshest criticism of Cunliffe's actions can be found on the leftwing blogsite, No Right Turn. The first post, David Cunliffe: Unethical, accuses the Labour leader of donation 'laundering' and says he's failed a major test on trustworthiness: 'by failing to tell us who he owes political debts to for financing his leadership ambitions, David Cunliffe has clearly failed that test and is unfit to be in Parliament, let alone a party leader'. A second post, A win for transparency, says that Cunliffe's values and his response to the scandal becoming public are unacceptable: 'Which is just sociopathic "sorry I got caught" bullshit. The thing about values is that you live them, and they're instinctive. Cunliffe's aren't. When faced with a choice between transparency and corruption-enabling secrecy, he chose the latter, and then tried to cling to that choice when it was questioned. These are not the actions of an ethical man who believes in open politics - they are the actions of someone trying to get away with something they know is wrong. And actions like this are yet another example of why the New Zealand public thinks all politicians are liars, cheats and scoundrels'.

So will this scandal really damage Cunliffe and Labour? According to David Heffernan's blog post, 2014 National win stock on iPredict, Labour's chance of winning the election appears to be slipping away. See also, the NBR's How long will Cunliffe last? iPredict punters' surprising pick.

For other accounts of Cunliffe's mounting gaffe-count, see Vernon Small's Cunliffe: Three months, three gaffes and Larry Williams' Larry's Memo: 4 March. And for the best overall account of the trust scandal, see Claire Trevett's Cunliffe comes clean over donations.

In Defence of Cunliffe

The main argument in defence of Cunliffe's secret trust has essentially been to point out that the National Party utilised such trusts too (before they were outlawed for political parties). You can see Cunliffe making this argument in his TV3 interview this morning: Cunliffe turns tables in donations saga. For further defences see Labour's spin-doctor Rob Salmond's blog, Untidy and unnecessary. Also see The Standard's How short are memories?

However, The Standard's reputation is also being lowered by this political finance scandal. Like Cunliffe, this blogsite might well be accused of hypocrisy. After all it was one of The Standard's leading bloggers, Greg Presland (using the pen-name Mickey Savage) who railed against the use of trusts on The Standard, but was then the key person setting up Cunliffe's mechanism for hiding donors.

The other major line of defence is to say that the scandal is a beat up and simply reflects the rightwing bias of the media - see Martyn Bradbury's Latest msm Cunliffe feeding frenzy over donations.

Labour is fortunate that another political finance scandal has broken out, this time putting pressure and questions onto the Government - see Brook Sabin's TV3 report, Collins says Oravida visit not conflict of interest. The Standard raises some further good questions about this in the blog post Collins and Oravida.

Divisions within Labour?

Some commentators are suggesting that the scandal represents deepening divisions within the Labour Party. Certainly questions are being asked by many as to who in Labour might have leaked information on Cunliffe's trust, with the implication that some on the right of the party are retaliating over Matt McCarten's appointment by Cunliffe. For the best example of this, see Rob Hosking's NBR column, David Cunliffe and the Myth of Trust (paywalled).

In a lengthy analysis of the divisions within Labour, Hosking ponders the eventual breakup of Labour and the establishment of a new left party involving McCarten. While that seems fanciful, his speculations about leaks within Labour are certainly interesting: 'How Mr Cunliffe's own caucus will react to this is anyone's guess. If the track record is anything to go by, they will hunker down, try to hang onto their seats and quietly feed ground glass into the political water supply of Mr Cunliffe, Mr McCarten, and anyone who supports them. The trust revelations over the past 24 hours show a big chunk of ground glass has already been released, and done some damage. These leaks came from within Labour, and from Mr Cunliffe's enemies, of that you can be sure'.

Another person that thinks Shane Jones might be rising to the occasion is rightwing blogger Matthew Beveridge - see his post, BBQ season on social media: The warning signs of a leadership challenge?.

Labour's ICT blunder

To add to Labour's reputation for gaffes, internal policy documents about Labour's information, communications and technology policy were accidently sent to Cabinet Minister Amy Adams - see Isaac Davison's Labour accidentally leaks own policy details. As detailed in this report, one of the most interesting revelations from the leak, was that 'Curran's document outlined plans for policies called KiwiMap, KiwiCode, KiwiCall, KiwiCap, KiwiCloud and Kiwis Come Home'.

For more in-depth analysis on this, see the NBR's Broadband strategy doc by Labour's Clare Curran accidentally sent to Amy Adams and Hamish Rutherford's Labour plans for free computers.

Unsurprisingly, Cunliffe's critics are taking the chance to link the ICT policy with the identity of Cunliffe's major financial donors - see Cameron Slater's How much of Labour's ICT policy did Dotcom write?. He says that 'My sources inside the grounds of the Dotcom Mansion tell me that these proposals were the exact ones discussed with Dotcom, indeed promoted by him and that extensive meetings were held after Curran's two visits to the mansion to discuss them and flesh them out'.

The State of the Labour Party

There is plenty of other debate at the moment about the health and state of the Labour Party. In terms of ideology, Chris Trotter argues that the party isn't necessarily going to the hard left - see: A lurch not to Left, but to sanity. Rob Salmond puts forward the evidence against the Labour Party moving to the left, and shows why a move to the right or centre makes more sense - see: Lurches this way and that. And Liam Dann argues against Labour becoming too unorthodox on economic policy - see: Labour must drop monetary madness.

Labour's candidate selection is getting a lot of coverage at the moment. See Benn Bathgate's Can Coffey break McClay's hold on Rotorua?, and John Drinnan's TVNZ bias probe stalls Labour's candidate.

But David Farrar points out that incumbent Labour candidates aren't facing much competition - see: Only one Labour MP facing a challenge. And in some electorates there are problems finding candidates - see Matthew Littlewood's Labour has no runner and Peter O'Neill's Anyone out there?.

In Christchurch, it's going to be fascinating to see who wins the Christchurch Central nomination for Labour. For details of the two apparent candidates, see Keir Leslie's Christchurch Central Selection. And one of the candidates, James Dann explains Why I'm running to be the Labour candidate for Christchurch Central.

Also in terms of the Christchurch rebuild, Labour has announced a new policy - see Jody O'Callaghan's Labour bids for 'fed up' claimants. But The Press newspaper is unimpressed, and says Labour needs to lift its game.

The McCarten appointment

Over the weekend there was plenty of very good analysis of the appointment of Matt McCarten as Cunliffe's 'left-hand-man'. McCarten himself wrote about this in his final column for the Herald - see: Now for something similar .... Other commentaries are all well worth reading - see: John Armstrong's McCarten taking on one of politics' trickiest jobs, Matthew Hooton's Cunliffe keeps promise to far left (paywalled), Rodney Hide's Fence-sitters watch out, Fran O'Sullivan's Good keen Matt to get Labour moving, and Colin Espiner's Let's do the (politics) time warp.

Finally, for some interesting social media commentary about Cunliffe and Labour, see my blog post, Top tweets about David Cunliffe's Labour leadership trust fund.