Donghua Liu's alleged donations to Labour need more scrutiny. But the Police won't be the ones to do it.

The Herald on Sunday's "big reveal" about Donghua Liu's claimed $100,000 purchase back in 2007 of a bottle of wine signed by Helen Clark is forcing me to interrupt a very pleasant stay in Newcastle to make some comments. Honestly - can't you people just put things on hold for a few weeks so I can enjoy myself in peace? No consideration whatsoever.

First of all, people who are calling for the Police to get involved and investigate this matter - including my esteemed colleague and friend Bryce Edwards, my arch-nemesis and sparring partner David Farrar, and that guy who types the Dimpost - are (with the greatest of respect) spouting complete nonsense.

It simply isn't clear that any offence has been committed here at all. Let's say that everything the Herald is reporting is true (an assumption we should be a bit cautious about making - the story is based purely on a "signed statement" from Liu, not even an affadavit). He gave Labour a bunch of money in 2007 in exchange for things like a bottle of wine and a book.

Well, if you go back to the financial returns from political parties for 2007, there is listed a donation to Labour of $150,000 from "Palmer Theron, Solicitors, on behalf of an undisclosed client" (as well as two other donations of $50,000 and $30,000 from other law firms on behalf of similaraly "undisclosed clients"). For balance, you might also note that in that year National reported $40,000 in anonymous donations, as well as $513,000 from three trusts that it had been using to launder donations previously.

Now, was Liu the "undisclosed client" who gave Labour this $150,000 donation? Who, aside from Liu, can really tell? And if this was Liu, then no law was breached. If he gave the payment to Labour by way of a cheque from a solicitor's trust fund, then not only did he do nothing legally wrong, but Labour (under the laws at the time) did nothing legally wrong in accepting it or listing the solicitor's undisclosed client as being the source. That was a bad law, as I argued a lot at the time, but it was the law ... and you can't retrospectively rewrite it now.

However, even if this particular gift from an "undisclosed client" is not the donation that Liu gave and Labour really did just take and bank his money without disclosing it in any way - an action that would have been unlawful even under the laws of the time - there's a reason why the Police can't investigate the matter. The Electoral Act in 2007 contained a six-month time limit on any prosecutions for filing a false electoral return. So there is no way that the Police can take anyone to court now for any failure to disclose Liu's gift - meaning there is nothing for them to investigate.

So, sure ... if Liu is telling the truth (but see previous caution about taking this assumption as proven), Labour has an "optics problem". It has to explain how as a party it managed to completely forget that this guy was splashing around tens-of-thousands of dollars at its fundraisers a mere 7 years ago. But a legal problem? I just don't think so.

Comments (7)

by barry on June 22, 2014

If he bought a bottle of wine at a fundriaser, then wouldn't the money have been recorded as a cheque from the fundraiser organiser?

Isn't this a current method of avoiding disclosing "anonymous" donations (like fundraising dinners)?  Everybody in the party can see how much you are giving (so you might be expected to get some attention when you come up with policy suggestions), but they are not recorded against your name.

If he paid $100 000 for a bottle of wine than it is hard to imagine that nobody would have remembered it.  there can  hardly have been many "purchases" of that magnitude?

As you say it is an "optics" problem for Labour, particularly for Rick Barker.  It is hard to criticise National when you have a history of the same behaviour.

It comes back to how to finance democracy while avoiding corruption (or even a perception of corruption).  The Labour party is in a bind, they need money to compete with National, while their supporters think the whole process stinks.  National supporters don't seem to care.

by Siena Denton on June 22, 2014
Siena Denton

Kiaora Andrew

As is to be expected, you are the voice of sound reasoning's both from a legal perspective and quite frankly using neutral, unemotive common sense.

Reading my Herald on Sunday and the front page bold-lettered RED EXCLUSIVE Labour, [Judas...oops!] Liu and the $100k bottle of [poison] wine also $50k for a crusie in China.

Liu's signed statement is just that, a statement not an affidavit.

What I can extract from and make an assumption about the information made publicly to date on Mr Liu and his donations is that he has been playing both sides of the political divide by providing cash for influence at the highest level or so he thinks and there is no optical illusion needed to clearly see that is what his so-called generosity is really all about.

Also, I have read that currently a senior New Zealand Police officer based in China is investigating Liu's role as a witness in a bribery trial and the New Zealand citizenship application which followed.

So, "people who are calling for the Police to get involved and investigate this matter - including my esteemed colleague and friend Bryce Edwards, my arch-nemesis and sparring partner David Farrar, and that guy who types the Dimpost - are (with the greatest of respect) spouting complete nonsense", will have to wait for an outcome, beit a positive or negative outcome from China.

John Key, Judith Collins, Maurice Williamson, Michael Woodhouse, Michelle Boag, John Banks and David Cunliffe should sing this song after all is said and done.

We Can See Clearly Now 

We can see clearly now, the pain is gone,
We can see all obstacles in our way
Gone are the dark clouds that had us blind
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.

We think we can make it now, the pain is gone
All of the bad feelings have disappeared
Here is the rainbow (Maurice) he's been prayin? for
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.

Look all around, there’s nothin? but blue skies
Look straight ahead, nothin? but red skies too

We can see clearly now, the pain is gone,
We can see all obstacles in our way
Gone are the dark clouds that had us blind
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.


by Andrew R on June 22, 2014
Andrew R

under the electoral law in 2007 would a political party have to be told who an "undisclosed client" was if receiving a donation  via a law firm or a trust? If not then wouldn't it be plaisible that Liu could donate and Labour not know he had?

by Andrew Geddis on June 22, 2014
Andrew Geddis


Not quite. If someone were to (say) pay $16,000 to have dinner at Antoine's as a fundraiser for National, that person's name would have to be disclosed both to the National Party and then to the Electoral Commission (and thus, to the public). But if they only pay $10,000 (or $5000), then the National Party must know their identity, but the Commission needn't. The fact a donation is made via a "fundraiser" doesn't change the legal requirement to disclose.

Andrew R,

No. In 2007, a party would not have to be told who a law firm's client was. Nor would they have to ask. Indeed, a firm would be in breach of its ethical obligations to its client if it were to tell the party who was giving the money, unless the client authorised them to do so.

(Note that things are different now. There is a specific legal requirement on a law firm (and anyone else) to tell the party if it is "transmitting" a donation on behalf of someone else, as well as who the real donor is.)

by Ian MacKay on June 24, 2014
Ian MacKay

All of the donations saga is predicated on the belief started by John Key. He giggled away at the "gossip and rumour" that he was passing on and that perhaps 100s of thousands of dollars were in involved. The statement seemed to claim that $150,000 was involved.

So far no money has been proved to exist. What I want to know is what happens to Mr Key and to the Herald?

by Ian MacKay on June 24, 2014
Ian MacKay

Oops What happens if no money exists? Key. Herald. Woodhouse.

by Bruce Thorpe on June 28, 2014
Bruce Thorpe

I expected more of a contribution.

Nothing of interest here , move on everybody.

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