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www.mccully.co.nz 11 August 2006

www.mccully.co.nz 11 August 2006

A Weekly Report from the Keyboard of Murray McCully MP for East Coast Bays

Appeal Court Decision

The Court of Appeal has this afternoon released its decision on the application of the humble member for East Coast Bays, to overturn a ruling by High Court Justice John Wild, declining him access to the Whangamata Marina file. Hot off the press, here are some key components of the decision:

“…we think that in this instance, the High Court judge was plainly wrong. Mr McCully has both a genuine and proper interest in this Court file. His interest is not frivolous or vexatious or merely prurient.

He has a real interest, and it is solidly based in the sense that Mr McCully wishes to inform himself (by access to the Court record) as to the nature and basis of the decision made by the Minister, and the basis on which it is said to rest, in the High Court papers.

We consider that his “standing” is clear. It is distinctly arguable that he has a greater interest than other citizens, as a Member of this country’s Parliament, to keep himself fully and properly informed, and he has significant public responsibility as the Opposition Spokesperson on Conservation. …we entirely accept the relationship between the House of Representatives and the judiciary is of the highest constitutional significance (see McGee, Parliamentary Practice in New Zealand (3ed 2005) at 190).

As Mr McGee QC has said, that relationship should be marked by mutual respect and restraint, and in New Zealand both Parliament and the courts do closely respect that line. However, we do not share the Judge’s concern as to how that line could be breached in this case. Parliament is entirely in control of its own processes. Mr McCully might or might not, according to the operative rules of Parliament, be able to utilise whatever information he gleans from the Court file, in the House of Representatives. But Parliament is master of its own house. It does not follow that simply by allowing a Member of Parliament lawful access to the information on the Court file, there is an intrusion upon the privileges of Parliament, or even that it creates a real risk of that happening. The Court should proceed on the basis that the rules of the House will be respected.”

A-G Cat Amongst Political Pigeons

Two weeks ago the general manager of the Parliamentary Service wrote to the leaders of each of the political parties represented in the Parliament. Attached to his letter was a draft report of the Controller and Auditor-General, supported by a Crown Law opinion. The purpose of the letter was to pronounce judgment, subject to any submissions leaders might wish to make, on the legality of hundreds of thousands of dollars of taxpayers’ cash, spent in the three months prior to the last general election.

Two areas of activity had been the subject of the A-G’s probe: expenditure of the party leaders’ budgets, and expenditure by individual MPs. For the Labour Party, who had rorted their leader’s budget with the $440,000 pledge card, the report was always going to contain bad news. For Don Brash, whose fastidious approach to spending taxpayers’ money is legendary, there was never a fear of reproach. The law establishing what is lawful parliamentary expenditure, and the law governing campaign spending in the three months prior to a general election, are inextricably interwoven here.

By definition, something that is a campaign expense cannot be funded from taxpayers’ funds. For the Labour Party, it’s a case of double jeopardy. The rules for spending Parliamentary Service cash are very clear. It can only be spent for a genuine parliamentary purpose.

And attempting to persuade voters to vote for your party in the three month lead-up to a general election, is not a parliamentary purpose. That translates into a double-barrel headache for the Labour Party: first, they would be required to pay back the money they have unlawfully spent. Second, if the $440,000 isn’t parliamentary expenditure, then it can only be defined, under the law, as one other thing: election expenditure within the meaning of the Electoral Act.

And once you add that $440,000 to the declared total of Labour’s election expenditure, it places them well and truly over the legal spending limit. In the language of the Electoral Act that is called a corrupt practice.

Only the National Party has been prepared to reveal the contents of the A-G’s report: a clean bill of health for Dr Brash’s leader’s budget, and $10,000 of expenditure by seven National MPs considered outside the rules. So on Thursday, Dr Brash fronted up with a cheque for the $10,000 owed by his MPs. And challenged other parties to do likewise. Helen Clark asserted that she didn’t know how much the Labour Party was in the gun for. Which is absurd, because the figure is contained in a table on the front page of the PSC letter to her. But her reticence is understandable. The media have, to date, assumed that the $440,000 pledge card is the sum total of Labour’s audit problem. Here at the worldwide headquarters of mccully.co it is suspected that the pledge card is merely the tip of a rather larger iceberg.

The Two Faces of Mr Peters

The howls of anguish which greeted the A-G’s report have been hilarious. Helen Clark insists that this is a much stricter and very new interpretation of the law that challenges all previous understandings. And when, having handed over his $10,000 cheque, Dr Brash was invited to appear on TV1’s Close Up, it was her little helper, Mr Peters, who was deputed to run the Labour Party lines.

According to Mr Peters, the Auditor-General must be living on another planet, or at least have taken leave of his senses. He doesn’t understand the case law of several decades. This new ruling throws decades of accepted practice out the window. And the ruling is therefore open to many and varied types of unspecified challenges. Get the picture?

Could this Mr Peters (Labour’s Mr Peters) be in any way related to the Mr Peters who featured in the most recent Electoral Petition case, Peters v Clarkson. Because that Mr Peters (let’s call him the Tauranga Mr Peters) was arguing completely the opposite proposition in the Court only a matter of months ago.

He was arguing that the law on electoral expenditure was clear, and that Mr Clarkson had broken it. The Tauranga Mr Peters went to Court alleging that his successful opponent, Mr Clarkson had overspent the allowed $20,000 budget. A particular target of this Mr Peters was an advertising supplement in the Bay of Plenty Times, which, he said, was clearly designed, so close to the election, to influence voters to support Mr Clarkson. And he was successful.

The Court required that a portion of the cost be allocated to Mr Clarkson’s candidate expenditure total. It is ironic that at the time that Mr Clarkson was engaged in this expenditure, Mr Peters’ flunkies were on the case of the Chief Electoral Officer, Mr David Henry.

And Mr Henry told Mr Clarkson to be careful to stay inside the limits. Simultaneously, the same Mr Henry was in contact with the Labour Party, warning that the pledge card was an election expense, which should be included in the Labour Party’s expense return. They, too, needed to be careful to stay inside the limits. Duly warned, Mr Clarkson cut his planned expenditure initiatives for the final few weeks of the campaign. And when the judges ruled against his supplement expenditure, he still had room in the budget.

By contrast, a duly warned but desperate Labour Party kept on spending. With the consequence that they are hundreds of thousands of dollars over the legal limit once the pledge card is included in the return.

A small matter of a corrupt practice under the Electoral Act, for which Mr Peters (not the Tauranga one) is now Labour’s chief defender. But if Mr Peters (Labour’s advocate) had chosen to consult the Tauranga Mr Peters, he would have understood that the law he claims is now subject to such a new and strict interpretation, is, in fact, merely the law as it has always been. And the Tauranga Mr Peters should know. You see, he wasn’t just dependent upon his own recent experience in Peters v Clarkson.

The frequently quoted authority in Peters v Clarkson (and therefore in the recent Crown Law opinion) is the Wairarapa Electoral Petition case of 1988. And who was one of the key players in unseating former Labour MP Reg Boorman, by proving allegations of breach of the campaign spending limits? Why none other than Mr Peters. The Tauranga one, not Labour’s one, that is.

And Now…

The Auditor-General will carefully listen as a parade of the guilty argue they were simply following previously accepted practice. And Clark and her flunkies will no doubt exert their usual intimidatory tactics. But the Crown Law advice could hardly be clearer. So the A-G’s room for manoeuvre is severely constrained. As forecast so presciently in this publication many many months ago, the A-G will be bound to find that Helen Clark’s parliamentary leaders’ budget has been spent on unlawful expenditures. He will have to advise the Speaker of the unlawful expenditure and may direct that the Speaker report this to the House. That, in itself, may raise interesting questions.

Because if Margaret Wilson, a senior Labour insider and former Party president was anywhere close to Labour’s expenditure decisions made during the campaign, she will have a conflict. Labour’s obligation to pay the money back is, though, merely the first of their problems.

The Crown Law advice makes the Police decision not to prosecute the Labour Party for a breach of the spending cap almost unfathomable. Serious questions will now be asked about how that decision was made. Retrospective legislation is now being suggested. Which would be just a wonderful look. And to cater for the future, Michael Cullen is now talking about state funding of political parties. Which is actually what this whole saga is about: a Labour Party attempt to introduce state funding of political parties, without actually telling the public up front. Oh, what a tangled web…


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