SFO welcomes Court of Appeal decision on political donations case
The SFO welcomes the Court of Appeal’s decision today which corrected the High Court findings in its New Zealand First Foundation (NZFF) case and reinforced the importance of transparency around political donations in a democratic system.
Following the NZFF trial in 2022 the High Court found “if the money is ‘party donations’, there is comprehensive evidence [the accused] deployed the dishonest scheme in order to deceive the party and party secretary as to their better claims to the money...”.
However, the Judge concluded that because the nearly $750,000 of funds were not deposited into the party’s account, they were not party “donations” under the Electoral Act, despite the clear intention of donors.
The Crown argued that this finding was wrong and today the Court of Appeal agreed that the Judge erred in finding the donations were not party “donations” under the Electoral Act. The Court of Appeal also left undisturbed the original conclusion that the two defendants had engaged in a “dishonest scheme” and intentionally and deceptively misled the party about the nature of the donations.
The Court noted that the respondents held themselves out to be collecting party donations and that using a trust as the recipient of the payments did not relieve them of responsibilities under the Electoral Act, given their roles within the party.
Ultimately, the appeal was dismissed on the basis of the second ground of appeal regarding claim of right. Due to “an unfortunate lacuna in the [High Court] Judge’s reasoning”, despite the finding that the respondents had acted dishonestly, the Court held that Crown was not in a position to advance an argument of error of law on this point.
“Today’s findings reinforce the importance of both taking the original case, but also appealing the High Court’s decision,” says SFO Director Karen Chang.
“Transparency is key to a well-functioning democracy. New Zealanders have a right to know who is funding our political parties, and this right should not be as easily circumvented as through depositing funds into a trust.
“Parliament also recognised this in introducing urgent changes to the Electoral Act as a direct response to this case. Today’s decision confirms that it was always Parliament’s intention that such funds would be considered “donations” under our electoral laws.
“A robust electoral integrity framework is fundamental for upholding the principles of democracy, protecting citizens’ rights, and ensuring the stability and legitimacy of government, as reflected by the recent Independent Electoral Review.”
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