More on Banks

The NZ Herald reports:

The donation scandal engulfing Act leader John Banks spread last night as it emerged he lobbied personal friend and Government minister Maurice Williamson over internet tycoon and donor Kim Dotcom.

Mr Williamson, the Minister of Land Information, last night admitted Mr Banks had lobbied him over a property purchase in Coatesville, just north of Auckland, Dotcom wanted to make. …

Mr Williamson said: “John Banks did call me to advocate on behalf of Kim Dotcom with regard to the OIO [Overseas Investment Office] application on the Coatesville property. Mr Banks and I have been good friends for years. It is a matter of record that the ministers considered the application, but declined it.”

Dotcom told the Herald Mr Banks referred to being “very close” to Williamson, whose approval was necessary before he could buy the $30 million Coatesville mansion he rents.

He said the comment was made by Mr Banks in reference to his application to buy the mansion.

“He said he knows lots of people from when he was a minister. He knows Williamson … They are very close.”

Dotcom said he believed Mr Banks spoke positively to Mr Williamson about his application.

Overseas Investment Office officials left the decision on the application to ministers, and Mr Williamson approved it in April last year.

But it was eventually declined after it was rejected by Associate Finance Minister Simon Power.

Three months after approving it, Mr Williamson changed his mind and joined Mr Power in rejecting it.

I’ll come back to this issue. Also of note is:

Mr Banks yesterday continued to refuse to be interviewed, but issued a statement in which he said he was unaware Dotcom had donated to his campaign and denied ringing the internet magnate to thank him.

“I could not have, as any such contribution was anonymous.”

But he said he had spoken to Dotcom on “other matters”.

In an interview in January, Mr Banks said those other matters included advice on Dotcom’s OIO application and residency.

He said the advice was “just the process”, and their conversation was “in total of 15 minutes, maybe 20 minutes”.

It is significant that Banks is now saying he did not thank him for the donation, because in my mind that is the issue that would most undermine a defence that the donation was anonymous. I suspect any Police investigation will focus on this issue.

Let’s look at a number of related issue.

Did Banks solicit a donation from Kim Dot Com?

Yes, there seems little dispute there. It is not denied that he suggested they make it two donations of $25,000 rather than one of $50,000. The bizarre thing however is that this has no impact on disclosure.

Can you solicit a donation and then claim it is anonymous?

At parliamentary level probably not, at local government level, basically yes you can. See this post by Andrew Geddis and this post by Graeme Edgeler.

Was Banks unusual in not declaring his donors?

No. As 3 News reported, Len Brown received $499,000 of anonymous donations (Banks had $638,512). Len Brown used the legal avenue of having most donors donate to a trust and then the trust making a donation to Len Brown. This means that Len Brown could legally know who had donated to the trust (and de facto know who had donated to him), but not have to legally disclose their identity. This is also what National used to do before the law changed for parliamentary elections with the Waitemata Trust.

So the issue is not about whether a Mayoral candidate knew who donated to them. The law allows them to know, if they structure it in the right way. The law is about the identifying donations, not donors. The key issue is whether Banks broke the law. If you think Banks is unfit to be an MP because he may have a very good idea of who his likely donors are, then one would have to argue that Len Brown is unfit to be Mayor if he has a very good idea of whom may have donated to the trust which donated to his campaign.

Should the law be changed?

Yes, absolutely. The provisions of the Electoral Act around donations should basically be put into the Local Electoral Act.

Did Banks break the law?

That is for the Police to form a view on, and a court to decide. The key issue will be whether Banks knew the that Kim DotCom was the source of the two $25,000 donations. It is very hard to prove that someone knew something. However the timing of any phone call from Banks to Dot Com will be a key issue. In the Peters and Owen Glenn case, phone records showed Peters phoned his lawyer a few seconds after talking to Owen Glenn, and his lawyer then e-mailed Glenn asking for money referring to the conversation you have had with my client. That was pretty much proof beyond reasonable doubt that Peters knew of the donation.

If Banks phoned Dot Com the same day as the donations were received, or even the next day, then it makes it look more likely that the call was to thank him for the donation as Dot Com alleges. If it was some time later, then the call being for other reasons is more plausible.

Is this just like the Winston Peters and Owen Glenn case?

Yes, and no. Both involved donations, where the MP denies they knew of the donation. Both involved very wealthy donors, who seemed to be seeking “influence” rather than ideological support of a party or policy position.

The donations to the Banks campaign was before Banks was an MP, or indeed a member of the ACT Party. It relates to his local government campaign, and the disclosure requirement is the Local Electoral Act. Breaches of that are a matter for the Police, who will investigate.

The donations from Owen Glenn was made when Peters was an MP, and was to his lawyer to effectively pay for Winston’s legal expenses. This doesn’t have to be disclosed under any law, but was required to be disclosed by Parliament’s Standing Orders around disclosure of interests. The Privileges Committee was the body responsible for investigating any breaches, and did so – finding Peters did know of the donation, and had filed a false return. Labour voted in favour of Peters both at the Privileges Committee itself, and against the finding of the Privileges Committee report. They did not accept that Peters knew of the donation, despite the massive weight of evidence from phone logs and e-mails.

Should Banks be stood down while this is investigated?

I find it hard to see how this is credible. A number of MPs are under investigation by the Police for breaches of electoral laws. None of them are standing down – despite the fact these relate to breaches of the parliamentary Electoral Act not the Local Electoral Act. Helen Clark did not stand down as PM despite the referral to the Police of Labour’s $400,000 overspend.

The other factor is that the Police can take a very long time to decide on electoral law issues. Often over a year.

The appropriate threshold for a stand down in this case would be if the Police laid charges.

This is not to say that we should regard the law as the minimum ethical standard for MPs and Ministers. It is not. That is why we also have the Cabinet Manual and Standing Orders. But this allegation is about actions by Banks before he was even an MP, is not related to his duties, and the evidence is contested.

So how about the lobbying on behalf of Kim DotCom on a property purchase?

It has some parallels to the Bill Liu case

What was the case?

He was a Chinese businessman who donated to several MPs who advocated on his behalf to become a citizen. Shane Jones approved his citizenship despite strong advice from officials not to do so, as they said he had criminal convictions, and many aliases. Dover Samuels presented the citizenship to Liu in the Labour Caucus Room.

How do the cases differ?

John Banks was a private individual (neither MP, Mayor, or candidate) when he lobbied Maurice Williamson. Dover Samuels was a sitting MP.

The officials took no position on the Dot Com application, they strongly oppossed the Liu application.

Shane Jones granted Liu citizenship despite knowing of the criminal concerns. Simon Power declined consent, and Maurice Williamson after initially supporting it, also then declined it.

Should Banks have disclosed Dot Com was a donor, when he lobbied Williamson on his behalf?

Personally I think if you ever advocate on behalf of someone, you should be very upfront and transparent over your relationship and connection to them. I believe it is better to “over declare” than “under declare”. That is one reason I disclose on this blog even very minor dealings.

On the legal side, Banks as a private individual had no obligation to disclose that Dot Com had been a donor to him, even if you accept he knew Dot Com was a donor.

It will be interesting to consider whether Holly Walker’s lobbyist bill would cover situations like this one.

Again personally, I didn’t like Winston Peters lobbying to get a honorary consul position for Owen Glenn, when he knew Glenn was a donor.

I also don’t like John Banks lobbying for Kim DotCom to get a ministerial decision in his favour, when at a minimum he has good grounds to suspect that DotCom had donated to his campaign (even if he legally did not know how much, and which donations).

While disliking both sets of actions, I point out that Peters was actually the Foreign Affairs Minister when he was lobbying on behalf of Glenn, and his lawyer received the money while he was Minister. Banks was a private individual at the time he lobbied. Labour’s position was that Peters did nothing wrong with lobbying for Glenn while not disclosing he had donated $100,000 to pay Winston’s legal fees – so their outrage over Banks is totally fake.