The Crown outlines its case against six men and a woman charged with deceit in concealing donations to the Labor and National parties, and lines up big names who will be called to give evidence.
Cabinet ministers Michael Wood and Andrew Little, former National leader Simon Bridges, the Prime Minister’s chief press secretary and an official from her department are among 54 witnesses the Crown is calling in its case against seven people alleged to have concealed political donations.
A former Labor president, Nigel Haworth, New Zealand’s ambassador to Jakarta, Trevor Matheson, and National’s general manager Greg Hamilton will also give evidence.
The expected 10-week trial opened on Tuesday with lawyers on behalf of the Serious Fraud Office laying out their case against former National MP Jami-Lee Ross and three others involved in two $100,000 donations to National in 2017 and 2018, and three people for $35,000 donated to Labor in 2017 as the proceeds of an art sale.
All of the defendants have pleaded not guilty to the charges of obtaining by deception.
The SFO says in all three of those donations, ‘sham’ donors were enlisted to pass on small amounts under the declaration threshold for electoral donations that had been given to them by one or two big donors wanting to conceal their involvement. National and Labor would have had to declare donations over $15,000 and identify the donors to the Electoral Commission, but were given incorrect information.
Crown lawyer John Dixon QC also raised a $100,000 purchase of a Chinese imperial robe at a Labor Party fundraiser by one of the defendants, Auckland businessman Yikun Zhang, but said because the actual value of the robe was $300,000 when donated by others, Zhang’s money could not be considered a party donation.
The Crown noted that Zhang received written support from both National and Labor luminaries (including Ross, outgoing National Party president Peter Goodfellow, former Labor Party president Nigel Haworth and the Mayor of Auckland Phil Goff) for his nomination for a Queen’s Birthday Honour, which he received in 2018 “for services to NZ-China relations and the Chinese community”.
“The Royal honor evidence provides a possible justification – a motive – for the defendants to engage in offense that shielded the donation and true donor from public scrutiny.”
Dixon told Justice Ian Gault: “This case involves the subversion and manipulation of the public process of political party donations.”
He said the three donations in question were funded by Yikun Zhang, with the possibility of a second defendant, Zhang’s right-hand man in a Chinese cultural association Colin Zheng, contributing as well, in one instance.
“The Crown alleges the true donor(s) wanted to conceal from the public their identity(ies) as donors of these funds. To achieve that, they, and some of the other defendants, persuaded friends and family members to pretend to be the actual donors and then they split the large donation up into a series of smaller donations from those persons (sham donors).”
Also charged alongside Ross, Zhang and Colin Zheng, is Joe Zheng, Colin’s twin brother, for the National donations. Joe Zheng is charged with lying to the SFO during his compulsory interview with him over the matter in 2020.
Yikun Zhang is also charged with the two Zhengs and three other defendants, who have name suppression, over the Labor Party artworks donation.
All defendants pleaded not guilty to all charges in court on Tuesday morning.
The hearing is expected to focus first on the Labor Party artworks donation, with politicians including Little and Wood expected to appear in the witness box late next week, before the case turns to the National Party donations.
Jacinda Ardern’s chief press secretary Andrew Campbell and former Labor party officials Andrew Kirton and Hayden Munro will also give evidence of what they knew from some of the defendants.
Dixon presented the court with diagrams showing how money linked to Yikun Zhang in China was transferred to either Colin or Joe Zheng via an online site called IE, and then distributed to the alleged ‘sham donors’ to send on to either Labor or National.
A number of the donors, including those who supposedly bought the artworks later found at Yikun Zhang’s home during an SFO search, will be called, Dixon said, to say they had not used their own money but had done what was asked of them.
Two of the defendants, Yikun Zhang and one of those with name suppression have had to join proceedings by video after either contracting Covid or becoming a household contact since Monday morning. The hearing with 20 lawyers, including six QCs, has led to a packed courtroom of more than 40 people at times, with one bench of 10 lawyers seeking more table space to be added, and media spilling over into the dock.
After the Crown opening statement, defense lawyers made brief remarks in reply.
John Katz, QC, for Yikun Zhang, said the Labor and National elements to the case were quite distinct and Zhang accepted he bought the five artworks as a donation to Labor in 2017. “The money was clearly his. That’s not in dispute.” There appeared to have been a mistake in Labour’s donations declaration for that year but that was not Zhang’s responsibility.
If Justice Gault was to find that any of the defendants used a stratagem with intent to conceal the true identity of the donor from the Labor Party, Zhang would argue he was not a party to that. “He had no intent to deceive anyone.”
On the National Party donation allegations, Zhang denied paying the $100,000 in 2017 or the same amount in 2018. “It was not money tended by him or on his behalf.”
Marc Corlett, QC for a defendant with name suppression charged over the Labor Party donation, said the SFO investigation had been what he called “rabid”, and a theory looking for evidence that had been reverse engineered to “make some kind of parallel construction between ” the National Party issue with funds raised by Labour.
Corlett also accused the SFO of “euro-centric, cringe-inducing cultural assumptions” of what the Chinese community might think or how it might act. It had not left open the possibility that if any scheme to deceive had been employed it had been entirely from the “donor side of the table”.