Details of a morning raid to execute a search warrant at a defendant's home wrap up the Crown's case against two men over the use of political donations to the New Zealand First party
Two men on trial in the NZ First fraud case have called no evidence in their defence after hearing 10 days of Crown allegations - and a defence lawyer has indicated they could yet ask the judge to dismiss the charges.
The men, who have name suppression, had previously tried unsuccessfully to have the charges dismissed at the district court and in preliminary High Court hearings.
They argued in their opening submission in this case that no crime had occurred, the Serious Fraud Office had come up empty-handed in searching for breaches of the Electoral Act so had resorted to charging them with obtaining by deception.
The Crown alleges the men took in money donated for the party and used it from two accounts not under the party's control and without party officers' knowledge. One account was a company owned by one of the defendants and one was for the New Zealand First Foundation, formed in February 2017, weeks before the political party's board even decided to explore the concept.
The SFO case was that payments were made from those accounts without the authority or knowledge of elected party officials and around $750,000 in total donations was not declared to the Electoral Commission as could be expected if held directly by a political party. Many donations were made just under the $15,000 threshold for declaring identities of donors to the commission.
Evidence from around 40 donors, party officials and board members and SFO investigators showed most donors were unaware their money was going to the company or NZ First Foundation and several party officials were unaware of the donations to, and spending from, those two accounts between 2015 and 2019.
Party officials expressed frustration at being stonewalled in their inquiries about the company, the foundation, and their activities.
Money from the accounts was spent on a software platform called Nation Builder which was to manage NZ First party memberships and donations, as well as linking to social media and mass email campaigns. The licence for Nation Builder was held by the defendant's company and then the foundation at arm's length from party officials. The trial heard evidence that party officers could not get answers to their questions on donations or spending.
Donations received by the foundation also paid $80,000 to one of the defendants, $80,000 to that person's family member, $12,000 for a UK trip for NZ First MP Clayton Mitchell, $10,000 for a Wellington Cup racing hospitality tent and $9000 for a speech to the 2018 NZ First convention by boxer Joseph Parker.
The trial heard evidence the NZ First party had trouble paying overdue bills and officials had to seek help from party leader Winston Peters and his partner Jan Trotman to arrange for money to somehow be made available.
One bill, from media company NZME for advertising ahead of the 2017 election, resulted in the foundation loaning the party $73,500 to tide it over. That loan was made without the party secretary's knowledge, as required under electoral law, so later had to be re-issued following advice from the Electoral Commission.
The two defendants, in their opening statement, said: "The party raised the money paid into the accounts for the benefit of the party, they were used for the benefit of the party as anticipated by the party. The evidence is the foundation used the money as the party expected.
"We ask the question - where is the deception? The party management was not deceived. Significantly, the party leader is not on the witness list. Disclosure shows he has not been interviewed about the property crime before the court. There is no evidence of this property crime against the party."
They argued that the party was therefore not deceived, and donors were not deceived. "None have complained. But that has not stopped the SFO charging the defendants as if they had."
During cross-examination of the final Crown witness, SFO principal investigator John Woolford, it was revealed the Crown sought earlier this year to add a charge of theft by a person in a special relationship but this was declined by a High Court judge.
Woolford outlined what was found under a search warrant executed at 6.30am one morning at the home of one of the defendants, and he outlined interview notes taken from discussions at that time with the defendant.
Asked by the defence why the SFO opted for a search warrant when it could have used its powers to issue a written order that people provide documents and files, Woolford said a judgment call would have been made on how likely the person concerned would be to cooperate with such an order.
Also influential in this case was that the Electoral Commission, in referring the matter to the police, who moved it to the SFO, had noted that it had not been given information that it had sought from the defendant.
Why make the visit at 6.30 am? "The object of the exercise is to get there at a time when occupants are at home and not gone to work and not so early as to be unfair."
Woolford said the defendant told him foundation expenses such as the study trip to the UK by Mitchell were "foundation business", the foundation's payment of office rent in Wellington (for what staff using it called the NZ Party 2017 campaign headquarters) was not for a party HQ but for a foundation office, and the hospitality tent at the races which cost $10,000 was not a matter for the party.
Asked by the defence who had "made the decision that there would be no offence under the Electoral Act" in charges laid against the pair, Woolford said he wasn't sure a decision that there was no offence under that act had ever been made.
The defence also asked him why the Serious Fraud Office director Julie Read had allegedly given a lunchtime speech discussing the investigation before charges had been laid, why she had been intent on issuing a press statement once charges had been laid and before the defendants' first court appearance, and whether Woolford knew there had been a general election looming in October 2019. He was unable to comment on the first two issues, but confirmed he was aware of that election.
Crown and defence lawyers will make their closing arguments on Thursday. Defence lawyer Tudor Clee suggested on Tuesday to Justice Pheroze Jagose, who is hearing the case alone, that there could be a further application on Thursday to dismiss the charges.
