Testimony from an expert witness on China's overseas influence operations never made it to the High Court trial of local Chinese and others hiding donations to Labour and National
In the political donations trial, one anticipated theme went almost unspoken - whether the tentacles of the Chinese Communist Party's overseas influencers was behind the donations to National and Labour.
Most of those charged by the Serious Fraud Office were of Chinese nationality, two of the three who were named and convicted were leaders in a community group known as the Chao Shan General Association, and one, Yikun Zhang, is reputedly highly influential not only in his community here but in China as well.
An expert witness was to be called at the trial by lawyers for the former National MP Jami-Lee Ross, who was acquitted with three others on Wednesday, but in the end her testimony was not introduced.
That witness is the Canterbury University academic Professor Anne-Marie Brady, a leading scholar on Chinese influence operations in countries like ours.
Her evidence would have outlined to Justice Ian Gault the extent of Yikun Zhang's influence, his standing among Chinese organisations and the operations of the CCP's United Front groups around the world and in New Zealand.
In her absence, there were just a couple of references over the seven-week trial to Zhang's activities in New Zealand to win friends and influence people.
The former National Party president Peter Goodfellow, said: "It gives me great pleasure to support the nomination of Yikun Zhang for a New Zealand royal honour, in respect of business, philanthropy, community services and NZ-China relations," in a letter produced in the trial of Zhang and six others for obtaining by deception in connection to donations to both National and Labour.
In the letter on National Party letterhead, dated August 17, 2017, Goodfellow even went as far as suggesting Zhang is one of the most highly regarded Chinese in China.
"Throughout the time I have known him, Yikun has been one of the most highly regarded members of the Chinese community in New Zealand, or in China. Yikun is well known for his genuineness, aptitude and generosity."
But in an early argument before the case started, a lawyer for a defendant with name suppression told the judge he understood "there may be expert evidence called by one of the defendants from Dr Brady suggesting that one of the defendants is linked to the Chinese Communist Party.
"There will be expert evidence that can fairly be described as inflammatory.... That evidence is extensive and that evidence is in effect [about] an operative of the CCP that uses people to infiltrate New Zealand political parties."
No such expert evidence materialised later in the trial. No explanation was given. The dragon in the room did not appear in the courtroom.
Zhang, who emigrated to New Zealand in 2000 was made a Member of the NZ Order of Merit in the 2018 Queen's Birthday Honours. He is now, as of Wednesday, a convicted criminal found guilty on one charge of obtaining by deception over a $100,000 donation to National in 2018. The offence is punishable by up to seven years in prison, but the Crown indicated in comments to the judge that a non-custodial sentence was possible.
The Crown case was that while he provided the money for the donations, others split the funds into smaller parcels and sham donors were used to make them to the parties to avoid electoral law requirements for the donor to be identified.
Throughout the case he was treated with great deference by others on trial and some witnesses. He sat proudly upright in the jury benches of the judge-alone trial, sporting a lapel badge of the Chao Shan association, and was referred to variously as 'Chairman' or 'President'.
He had been identified by both National and Labour as a high net worth individual to be targeted for possible donations, and was courted by or pursued connections with both major parties' presidents, elected leaders and MPs and national and local officials.
The source of his wealth, however, was somewhat inscrutable. Jami-Lee Ross, in a long text message to his then leader Simon Bridges before a dinner they both attended at Zhang's substantial Remuera home in 2018, said: "Mr Zhang is very wealthy, although the exact source of his wealth in China is not well known."
In court, his business interests were variously portrayed as property development, owning restaurants and exporting goods including wine to China. Zhang offered at one point to sign over rights to $40m in properties in this country to the control of the Crown as a guarantee of his return to New Zealand if allowed to visit his dying mother in China while on bail.
His lawyer, Blair Keown, told the court in a closing statement that Zhang had not called witnesses but the Crown's own witnesses attested to his "good character and impeccable standing in the community". However he had not been able to enjoy the fruits of his work, instead enduring the stain of criminal allegations when they were made public.
"The starting point for Mr Zhang is he’s not a criminal, fraudster, or a cheat, he hasn’t engaged in deceitful behaviour, hasn’t sought to conceal his identity, hide from authorities, hide from the public in any way. Over the years he has openly built a reputation within the Chinese community; a successful businessman, recognised philanthropist and …. he has created opportunities to benefit and advance New Zealand's interests."
However, Brady's view is decidedly more sceptical of Zhang's intentions and motivations.
She has been an expert witness in parliamentary inquiries into foreign interference, in courts over immigration cases, in Australia where she spoke on the CCP and its united front work, in the US and Canada to lawmakers.
For this case, her expertise would have traversed the CCP's use of united front activities to target political parties and to get foreign political and economic elites to accept China's foreign policy agenda.
"We saw with the Chaoshan General Association of NZ donations that Zhang Yikun was particularly concerned to get his personnel into both the National Party candidate college and the Labour Party candidature and into Parliament.
"Zhang allegedly provided large donations to the two major political parties in NZ, hedging his bets whoever was in power." (He was found not guilty of charges over a 2017 donation to Labour for artworks, but has been clear he paid $100,000 for an imperial robe and other items at a Labour 2017 campaign dinner in Auckland.)
"The CCP weaponises Chinese cultural traditions and associations as a means to control the Overseas Chinese diaspora, exclude dissidents and draw in foreign elites."
Brady believes "the prominence of Zhang Yikun in united front work has been completely overlooked and in particular the meaning of his political roles and actions".
She argues New Zealand appeared to have been a test zone for many of the CCP's foreign interference efforts.
"From 2007 to 2017, the NZ National Party received $1.36m of their publicly declared donations from proxies of the CCP."
Yikun Zhang had succeeded in gaining cooperation from National, Labour and local mayors in sponsoring him and his associates for honours.
"There is hardly a minister or senior figure from those parties who did not attend an event with him and the Chaoshan General Association of New Zealand and have a photo to prove it."
Brady says the Chaoshan General Association of NZ "is a CCP united front organisation", founded in 2014 when China's President Xi Jinping had called for the expansion of united front work.
It is, in her judgment, the largest such organisation in this country.
"It is a local branch of the Teochew International Federation, which is a CCP united front group under the Office for Overseas Chinese Affairs, a division of the CCP organisation the United Front Work Department. The United Front Work Department is the CCP's key organisation for united front work."
And Brady says Zhang is "extremely prominent in united front activities, as well as internationally".
"In my opinion, he is without any doubt the most prominent figure in CCP united front work in New Zealand, and one of the most prominent figures in the world, through his leadership role in the Teochew International Federation."
Zhang is promoted on websites of the CCP United Front Work Department, she says, including his name being headlined as a key attendee of an event attended by every member of the CCP Politburo Standing Committee, including President Xi.
"Only a very select few of the most politically-trusted and most influential united front leaders receive such honours and status."
Zhang, and his successor as chair of the Chao Shan General Association, Colin Zheng, and Zheng's twin brother Joe, were all convicted of obtaining by deception over the donation to National in 2018, Colin Zheng was convicted for a 2017 $100,000 donation to National and Joe Zheng was also found guilty of lying to the Serious Fraud Office.
The three men, on bail having forfeited their passports, will be sentenced in November.
