Republished with Permission
Bryce Edwards
I am Political Analyst in Residence at Victoria University of Wellington, where I run the Democracy Project and am a full-time researcher in the School of Government.
There’s a problem with democracy in New Zealand – authorities won’t enforce the Electoral Act’s rules on donations to political parties. Unfortunately, modern New Zealand electoral history is littered with examples of lawbreaking by politicians and political parties in their fundraising. Yet, there have been no successful prosecutions for the many corrupt and illegal ways the Electoral Act has been broken by wealthy individuals giving money to decision-makers.
The latest example is the police decision, announced on Thursday, not to prosecute National MP David MacLeod for failing to disclose $178,000 in donations for his election campaign last year. The police have merely stated that they had “completed their enquiries into this matter and no further action will be taken”.
No explanation has been given for failing to take action in what all assumed as an open and shut case of the Electoral Act 1993 being breached, requiring prosecution. The result will be a further decline in public confidence in the electoral system.
Background about MacLeod’s Electoral Act breach
In May of this year, the National MP for New Plymouth admitted that he had failed to disclose $178,394 in donations he had received for his successful 2023 election campaign. He fronted up to the media, saying “I’m owning this, I have broken the law by filing an incorrect return to the Electoral Commission and the law is very clear on that.”
MacLeod corrected the error by filing an amended return of the donations to the Electoral Commission. He explained to the public that he had originally left the vast majority of his donations out of his disclosure because they were given to him in 2021 and 2022, and he had thought he only had to declare donations for the 2023 election year. In reality, the Electoral Act states that candidates must declare all the donations received over $1500 for their entire campaign.
In addition, MacLeod admitted to having also left out a donation of $10,000 received in 2023, which he said was a mistake he could not explain.
Although MacLeod initially only disclosed $29,268 from seven donors, he received $207,662 in donations above the threshold of $1500, from 24 donors.
Party leader and prime minister, Christopher Luxon, held a press conference and said that MacLeod had failed “to meet the high standards we expect of our MPs”, and he therefore stripped him of his environment and finance and expenditure select committee roles as a punishment.
The Electoral Commission then carried out its own investigation, and a few weeks later, in June, referred the issue to the police, as they believed that McLeod has breached the Electoral Act. The Commission’s legal and policy manager, Kristina Temel, said it was “up to the police to decide whether to investigate or take further action”.
What the Police had to decide
The police had to decide whether MacLeod's actions were either “corrupt” or “illegal”, and therefore to prosecute him in court. And they didn't need to prosecute if it was neither of those things.
In this regard, a “corrupt” act would mean that MacLeod had intentionally broken the law. For this, a conviction could carry a sentence of two years in prison, or a $100,000 fine.
The lesser charge of an “illegal” act could be used if MacLeod’s breach of the Electoral Act was essentially deemed accidental but careless. For this the punishment would be a fine of up to $40,000.
To escape either of these charges, MacLeod would need to be able to show that the breach was an accident and that he had taken “all reasonable steps in the circumstances to ensure that the information in the return was accurate”. Hence, it’s not enough to claim that the breach was a just “genuine mistake” to avoid prosecution. Ignorance of the law is no defence.
Surprise and disagreement about the police inaction
The police decision not to prosecute MacLeod has been well received by the MP himself. He said last week, “I’m just feeling hugely relieved that it is not being taken any further” and “this has been the most trying time of my whole career”. He felt he had paid the price of his error and now wanted to put the issue behind him: “I admitted I made a mistake and I just want to move on.”
However, there have been surprise and disagreement expressed by commentators from across the political spectrum. National Party aligned blogger and pollster David Farrar wrote that “this was the wrong decision by police”, and argued that they should have taken the breach of the law to the courts. He argues that there is no debate about the fact that “The return was false,” and so it is hard to understand how it wouldn’t be prosecuted.
For Farrar the key issue for a conviction is over whether MacLeod had taken all reasonable steps to ensure his disclosure was accurate (such as seeking advice from the party or a lawyer). This in Farrar’s view needed to be decided by the courts: “As it is contestable, I think the police should have laid a charge of an illegal practice, so that the court could decide if all reasonable steps were taken. It could well be that they decide in the candidate’s favour, but I want a court to decide that, not the police.”
Unsurprisingly, on the political left there was also incredulity expressed that MacLeod had escaped prosecution. At the Labour-aligned blog the Standard, Greg Presland, a lawyer and Labour Party activist, challenged the police decision, saying that although McLeod’s actions might not meet the high threshold for a “corruption” conviction, it seemed evident that a sentence for “illegal” behaviour was obtainable.
He suggests that the police need to show that MacLeod had actually taken “all reasonable steps in the circumstances to ensure that the information in the return was accurate”. He believes this is patently untrue, as leaving out $178,394 in donations is too significant. According to Presland, a private prosecution could still be made of MacLeod.
Similarly, blogger No Right Turn says that MacLeod “clearly did not take all reasonable steps to ensure his declaration was accurate”, and therefore the police have made the wrong decision.
Did MacLeod deliberately or accidentally leave the donations out of his disclosure?
Part of the police’s decision to prosecute or not would have been based on how deliberate they perceived McLeod’s breach to be. Was it intentional, or an ignorance of the law, or an unconscious and accidental oversight? These motivations and intentions would have been an important determinant for the Police.
There are some signs that McLeod’s omission of the donations was deliberate but ignorant of the law, rather than an accidental oversight. It appears that McLeod had in fact told his donors that he would not declare their large donations to the Electoral Commission if they were passed onto him before the end of 2022, because that’s when the election year started.
This is made apparent in a statement released by one of the donors, New Plymouth businessman Philip Brown, who donated $10,000 in October 2022, which wasn’t declared initially: “David and I discussed the donation, addressing any potential conflicts of interest. In these conversations, David indicated his understanding of how donations were to be recorded. It was his genuine belief that only donations made in the election year were to be recorded, which fully aligns with his recent statements.”
Therefore, this statement suggests that MacLeod’s decision not to disclose $178,000 in donations was deliberate, albeit made under a misunderstanding of the law. It appears that the MP thought he had a legal loophole to avoid disclosure of his funders.
It needs to be pointed out how significant MacLeod’s donations were. His total contributions (now) were declared to be $207,662. This was the highest amount of any candidate in the 2023 election campaign. His New Plymouth rival, the then-incumbent MP Glen Bennett, declared only a fraction of the amount: $27,510.
Although other National MPs also had large war chests, none came remotely close to MacLeod’s – the next highest was Siva Kilari with $110,483. And other candidates that hauled in a lot, with big name recognition and business connections, were Chris Bishop with $98,549, and Shane Jones with $95,524.
It therefore says something about MacLeod that he had extraordinarily high donations for his campaign [and] was telling some of his donors that he didn’t need to declare their contributions, but apparently didn’t bother to double check his understanding of the donations disclosure law.
The police need to have the responsibility for political crimes taken off them
The decision not to prosecute MacLeod is another case study for why New Zealand needs to remove the role of electoral enforcement from the police, and give it to a dedicated agency, such as an anti-corruption commission. David Farrar argues in favour of this too, saying this week, the police decision is an “example of why they should not be the body that enforces electoral law.”
This article was originally published on the author’s Substack.
