John Banks' treasurer kept in the dark, court told

John Banks stands in the dock, during his trail at the High Court in Auckland, this morning. Photo / Brett Phibbs

The treasurer for John Banks' failed 2010 Auckland mayoralty bid did not know two sizeable donations to the campaign team were from internet entrepreneur Kim Dotcom, nor did he ask Banks about them.

Lance Hutchison told the High Court at Auckland today he only found out where the money came from after police told him.

Banks is defending a charge of filing a false electoral return in what is expected to be a two-week hearing before Justice Edwin Wylie, without a jury.

Banks is accused of knowingly receiving political donations from Mr Dotcom and SkyCity that were recorded in official returns as anonymous.

The allegations relate to two $25,000 donations from Megastuff Ltd on Mr Dotcom's behalf in June 2010 and $15,000 from SkyCity in May of that year.

Mr Hutchison received the SkyCity cheque in a sealed envelope. He said he phoned the person who signed it and they asked for the donation to stay anonymous.

Mr Hutchison said he never asked Banks about donations and didn't question him before he filed out the electoral return, which Banks signed after asking Mr Hutchison if the document was correct.

When the pair went through the document Mr Hutchison quickly flicked through the donations section. The pair spent three or four minutes discussing the expenses part.

"As far as I'm concerned, the return is true and correct and still is today," Mr Hutchison said

He revealed insights into how money was sought by the campaign team, which aimed to find 10 people to each donate $25,000. The National Business Review's annual rich list was the first place they looked.

"That was our initial wish-list."

Proceedings today were delayed by 90 minutes after protester Sam Bracanov threw a bucket of mud at Banks as he arrived at court, spattering Banks' face and suit jacket.

Former Act MP John Boscawen, who was attending the trial, said Banks went home and changed into a fresh suit before appearing in the dock.

This afternoon a police spokeswoman told APNZ: "No arrest has been made yet but police are investigating and following strong leads to locate and speak with the mud slinger."

The Crown is expected to call 16 witnesses, including Mr Dotcom, his now estranged wife Mona, SkyCity boss Nigel Morrison and political insider Michelle Boag, who was also part of Banks' 2010 campaign team.

Banks allegedly met with Mr Morrison, who handed him a cheque in a SkyCity envelope. Banks has told police he had no recollection of the meeting or of receiving a cheque from Mr Morrison, Crown prosecutor Paul Dacre, QC, said.

The Crown also says that Banks went to Mr Dotcom's Coatesville mansion, where Mr Dotcom offered to give him a $50,000 donation.

Banks instead asked for two $25,000 cheques, so he wouldn't have to declare where the money came from, Mr Dacre said.

Banks' lawyer David Jones, QC, said the defence agreed there was no contest that Banks was a candidate in 2010 and that he filed a return.

But the two other points of law the Crown must prove, that the return was false and Mr Banks knew that, were "at issue".

"The defence case is that at all material times Mr Banks considered that the return was true and correct, that he acted honestly and with integrity throughout and that as far as he was concerned, the return was accurate when it was transmitted by Mr Hutchison on his behalf after Mr Banks has signed it," Mr Jones said.

If Banks is found guilty he faces a jail sentence of up to two years or a $10,000 fine.