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On Where The Politically-donated Bucks Should Be Stopping

By now, it seems crystal clear that something is deeply amiss with the way that New Zealand political parties solicit, receive and report their funding. Evidently, the nominal threshold of $15,000 that requires public disclosure of the donation and its source is…shall we say…vulnerable to manipulation by all and sundry. Moreover, as Otago law professor Andrew Geddis has pointed out, unless political leaders have been stupid enough as to explicitly tell their own staff and/or donors that they’re aware that certain practices break the law but intend to pursue them anyway, then the law has not been broken - not by the political leaders at least.

Alas, that latitude does not extend to those further down the totem pole. Any minions who believed they had been given a green light to tell donors how to break up their gifts into little bundles in order to legally circumvent disclosure, may find themselves cast out into the cold. That’s one reason why National’s then-bagman, Jami-Lee Ross, and donors Yikun Zhang, Shijia( Colin) Zheng, and Hengjia (Joe) Zheng are scheduled to be standing in the dock to answer charges of fraud, but National Party leader Simon Bridges isn’t. It is also why New Zealand First leader Winston Peters can say – hand on heart - that he wasn’t involved with handling the donations to the NZ First Foundation, and knows little or nothing about them.

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Call it ‘implausible deniability’ – but deniable it is, under the law. If you listen to the tape or read the transcript of Jami-Lee Ross and Bridges discussing a $100,000 donation, you can draw your own conclusions about what was being discussed. In the end, there were two sets of donations of $100,000 involved, one given before the 2017 election, and another one in 2018. Among the transcript highlights:

J-LR: [laughs] Hey um you know at Paul Goldsmith’s function you saw those two Chinese guys, Zhang Yikun and Colin? You had dinner at their home?

SB: Yes.

J-LR: They talked to you about a hundred thousand dollar donation –

SB: Yep

JLR: That is now in.

SB: Fantastic

J-LR: What would you like done with it? It’s currently sitting in a Botany electorate account.

After a bit of chitchat, Bridges moved on to explain what he could use the money for, and this included paying for attack ads on the regional fuel tax, or on industrial relations.

SB : Um look, I just think we want it for, uh, the advertisements and the like, you know? We want it for the things that we’re gonna need to do over the next year or so, sort of outside of the – not outside of the party but um, uh, you know, like I say we want to do some more attack ads – say we want to do another regional fuel one, say we want to do an industrial relations one. We just want to keep doing those things, right?

The pair then discussed whether - and how best - to bring National Party president Peter Goodfellow up to speed with the donations, and J-LR pointed out : “ I don’t think we can raise tens of thousands and completely keep him out of the loop.” Bridges agreed, but wanted time to think through how this should best be done. To which J-LR made this attempt at clarification:

JLR: Donations can only be raised two ways – party donation or candidate donation. Party donation has a different disclosure which is fine, and the way they’ve done it meets the disclosure requirements – sorry, it meets the requirements where it’s under the particular disclosure level because they’re a big association and there’s multiple people and multiple people make donations, so that’s all fine, but if it was a candidate donation it’s different. So making them party donations is the way to do it. Legally, though, if they’re party donations they’re kind of under Greg’s name as the party secretary, so –

SB: So we need to tell them, I get that. I get that. I’m going to tell him – I think he’ll accept it, I just need to explain to him what it is I want it for. Uh, unless I get him to come along to, unless I get him to – leave it with me, I might talk to McClay as well, see what he’s got up his sleeve. Cause Peter is going to be at this meeting with me in Wellington, that’s all. If I then brought him after that – good work though man, that’s a lot of money.

At which point, J-LR raised the possibility of what looked like a quid pro quo : namely a potential National Party candidacy for Colin Zheng.

JLR : ….You may recall at the dinner they did discuss candidacy, and another Chinese candidate.

SB: Two MPs, yeah.

JLR: Colin Zheng, the younger one, he’s put his name in for candidates college and so I assume he’ll get through candidates college and we’ll just make some decisions as a party further down the track as to what we want to do with candidates.

SB: I mean, it’s like all these things, it’s bloody hard, you’ve only got so much space. Depends where we’re polling, you know? All that sort of thing. Two Chinese would be nice, but would it be one Chinese or one Filipino, or one – what do we do?

JLR: Two Chinese would be more valuable than two Indians, I have to say.

SB: Which is what we’ve got at the moment, right?

Note that in the next breath, Bridges did not query the morality of extending a candidacy or list position to donor Colin Zheng, but talked instead about the management problems involved in shifting out current MPs to make room for new ones :

SB Your problem there is you end up in a shit fight because you’ve got a list MP – you’ve got two list MPs – it’s a pretty mercenary cull – sitting MPs, all that shit. And then we’ve got the issue of – we could end up getting rid of some list MPs if we want and bringing in some of those new ones, and if you do that you’re just filling up your list even further with ones that you’ve gotta sort of look after…..

After reading this transcript, it is pretty difficult to square its contents with Bridges’ claim that the allegedly fraudulent activities and donations of the Chinese donors and Jami-Lee Ross had nothing to do with him : 

Bridges has consistently denied any wrongdoing. "I have always maintained I had nothing to do with the donations," Bridges said last month. "As I have always said the allegations against both myself and the party were baseless and false."

Presumably, the onus would be on the party receiving and benefitting from the donations – and not the donor - to ensure that the rules on disclosure were being faithfully followed. Apparently though, National has not been alone in being blessed with donors who find themselves motivated to offer gifts to politically linked entities in packages of say, $14, 995, while never feeling quite inspired enough to stump up with the extra $5.01 that would have made their donation and their identity a matter of public knowledge : 

Last year companies owned by New Zealand's richest man donated nearly $30,000 to the Foundation in two amounts that each fell $5.01 short of the $15,000.01 level at which political donations are publicly disclosed.

Church Bay Farm, which is 100 per cent owned by Graeme Hart, donated $14,995 to the New Zealand First Foundation on 29 March, 2019, according to documents seen by RNZ. On the same day Walter & Wild, which owns the Hubbards, Hansells and Gregg's food brands, also donated $14,995 to the Foundation. Walter and Wild is two-thirds owned by Graeme Hart with the remaining third owned by his son Harry Hart.

Moreover, there is the matter of undisclosed donations from fishing industry giant Talleys, to the New Zealand First Foundation:

One of the country's biggest fishing companies, Talley's, and its managing director donated nearly $27,000 to the New Zealand First Foundation, which has been bankrolling the New Zealand First Party. The foundation received $26,950 from seafood giant Talley's and from managing director Sir Peter Talley between 2017 and 2019, according to records viewed by RNZ. It received the money from Talley's in four amounts - all of which were below the threshold for public disclosure and so have not been publicly revealed until now.

Greenpeace has expressed its concerns about the potential links between the Talleys donations and NZF’s role in shaping the coalition government policies in favour of commercial fishing.

Last year, we saw a halt to the rollout of cameras on fishing boats, which is consistent with Talley’s opposition to this scheme. A commitment to put cameras on boats had been made by the previous Government in response to under-reporting of catch, including Talley’s being found to be underreporting the weight of their cartons of fish.

We’ve seen other Talley’s-related decisions made by the Government, such as lobbying by a governmental delegation at a South Pacific fisheries meeting just last week to get a Talley’s-owned fishing vessel off the draft international blacklist after it was caught bottom trawling 14 times in a restricted area. New Zealand First Minister Shane Jones publicly undermined the prosecution of the vessel, labelling it “a mere technical issue”.

At the meeting, the New Zealand delegation was also one of the only countries arguing against more protection for vulnerable marine ecosystems from bottom trawlers. Talley’s is one of just two New Zealand fishing companies bottom trawling the South Pacific.

For public figures, conflicts of interest need not be absolute. They can and do include the perception that such conflicts may exist. In that respect, there are serious problems with the existing disclosure threshold, and with the way it is currently wide open to manipulation. During this election year, New Zealand First has copped more media flak for the handling of its political donations than has National - whose problems tend to be treated as a rogue operation, already well aired 18 months ago. In 2020, Bridges’denials of knowledge or involvement have largely been taken at face value, while Peters’ similar denials continue to generate headlines and deep suspicion. The public may have to look elsewhere for an honest broker on the current state of political funding, and how this needs to be reformed.

Threshold Woes

Corruption is not perceived to exist here, and the public sector and judiciary operate with relative integrity. However, the New Zealand branch of Transparency International(TI) has expressed its concerns about the “incredibly weak” disclosure rules on political funding, and this TI guest article (“Is New Zealand Becoming A Plutocracy ?”) brings together many of the concerns :

Researchers who wish to document the fundraising base and economic backers of the major parties, can’t even get a foothold because of the incredibly weak disclosure rules. Under such conditions, it’s all too predictable that this country’s reputation as one of the least corrupt in the world is poised to decline. More important than our reputation for high quality civil service and integrity, we risk losing the actual reality of good government. Citizen confidence, freedom, equality, and self-governance for all, are now in doubt — right when the climate crisis and the technological crisis (fake news, deep fakes, and online hate) are striking.

Is New Zealand on its way to a privatised democracy and a public policy environment systematically opposed to the interests of every-day citizens and residents?

The question may be relevant, but are there any answers on the table? Given the vested interests involved, and given the media’s handling to date of the funding scandals that have been unearthed, the government can only begin a credible process of reform by establishing an open and independent inquiry into political funding. Around Parliament though, there seems little interest in genuine reform of what is an indefensible situation. For the foreseeable, only the few (disposable) people actually handling the money seem at risk of being caught, and prosecuted.

Footnote: In the light of the funding scandals, the furore over the taking of photographs of two journalists meeting in a public place with former New Zealand First president Lester Gray – and the subsequent leaking of the photos to a right wing blog – seems wildly overblown. Surely, it isn’t all that hard to understand why a NZF supporter resentful of media coverage of the party might have taken such photos. It isn’t nice, it isn’t justified, but it’s the kind of hostility that journalists face (and ignore) on an almost daily basis. Gray was hardly a secret source being outed. His serious concerns about NZF’s handling of its donations had become a matter of public record in late 2019.

IMO, treating the handling of the photos as a serious threat to journalistic practice is absurd. Not only does that kind of hyperbole trivialise the threats to their lives and work that journalists commonly face in other countries….but if this is all it would take to deter our intrepid investigative journalists, then we’re really in trouble. (In reality, our journalists have thicker skins.) And since we’re talking about legalities, the photos and their publication are within the law and we all have Mike Hosking to thank for inadvertently clarifying that point :

In 2003, Mike Hosking and his wife sued a paparazzo for taking photos of his twin daughters whilst she was walking them on a street in Newmarket. The Court of Appeal held that since the photographs did not breach their reasonable expectation of privacy, and no one would find the publication of those photographs highly offensive or objectionable, there was no legally actionable breach of privacy. This high standard has more or less remained since the decision, and it is almost certain that the [New Zealand First] photos would fall short of meeting it.

Moreover, as the Privacy Commissioner notes, if "you are an individual and you're taking the photo or making the recording in a personal capacity, this generally won't be an issue under the Privacy Act [1993]." Finally, the new protections under the Harmful Digital Communications Act 2015 seem not to apply to the BFD website's publishing the photos: the revelations they contain wouldn't "cause harm to an ordinary reasonable person in the position of the [reporters]".


it has also been ‘false equivalence’

to liken the leakage of these photos to the way that Whale Oil was used by politicians a few years ago, as detailed in

Dirty Politics.

That was systematic, and it had serious consequences. To paraphrase Neil Young… in this case, you can see the needle but its hard to see the damage done.

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