A Serious Fraud Office case that led to allegations of unfairness and ‘jackboot behaviour’ against NZ First before the last election is returning to court – in the middle of this year’s campaign.

In a double dose of electoral sensitivity, a separate SFO case highlighting donations practices at the National Party is also set to hit the political radar in the lead-up to election day, with a hearing in August.

Both cases are being taken to the Court of Appeal after high-profile High Court trials and verdicts in 2022. 

In the NZ First Foundation case, two people whose names remain suppressed were acquitted of charges of obtaining around $750,000 by deception in channeling political donations for the NZ First party from a range of rich listers, racing and fishing industry leaders through that legally distinct foundation.

NZ First party leader Winston Peters, who maintained the foundation and party were entirely separate and he had no knowledge of its activities, greeted that acquittal by saying the court found “no crime had been committed”. He claimed the real guilty party had been the media who had believed “liars” and had conducted a “trial by media”.

But the Crown has appealed those acquittals and a hearing is set down for September, again falling at the height of the political campaign. When charges were originally laid around the same time in the electoral cycle in 2020,  Peters claimed the SFO’s announcement had been designed to undermine his party.

“I’ve never seen behaviour like this,” he said at the time. “It’s unbelievable, right before an election. We are drawn to the conclusion that there is inconsistency, where we are concerned.”

The timing this year is down to Court of Appeal scheduling, but it means the issues of the NZ First Foundation’s soliciting of donations from high-rollers and then paying for an NZ First Party campaign office and website and other costs will re-emerge in the 2023 campaign period. The last trial saw internal disputes in the party aired in detail, and the names and evidence of big name donors dissected in court.

The Serious Fraud Office decided to appeal the NZ First Foundation verdicts despite Justice Pheroze Jagose finding the donations were not strictly party donations because they went to the foundation, and donors had not been deceived because monies they intended for NZ First went to the party.

Parliament passed urgent amending legislation to close that out for political parties, and lower the threshold for declaring the identity of donors from $15,000 to $5000, but the deputy solicitor-general approved the SFO’s request to appeal the verdicts regardless.

In the National Party case, three men, Yikun Zhang, Colin Zheng and Joe Zheng, were convicted of concealing two $100,000 donations to the party in a series of payments broken down and paid through a number of others ahead of the 2017 election and in 2018.

Newsroom understands they are now appealing their convictions and the Court of Appeal is to hear their arguments in August, just weeks before the formal election campaign begins.

Their seven-week trial last year saw the Crown allege large sums were broken into smaller amounts beneath electoral law disclosure limits, and instead ‘transmitted’ to the parties via ‘sham donors’.

The case followed public allegations by former National MP Jami-Lee Ross that National and its then leader Simon Bridges had indulged in corrupt practices in obtaining the two substantial donations. Ross had also been charged with Zhang and the Zheng twins but was found not guilty.

The trial revealed National’s tactics for soliciting donations from the Chinese community and the close association of its former president, Peter Goodfellow, with Yikun Zhang, a wealthy Chinese-born Auckland businessman who led a business and cultural association in the city.

The Labour Party was also caught in the crossfire of the Ross allegations, and three people with name suppression had faced charges of obtaining by deception over a net $35,000 donation to that party from an art auction ahead of the 2017 election. They, and Zhang, Zheng and Zheng were acquitted in relation to the Labour charges.

After the trial, the SFO issued a statement outlining the guilty verdicts. 

“New Zealanders have the right to know who is funding the party they support and to be able to make an informed decision when they head to the voting booths,” the SFO director, Karen Chang, said.

“Transparency around political donations is vital to the continued health of New Zealand’s democracy and our global reputation for low levels of corruption, both of which deserve protecting.

“It is extremely important we take action when we believe this reputation is at risk.”

October 14’s election is the first since the two big political donations trials.

There would have been extra incentive for all parties to be extra careful to stay within parameters of the Electoral Act and to avoid Crimes Act culpability by eschewing broken up donations or dummy entities accepting monies to conceal the origin of funding.

The upcoming Court of Appeal hearings, just ahead of the election campaign, will put a focus back on the murky area of political donations and who gives what to whom and why.

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

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