Crown calls NZ First Foundation deed 'a sham' as it closes donations case

The Crown has described the New Zealand First Foundation's founding document "a sham", as it closes its case against two men accused of mishandling political donations.

The pair have been on trial at the High Court in Auckland for the past two weeks, accused of obtaining nearly $750,000 by deception.

They deny deceiving the New Zealand First party by collecting and spending money the Crown says should have been treated as donations with reporting obligations.

Over the course of the trial, the court has heard the New Zealand First party was having money troubles roughly a decade ago.

Evidence presented to the court shows insiders were concerned it had no consistent funding stream and was missing bill payments, sometimes at Winston Peters' own expense.

It was within this context the Crown said two men - who continue to have interim name suppression, set up the New Zealand First Foundation.

John Dixon QC said they gathered and spent money donated to the foundation, keeping it secret from the party; its leader and its board.

"They did not know how the foundation was funded, how much money it had or what it was spending it on. There were no board updates on the foundation activity; they were kept in the dark."

Dixon QC said the accused actively told people, including former New Zealand First MP Clayton Mitchell who fundraised for the party, that the foundation and the party were the same thing.

"He said it was designed and set up to assist New Zealand First, be a part of New Zealand First and assist New Zealand First getting into Parliament at the next election.

"And Mr Mitchell fundraised on that basis; that this was all just one. [One of the defendants] must have understood that."

The money was used to pay for a software system and rental expenses of an office space on Lambton Quay that bore the sign 'New Zealand First Party Headquarters'.

It also paid for boxer Joseph Parker to speak at a party conference and the production of a video of party leader Winston Peters touring the country during the 2020 Election campaign.

The evidence of many of the donors, who gave in individual sums that totalled nearly $750,000, was that they gave money believing it was going to the party or Winston Peters.

Dixon QC said an early email from one of the defendant's talking about "a leader's fund" and bank transfers, including one with the reference 'Winston', showed the accused had to have known what they were doing was illegal.

"The fact that they spent money, contrary to the terms of the trust deed, suggests that that was really just a sham. The simple fact is the whole thing was unnecessary.

"If all of this was above board and understood by defendants all of this could have been achieved in quite different ways."

The defendants, who still have interim name suppression despite being before the court since September 20202, deny both charges of obtaining by deception.

The defence has argued the party wasn't deceived, no wrongdoing occurred and party leader Winston Peters is "significantly" absent from the Crown's witness list.

Peters' name has come up time and time again during the trial, which has heard donors were fond of him and he was fond of a sausage sizzle fundraiser.

John Dixon QC said any suggestion he was involved in the alleged mishandling of political donations was both unsubstantiated and contradicted by the defendants' own evidence.

"If Mr Peters was in control then there would be evidence of the defendants consulting him before spending the money but they didn't; they just went ahead and spent it."

"Any argument that the defendants did, or could have, believed that the party knew and approved of the conduct is unsupported by any evidence and is, with respect, directly contradicted by the numerous statements of the defendants."

The defence will give its closing arguments on Monday 27 June, after which it's likely Justice Jagose will reserve his decision.