David Cunliffe's Trust and the Dinner at Antoine's were not the same. I wish they were, but they just aren't.

There's been a bit of lefty gloating going on around the traps about Patrick Gower's interview with John Key on The Nation, in which he sought to draw an equivalence between David Cunliffe's use of a trust to receive donations for his Labour leadership campaign and donations that National received back in 2010 and 2011 through a dinner held at "Auckland's pricey Parnell restaurant Antoine's".

(On that last point, check out Antoine's menu and the attached prices. This, remember, apparently is one of John Key's "favourite places to eat". That this fact does not at all seem to undermine the popular view of him as being "just like us" is a source of unending mystery!)

But much as I would love to grab a pitchfork and torch and follow in behind the crowd all the way to the door of Key's castle on a bleak mountain top (which is what he lives in, right?), my goddam conscience just won't let me do it. So I'm going to have to break ranks and say, "nice try, but not quite."

The asserted equivalence seems to be that Cunliffe's trust lumped together a bunch of money and passed it on to him in ways that did not reveal the individuals who donated it, whilst the "Dinner at Antoine's" likewise generated a bunch of money from individuals that then got passed on to the National Party without anyone getting to see who really gave it. That's true enough. But it's a superficial and misleading similarity.

Because the important difference is the intent in each case. Cunliffe's use of a trust was deliberately meant to enable individual gifts that otherwise would have to be declared to Parliament's registrar of pecuniary interests (which has a $500 threshold) to remain "faceless", in that it permitted only the Trust's gift to Cunliffe to be declared. It's the exact same strategem that the National Party used for years with its Waitemata Trust donation laundering vehicle - a practice that Labour criticised heavily at the time and enacted the Electoral Finance Act to stop (amongst other things). Which is why Cunliffe's decision to adopt the same strategy was so very, very silly.

In comparison, none of the individual donations made at the Dinner at Antoine's (in the form of a $5000 payment to attend) had to be declared to the Electoral Commission, as the threshold for declaring party donations was at that time $10,000 (its since gone up to $15,000). So there was no necessary reason for the donations to be bundled together  and passed over in one lump sum. It just seemed to happen that way because the owner of Antoine's got the attendees to first pay him for the dinner, then gave a single cheque to National a few days later, rather than the attendees writing out cheques to National directly. If they had done the latter - which would have been entirely legal - then we would not have had any record of the dinner taking place at all.

(Oh, and in case anyone's wondering how we know how many places any individual person bought, note that National's financial return for 2010 states that the donation from Antoine's was made up of "contributions" ... so National must have been told who each of the guests at the dinner were. And had any of these guests paid for more than one place at it, their identity would have had to be disclosed under s.210(1)(b) (as the disclosure threshold stood at that time). So the fact that no-one's name was disclosed tells us that each attendee paid for only one place.)

That's why Cunliffe's decision to use the Trust actually does feed into the whole "tricky" label that National is trying to pin on him. It was a strategem to avoid an outcome he did not want, in a way the Dinner at Antoine's episode was not.

Having said that, I don't think we should just shrug our shoulders at the Antoine's fundraisers (because there were two - one which brought in $100,000, the other $60,000) and say "move on, nothing to see here". Because what these did involve is the PM going along to a private dinner setting with a small group of people who all valued the opportunity to spend an evening of face-time with him enough to shell out $5000 for it ... and were legally able to do so without the public getting to see who they were.

The rationale for permitting this is that, in the scheme of fundraising for a political party's campaign, $5000 is such small change that it doesn't raise any real concern that you'll get anything in return for it. Indeed, it's only once someone gives $15000 in a year that we (now) require the political party tell the world who they are. Anything given below that amount is kept strictly between the donor and the party.

OK. That's fine. But let's say that the guest list for the Dinner at Antoine's got leaked. And let's say that it turned out six of the places around the table were taken by Chris Moller, Bruce Carter, Peter Cullinane, Nigel Morrison, Rod McGeoch and Brent Harman. (Note to Chapman Tripp or whomsoever may be asked to look at this paragraph - I am not saying that these individuals were at the dinner, but rather posing a purely hypothetical point for the purpose of academic discussion.) Would it not be of considerable public interest to know of that fact? In particular, would it not be relevant to us that (in the purely hypothetical case discussed) members of SkyCity's Board of Directors had given National $30,000 between them prior to the last election, so that they could spend an evening in private conversation over dinner with the PM? And then let's say that each of their wives also had chosen to buy a place at the table in their own names - adding another $30,000 to the pot.

I'm not saying that this was what the Dinner at Antoine's was all about. It probably wasn't - more likely it was an amalgam of social climbers and old friends taking the chance to hang out with a guy who is (by all accounts) good company. What I am saying, however, is that because New Zealand has set the legal disclosure level for donations to political parties at such a high level, we may never know if and when such a dinner ever does take place. And that, I think, is a problem.

Comments (22)

by stuart munro on March 09, 2014
stuart munro

I'm not sure you have the characterisation right Andrew,the impression I got from various sources was that the trust was designed a bit like the US superpacs, to conceal donor identity from the candidate so that they could not be corruptly partial to their funders.

As far as reform goes, the short answer is to tax all political donations. The IRD can then accumulate good records of who does what, and the pernicious influence of money instead of votes on our democracy is slightly reduced.

by Andrew Geddis on March 10, 2014
Andrew Geddis

Stuart,

That's not what Superpacs are for ... but let's put that to one side. Even if the immediate intent of Cunliffe's Trust was to hide the source of the donations from him, an inevitable and unavoidable follow on from doing so is that the source is hidden from the rest of us, too. Now, we may be asked to trust that the people running Cunliffe's Trust won't tell him anything about it, but again that is a position that Labour spent a long time attacking when National argued it in relation to its own donation arrangements. And it's one that has ben rejected in our electoral legislation, so

As for taxing donations, I'm not sure it would accomplish what you thing it would. The IRD would have good records, but those would not be public and not necessarily even available if there were a police investigation/prosecution for corruption.

by Ian MacKay on March 10, 2014
Ian MacKay

Since you mention the IRD, the question arises that since the dinner was provided and was therefore Goods and Services shouldn't GST have been paid? Was it? Would have been about $10,500.

by Ross on March 10, 2014
Ross

Antoines donated 165K to the National Party prior to the last election. I can well understand why John Key likes to dine there.

by Ross on March 10, 2014
Ross

In comparison, none of the individual donations made at the Dinner at Antoine's (in the form of a $5000 payment to attend) had to be declared to the Electoral Commission

I thought the debate was aboth ethics, not about what has to be done.

by James Meager on March 10, 2014
James Meager

@Ross

I think Andrew's point is about ethics when he talks about the intent of the collection of money: Cunliffe funnelled donations through a trust for the purpose of avoiding disclosure which otherwise would have to happen (ie a political arrangement); National collected donations through Antoine's which would not have been disclosed either way (ie a practical arrangement).

I think the closest you can get iin this instance is complaining about the level of the disclosure threshold, but not about the method of collection.

by Rich on March 10, 2014
Rich

Labour chooses their leader by a secret ballot, in order that MPs are able to vote genuinely rather than being swayed by the promise of career preference. Funding follows the same principle - if the successful leader knew how was donating to them, they could offer posts for money. 

Ideally, Labour would fund all duly nominated candidates equally from party funds, avoiding the need for this.

 

by Tim Watkin on March 10, 2014
Tim Watkin

Ross, you're right the questioning was based on Key's ethical stance, not the rules. If you look at Key's quotes last week he called for Cunliffe to name the final two donors and said if Cunliffe couldn't be transparent about who donated to his cause then it would look like a "secret agenda".

See this from Key:

"Clearly there's something going on there about people who gave money but know that if their identity is in the public domain, that would be very untidy for the Labour Party, maybe the policies that they've developed who knows, but three of his donors have come out and said it's ok.

"David Cunliffe has a responsibility to make sure he tells the public who the other two are or he's going to guilty of being labelled as having a secret agenda which none of us can verify either way."


That was the standard Key was holding Cunliffe to, and so Gower's questioning purposefully relied on those quotes, not the rules, as the standard for Key as well. With the Antoine's donations – as per your latter comments about how the law works, Andrew – could a Key critic not equally say:

"Clearly there's something going on there about people who gave money but know that if their identity is in the public domain, that would be very untidy for the National Party, maybe the policies that they've developed who knows, but three of his donors have come out and said it's ok.

"John Key has a responsibility to make sure he tells the public who the other 21 are or he's going to guilty of being labelled as having a secret agenda which none of us can verify either way."

by Ross on March 10, 2014
Ross

National collected donations through Antoine's which would not have been disclosed either way (ie a practical arrangement).

You mean if those attending the dinners had simply paid National 5K, there would have been no need for disclosure? I'm not sure that's right.

by Ross on March 10, 2014
Ross

Yes, Tim, David Cunliffe has publicly named three of his donors. I haven't heard John Key name his...not that he has to of course. But he might need to climb down from his high horse if he chooses not to.

by Andrew Geddis on March 10, 2014
Andrew Geddis

You mean if those attending the dinners had simply paid National 5K, there would have been no need for disclosure? I'm not sure that's right.

No legal need? I'm 100% certain I'm right. And as proof, I point to the fact that Graeme Edgeler hasn't popped up on this thread even once!

by Andrew Geddis on March 10, 2014
Andrew Geddis

@ Tim,

Yes. People may say that in relation to Key and donations made to National. Like I say, you can construct all sorts of hypotheticals about who might have been at that dinner, and what they were wanting out of it. However, blunting such accusations are the fact that:

(1) Labour voted for a $15,000 disclosure limit when they supported the replacement to the Electoral Finance Act back in 2010. So for Labour to suddenly turn around and say "it's critical that the public see who gave the National Party $5000!" leaves them open to the question ... where were you when it mattered?

(2) The donations were of a different nature. The Dinner at Antoine's money went into National's general election fund, out of which some $3 million got spent on the 2011 election ... so even $165,000 is a smallish portion of the total money flowing into the party coffers. Cunliffe's Trust was raising cash for a campaign for him personally as leader, which had a $30,000 cap. So the amounts raised were of a much more direct benefit to him, and much more significant in the context.

The difference in the two donations is then reflected in the amount of info we generally require to be disclosed in relation to each. With political party funding, the amounts involved are such (and the ) that we say anything less than $15,000 isn't a problem (I think that's too high ... but it is what it is.) With individuals running for election in individual constituencies, the disclosure level is $1500 (because such candidates can spend less, and have a more direct and personal interest in the donation.) With gifts to MPs of a personal nature (like the donation to Cunliffe's leadership campaign), the threshold is only $500 ... precisely because an MP getting a direct personal benefit from something given to them is considered a greater risk of "corruption".

Now, maybe that's all wrong. Maybe the risks/interests involved are the same in all case, so we should have a common disclosure regime with a $500(?)/$1000(?)/$5000(?) threshold. But that just isn't what we've got now ... and so demands that political figures "tell us where the money came from!" must be viewed in that light.

by Ross on March 10, 2014
Ross

No legal need? I'm 100% certain I'm right. And as proof, I point to the fact that Graeme Edgeler hasn't popped up on this thread even once!

Yep you are right. Although I note that political parties are required to disclose:

"the number of all party donations received over $5,000 but less than $15,000 and the total amount of such donations."

by Ross on March 10, 2014
Ross

Cunliffe's Trust was raising cash for a campaign for him personally as leader, which had a $30,000 cap. So the amounts raised were of a much more direct benefit to him, and much more significant in the context.

But choosing a leader is surely not as significant as choosing a Prime Minister!

by Siena Denton on March 10, 2014
Siena Denton

Kiaora Andrew

Thanks for the explanation in relation to David Cunliffe's Trust and the Dinner at Antoine's Restaurant.

I was reading political party donations on the Electoral Commission's website last week though I admit I was looking specifically for the donations made by Orivida to the National Party coffers and I decided to nosey at other National Party donations from previous years and naturally I read the Party Donations Return for the Year ended 31 December 2010.

My first impression of the $105,000 donation from Antoine's Restaurant Limited was that it was a contribution by one donor, dated 18 June 2010 to the New Zealand National Party, and that is the way I still view it.

I'd like to end this comment with the final paragraph of the Late Sir Robert Muldoon's book, Number 38 and his words of wisdom...

If the future belongs to the newer members, and I believe that it does, then particularly to the 1984 new entrants, most of whom have considerable potential, I would give this word of advice: Learn to walk before you try to run

Quite frankly, this lot learnt to run fast before they could walk.

Cheers

 

by Tim Watkin on March 10, 2014
Tim Watkin

Andrew, 1) doesn't count because it wasn't Labour launching into the questions, but independent journalists.

2) Fair point – proportionately Cunliffe's is more significant and yes it's messy to have different thresholds (although if you're making an argument for proportionalty then it makes sense to have different thresholds for different donations, that if you're arguing they should be the same across the board you can't logically say it matters that the donations were of "a different nature".

But I disagree that this issue "must be viewed in that light" (ie in the light of the rules). The questions weren't about rule-breaking but rather hypocrisy. In the end, none of the rules matter, because the standard he was being held to was not the legal one, but his own standard as laid out in his criticism of Cunliffe. Petard and all that.

by Tim Watkin on March 10, 2014
Tim Watkin

Hi Siena... I'm not sure what point you're making when you say you saw it originally as a single donation and still see it that way. It clearly wasn't a single donation, but came from 21 individuals who wanted to donate to National and did so in a way that got them a dinner and some PM-face time along the way. It wasn't a single donation from Tony Astle.

by Andrew Geddis on March 11, 2014
Andrew Geddis

@Tim,

Andrew, 1) doesn't count because it wasn't Labour launching into the questions, but independent journalists.

Of course. Sorry. Guess I was seeing things in terms of the parliamentary battle, rather than the issue generally.

The questions weren't about rule-breaking but rather hypocrisy. In the end, none of the rules matter, because the standard he was being held to was not the legal one, but his own standard as laid out in his criticism of Cunliffe.

At risk of being fairer to Key than I need to be, I dunno. I'm just not convinced there's an equivalence between Cunliffe deliberately structuring his fundraising activities to ensure secrecy (from himself and the world as a whole) and the donors to National having dinner for a donation that no political party has to disclose. So, for me, the charge of hypocrisy doesn't stick. Sorry.

by Andrew Geddis on March 11, 2014
Andrew Geddis

My first impression of the $105,000 donation from Antoine's Restaurant Limited was that it was a contribution by one donor, dated 18 June 2010 to the New Zealand National Party, and that is the way I still view it.

There's a column on the party's financial return marked "does the donation contain any contributions". There is a tick in this column next to the donation from Antoine's Restaurant. This tells us that the named donor isn't the actual source of the money - someone else gave it money, which it then gave to National.

by william blake on March 11, 2014
william blake

I'd probably front the Five grand to not have the wasabi snails.

by Ross on March 11, 2014
Ross

The restaurant owner donated $105,000 yet he wouldn't have received this much from those attending the fundraiser. Was GST paid by those attending?

http://thedailyblog.co.nz/2014/03/10/nationals-fund-raising-at-antoines-was-gst-paid/#comment-199104

by Siena Denton on March 11, 2014
Siena Denton

Kiaora Andrew and Tim

What I was saying in my posting was what I read in that Party Donation Return was as I had read it literally.

1 Donor's name

2 Donor's address

3 Date of donation (or dates of aggregated donations)

4 Does the donation contain contributions? (yes/no)

5 Amount of donation or aggregated donations

http://www.elections.org.nz/sites/default/files/bulk-upload/documents/Na...

4 was ticked Yes, which I interpreted to mean the sole donor Antoines Restaurant Limited contributed $105,000 to the New Zealand National Party. Thats how I interpreted this column, not taking into account that important plural 's' I guess.

For GST purposes donations ‘Over $30,000’ means $30,000.01 or more. GST, where relevant, counts towards a donation value".

I also read which I did not comment on was Returns of Donations Exceeding $20,000, which carried detail of returns of party donations that exceeded $20,000 from the same donor filed with the Electoral Commission between 1 January 2008 and 31 December 2010. 

"The relevant law is sections 210C and 210F of the Electoral Act 1993.  Since 1 January 2011 section 210C has been amended so that a party secretary must file a return in respect of every party donation that exceeds $30,000".

And guess who's there and some.

http://www.elections.org.nz/parties-and-candidates/registered-political-parties-0/party-donations/immediate-return-donation-0-0 

Even though I am suspicious of anything a certain "smiling assassin" engages in behind those 'Mansion Walls' aka that honey pot where "tricky" deeds may be conjured up, I don't think there's anything really to cause a stir about.

I did make a comment in a 3 Political news article about how the smiler appeared to protect the identities of this rather obscure group of dining donees, but that was because of the interview on TV.

Cheers to your both

PS I look forward to ticking my 2 votes on the 20th September, at the Polling Booth...I haven't quite figured out yet, which party or candidate I want to choose So far, I don't fancy any of them, including Daddy Big Steps Internet Party.

 


 

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