SFO to probe Labour donations
AUCKLAND: The Serious Fraud Office has begun an investigation into donations made to the Labour Party in 2017.
However, it is remaining tightlipped about its details.
Labour Party president Claire Szabo said in a statement: ‘‘We have not been advised of the specifics of the inquiry . . .The Labour Party will fully cooperate with any SFO investigations.’’
‘‘We will not be issuing any further statement while the investigation is under way.’’
In February, Ms Szabo confirmed two men — brothers and businessmen Shijia Zheng and Hengjia Zheng — who were then being investigated by the SFO and had made donations to the National Party had also made donations to Labour.
Hengjia Zheng’s $10,000 donation came through buying a piece of art at a silent auction in 2017, while Shijia Zheng gave $1940 in 2018.
Ms Szabo has said the donations were appropriately filed in accordance with the rules.
The Zheng brothers have since been criminally charged by the SFO, alongside independent MP JamiLee Ross and New Zealand Order of Merit recipient Yikun Zhang, over allegations relating to National Party donations.
The Labour Party investigation, the SFO said in a statement, was also not an indication of guilt.
‘‘In order to commence an investigation, the Serious Fraud Office Act requires that the director [of the SFO] must have reasonable grounds to believe that a relevant offence may have been committed.
‘‘The director does not have to be satisfied that an offence has been committed,’’ it said.
The SFO has previously said it will make a decision before September’s general election on whether to lay charges in relation to the New Zealand First Foundation, which has been bankrolling the NZ First party.
It has also said the investigations into donations made for the Auckland and Christchurch mayoral elections came from separate referrals from police about Auckland Mayor Phil Goff’s election expenses and Christchurch Mayor Lianne Dalziel’s expenses.
A fifth recent investigation regarding donations led to the charges against Ross and the three businessmen.
Last week, Ross, Zhang and the Zheng brothers appeared in the High Court at Auckland after their case was transferred from the District Court to the higher jurisdiction. — The New Zealand Herald
WELLINGTON: Laws around donations to political parties through auctions need to be tightened, a law professor says.
The Serious Fraud Office (SFO) yesterday announced it had launched an investigation in relation to donations made to the Labour Party in 2017.
In a statement, the SFO said it was one of four investigations being conducted in relation to electoral funding.
A fifth is now before the courts.
University of Otago law professor Andrew Geddis told RNZ last night the latest investigation was in line with its previous inquiries.
Prof Geddis said it was important to note the SFO had not yet commented on the specifics, but there was a possibility it could be linked to donors via auctions.
‘‘We have to be very careful that we’re surmising . . . two of the investigations that the SFO has running are into Lianne Dalziel and Phil Goff — exLabour Party Cabinet ministers — in relation to how they raised money or got donations for their local body campaigns.
‘‘What the SFO is looking at with regards to those donations is the way that auctions were used to disguise the identity of donors to candidates.
‘‘Items would be auctioned, allegedly at an inflated value, and the identity of who had bid on those things was not made clear.’’
Prof Geddis said questions had been raised over whether this was a tactic employed by the Labour Party at a national level in 2017, though he noted this was mere speculation.
‘‘There have been questions raised as to whether the Labour Party’s technique at those auctions was strictly in compliance with the Electoral Act, so it may well be that what the SFO is looking at is the way that the Labour Party used this tactic, given it’s already looking at how two exLabour Party Cabinet ministers used that tactic.’’
One of the bigger problems around such auctions was with artwork, which had no inherent material value, he said.
‘‘What it appears the Labour Party did was if they were given an artwork that sold for a certain amount at an auction, they would say that the person who created the artwork was the donor of the full value — even if someone had bid what seems to be quite a large amount of money, more than the painting would usually sell for.’’
If something was sold within the disclosure cap then it usually was not problematic.
However, Prof Geddis said a donor could also buy multiple items, ‘‘so that when you add all that extra value together it becomes [above the nondisclosure cap] and so should be declared’’.
‘‘It’s not clear whether that sort of thing was happening in these circumstances.’’
He said the law needed to be tightened quite considerably in this area.
‘‘There’s no doubt what we really need to be interested in is not an artist who is giving a painting to the Labour Party, but who is paying tens of thousands of dollars for that painting...
‘‘If we don’t know that then we don’t know who is giving the cash that parties are using to run their campaigns.’’
Auctions had been used to hide the identity of donors for quite a while, Prof Geddis said.
‘‘The Electoral Commission has actually apparently signed off on this and said they regard this as being OK.’’
He was unsure the commission knew the full extent of how the auction tactic was being used.
The commission ‘‘only knows what the parties tell them’’.
While the Electoral Commission had oversight, it was not an investigative body.
He thought it was ‘‘very likely that we’ll go to the September election with an ongoing investigation by the SFO into the Labour Party’’. — RNZ