Donghua Liu

Dinner at Donghua’s

Remember when David Cunliffe and Labour were under all sorts of fire for their links to Donghua Liu? There were questions about $100,000 worth of apparent donations from Liu to the Labour Party (an issue which seemed to collapse under the weight of some dubious NZ Herald reporting and Mr Liu’s somewhat impaired ability to recollect specifics); and Mr Cunliffe was being stitched up regarding his failure to recall a letter written on behalf of Liu eleven years previous.

Here was what Bill English had to say last year, as he put the boot into Labour:

“In the next few days the Labour Party has to come clean about every contact with Mr Donghua Liu and every donation from him… The reason the Labour Party has to explain all those contacts and donations is that no one trusts what David Cunliffe says about the donations and the contacts with Mr Donghua Liu.”

Well, all of the time that National was needling Labour about alleged undisclosed donations from Liu, there was a $25,000 undisclosed donation to National.

It’s been revealed that National’s Botany MP, Jami-Lee Ross, received a $25,000 donation from Mr Liu in August 2013. It’s only just being disclosed by Mr Ross, after having been returned to Liu in November 2014.

It’s the cynical nature of the whole affair that gets me; cynical in so many ways.

Firstly, the donation was made less than a month after both John Key and Jami-Lee Ross were present at Mr Liu’s house for a private dinner. Yet, when Key was questioned in May 2014 (approximately eight months after the dinner) about his links to Liu, a National spokesperson said:

“As Prime Minister and the leader of the National Party, Mr Key attends a number of functions up and down the country which are attended by a large number of people. While we don’t have a record of who attends these events, Mr Key recalls seeing Mr Liu at various functions, including a dinner as part of a National Party fundraiser.”

Key could recall “a dinner”, but presumably chose to conceal the fact that the dinner was at Mr Liu’s own home.

Secondly, there’s the way in which the donation was kept hidden. Throughout all of the mock outrage from National about what Liu had donated to Labour and when, the party knew that $25,000 was sitting in a National Party bank account. It’s inconceivable that Jami-Lee Ross wouldn’t tap his party leader on the shoulder and say, “Heads up – remember that dinner with Donghua Liu? Well, he gave me $25,000 that month.”

Ross, Key and whoever else was in the loop would have known that at some point the donation would have to be declared. So Ross waits for a month or two after the general election, sends it back via Liu’s lawyer, and pretends that it was surplus to requirements and therefore returned. The donation gets officially declared in Ross’s post-election return, but by then Cunliffe is a distant memory, National is well and truly re-elected, and there’s now another two and a half years to the next election – plenty of time for the public to forget about Dongua Liu.

But National’s cynicism aside, there are some questions regarding the status of the donation. If it was a donation to the National Party, it should have been disclosed in National’s Party Donations Return that was filed on 30 April 2014. It wasn’t.

Mr Liu has described the donation as being through the “Botany Cabinet Club”. If that’s code for Jami-Lee Ross’s personal campaign, the party wouldn’t need to declare it. Instead, it’s up to Mr Ross to do so in his post-election return (as he’s done).

However, Mr Ross has stated that he didn’t end up needing the $25,000 because a $24,000 donation from the National Party covered his expenses. So why would Ross be seeking donations for his electorate campaign, if the party was going to be covering him? Or, to look at it the other way, why would the party cover Ross’s campaign expenses when he’s already got $25,000 sitting waiting in the bank account?

As with anything involving Donghua Liu and politicians, more questions seem to lurk…

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Donghua Liu – a little clearer, but still muddy

So, Donghua Liu has clarified some questions regarding his 2007 donations to Labour. Apparently, the “close to $100,000” that the NZ Herald was reporting had been spent on a bottle of wine was in fact the total amount of donations.

That figure includes the $50,000 to $60,000 spent on hosting Rick Barker on a Yangtze River trip, which appears to have been the staff party that Mr Barker rode shotgun on. Although it’s something that Mr Barker should probably have disclosed in the Register of Pecuniary Interests, it seems rather unfair to call a staff party a $50,000 political donation.

If one subtracts the Yangtze River trip from the “close to $100,000”, that leaves between $40,000 to $50,000, which includes a confirmed $2,000 to the Hawkes Bay Rowing Club (which of course is not the Labour Party), the bottle(s) of wine purchased at a fundraising auction and anonymous donations to MPs.

A key quote from the Herald’s reporting is Liu’s statement that:

“I did say I made a contribution of close to $100,000 and that is my closing comment in my statement… that is how much I believe I have donated in total to Labour and some of their MPs during their last term in Government.”

That means that unaccounted for $40,000 to $50,000 could have been donated to Labour over a three year period, and could have been a mixture of donations to both central HQ and individual electorate MPs.

Mr Liu’s statement makes no mention of the book signed by Helen Clark, which the Herald’s “unnamed Labour sources” say he apparently purchased for $15,000 at a fundraising auction. If that purchase occurred, that would leave just $25,000 to $35,000 unaccounted for over a three year period. If Liu’s remaining total donations were at the lower end of that spectrum, and were made through anonymous means, such as trusts or through a law firm trust account, it is entirely possible that Labour has not breached any electoral law at all. New Zealand’s electoral laws at the time provided all sorts of ways for anonymous donations to be made.

Of course, we don’t know any further details about how Mr Liu made the remaining donations, whether it was one lump sum or several smaller sums, who they were made to (HQ or electorates), whether they were in fact spread over three years or were all from 2007, and whether the $15,000 purchase of the signed book occurred. The Labour Party therefore remains largely in the dark, unable to confirm or deny anything unless Mr Liu drip feeds more information.

Donghua Liu – clearer than mud

So, just yesterday the NZ Herald were reporting that Donghua Liu would not be commenting further on his political donations and would not be supplying any affidavits regarding dollar amounts, and I was calling for Mr Liu to come clean.

Well, whaddaya know? This morning the Herald has suddenly obtained a signed statement from Donghua Liu dated 3 May 2014, two days after Maurice Williamson resigned as a Minister. I’m interested in where it came from. Stuff.co.nz had previously reported that Mr Liu was poring over an affidavit with his lawyers, who were concerned about the lack of documentation. The statement obtained by the Herald apparently isn’t a sworn affidavit, but it is signed by Mr Liu. One wonders who’s slipped it to the Herald… And is there another draft affidavit out there, lurking in a lawyer’s office, never to see the light of day?

Regardless, this signed statement is hugely embarrassing for the Labour Party, given their “cash for access” attacks on National. The Herald reports the statement as saying:

• Liu paid “close to $100,000” for wine at a 2007 Labour Party fundraiser;

• That he spent $50-60,000 hosting then-labour minister Rick Barker on a cruise on the Yangtze River in China in 2007; and

• That Liu visited Barker in Hawke’s Bay in 2006, having dinner with him at an exclusive lodge and then meeting for breakfast the next morning. Liu said he made a donation to Hawke’s Bay Rowing, which Barker was associated with.

Rick Barker, after challenging Mr Liu to put specific allegations in writing, may now be wishing he’d kept his mouth shut. The contents of the statement mean that Mr Barker has some serious explaining to do. A $50,000 to $60,000 cruise on the Yangtze River is something that should have been disclosed, so will Mr Barker now rely on “brain fade” or will he call Mr Liu a liar?

And of course there’s the big question of what happened to the “close to $100,000” donated to the Labour Party. Many of my questions from yesterday remain.  Why does no one in Labour seem to know anything about this (apart from the Herald’s two un-named Labour sources)? Wouldn’t an almost $100,000 winning bid for a bottle of wine have turned a few heads at the time? Who in Labour received the donation, or was it an electronic transaction? If it wasn’t an electronic transaction, was it cash or a cheque? Did it go to Head Office or to one of the electorate committees?

Over at the Pundit site, Professor Andrew Geddis focuses on donations to Labour from law firms on behalf of undisclosed clients. Labour received three such donations – one of $150,000 from Palmer Theron, one of $50,000 from Simpson Grierson, and one of $30,000 from Morrison Kent. Professor Geddis focusses on the $150,000 donation, suggesting that it might have come from Mr Liu, and noting that if Liu doesn’t confirm or deny it, we’ll never know. However, Liu’s statement refers to a donation “close to $100,000”. That’s a more than $50,000 shortfall between what Liu says he donated and the Palmer Theron donation.

Lynn Prentice yesterday referred me to a 2010 blog post by Professor Bryce Edwards, “Pansy Wong’s dubious solicitation of political funding“. It refers to a fundraising event held by Pansy Wong in 2007, at which $200,000 was raised, including $50,000 paid by a Chinese businessman for one of John Key’s ties. The money didn’t appear to have been declared by National in 2008, and Professor Edwards discusses various reasons why that might have occurred. One of those reasons is the then practice (apparently illegal now) of treating a fundraising event as a “bogus business venture”, with all money raised classed as “business transactions” rather than donations. Thus, in terms of the $50,000 tie, the party could argue that the business valued the tie at $50,000 and it was therefore a valid “business transaction”. It’s entirely possible that Labour has adopted the same approach in the Donghua Liu situation.

Professor Edwards has called for a police or parliamentary enquiry. As Professor Geddis has pointed out, “[t]he Electoral Act in 2007 contained a six-month time limit on any prosecutions for filing a false electoral return”. That’s a time limit that has long since expired… The court of public opinion is the only court that Labour will be tried in, which may be damaging enough, given how soon the election is.

Donghua Liu needs to come clean if Labour can’t or won’t

This week, Labour has been under heavy fire for apparently receiving a $15,000 donation from Donghua Liu back in 2007, while David Cunliffe has been under sustained attack for forgetting about a 2003 letter written in support of Mr Liu. Cunliffe’s gullibility in walking into National’s trap regarding the letter speaks volumes about the Labour leader’s political competence, but the more important story is the donation. If $15,000 was given to the Labour party, where did it go and why was it not declared?

The problem for Labour and the media is that there really has been no trace whatsoever of the alleged donation. There’s been an unnamed “Labour source” who provided the initial story, and that’s apparently been backed up by a second anonymous “Labour source”. From there, the trail goes cold. Was it for a book, a bottle of wine, or neither? If it was for a book at an auction fundraiser, wouldn’t a $15,000 winning bid have caused somewhat of a stir at the time? Who in the Labour party received the donation, or was it an electronic transaction? If it wasn’t an electronic transaction, was it cash or a cheque? Did it go to Head Office or to one of the electorate committees?

And of course there’s been the rather large question of “Did it even happen?” With no paper trail and no names, just the word of an anonymous source that $15,000 was received, Labour has only been able to collectively shrug and say they’ve got no idea what anyone’s talking about. Has it all just been a hatchet job by some disgruntled Labourite who wants to watch Cunliffe crash and burn?

John Key was enjoying himself immensely, stoking the rumour mill that Donghua Liu had in fact donated a six figure sum to Labour. There was More To Come, and everyone – Labour included – was Watching That Space. Rick Barker – Labour’s former Immigration Minister – was unimpressed, calling for Mr Liu to make everything public in affidavit form.

Which meant that the rumour mill went into overdrive last night when Vernon Small reported that:

“Labour is bracing for the expected release of an affidavit claiming six-figure donations were made to the party by wealthy businessman Donghua Liu. … It is understood the affidavit was being pored over by lawyers today because there was a lack of documentation.”

However, in the NZ Herald this morning, the reporting related to a media statement by Liu that he had given “equally to Governments of both colours”. All other questions remained unanswered. Amounts? Dates? How the donations were made? Silence. Instead, the Herald reported that “Liu said he would not make any further comments about political donations or swear an affidavit outlining dollar amounts”.

If Donghua Liu thinks that his statement will make the issue disappear, he’s likely to be sadly mistaken. At the very least, he needs to confirm whether, in any single year, he donated more than $10,000 – enough to trigger Labour’s disclosure requirements of that time. If he did, then something either went horribly wrong with Labour’s record-keeping or someone in Labour made a conscious decision to break the law by keeping the donation secret.

Mr Liu may say in his statement, “As a private citizen it’s not for me to make declarations about donations and political relationships.” Nonetheless, if he donated $10,000 or more in any given year to Labour, that information should now be a matter of public record. The fact that Labour can’t seem to find anything in their records surely imposes a moral obligation on Mr Liu to make public what should have been made public over half a decade ago.

If Donghua Liu did make sizeable donations to Labour, someone in the party is surely now sweating bullets.

Comedy at the Standard

I had to laugh this morning when I Stephanie Rodgers’ blog at the Standard – “The dirtiest election campaign backfires“. Ms Rodgers writes:

Yesterday looked like it was going to be a pretty bad day. There were scandalous revelations, blatant lies, unrestrained corruption gnawing at the very heart of the left. At least, that’s what we were promised.

But in the end what we got was a pretty standard, decade-old MP’s letter to Immigration asking about timeframes for a constituent and a chorus cry from people who were never going to support anything Labour did anyway for Cunliffe to resign.

What happened next was interesting.

As the story developed – or rather, undeveloped, because a few pictures of someone’s wife standing next to Rick Barker is not the Zimmerman Telegram – I saw a lot of people on my (admittedly leftwing, Wellington-focused) Twitter feed coming together to call bullshit on the whole thing.

In addition to providing a collection of tweets that supported David Cunliffe, Ms Rodgers also pointed to three other posts on the Standard as evidence that that nice Mr Cunliffe is being most unfairly picked on by the media. Apparently there’s no crisis if the people who share your ideology also believe there’s no crisis.

However, if it’s all a storm in a teacup and the public see though the invidious media manipulation, then why does the Herald’s current online survey have 62% of people answering “Yes” to the question “Should David Cunliffe resign as Labour’s leader?” Sure, it’s an unscientific, self-selecting survey, rather than a scientific randomly conducted poll. However, at the time of publication of this post, almost 16,000 had voted, providing a large enough sample that Labour should be worried.

Ms Rodgers goes on to write:

But it is, really, a story of hope. Because you have to ask yourself just how desperate the Nats have to be if their first kinghit on Cunliffe is an 11-year-old pro-forma MP’s letter which says nothing more than “how long is this going to take, yo.”

Now, I agree that the letter is, in itself, relatively innocuous. However, having spent weeks using Donghua Liu as a stick to beat National with, the unveiling of Cunliffe’s letter, in conjunction with the allegedly undeclared $15,000 donation from Mr Liu, completely destroys Labour’s “cash for access” line of attack. It destroys Labour’s “brain fade” line of attack against John Key. It forces Cunliffe to appear on every talk show in the land, denying that he’s a liar. And less than 95 days from an election, it stops Labour from talking policy.

That’s not National party desperation. It’s simply cynical and tactical use of a weapon at an opportune moment. And Cunliffe was gullible enough to walk into the trap that had been set.

Cunliffe’s credibility – parcel delivered to National, tied up with string

David Cunliffe has just been stitched up – caught in a trap he should have seen coming a mile off.

After Maurice Williamson’s fall from grace over his interference in a police investigation on behalf of Donghua Liu, Labour have been having a field day accusing National of accepting “cash for access”. Earlier this week, somewhat awkwardly for Labour, someone in the party revealed that Donghua Liu had donated $15,000 to Labour back in 2007. Not only did this undermine Labour’s attack on National, the $15,000 donation doesn’t appear to have ever been disclosed. (I’m making the assumption that because the anonymous source was correct about Rick Barker’s meeting with Mr Liu in China, they’re also correct about the $15,000 donation.)

So when the NZ Herald yesterday asked David Cunliffe a series of questions about his personal association with Mr Liu, alarm bells should have been going off in Mr Cunliffe’s head. Here’s the Herald questions to Cunliffe:

Q: Do you recall ever meeting Liu?
A: I don’t recall ever meeting him, no.

Q: Did you have anything to do with the granting of his permanent residency?
A: No, I did not.

Q: Did you advocate on his behalf at all?
A: Nope.

Q:Were you aware of any advice against granting him permanent residency?
A: Not to my recollection.

Cunliffe should have known that he was being set up. Rather than an outright denial of ever advocating for Mr Liu, he should have been hedging his bets, saying that he had no recollection of doing so, just as he did with most of the Herald’s questions. Once they had the denial, it was always going to be open season on him once the letter from Cunliffe’s office turned up (copy of the letter attached here).

Over at the Standard, Lynn Prentice makes an interesting point as to whether David Cunliffe ever met Donghua Liu:

The letter was signed by him back in 2003 – more than 11 years ago. He was a busy backbencher with a large constituency workload. Dozens of similar letters would have been sent each week. The vast majority would have been prepared by his staff, shoved in front of him, and signed. In all likelihood he never met Donghua Liu.

Electorate MPs always have a great deal of trust in their electorate staff. They really don’t have any choice. They have competently handled thousands of individual constituency cases of which this looks like only one. In all likelihood David never met the guy, and only saw the form letter to sign.

On 3News this evening, Patrick Gower stated that the letter proved that Cunliffe had met Liu. Frankly, I agree with Mr Prentice. The letter proves nothing of the sort. It proves that Liu approached Cunliffe’s office, nothing more. I’m no expert in how MPs run their constituency offices, but from the examples I’ve seen, you don’t need to have actually met with the MP for them to advocate on your behalf. The phrase “I have been approached by my constituent…” does not necessarily mean “I have met my constituent…”. It means their office has been approached. An MP can sign a form letter, advocating for a constituent who has approached their office, without ever having physically met that constituent.

I’d have to say though, that’s beside the point. As much as I may feel sorry for Mr Cunliffe for failing to recollect a letter signed for a constituent eleven years ago, who he might not have even met at the time, the sin is the lack of political nous – not comprehending the coming storm when the signs became obvious. National has spent countless months painting Cunilffe as “tricky”. It’s a catch cry utilised with monotonous regularity. Cunliffe, to Labour’s detriment, continues to keep the “tricky” campaign alive.

Ninety-five days out from an election, and struggling with terrible party and personal poll ratings, it’s one hell of a trap for Cunliffe to have fallen into.

Maurice Williamson bites the dust

Maurice Williamson has resigned, following news that he called police in December 2013 to discuss the arrest of Donghua Liu on assault charges. (You may recall Mr Liu from this post, following news that Mr Williamson and Nathan Guy granting citizenship to Mr Liu against the advice of the DIA, after which Mr Liu donated significant funds to the National party).

Mr Williamson has said:

“When I made inquiries with associates, it became clear that there was confusion about whether a prosecution would proceed. I offered to call police and clarify the matter.”

However, the officer who handled Mr Williamson’s inquiry, Inspector Gary Davey, said the following in an email his colleagues:

“He started by saying that in no way was he looking to interfere with the process, he just wanted to make sure somebody had reviewed the matter to ensure we were on solid ground as Mr Liu is investing a lot of money in New Zealand.” [Emphasis added]

Let’s get this straight. A Minister who rubber stamped Mr Liu’s citizenship against official advice (with Mr Liu then donating $22,000 to the National party via his company, Roncon Pacific Hotel Management), calls police when Mr Liu is arrested, and let’s it drop into the conversation that somebody needed to review the matter because “Mr Liu is investing a lot of money in New Zealand”.

That’s a hell of a statement to make if you’re “in no way looking to interfere with the process”. Police make their own decisions about whether to lay charges and whether to proceed to prosecution with those charges. One of the factors that should certainly not be taken into account when police make such decisions is whether that person is splashing around a lot of money.

One can be charitable to Mr Williamson and assume that it was just something that slipped out accidentally; that he honestly had no intention of trying to influence police decision making. However, Mr Williamson’s words had enough of an effect for them to be mentioned in Inspector Davey’s email to his colleagues, and Willimson’s intervention certainly resulted in a police review of the matter (even if – and full credit to police – they pressed ahead with the charge anyway, and have now secured a guilty plea).

Whatever Mr Williamson’s intentions, this is bad news for the National party. Just as it seemed that the Judith Collins saga had died a death in the public mind, along comes a new allegation of corruption against another government minister. The narrative that money buys you ministerial influence gains another thread.

Whether it’s good news for Labour is a different story. Sure, it gives them a new attack line against the government, but it blunts the extensive coverage they had been getting due to their new “Kiwisaver as a monetary policy tool” policy. David Parker won’t be best pleased that all of the political journos will now switch focus to Mr Williamson’s political corpse.

Transparency and perception – four easy pieces

Political figures (and those in the public service who might wish to become political figures) appear to have a real problem with making judgement calls on how their actions will be perceived by the public. Let’s take a look at four recent examples – for no reason other than that we can!

Example the First: Shane Taurima

A good journalist should appear to be impartial. A good journalist employed by the state broadcaster, TVNZ, should be doubly so. That’s not to say that they can’t have their own political beliefs, but the public shouldn’t see those beliefs as colouring editorial decision or journalistic content.*

One may very well think that it would be obvious to a good journalist that if they held Labour party meetings on TVNZ property, and that if someone were to leak that information to a rival channel, that the public may very well hold the perception that there was and had been a left-wing bias to said journalist’s content and said TV station’s Maori-Pacifica unit.

Example the Second: Judith Collins

The Cabinet Office Manual is very specific about managing conflicts of interest and perceptions of conflicts of interest.

Thus, when one is a Minister of the Crown, and one’s husband is the director of a company that has given a lot of money to the National party to which one belongs, and one is very close friends with the company’s chairman, and one visits the company’s China office to have a glass of milk (I mean, seriously, who stops in for a glass of milk?) after having previously met the company’s chairman for dinner (at which was present a Chinese border control official), (pause for breath), SURELY one would consider that the public may very well perceive that one’s actions were intended to benefit the company and therefore indirectly benefit one’s husband and therefore oneself?

And would one not consider that initially hiding the fact that one had had dinner with the company’s chairman and a Chinese border control official might very well increase the perception that one’s actions had been designed to benefit the company, one’s husband and oneself?

But according to Ms Collins, that’s just rubbish. Self-awareness is not perhaps her strong suit.

Example the Third: Parmjeet Parmar

Stuff.co.nz reports that Parmjeet Parmar, a current commissioner with the Families Commission, was spotted at the Pasifika Festival sporting a blue National party rosette, campaigning with John Key.

If the allegation is correct (and Ms Parmar does not appear to have denied that she wore a blue rosette as a fashion accessory), one wonders how a supposedly politically-neutral state servant could possibly think that wearing a blue National party rosette and campaigning with the Prime Minister wouldn’t create the perception that the Families Commission was somewhat politicised…

And it really must said that the Social Development Minister, Paula Bennett, really didn’t help matters when she stated:

“I have known Dr Parmar for several years and I am well aware of her political views – she brings extensive knowledge and professionalism to her role in the Families Commission.”

Yes, Minister, of course you will speak favourably of her if you’re well aware of her political views – and they are aligned with your own.

Example the Fourth: Maurice Williamson, John Banks and Donghua Liu

And another citizenship scandal breaks involving a Mr Liu, albeit a different Mr Liu on this occasion to Shane Jones’ favourite Mr Liu of Auditor-General investigations past.

In brief:

– Mr Liu applies for NZ citizenship, but the DIA recommends his application be declined on the grounds that he doesn’t spend enough time in NZ and he can’t speak English to the requisite level.
– Mr Liu’s business partners approach Maurice Williamson (Minister of Building and Construction) and John Banks (then-Mayor of Auckland City), who write to the Minister of Internal Affairs, Nathan Guy, recommending that Mr Liu be granted citizenship regardless.
– Mr Liu is granted citizenship in 2010.
– Two years later, Mr Liu’s company, Roncon Pacific Hotel Management, makes a $22,000 donation to the National party.

The Auditor-General’s report into the first Mr Liu stated:

“[i]t is clear that the apparent links between different applicants and their agents, or supporters, coupled with strong support from various MPs and subsequent questions from the minister or ministerial officials caused disquiet among some citizenship officers.”

And that, although there was nothing wrong or improper with MPs advocating on behalf of constituents in citizenship cases:

“However, advocacy of this kind, in particular where the advocate is a fellow MP or known to the minister, clearly presents risks to the integrity of the decision-making system and to the reputations of those involved.”

Yup, it looks bad when a rich property developer’s rich mates go to their friends in Government, and suddenly the DIA’s recommendation is overturned. What could Mr Williamson and Mr Banks have said to Mr Guy that could not have been said by Mr Liu’s friends as part of his application for citizenship? That the rules about time spent in NZ were outdated? That submission could surely have been made directly to Mr Guy? The use of MPs and Mayors as go-betweens to the Minister of Internal Affairs invites the perception that all was not above board.

And did it not occur to Mr Liu that to then make a significant donation to the National party (albeit two years later) invites the perception that a favour has been paid for?

* At the time that the Taurima scandal and resignation unfolded, a number of left wing commentators held up the example of Paul Henry as a defence. Many other commentators have pointed out just why that example was flawed. I’d just like to note that surely no one actually considers Paul Henry to be a “good journalist”?