Foundation fund

NZ First Foundation case: Trial begins for duo accused of scheme to hide and misappropriate party donations

The two defendants face a trial by judge alone of approximately six weeks before Judge Pheroze Jagose. Picture/File

Two men accused of staging a scheme to hide three quarters of a million dollars in donations to the NZ First party are currently on trial.

The duo, who continue to face name suppression, deny allegations of campaign donation fraud by the Serious Fraud Office (SFO) and today reaffirmed their pleas of not guilty to two charges of obtaining by deception.

Both now face an approximately six-week judge-alone trial in Auckland High Court before Judge Pheroze Jagose.

At the time the SFO brought the charges in September 2020, none of the defendants were ministers, incumbent MPs, 2020 election candidates or members of their staff, or current members of the NZ First political party.

In an opening speech this morning, Paul Wicks QC, who is pursuing the case for the SFO alongside John Dixon QC, said that over a period of more than four years most of the roughly 40 donors believed their funds were going straight to NZ First.

But, according to Wicks, the defendants deployed a fraudulent device, trick or scheme to deceive them, New Zealand’s First Party Secretary and the Electoral Commission.

Charging documents allege $746,881 was deposited between September 30, 2015 and February 14, 2020.

Wicks said some donors were given a bank account for one of the defendant’s private companies, while 35 were given the NZ First Foundation (NZFF) account.

“These undeclared funds thus became available for [suppressed]/New Zealand First Foundation to be used as the defendants saw fit, and was used to pay party expenses and to develop a fundraising database for the benefit of the party and [suppressed]”, reading the charging documents.

The court heard the NZFF was created before the 2017 election to help secure donations for the party, which had run campaigns with as little as $98,000 but would remain separate in organization and law.

Paul Wicks QC.  Picture/File
Paul Wicks QC. Picture/File

From April 2017 to 2020, some $677,885 was donated to the NZFF that should have been treated as party donations, Wicks said.

He said the party secretary, the board and the electoral commission were not informed of the funds during this period.

Instead, Wicks told the court that the couple kept him apart and “spent him as he saw fit” on a range of party expenses and endeavors.

Wicks listed some of the expenses today, which included renting and furnishing office space on Wellington’s Lambton Quay for the ‘New Zealand First Party Headquarters’, and paying for furniture storage after the end of the lease.

A guest appearance fee for Kiwi boxing champion Joseph Parker was also paid, the court heard.

Social media activity, business cards and a $25,000 video of NZ First frontman Winston Peters touring New Zealand on a bus – shown during the party’s annual convention – were also reported. funded with money deposited with the NZFF.

Whether or not these expenses benefited NZ First was irrelevant, Wicks explained.

“This case is not about the use of money but about exercising control over that money.

“The [NZ First] the council would not have approved the expenditure of the funds in the manner in which the defendants spent them, if they had known.”

Wicks concluded, “It was for the party to decide and control how they wanted to spend their money, not for the defendants to do.”

Election law requires a political party secretary to submit an annual report of donations to the election commission, however, Wicks said in this case, “Not a penny was counted in the annual reports.”

A party secretary is further required to keep a record in his or her accounts of donations over $1,500 and for those over $15,000 in a calendar year, also note the identity of the donor.

“The defendants knew the requirements of election law and chose not to follow them,” Wicks alleged.

He added that the couple’s alleged scheme had kept NZ First, the Electoral Commission and the public “in the dark” about the extent of the donations.

Wicks said the money was also used to cover operating costs for the defendant’s private entities, which had a working arrangement with NZ First.

He alleged that the company used donation money to fund itself to get a commission on any additional donations.

Wicks added that the alleged scheme ensures defendants retain control of the funds, “including for [the defendant’s] private company to fund for his work for NZ First”.

Efforts by the media to name the accused couple date back to before the 2020 general election, when NZME and the group of media companies filed a lawsuit in an attempt to inform voters before they went to the ballot boxes, but without success. The NZ First Party has also failed in its attempt to keep the charges from becoming public until a government is formed.

Further legal arguments regarding the removal of the defendants and the identity of the donors are to take place during the trial, which is expected to hear testimony from more than 70 witnesses, many of whom are donors.

Peters has distanced himself from the NZ First Foundation and denied any wrongdoing after he was first scrutinized in November 2019.

When the allegations became public, Peters also claimed he and the party had been “exonerated” and criticized the SFO’s decision to press charges close to the election.

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