The High Court trial of seven people for concealing political donations hears WeChat deals, and of a party thanking a wealthy donor while also professing ignorance of his involvement
WeChat, the world's biggest mobile messaging app, took centre stage in the High Court political donations trial in Auckland with saved audio messages found by the Serious Fraud Office outlining a scheme to conceal a wealthy donor's identity.
The messages between a Chinese speaking defendant and two men who 'transmitted' money to the National Party as part of a secret $100,000 donation are part of an extensive 'Crown chronology' of what it alleges is a scheme by four men to avoid Electoral Act requirements.
The Serious Fraud Office has pieced together WeChat text, audio and picture messages, translated from Mandarin to English, alongside bank account statements and transactions, and international money transfers through a service called IE Money.
The court heard one man describe the need for a large donation to be broken up to avoid the donor's identity being made known and for the 'transmitters' bank accounts to be used to receive and then send on smaller amounts to National. Another audio clip has a 'transmitter' joking that the wealthy donor could send him a million or two dollars and he could hold it in his account for a couple of days to benefit from the interest.
Crown lawyers have begun detailing how the first of two $100,000 donations to National from Auckland businessman and Chinese leader Yikun Zhang was broken into seven lots of $14,500 in seven different donors' names and sent to National's Botany electorate bank account, in June 2017. That figure falls under the $15,000 threshold for declaring the identity of a donor, something Zhang is said to have wanted to avoid.
The National part of the case follows days of the High Court hearing evidence from Labour Party officials and three people whose identities were used in a different scheme to purchase paintings which Zhang had also paid $60,000 for as a donation which netted Labour $35,000 in March 2017.
Both cases came to authorities' notice after former Botany MP Jami-Lee Ross made public allegations in October 2018 about the $100,000 donation to National, accusing his former leader Simon Bridges of corruptly making Ross participate in breaking up the donation.
Police, then the Serious Fraud Office, investigated, arresting Ross, Zhang and twin brothers Colin and Joe Zheng and charging them with obtaining by deception. When in early 2020 they lost name suppression, Labour reviewed its donations from 2017 to cross-check if any of the accused had also donated to its campaign, finding that Colin and Joe Zheng had done so. The SFO then investigated the Labour artworks fundraiser and charged a further three people, whose names are suppressed, with obtaining by deception.
All seven defendants have denied the charges in the case being heard before Justice Ian Gault. The evidence in the Labour part of the case was interrupted on Monday as key Labour witnesses, including party president Nigel Haworth and cabinet ministers Michael Wood and Andrew Little, the party's leader at the time of the artworks donation, can't get to court until late in the week.
SFO opens case against National
John Dixon QC, for the Crown, called Kelvin Zheng, the older brother of the two defendants Colin and Joe Zheng, as a witness. He confirmed WeChat text and audio messages from Colin asking him to use his bank account to receive then move on $14,500 to National.
"Elder brother. President [Zhang] wants to donate $100,000 to the National Party, right. So I've divided it into several account numbers ... I'm thinking of one your side, using yours, to donate one share, to contribute one part. So decide which account and then send it to me so I can transfer the money to you and then you transfer it to another account."
Kelvin Zheng sent his brother a photo via WeChat of his bank account number, Colin replied he would deposit the money there, then Kelvin should "transfer it straight away to the Botany electorate of the National Party. It's not a big issue."
Wendy Andrews, acting for Colin Zheng, asked Kelvin Zheng if he would have pushed back against his brother's request if he had known the origin of the money to be 'transmitted' through his account was from their own father.
(The Crown had said in its opening statement that some of the money for the June 2017 $100,000 donation to National came from Yikun Zhang's sister's account in China and some came from Colin Zheng's father in China, before being split up to the seven 'transmitters'.)
"As a family man I would probably provide some suggestions and probably say, probably best not to donate," Kelvin Zheng said.
Andrews: "But because Colin said it was the chairman's money, no discussion?"
Kelvin Zheng: "Yes, basically right."
Another Crown witness was Jason (Jianfeng) Xie, who knew the Zhengs through house construction activities, and Zhang as the chairman of the Chao Shan 'Business Society'.
He also received a WeChat message from Colin Zheng in June 2017 asking to use his account to make a political donation.
"Need to ask a favour," an audio message from Colin Zhang, played to the court, says. "The Association Chairman needs to donate money to the National Party but it is too much in one transaction and registration will be required, so he is splitting up the amount into $14,000 per lot. It will probably have to be transferred through your account to the National Party to make it work."
The WeChat audio and text messages in Chinese were confirmed by Xie as being between him and Colin Zheng.
Xie: "No problem, transfer of any amount is fine. Ask your association chairman to remit a million or two for me to spend for a period of time before I help you send it over." He then suggested he hold onto the $14,500 for a day or two's benefit.
Colin Zheng: "Any donation over $15,000 needs to be registered. The association chairman is donating $100,000 so he must split it into multiple lots. He does not want his name registered."
On the National side of the prosecution, the Crown intends to call eight further 'transmitters' or 'sham donors' to give evidence, as well as Simon Bridges, National's general manager Greg Hamilton, two other party officials and a former assistant to the MP Jami-Lee Ross.
Labour officials grilled about art auction, imperial robe purchase and knowledge of donor's identity
Earlier on Monday, Labour head office staffers gave Crown evidence on their checks in 2017/18 and again in 2020 when the news of the National donors' identities broke, on the artworks fundraiser and their donations declaration over the auction of an imperial Chinese robe for $90,000.
Last week, the 2017 general secretary Andrew Kirton said the party had been satisfied that the list of names it was provided with as purchasers of the five paintings for a total of $60,000 had been checked and recorded satisfactorily at the time. He said he did not notice the paintings hanging at defendant Yikun Zhang's home when he went there for dinner and posed for a photo in front of them. Kirton had prepared individual receipts for the people he'd been told bought each painting but did not recall sending them and none recalled receiving them.
Kirton also said he did not know if Zhang had purchased the imperial robe and other items at an auction Kirton attended with the Prime Minister Jacinda Ardern and others at a Britomart Chinese restaurant at the height of the 2017 election campaign. Labour had received a list of names of other 'purchasers' and recorded those names.
However in evidence yesterday, Labour's head of finance at the time, Judi Fergusson, was shown by Yikun Zhang's lawyer John Katz QC a direct thank you note from a few weeks after the imperial robe fundraiser from Labour's president Nigel Haworth to Zhang for his donation.
"I'm writing to thank you for your generosity at our fundraising auction on September 9 in Auckland," wrote Haworth, who was Kirton's senior official at the time.
"I want to assure you that your contribution has played its full part in the success of our campaign. I know that I speak for the entire Labour Party when I offer to you, once again, my sincere thanks."
Zhang even wrote back, but still this information did not seem to have been registered by officials. "I am more than pleased to see the success of the campaign you have achieved and your letter makes me feel being part of that."
Fergusson told Katz she had been passed Zhang's response by one of the three defendants in the Labour side of the case, and she had passed that to Haworth.
To Crown lawyer Kim Hogan, Fergusson said the single $60,000 donation which logged in Labour's bank account on March 29, 2017 had a reference 'Colin, 1 April'.
"At this stage, I said: 'Where did this come from? Who is Colin? And I needed to work back from that to the [artworks] auction."
After inquiries with two of the defendants, a list of five names and addresses were found and values each under the $15,000 established for the donations from the painting purchases.
Katz asked Fergusson if it was unusual for the name of the person who deposited a donation in Labour's bank account not to match up with such a list of donors.
"It's usually the person who purchases the item who makes the payment."
Katz put it to her that "no auction took place".
He asked if she had been totally reliant on Andrew Kirton's information from two of the defendants for the calculations made about sale prices and net values to the party.
"Yes."
Katz: "Do you accept that a lot of information in the possession of [those two defendants] was not actually provided to you in 2017?"
"I don't think I can say that."
"Were you satisfied you got all the information you needed?"
"Looking back, no, I was not given all the information I needed."
Earlier, Labour's 2020 election campaign manager Hayden Munro told the court of trying to establish if the named defendants in the National case had also given to his party.
He found Joe and Colin Zheng had done so and made inquiries of Kirton and the two defendants to establish the background to the art auction.
He was not told that one of the name-suppressed defendants had bought the artworks for the party to auction, that that person had swapped out two of the paintings for his own from his home before they were sold, and that that man had not attended the auction.
Wendy Andrews, for Colin Zheng, suggested to Munro that he had been misled by those two defendants when he tried to verify information in 2020.
"If what they told me was not true, then yes."
Later, Marc Corlett QC, for one of those defendants, tried to reverse that thought for Munro. "If what they told you was true, then no, you were not misled."
Munro: "That's an interesting epistemological debate. My understanding is for me to be misled, someone had to have told me something that they knew to be untrue and I'm not in a position to judge that."
