SFO tight-lipped over probe of Goff's election expenses

The Serious Fraud Office (SFO) says an investigation into Auckland Mayor Phil Goff's election expenses is still a work in progress and it's not giving much away about exactly what it is looking at.

The SFO confirmed in March it had started a formal investigation into Goff's campaign expenses, as well as those of his former Labour Party colleague and Christchurch Mayor Lianne Dalziel, after they were referred to it by police.

Goff's 2019 campaign director Shale Chambers said the SFO has never confirmed the nature of its investigation.

But Chambers said the issue appears to revolve around the use of auctions in the 2016 and 2019 campaigns and what items should have been declared in the campaign returns.

"It's no secret that there was an auction during the 2019 campaign and there were a couple during the 2016 election campaign," he said.

Chambers wasn't campaign director in the 2016 election, but took up the role in time for the 2019 mayoral race. He said he was confident there were no grounds for further legal action.

"In the returns we filed we fully declared auction bids that were above the threshold of $1500 for donations."

Under the Local Electoral Act, donations under that amount don't have to be declared.

However, "there is a grey area where a competitive bid could become a donation and should be declared".

Chambers said he does not know who the complainant is, but he is keen to see the issue resolved.

"Reputations are at stake and until there's an outcome we can't close the chapter and move on."

Goff declined to comment. A spokesperson said he hadn't been contacted by the SFO to date and directed the query to the agency.

Last September, electoral officer Dale Ofsoske passed a complaint about Goff's 2016 election expenses to police.

It centred on a $366,000 auction declaration which did not specify individual donations or purchases. It included the sale at an auction of a book for $150,000.

The book had belonged to Goff, a former minister of foreign affairs, and had been signed by Chinese President Xi Jinping.

Police made "a number of inquiries" but the timeframe for a possible prosecution expired in December.

At the time, Ofsoske said the complaint was under section 112D of the Local Electoral Act 2001 - 'filing a false return of electoral donations and expenses'.

Artists listed as donors

It's not the first time questions have been raised about politicians and political parties using auctions as a means to secure political donations.

In 2017, it was reported by Stuff that the Labour Party was hiding tens of thousands of dollars in donations behind over-inflated art auctions, naming the artists as donors instead of the secret individuals paying for the works.*

The Labour Party said the practice complied with electoral law.

The artists involved had no idea the party was naming them as the donors and they never saw a cent of the money, Stuff said. They said their works were auctioned off at well above market value to wealthy benefactors who wanted to keep their support for the party secret.

At the time, one party member described the practice as "whitewashing" - a way to keep big donations private at a time when corporate contributions to political parties were falling because of public scrutiny.

The Labour Party said the practice complied with electoral law. But one party member described the practice as "whitewashing" - a way to keep big donations private at a time when corporate contributions to political parties were falling because of public scrutiny.

University of Otago Law Professor Andrew Geddis said candidates and parties often use auctions to raise money for their campaigns. He said it can involve someone paying a large amount for an item that is above and beyond what they would normally pay for it.

He said it's important that the public knows who paid the money at such auctions and who has been funding a party's or candidate's campaign.

Professor Geddis said when local body candidates file their expense and donation returns there is often no auditing or independent checking carried out.

Under the Local Electoral Act, returning officers have a limited window to take legal action over any irregularities that are found, he said.

However, the SFO has the ability to prosecute under the Crimes Act and isn't limited by such time frames.

Local Democracy Reporting is a public interest news service supported by RNZ, the News Publishers' Association and NZ on Air.