Labour figures buying art, wine and other collectibles for the party to auction for fundraising was not unusual, a party ‘hack’ told the High Court 

The Labour Party has a range of prizes it offers its members and supporters at fundraising events, including “good quality art”, bottles of wine signed by its leaders and even an Ardern Cup for a trivia night, a political donations trial has heard.

A defence witness for one of seven people the Serious Fraud Office has charged with obtaining by deception over donations to Labour and National told Justice Ian Gault some events had art so classy it was similar to pieces hanging in the High Court hallways outside the courtroom.

“A lot of the artwork donated is from Labour sympathisers. I noticed if you walk out of this room there are a number of artists displayed there and some of them are featured in our art auctions – good quality art.”

The witness, longstanding Auckland Labour Party member Paul Chalmers, was being quizzed about a silent art auction event in early 2017. The SFO says the event involved one ultimate donor but that a total of $60,000 paid for the works (and a net $35,000 donation to the party) was split into smaller amounts in the names of ‘sham donors’ to avoid electoral declarations.

One of the defendants, whose name is suppressed, bought five paintings ahead of the event and provided three of them to the party to auction, alongside two works from the person’s home art collection. The SFO alleges that defendant knew who the donor was who ended up buying the five works but allowed Labour to be told the paintings had gone separately to five other people.

Chalmers said it was “very common for a range of personnel” to obtain the works for later on-selling in party fundraising. He named former MP Louisa Wall as one who had bought art in that way. “She had pretty good quality taste,” he noted, “and would pop these items into the auction”.  

“Someone from the party would give her a call and ask if she had any work she wanted to seed [place in the fundraiser].” Wall is not connected to this case, and Chalmers only used her name to illustrate how various party people could contribute to auctions around the country.

He explained that as recently as last Sunday the Auckland Central Labour electorate committee had held a small art auction and more substantial ones were organised at the party HQ level. In some electorates MPs and others would source wine bottles signed by politicians. Chalmers thought he had bought one signed by former Prime Minster Helen Clark.

Asked if any events carried the names of politicians, he said there was an annual Ardern Debate in the Mt Albert electorate with celebrity auctioneers and, recently, party members had attended a trivia night at the Irish Society competing for the Ardern Cup. That did not mean she had organised the events and in fact she had not been present at the trivia night.

Chalmers said the defendant who had bought the paintings, and included some of his own for the ultimate auction in 2017, had mentioned to him at a meal before the event that he had got them from a dealer in Ohope. In the same way that party members might have approached Wall to see if she could contribute art, they might also at that time have known the defendant had a stock of paintings for that purpose. 

“If somebody was doing an art auction you’d ring [name suppressed] and ask can you chuck one of those in.”

The Crown’s case is that the ‘silent auction’ in this case did not occur, that all concerned knew another defendant, Yikun Zhang, had the first option to buy them privately before other people’s names were provided to the Labour Party as having purchased the works at auction.

Zhang’s lawyer John Katz QC told the trial earlier that his client accepted he bought the paintings and donated the funds to Labour, and could not be held responsible for an error in Labour’s 2017 donations return to the Electoral Commission listing other purchasers.

Chalmers said the defendant who had sourced the artworks was a person he had known for many years, having encountered the person when Chalmers had stood for a party candidacy. The witness said of himself: “I would class myself as a Labour Party hack.”

The defendant was “an extremely precise, polite nice guy. He’s a very nice person. And is also very professional.” He was a person who was careful about receipting in terms of fundraising and donations, open and ethical.

“I’d say [name suppressed] is a really nice person and perhaps politics is not that nice a place.”

Asked by Paul Wicks, QC, for the Crown if he would expect artworks to be auctioned rather than sold directly, Chalmers said: “Not necessarily, [they] could be purchased privately before the auction. There was a bid for a piece prior to an auction, they deemed it to be a satisfactory offer, and went ahead with the sale.”

Wicks asked: “[The defendant] indicated to you he already had a stack of art for the purposes of fundraising… why might he have that stack of art?”

“One, he was a keen art collector and two, he was anticipating donating the artworks to the party for fundraisers.”

Two other witnesses, former Race Relations Commissioner and Labour MP Dr Rajen Prasad, and the current Race Relations Commissioner, Meng Foon, gave evidence in support of the defendant with name suppression.

Prasad said: “I have found him to be a person of great integrity and mana” who had never given any advice contrary to the law. “He was absolutely clear on rules of the electoral system.”

Foon said: “I have always found him to be professional and honest with me in all of his dealings and roles.” 

On Tuesday afternoon an expert witness on Chinese culture, Xin Chen, a research fellow at the NZ Asia Institute at the University of Auckland, briefed the court on cultural issues arising in the donations case.

She said it was highly unlikely, as alleged in Crown evidence, that the defendant with name suppression would have raised directly with Yikun Zhang, the leader of the local Chao Shan General Association, where the funds to buy the paintings would be sourced.

“Such a topic would be highly offensive in the Chinese cultural context,” Chen said.

On the question of the Labour artworks being bought and then payment divided up later, she said Chinese society was fundamentally about groups.

“An important feature of Chinese society… is many things Chinese people do or say only makes sense when the group is taken into account.” One person collecting or paying on behalf of a group would be a “very normal way of doing business” in China. The cost would be divided later. 

She said it would be standard if Yikun Zhang, as chairman of the association, had agreed to donate to Labour and others had sorted the details. 

“When placed in a Chinese cultural frame there would be nothing remarkable about the chairman committing to supporting the party and for others to subsequently sort things out behind the scenes, including collecting different amounts from different people. Nor would it be surprising for an amount to be paid or financed by one person up front, while those involved pay various amounts to that person later on … settling up later.”

Had Zhang been asked directly about where the money for the paintings had come from, Chen said, that would have implied to Zhang that Labour thought he was a criminal, while the defendant who’d liaised with him would have been assumed to have failed in his function.

To the Crown’s lawyer Wicks, Chen would not acknowledge that it was possible the defendant with name suppression might have raised details about the art purchase with Zhang. 

“It’s impossible. People wouldn’t. Chinese don’t talk,” she said, about deals like that “at that level”.

Wicks asked if she would agree that people from the Chinese community might do something unlawful.

Chen: “I don’t think so… In the Chinese community, as I mentioned, people function as groups. You belong to a group. People who become the heads of groups need to get the trust and respect of the community and your community or group is watching you so you’re supposed to do good for” your community.

“I’ve never seen or heard that anyone would work to do something criminal… especially just a donation to a political party.”

Wicks asked her if there was a criminal code in China.

“Yes there are criminals”

Would some be high status?

“Yes. Corrupt leaders, yes.”

And they might work together?

“I don’t really know any cases.”

Zhang, the defendant with name suppression, two others with names suppression and twin brothers Colin and Joe Zheng, are charged with obtaining by deception over that Labour artworks donation. Zhang, Zheng and Zheng, with former MP Jami-Lee Ross face the same charges over two donations of $100,000 to National in 2017 and 2018. All defendants have pleaded not guilty. 

Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland, and media. Twitter: @tmurphynz

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