Right now Phil Goff and Lianne Dalziel are under investigation for using a dodgy artifice to launder big donations by holding allegedly fake auctions and declaring those donations as anonymous.
As was pointed out in an earlier post, this is a standard, and supposedly illegal, way political parties and candidates have laundered donations. Now that Goff and Dalziel are under investigation, you have to wonder how long it will be before similar investigations are conducted into the Labour party and the National party?
In Professor Anne-Marie Brady’s submission that was highlighted here yesterday, she pointed out just how large the donations that were laundered using this method were:
Since entering parliament, Dr Yang has become the National Party’s main organizer and fundraiser among the Chinese community. For example, in 2014 PM John Key attended a fundraising dinner and auction organized by Dr Yang for unnamed wealthy ethnic Chinese voters, which raised $200,000 for National’s election campaign.
In 2016 Dr Yang was involved in another major fund-raising event with PM Key, related to the bid to change the New Zealand flag. Six unnamed Chinese donors at an exclusive lunch for nine (the other attendees were Yang and National MP Nikki Kaye) donated a total of $100,000 for the flag campaign. The Chinese donors wanted the Union Jack removed from the New Zealand flag, because it reminded them of the history of British imperialism in China.
Amazingly the National Party never reported the $200,000 donations in their return, at all. Yet the donors were actually known:
Stuff reported it at the time:
John Key posed, smiling for photos with cashed up donors and other supporters, at a fundraising dinner and auction at King’s House restaurant in East Tamaki this month.
A source believes they donated about $200,000 to National’s election campaign – but their identities would never have been known if the Sunday Star-Times had not obtained these photos.
“This was my private fundraising dinner, I don’t want to talk about the details,” National list MP Dr Jian Yang said yesterday. “It was a private dinner and I don’t want to reveal it to the public or the media. All parties have their fundraisers, it was all done legally and there’s nothing wrong.”
Except that it doesn’t show on their return. Jian Yang might find that the Steve Joyce defence of it being “pretty legal” isn’t actually a defence at all.
But Labour and Act also do it, as Stuff revealed in the same article:
On the other side of the political fence, Labour has been running similar fundraising dinners at the Lucky Fortune restaurant; this newspaper has been supplied with more photos from an ACT fundraiser that is said to have raised up to $80,000; and an earlier Maori Party fundraiser offered guests the chance to “chat confidentially” with the prime minister.
Stuff
So how big is this problem? Professor Brady provides some answers from her submission:
According to a 2017 Sunday Star-Times report, eighty-three per cent ($8.7 million over six years) of the political donations received by National are from anonymous donors, while eighty per cent ($2.8 million) of those donated to Labour are also from anonymous donations. This means that the figures available are only partial at best, but they do give an indication of trends when it comes to the large donations to political parties in the period from 2007-2017.
Sources tell me that since the 2017 election the National party was on track to raise more than $1million and pass that through the Botany electorate. That represents more than a third of National’s total donations, and yet we don’t see that in the donations returns of the party for 2017 or 2018.
The Sunday Star-Times report that Anne-Marie Brady mentions is very revealing too, as to the scale of donations laundering.
The Labour party isn’t immune either. Their preferred method of laundering donations is via “art auctions”. Stuff looked at that in 2017 as well, and perhaps this needs to be re-visited by the Serious Fraud Office since the artifice is similar to that which Lianne Dalziel used:
The Labour Party is hiding tens of thousands of dollars in donations behind over-inflated art auctions – and naming the artists as donors instead of the secret individuals handing over the big bucks.
The artists had no idea the party was naming them as the donors – they never saw a cent of the money. They say their works are auctioned off at well above market value to wealthy benefactors who want to keep their support for the party secret.
Labour says the practice complies with electoral rules. But one party operative described the practice as “whitewashing” – a way to keep big donations private at a time when corporate contributions to political parties were falling because of public scrutiny.
“What’s the value of a painting?” the operative asked. “It’s hard to put a price on it, not like a car or an airfare or something that can easily be valued. But a painting can’t be valued, and that’s exactly how auctions are used to launder the money.”
Stuff
That looks like a slam dunk for the SFO. A deliberate and false attempt to conceal donors. Labour declared the donations under the artists’ names, but the artists did not actually give the money, nor did they transmit the donations to Labour. That makes the returns a fraud.
Both National and Labour appear to be at serious risk if the SFO widens its investigations. Both parties have used auctions as an artifice to hide the real donors. Labour appear to have deliberately lied on their returns. For all intents and purposes they all appear to be at it, and it is time it was stopped.
It beggar’s belief that the SFO wouldn’t look at these, and if they do then the Donorvirus will spread even further.
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