The trade minister, the billionaire and the $150k donation
Exclusive Jami-Lee Ross bombshell ties McClay to Chinese racing mogul’s gift
Former National Party MP Jami-Lee Ross has dropped a fresh donation bombshell, revealing then-Trade Minister Todd McClay helped facilitate a $150,000 donation to his party in 2016 from a company owned by a Chinese racing industry billionaire known as “Mr Wolf”.
McClay first met horse-racing mogul Lang Lin in July 2016 while the Cabinet minister was in Beijing for a meeting of G20 trade ministers.
The pair met again in April 2017 in Rotorua, McClay’s electorate.
A month later National declared a six-figure donation paid by Lang’s company, Inner Mongolia Rider Horse Industry NZ (IMRHINZ).
The donation was largely organised by a phone call made from Ross’ parliamentary office to Lang’s representatives on the evening of April 4, 2017. Ross claims he was asked to make the call by McClay, who was in the office listening to the call on speaker, and the minister was kept informed of developments.
The revelations a minister was involved in facilitating National’s largest donation of the most recent electoral cycle — with the cash coming from a China-owned business — comes as Parliament mulls how to counter foreign interference in New Zealand’s political system.
Ross gave the Herald documentation around the IMRHINZ gift, including a cluster of calls to and from McClay around correspondence with Lang’s representative, and an
invoice showing the donation was paid into the party’s Rotorua electorate bank account.
Ross said the episode should prompt action. He called the donation “the most obvious example from the last election, where a foreign individual was able to make a donation to a political party using a company. If we don’t make the right decision now we’re wasting our time”.
McClay this week declined to be interviewed about the money or his relationship to the man behind it, but in a statement said his first meeting with Lang was arranged by Ministry of Foreign Affairs staff and the prospect of a donation was not raised until the second meeting in Rotorua.
“During that visit [in April] he indicated for the first time that Inner Mongolia Rider Horse Industry NZ Limited would like to support the National Party,” McClay said. He said he had done nothing wrong as a minister, and the donation itself was handled in an “entirely lawful” way.
Questions to Lang’s Rider Horse group, which has been a big player at the annual Karaka stock sales and has airlifted 1700 New Zealand horses to China in the past six years, were answered with a statement describing McClay as Lang’s “friend” and saying he expected nothing in return for his company’s donation.
The justice select committee is deliberating on reforming electoral finance laws, having heard from NZSIS director Rebecca Kitteridge in a rare briefing, saying foreign donations were a matter of concern.
“One of the main reasons we become concerned about these activities is because as relationships of influence, or a sense of reciprocity is established, they may be used as leverage to facilitate future interference or espionage activity,” she said.
Ross said he hoped the committee would decide to limit political donations to people — and not let firms or other legal entities donate, despite the resulting problems over union and corporate donations to Labour and National respectively.
“I’m of the view if you’re not able to influence the outcome through voting, you shouldn’t be able to do it through donations,” Ross said.
University of Canterbury professor Anne-Marie Brady said giving foreign donors the ability to use locally registered companies allowed a “back door” into the electoral system.
Lang first made his fortune in hot pot restaurants, and now also runs China’s largest horse farm. Thanks to his keeping of two pet wolves and his name sounding like wolf in Chinese, he gained the moniker Mr Wolf.
Lang, McClay and lawyer Peter Kiely, acting for National, emphasised the donation was not from the man, but from his company. Lang directs IMRHINZ and is the chief executive and chairman of its sole owner.
Electoral law forbids donations above $1500 from foreign nationals but classes New Zealand-registered companies as local even if their control or ownership is foreign.
University of Otago law professor Andrew Geddis said claims by politicians that foreign donations were effectively banned — with a $1500 limit on such donations — were undercut by allowing them from foreign-owned companies.
Lang’s donation was mentioned in Brady’s groundbreaking Magic Weapons paper outlining China’s influence campaign in New Zealand.
It noted Lang’s group was backed by a state investment fund set up as part of a “United Front” foreign influence apparatus.
Brady noted the World Bank had regularly awarded New Zealand the title of “easiest country in the world to set up a company” and called current arrangements a “back-door into our electoral system”.
McLay said: “It is entirely lawful for New Zealand companies, permanent residents and citizens to make donations to political parties they support, and, where required by law, donation disclosures are made. As was the case here.” He said a potential donation was not raised in Beijing when he was on official business, was first broached only in the latter meeting in Rotorua and he did not meet Lang again while a minister.
“There could therefore be no conflict,” he said.
Representatives for Lang said he expected nothing in return from the donation, and it was made in appreciation for National’s “promoting trade between the two countries”.
They added he had expressed an interest in a gong: “Lang also considered that he made so much effort to open the China market in exporting NZ horses to China, the NZ Government should award him an honour.”
Since moving into Opposition, McClay said, he had gone on to meet Lang at “some racing industry events and in a social capacity”.
In the 2018 pecuniary interests register McClay declared having accepted gifts of travel and accommodation from the Yunnan Rider Jialize Horse Industry Co.
McClay said this related to a threeday trip to China facilitated by IMRHINZ. “It was an entirely businessfocused visit and there were no meetings with any government or party officials,” he said.
Chinese records show Yunnan Rider Jialize Horse Industry Co is another in Lang’s Rider Horse group.