Fundraising

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…

Advertisements

Was Tim Barnett proposing a secret trust to fund Kelvin Davis?

So Tim Barnett, Labour’s General Secretary, tells Kelvin Davis’ team (via Kaye Taylor) that Team Davis’ proposed anti-Dotcom website isn’t a goer. It’s too negative. It uses National’s “Working for New Zealand” slogan.

Kaye Taylor responds with this:

I think we as a party need to realize that the battle we are fighting in the north is unique. Our opposition is not Keys and his party. We are fighting against Hone who is being funded by a multi- millionaire who is frankly trying to buy his way into parliament. The website is confrontational as it is a wakeup call, it’s not aimed at traditional supporters, honestly I think national supporters may contribute.

Frankly our ability to fund this campaign is limited and that is why we are trying something different that carries some risk.

To which Tim Barnett replies:

Of course the obvious response is that we are one party and whatever you do will be seen as happening on behalf of Labour, and with the full agreement of Labour. If the fundraising was carried out by a third party organisation which then donated that would be less risky to the whole Party. Is that an option?

In other words, we don’t mind receiving funds from right-wing sources, but we don’t want anyone to know we’re taking that money. Let a third-party entity collect the individual donations, and then funnel it to the Labour Party in one lump sum.

Is it just me or does that sound suspiciously like funnelling donations through a trust to obscure their source?

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.

The “Cabinet Club”

3 News last night had a rather breathless report from Tova O’Brien regarding the existence of the so-called “Cabinet Club”. Frankly, as much as I may champion transparency in New Zealand’s political donations regime, I find it somewhat difficult to get very aggrieved by this “Club” (or “secret racket,” as the Green Party prefers to call it).

Ms O’Brien gleefully stated in her report that:

“The first rule of Cabinet Club is you do not talk about Cabinet Club. Four National MPs 3 News spoke with said they were not sure what it was.”

This was followed by footage of the four MPs looking somewhat bewildered, although later in the segment National MPs (including some of those initial four) chatted quite openly about the fundraising process that was being scrutinised.

I would imagine that the reason the four MPs looked bewildered, is that the Cabinet Club does not actually exist. There is no over-arching organisation or set of rules with that name. What Ms O’Brien was describing is a fairly simple fundraising process that has, to the best of my knowledge, been around in the National party for decades. It’s had various colloquial names, one of which is obviously now the Cabinet Club (it’s a name that obviously wouldn’t have worked in opposition…).

The process works thusly: All electorate MPs (and indeed those list MPs who have based themselves in a particular electorate) are expected to assist that electorate in fundraising. MPs and electorates are free to decide how they fundraise, but one of the template options that is often taken up is where people donate a certain amount of money to attend an occasion or occasions where there’s a guest speaker and Q&A afterwards. Usually the guest speaker will be a visiting Minister or other MP, who will give a speech on their particular policy area of choice.

Nick Smith described it as “pizza politics” – evidently the events are more informal in Nelson than they are in some other electorates. But the process remains the same. It’s about using a speech and ‘meet and greet’ with a visiting Minister or other MP as a drawcard to get party members to stump up some cash above and beyond their usual membership fees, and to try and get sympathetic non-members to donate and/or get involved with the party.

What it isn’t is a coordinated scheme designed to provide cash for influence, despite Ms O’Brien’s insinuations. A donation to attend a speech, followed by a Q&A and some handshaking and polite chitchat can hardly be described as corruption in my book. I would imagine that all parties use their MPs to fundraise in similar ways. Even the Greens.

I would presume that the nickname “Cabinet Club” comes from the simple fact that Ministers are better draw cards than basic MPs. It’s not rocket science – if you want to get people paying to come along and listen to a speech, the big names are always going to attract more attention. After all, if you want people to pay money to attend a charity concert, you’ll sell more tickets with a reformed Led Zeppelin than you will with the local covers band.

Labour certainly seems to be keeping quiet on the issue. Perhaps they remember this proposal from last year’s conference in Christchurch, where $1,250 (plus GST) would buy you:

“An opportunity to meet 1:1 in a short meeting with your choice (subject to availability) of Members of Parliament and senior Party officials (further information regarding this will be sent to you on payment).”

UPDATE:

Here’s a useful comment by former North Shore MP, Dr Wayne Mapp, published at the Standard this morning, which is worth re-publishing in full:

It would help debate here to actually know the facts.

Most electorates, especially those with a sitting National MP, have one of these “clubs”. They continue whether in Opposition or Government and they go back many decades. The title is intended to be aspirational. They are a way of encouraging better off members of the National Party to make a larger donation than the usual membership fee. For that there are typically 3 or 4 dinners per year with visiting MP’s who speak on their portfolio areas. About half the donation goes to fund the triennial campaign, with the other half covering the meals. Yes, these dinners are smaller than public meetings, but they are hardly policy making forums.

I am pretty sure Labour has similiar events to raise money for campaigns. And they are ubiquitious for political parties throughout western democracies. So forget the ludicrous calls of corruption.

As an MP, any member of the public could make an appointment to see me for 30 minutes or so to pretty much discuss whatever they wanted. And I was well known in North Shore to be readily available to see anyone who wanted to see me. A lots of people had all sorts of policy ideas.

So these dinners are not about access to secretly plot policy. Access could be easily got anyway for anyone.

They are about raising money to fund the campaign. Think about it. the local campaign costs $25,000 in the three month period, plus more outside it. There are levies to be paid to head office to run the nationwide campaign. There are newsletters, for members, postage, etc. Even if the local party has 1000 members, and many do not, and each member paid $20, which many do not, there will not be enough money to run the local electorate organisation. The money has to be raised from a whole variety of specific events and from additional donations.

The commenters here seem to want all party donations to be less than $100, for MPs to have no dinners or functions, to see no-one for more than 5 minutes, to never discuss policy with anyone, to have no trusted confidants. In short, for MP’s not to be human beings.

And presumably taxpayers paying virtually the whole of political party activity.