Labour’s art auction fundraiser returns despite Serious Fraud Office probe in party donations

Donations disclosed in the last weeks of the campaign reveals Labour went ahead with its usual art auction fundraiser, despite questions about how it was disclosing the donations.

They also reveal that New Zealand First leader Winston Peters appears to have loaned his own party $60,000.

In early October, Labour declared donations of artwork from artists Karl Maughan and John Reynolds totalling $35,760 and $32,000 respectively.

Those “donations” represent how much a number of separate pieces of art sold for at auctions – that money is counted as a donation by Labour.

But Electoral Commission records don’t show who bought the artwork.

Labour has a long tradition of holding art auction fundraisers and has always treated them as donations from the artists, rather than disclosing the people who purchase the artworks.

Labour President Claire Szabo confirmed the party continued with this tradition during this year’s election.

“We have had a couple of art auctions this [election] cycle; we had an Auckland one and a Wellington one.”

The art by Maughan and Reynolds were sold as part of those auctions.

Labour’s acting party secretary Rob Salmond confirmed that all the pieces auctioned off by the artists were sold for “around about the market value”.

If someone were to pay far above the market value, “you bet your life we’re going to identify the person paying over the [value] for something as a donor,” he said.

The art is appraised by two separate valuers before going to the auction.

“We think that it meets both the spirit and the letter of the electoral act and we think that meets the expectations of the New Zealand public as well.”

Otago University electoral law specialist Andrew Geddis said this is an area where the law should be tightened up to require disclosure of those who purchase the artworks, sometimes for much more than their value.

The Serious Fraud Office (SFO) is investigating a matter relating to donations to the Labour Party in 2017 but has not revealed any details of what it is investigating.

Speaking to the Herald, Geddis said this could be one of the areas that the SFO was looking into.

He said the issue with Labour’s practise of raising money through selling art is the buyer could be deliberately be paying more than a piece is worth as they know it’s raising money for a political party they support.

Donations and loans of more than $30,000, including the identity of the donor, must be declared within 10 working days of the donation being made.

Donations of more than $15,000 must be disclosed in a party’s annual donations returns.

Geddis said the effect of the art auction system of donation is that the commission never actually sees the person who gives the money to the party.

“This is one of the areas of Labour’s fundraising that could potentially be of interest to the SFO.”

The $32,000 “donation” by Reynolds was split up into two payments – $12,000 on August 1 and $20,000 on October 2.

Maughan “donated” $20,760 and $15,000 on the same days.

In the past, there has been speculation the SFO probe could relate to the art auctions.
Szabo said she was not at liberty to talk about that investigation.

“They [the SFO] have not released their findings at this point in time.”

In February, Szabo revealed that Zheng Shijia, one of the men now facing charges in a case relating to National Party donations, had donated $10,000 by buying a piece of art at a silent auction in April 2017.

Meanwhile, Electoral Commission documents show that New Zealand First leader Winston Peters appears to have loaned his party $60,000 just days before Election Day.

The records show that one WR Peters, residing in Northland’s Whananaki, loaned NZ First $50,000 on October 6, then a further $10,000 the next day.

According to the documents, the loan’s due date is October 6 next year and it has a 2 per cent interest rate.

Under New Zealand’s electoral law, any donation or loan to a registered political party more than $30,000 has to be disclosed.

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