Te Pāti Māori president John Tamihere is calling an investigation into his charities' political donations racist.
The Charities Services is investigating Tamihere in relation to two donations made by National Urban Māori Authority and Te Whānau o Waipareira, of which Tamihere is also chief executive.
Tamihere said they disclosed everything in audited financial statements and that there was no cover up or attempt to be dishonest.
"It is a sad day for democracy in Aotearoa when Māori get demonised for being honest in publicly ensuring that every cent spent to advance the Te Pāti Māori, or Māori causes by Māori people is somehow deemed illegal or unworthy."
Tamihere and Te Pāti Māori are demanding that the Electoral Laws change so all funds channelled to political parties are fully disclosed.
"If you have nothing to hide, you have nothing to fear. This is the hallmark of a just society and an open democracy."
Financial statements filed to the Charities Register for Te Whānau o Waipareira Trust Group showed $385,307 had been given as an interest-free loans to its chief executive to pursue the general elections and political aspirations.
The National Urban Māori Authority also shows a $82,695 payment provided to its chief executive
General manager of Charities Services Natasha Weight said it was established through the common law that supporting a particular political party or its candidates was not charitable.
"Charities can express support for a particular policy of a political party that is important to their charitable purpose. However, a charity must not support or oppose a political party or candidate."
Weight said this included making a donation to a political party or a candidates election campaign, endorsing a party or candidate, or allowing a party or candidate to use a charity's resources.
Tamihere said should the Charities Commission find against them, they would litigate this because he said they had a right to overtly and openly stand up in a free democracy.