30 Apr 2012

Banks welcomes mayoralty donations inquiry

10:27 pm on 30 April 2012

John Banks says he welcomes news there will be a second investigation into donations made to his Auckland mayoralty campaign in 2010.

The ACT Party leader says he is 100% confident the investigation will find in his favour, as his return was filed in accordance with the law.

Police are investigating claims Mr Banks declared $65,000 of donations from SkyCity and internet millionaire Kim Dotcom as anonymous when he knew who they were from.

Mr Banks has come under pressure to stand down as a minister after Mr Dotcom claimed he had made two $25,000 donations to the mayoral campaign.

Mr Dotcom has said Mr Banks rang to thank him for the donations, even though Mr Banks listed the donations as anonymous in his electoral return.

However in a statement on Monday, Mr Banks says he never rang Kim Dotcom to thank him for the donations.

Mr Banks says he did thank Mr Dotcom for donating $500,000 towards the cost of Auckland's New Year Eve fireworks display in 2010.

Labour Party leader David Shearer is calling on Prime Minister John Key to take action, saying Mr Banks should be stood down from his ministerial portfolios.

Electoral laws review may be needed - Key

John Key says he has been assured by John Banks there has been no breach of the law. However, the Prime Minister says it might be necessary to review local government electoral laws to bring them into line with similar laws applying to central government.

Mr Key said on Monday that local government electoral laws are not as stringent as those that apply to central government and there could be an argument made that the local government disclosure regime should change.

"That could be a matter for genuine review. I think if you go and look at what's happened, there's a significantly different disclosure regime under central government and a significantly different requirement on political parties."

Wellington lawyer Graeme Edgeler has a special interest in electoral law and says the Local Electoral Act allows a very loose interpretation of what a candidate knows about anyone who gives money.

Mr Edgeler says it is easy to declare a donation as being anonymous and the act should be changed to match the donation rules for central government.

PM accused of double standard

Earlier on Monday, New Zealand First leader Winston Peters accused the Prime Minister of double standards for not forcing Mr Banks to stand down as a minister.

Mr Peters says he stood down as Foreign Affairs Minister in 2008 after National and ACT initiated separate investigations by police, the Serious Fraud Office and the Electoral Commission into New Zealand First's fundraising.

He says the Government has one rule for itself and another for Opposition parties.

Electoral law specialist Andrew Geddis from the University of Otago says police may take some time to complete their investigation.

Donations can be made directly to a campaign organisation without a candidate being told who they are from. Mr Geddis says such an approach would technically be within the law.

By-election if Banks forced out

The law requires candidates to declare the source of a donation if it is known to them.

Candidates face a two-year prison term for filing a false declaration; if convicted, a sitting MP would have to vacate their seat.

If John Banks does resign from his seat or is forced out, there would be a by-election in Epsom.

If National won the seat, it would retain its parliamentary majority with the same number of votes it had available with the support of the ACT Party.