Legal Beagle by Graeme Edgeler


Johndotbanks - the law is over, let the politics commence

The police have announced that they will not be prosecuting Hon. John Banks under the Local Electoral Act for filing a false donation return following the 2010 Auckland Mayoral election. The complainant, Hon. Trevor Mallard, has a more fulsome letter (.pdf)explaining the decision on his blog.

At the time the investigation was announced, I was quoted in a range of news media about the difficulties of establishing the charge in the Local Electoral Act. Among other observations about the problems with the donation regime in the Local Electoral Act, I observed at various points that:

  • Only actual knowledge of the donation would count sufficient, so that even if John Banks had really good reasons to suspect where the donations came from they could still be declared anonymous.
  • Only if that knowledge was in place at the actual time the return was signed and filed, would it matter. If John Banks was later told who made the donation, he wouldn't have to say.

I even wrote a 'blog post going through some of the anomalies.

The law provides a substantial out to both donors and candidates who wish to hide the source of donations from the public, if not really from themselves, if that's what they want. We have done a lot to remove such "loopholes" from the laws applying to general elections, but many still remain in our local electoral laws.

What is interesting, is that none of this appears to have actually presented a problem in respect of John Banks 2010 donation return.

Naturally, I cannot be certain that the short police description of the case accurately reflects what could properly be proved. Previous police descriptions of what they could prove have been somewhat malleable. In respect of the Sky City donation in particular, what Police have said is that:

The Police investigation established that on 24 May 2010 Mayor John Bank met with the Chief Executive Officer (CEO) of Sky City Entertainment Group Limited. At that meeting Mayor Banks received a sealed envelope containing a $15,000.00 cheque written out to "Team Banksie 2010".

The reason that police decided that they could not properly charge Mr Banks is that, in effect, they did not believe they could prove he had read the return before he signed it, his having simply sought assurance by a campaign worker that it was correct. Not being able to prove that the return was known by Banks to false, there might still be the possibility of a charge under the strict liability offence (which is much less serious, carrying a fine only) which contains no knowledge requirement, and places the onus on the person charged to proved they took reasonable steps to be sure of the accuracy of their return, but, as I pointed out at the time, there is a strict six month time-limit on summary charges like the one here, so this was never going to be a possibility.

In a post at the time of the first airing of the allegations, Andrew Geddis addressed exactly this possibility: that Banks might know who made the donation, but not know that it was improperly recorded. There is discussion in the comments thread about the possibility of whether someone can be held to have knowledge if simply wilfully blind to the source of a donation. Wilful blindness is a concept that can apply in instances even where the law requires knowledge, but (1) it is not clear it would apply to Local Electoral Act, and (2) having been assured by a campaign worker of the accuracy of the return police probably rightly concluded it wouldn't actually apply here even if it theoretically could.

What next? The big questions remaining aren't legal, but political: if John Banks actually knew who made some of these donation, as the police appear to state they can prove, then some comparison of these conclusions with Banks' statements at the time may be in order. I recall John Banks fudging his answers on a number of occasions, but if he categorically denied something the police appear to claim they can prove, there may be a political cost. I have no idea whether police could actually prove what they say they have established, but if someone with access to media search facilities would care to look up Banks' public claims, others can begin to calculate whether there may be a political cost.

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