The trial of two men on charges of deception in handling funds raised for the New Zealand First party hears of internal confusion over who was taking donations and who authorised and paid party bills
Winston Peters was not present in Courtroom 13 of the High Court at Auckland on Wednesday when the minute detail of New Zealand First's administrative failings and elaborate fundraising machinations was entered into the public record.
The party's leader is not, as he has made clear, directly connected to this case, nor are his former MPs, his current party officials or members.
But his name, his words, lunches, dinners, his partner's role in decision-making and handling of his emails, his promises to the racing industry and investment in a racehorse, his face on the side of a bus, his apology for a party non-payment and his studied discretion in not discussing money with big-name potential donors were all aired in evidence.
Two men deny charges brought by the Serious Fraud Office of using deception to control funds raised by the New Zealand First Foundation, a parallel organisation formed by the party in 2016 to turn it from a "coffee club" into a serious and long-term political vehicle. The defendants' identities, suppressed since they were charged in 2020, remain secret by court order until a further hearing.
The SFO alleges money donated for the party was received instead by the legally separate foundation and dispensed by the defendants without the knowledge or direction of the party organisation's elected officials. The total raised, which the SFO says amounted to $750,000, would usually have been declared as party political donations under the Electoral Act.
On Wednesday, the High Court heard one witness in person, with a further 16 witness statements read to Justice Pheroze Jagose by Crown lawyers.
What emerged was a Crown picture of a political party struggling with funding and administrative problems and repeated examples of bills being delayed, unpaid, or even underpaid to overseas suppliers because of errors in translating to foreign currency.
The evidence showed that in the buildup to the formation of the NZ First Foundation ahead of the 2017 election, (which resulted in NZ First having the balance of power and backing Labour to form government) party workers and officials expressed confusion about who was authorising and paying what bills, when and why.
In court, a parade of rich-list business people and luminaries from the thoroughbred racing industry had their donations to NZ First disclosed, their support for a Peters return to the role of racing minister aired and their reasons for unusually configured donation amounts dissected.
A former party staffer, contractor and later a political consultant, Apirana Dawson, told the court of examples of NZ First's organisational and financial issues in the period 2016-2017, as the foundation was being formed.
Funding Nation Builder
He and some party officials believed it needed to be modernised and they moved to introduce a computer system known as Nation Builder used by political parties here and in Australia to streamline membership, fundraising and electoral roll and voter data.
But NZ First's systems for payment had been upended by the formation of the new foundation. On the Nation Builder project and other services officials found it difficult to get payments made, with delays, errors and interruptions to vital functions.
Soon after it was introduced, and before its electorate-by-electorate rollout, Nation Builder's developer complained it had been unpaid $20,000 for three months and 'paused' NZ First's access to the system.
After repeated efforts to get the money paid, Dawson raised the issue with "the person who holds the purse strings" – one of the defendants – but was told it was not possible to pay the invoice at that time. Dawson then elevated it to Peters and his partner Jan Trotman.
Asked by John Dixon QC, for the Crown, why he made them aware of an administrative payment problem, Dawson said: "So he could do something about it. She was quite often the one who would answer his emails. She was the conduit."
Trotman emailed back: "Oops, did not see this one. Will check with [name suppressed] and come back to you". The sum was later paid and the new system "unpaused."
But not before NZ First's 'purse string holder' had transferred the wrong amount. "There is a payment in NZ dollars rather than USD I think," Nation Builder replied.
That same problem occurred when NZ First was paying for another overseas tech product, Webedge of Australia. "Unfortunately the payment was made in NZD but our quotations are in AUD," that firm said when seeking full payment.
Dawson also said $10,500 paid by the purse string holder to a designer for creative work on NZ First's social media campaign against changing the country's flag - which included a cartoon portrayal of then PM John Key as a clown - might have been processed in a more standard fashion. "I can't recall why these [invoices] are going to [a defendant]. Thinking about it, it could have been paid for by the Parliamentary leaders' budget."
The 'purse string holder' paid bills from foundation monies and at least one other entity over these years, with Dawson in some instances pleased to have anyone meet the party's financial obligations to suppliers.
In an email presented to the court, Dawson had complained to one of the defendants that Peters had not been forcing change in the party systems. "The party at large has not been transformed from being the coffee club it is, into a political movement."
Forming the Foundation
Some around the party had been frustrated with how payments had been approved or made and wanted a more sophisticated set-up. One defendant had asked Dawson if he could "snoop" on an existing fund being used for some NZ First payments. "Who's paying. Who's not."
As Dawson and others discussed setting up the foundation, one defendant emailed him that: "If it is going to pose as a party fund we might need somebody very deeply trusted - I guess it's up to [Winston] who else goes on the list. All of this should be able to proceed almost in spite of the board or the President and this is where Winston and Ron [Mark] need to stay staunch. We used to call this sort of thing the Leader's Fund."
The Crown's Dixon asked Dawson: "Who were you taking direction from in setting up the foundation?" Dawson answered. "I was just a digital guy."
It was modelled on the National Party's foundation - with Dawson telling the court he had walked past National's Pipitea St building housing its foundation in Wellington on the way to his work at Parliament in those days and felt his party should have the same.
In emails examined in court, he and a defendant spoke directly about copying National's foundation website, donation forms, disclosure paragraphs and even a fundraising email by former deputy leader Paula Bennett. "This is how they do it mate. Right up front and blatant."
Dawson said NZ First basically "cribbed" as much as it could off National to form a "Minimum Viable Product" for its foundation's site and functions.
A draft of a trust deed for the foundation nominated four trustees, Trotman, two others and Dawson, but Dawson said he was unaware he had been put forward and in the end only two names made the final cut.
When the party board accepted a recommendation to establish the foundation, one of its architects said in an email "the age of ad hoccery is over."
And: "We have done that for 20 years now, but to take the party to the next level we are going to have to spend more. To this end we've formed the NZFF which will raise and hold funds for the party but be separate from it in administration and law."
An email before the court detailed a message from an MP to those who'd helped form the foundation, saying Winston Peters belatedly wanted it to bank with Kiwibank or another locally owned bank rather than ASB. The response: "Jesus wept."
Evidence presented by the Crown showed problems continued, with a lack of transparency or lines of approval for payments and for the destination of incoming donations.
Offices leased at Lambton Quay
Dawson said Peters asked him in early 2017 to find office accommodation in central Wellington for a campaign headquarters for that year's election.
An area was found in 86 Lambton Quay, next to the parliamentary precinct's Bowen House, for Dawson and others to base themselves and two signs saying 'NZ First headquarters' were put up. Peters signed on as the 'tenant' until the election.
But again, the landlord did not get paid and in April 2017 had to chase three months of unpaid rental. "We are yet to receive any payment for rent," the landlord wrote. Dawson, who had liaised on finding the offices, told the court he presumed Peters would arrange payment. In the end he, Dawson, instead sent the bill to one of the defendants
"I'm not sure who told me to forward to him to pay the invoices."
But the other defendant wrote, in a memo presented to the court, that the premises were to house a separate company's contractors. "It was never the NZ First party campaign HQ, whatever the contractors [Dawson and colleagues] said.
"The campaign HQ for the 2017 election was at all times as it was in the past - with the leader as he was travelling."
Asked by Dixon QC if that was so, Dawson said: "No. My understanding is it was for the NZ First base for the party."
Another contractor who worked at the office, Luke Davia, told the court there was "something on the door and a tall stand, like at some large venues, with NZ First HQ on it."
Davia did hint at the air of mystery around the operation, however. When he had been interviewed for his role by Dawson he wasn't even told who he would be employed by, and had to Google it to make the assumption it was for the NZ First Party.
Davia said it did not make sense to him that the NZ First Foundation web page he was working on would have a donations button when the existing NZ First Party website also solicited donations direct.
The party's fit-out costs were sent by Dawson to one of the defendants in this case for payment. After the election NZ First did not renew its lease, walking away from the offices and leaving abandoned furniture, boxes of electoral rolls, filing cabinets and a lone NZ First plaque.
The commercial manager for the landlord, Scott McCausland, took that plaque back to his own office "to wind up my boss".
Other payments
Dawson sent the foundation, through one of the defendants, his final bills for work on Peters' re-election campaign, a $10,000 fee and $9000 for expenses. Asked why an election cost would be sent to the foundation, Dawson answered: 'Not sure, someone must have told me to do that. It could have been Winston."
Having left the party after the election, Dawson had this bill bounced back to him via one of the defendants wanting verification for the expenses. "I have to check with [other defendant] before I pay you now. I hate all this shit but things are a bit messy right now as you know."
Cross examined by a person in the court, asking if the SFO had ever suggested to Dawson that this prosecution had nothing to do with breaches of the Electoral Act, Dawson said no.
"Was it really the situation that Mr Peters was really the CEO of the NZ First Party in the time you were there?"
Dawson: "Yes, Winston was the boss."
"All the expenditure was authorised by Mr Peters or you authorised it under your delegated authority?" - "Yes."
The questioner suggested to Dawson that NZ First board members were elected geographically, not on merit, at party AGMs primarily so they could influence party list selections for elections.
The board then left all the fundraising delegated to Peters as CEO.
Dawson said: "Winston had been through elections previously where he was left having to pay the debt from the election himself."
"Is it fair to say Mr Peters got very frustrated by the lack of fundraising by people around the party?"
Dawson: "Yes, I think that was accurate."
The case is scheduled to last five weeks.
