The first NZ First MP to give evidence in the fraud trial linked to the party’s fundraising foundation has revealed dealings with controversial lobbyist Simon Lusk, and the term the party leader would use when he wanted supporters to ‘pony up’ with donations.
Former MP Clayton Mitchell, who had been tasked by leader Winston Peters to fundraise for the New Zealand First Foundation when it was set up in parallel with the party ahead of the 2017 election, said Lusk acted as “an adviser, a political adviser” and sent potential donors in Mitchell’s direction. Earlier evidence showed Lusk directing natural products firms to NZ First for donations.
Lusk, who featured in the pre-2014 election book Dirty Politics by Nicky Hager, was one of those called to a meeting once the NZ First Foundation was exposed by an RNZ report in November 2019.
Two men, whose names are suppressed, deny Serious Fraud Office charges of obtaining by deception through the foundation in a trial before Justice Pheroze Jagose at the High Court at Auckland. The SFO alleges the men took in $750,000, which was donated for the party, and spent it without the authority or knowledge of elected party officials. The total was not declared to the Electoral Commission as donations.
In earlier evidence, Mitchell had been shown to have led fundraising efforts for the foundation among the horse racing and thoroughbred industries in 2017, including a lunch that raised $56,000 almost immediately. He said he did not recall where he first received the foundation account number that he provided donors. He would target his approaches for either the party or foundation, depending on either’s need.
He had letters for donors seeking money for either entity, containing different bank account details, with various versions of this document, including ones edited by Peters.
Meeting after media attention
Mitchell told the court on Monday that the meeting in November 2019 after news of the foundation broke was attended by one of the defendants, himself, two others and someone listed in notes as ‘V’.
Asked by Crown lawyer John Dixon QC if the V stood for video, Mitchell said: “No, that’s for Simon Lusk. We used to call him Voldemort.” (Lord Voldemort is a main character and antagonist of Harry Potter in the JK Rowling novels).
Details on how the foundation functioned had previously been kept secret within the party, including from some board members.
At the meeting, the defendant drew a diagram to show the others how the foundation and the party were separated. “That’s what he had drawn for us on the whiteboard,” Mitchell said in evidence. “I drew it down. NZF sat on one side and there was a firewall down the middle, the arrows connecting them meant they were mutually connected.”
But what was drawn was quite different from what he, Mitchell, had been led to believe earlier about how the foundation worked in with the party. “Different insofar as we saw NZ First and the foundation on the same side … there wasn’t a separation.” It was different to “what was originally told to us by [that defendant]”.
Asked by Dixon how that made him feel towards the defendant, Mitchell said: “I guess probably I felt a little bit of trust … I certainly had some trust issues had been breached … betrayal is too much but it certainly left me with a lot of questions to answer.”
On the same date as that meeting and in light of the media revelations, the second defendant had sent Mitchell an email with the subject line “private shit”. The defendant wrote: “I decided not to send all the guff, it is too scary my brother, I will give you a hard copy tomorrow, here is 2017 for you.”
That was a list of the donors to the foundation in 2017.
Dixon to Mitchell: “What did you understand all the guff to be?”
“I don’t recall but probably around what the cost of everything to run the foundation and [one defendant’s private firm]. I’m assuming the donations are for me to go and contact them to let them know their information may be put to the media.”
Mitchell could not recall what “too scary” meant.
Mitchell contacted many of the donors to advise of the media inquiries, not all but he tried.
Electoral Commission questions
When the Electoral Commission sent Mitchell an email asking what role he had played in soliciting donations for the foundation, he was provided with answers by one of the defendants.
Dixon said one question was whether Mitchell directed donations to the foundation, not party. The suggested answer from that defendant was to answer “If the person I am talking to seems reluctant to the party I direct them to the foundation”.
Mitchell said he didn’t agree with this proposed answer; “It’s not how it actually was for me. If the party was needing support I would put it into the party, if the foundation needed support…”
The MP later tried to invoke legal privilege to decline to answer questions on the answers he sent the Electoral Commission, but was required by Justice Jagose to answer if he discussed his proposed answers with anyone else before sending them. “Yes I did. With the leader, Winston Peters.”
Asked to describe his role with Peters at one of the horse breeders’ fundraising lunches in 2017, Mitchell said he attended because the leader always wanted someone on hand at such functions. Part of his job was to fundraise at the lunch.
Asked if Peters asked for money, Mitchell said, “Not specifically, but he’d always say … you can’t get a microlite and expect to fly to the moon, which was his way of saying pony up.”
Dixon: “A good analogy for horse racing as well.”
After the meeting Mitchell sent a defendant an email suggesting participants be chased up for potential donations to the foundation. “It would be great if you could chase the ones who pledged originally, starting with Brent Taylor [the host of the lunch, at Trelawney Stud near Cambridge].
The MP did this as he and the defendant were fundraising together. “Often he would go and do the tidying up and seeing it through.”
Mitchell was asked about his involvement in fundraising from richlisters Kent Baigent, Brendon Lindsay and fishing industry leader Peter Talley, among others. He could not recall for the court who he had given a cheque from Talley for $2500 from a Nelson lunch, or even if he, Mitchell, had been at that lunch.
He called Talley “a good friend of Winston’s. He’s become a good friend over that period of time with myself. He’s an avid supporter”
By July 2017, one defendant sent Mitchell an email showing the NZ First Foundation bank account totalling more than $300,000, with a note “we’re getting there”.
Mitchell said the foundation was used to pay a bill for $7500 for hospitality at a marquee invoiced by Race Inc., for around $12,000 for airfares and travel for the MP to go to the UK in 2019 to observe the British election (with accommodation for Mitchell funded by the Brexit Party), and a fee for boxer Joseph Parker to be a last-minute replacement speaker at a New Zealand First convention.
In all three instances Mitchell told the court Peters had directed him to send the bills to the foundation. On the Parker invoice, Peters had wanted to keep that payment quiet. “It’s not something we like to pay for, guest speakers.”
Urgency to repay loan
The court had last week heard that the foundation made a $73,000 loan to the party to cover 2017 media advertising bills, without the knowledge of the party secretary. When the issue of the loan became known, one of the defendants urged Mitchell to fundraise quickly to raise that money to pay it back.
“The party needed to get some funds to do that … I was asked to do that by [one of the defendants], he had a meeting with me in Wellington in my office. He said there was a loan that needed to be paid back and it was under a time constraint so it needed to be done quite urgently…. I was quite humourous at the time as it was the first time he had asked me to do [that]…”
Dixon QC asked Mitchell in court on Monday: Didn’t you think NZ First Foundation and NZ First was one thing?
Mitchell: “There were some questions starting to needing to be raised in my mind… obviously when it broke out in the news there were more.”
Lawyer Tudor Clee, for the defence, suggested to Mitchell that Winston Peters’ handwritten edits across a version of the donor letters meant he, Peters, was fully across the funds raised for the NZ First Foundation.
“So you’d accept from this document that Mr Peters was fully aware of the Foundation” and intended to use it to raise funds. Mitchell answered that Peters had in fact crossed out detail on the foundation.
Clee said Mitchell had also mentioned that when he travelled to London it was Winston Peters who suggested he collect reimbursement from the NZ First Foundation, and asked the former MP if that meant Peters had control over the funds there.
Clee: “Was it made clear when you sought reimbursement that you had been invited by Winston Peters?”
“I think that was made clear.”
Re-examined by Dixon for the Crown, Mitchell said Peters had suggested he seek reimbursement for the UK trip as it was for the betterment of the party.
“Winston is the leader of NZ First and obviously the foundation was founded for the benefit of NZ First. What Winston asked for generally gets delivered.”
Dixon asked: “How does that sit with the firewall concept [between party and foundation, as outlined to Mitchell by one of the defendants]?”
“It’s probably not in complete alignment, no.”