Skip to main content

The money that never touches the party

 

The money that never touches the party

When undercover reporters set out to put foreign money into British politics, they did not wire cash to a party account. They paid a pollster.

Channel 4 News and the investigative group Verbatim revealed this week that senior figures around Nigel Farage arranged for a company registered in the United States, controlled by the undercover team and presented as the vehicle of a wealthy American, to pay for polling that Reform UK had itself commissioned. The bill came to more than £30,000. The results ran in the Telegraph and the Times as independent research, and neither paper was told that the party had ordered the work. The benefit was never declared to the Electoral Commission. Reform UK's head of policy, James Orr, was filmed saying the party could "easily get away with it." Bob Posner, who once ran the Electoral Commission, told the programme that serious criminal offences may have been committed. The Liberal Democrats have written to the Metropolitan Police. Reform UK denies wrongdoing, describes the operation as a hoax by foreign-funded climate activists, and says it holds a King's Counsel opinion that no law was broken.

The particulars are British. The method travels. Money that benefits a party without ever entering its accounts, routed through a supplier, an intermediary company, or a friendly third party, is the oldest workaround in campaign finance, and it works because disclosure regimes are built to watch bank transfers rather than relationships.

New Zealand votes on 7 November. The regulated campaign period is already running. This is a good moment to ask what our own rules actually catch.

Under the Electoral Act, parties must publicly name any donor who gives more than $6,000 in a calendar year, whether in one payment or a series from the same source. Donations above $20,000 must be reported within 20 working days during an election year. Overseas persons, meaning non-citizens and non-residents, foreign-incorporated companies, and bodies whose principal place of business sits outside the country, may give no more than $50. Since 2019 it has been an offence to enter into any arrangement whose effect is to let an overseas person exceed that limit. Anonymous donations are capped at $1,500, with a separate channel through the Electoral Commission for larger gifts a donor prefers not to attach a name to.

On paper this is a defensible regime. The $50 overseas limit is among the tightest anywhere. Aggregation stops a donor from drip-feeding payments just under the naming threshold. Parliament tightened the definition of a donation in 2022 to capture money given to a third party for a party's benefit.

Then look at what happened when the state tried to enforce it.

In 2022 the Serious Fraud Office prosecuted a scheme that had split two donations of about $100,000 each to the National Party into smaller payments made through a string of named individuals, concealing the true source. The High Court convicted the businessman Yikun Zhang and the twin brothers Colin and Joe Zheng. In November 2023 the Court of Appeal quashed those convictions. The men had obtained no benefit of the kind the Crimes Act provision required, and the court rejected the argument that escaping public scrutiny was itself a benefit capable of being valued. Only Joe Zheng's conviction for lying to investigators survived. In a separate case, roughly $750,000 given for the advantage of New Zealand First had been paid into an account held by a legally distinct foundation. The judge found that those gifts were not political donations under the Electoral Act at all, and the defendants were acquitted.

In both prosecutions the SFO declined to charge under the Electoral Act, having concluded it was too weak to sustain a conviction. That judgment is the most damning fact in the file. The agency responsible for chasing the money looked at our electoral law and decided it was not worth using.

The vulnerability the Verbatim cameras exposed in London therefore sits in three places here rather than one.

The first is the sub-threshold layer. Coordinated gifts from family members, employees, associates, or a cluster of locally registered companies and trusts can each sit below $6,000 and never surface. Unless an investigator can prove common control or an arrangement designed to defeat the overseas limit, the source stays dark, and the cases above show how hard that proof is to assemble.

The second is the corporate route. The 2019 reform stopped foreign nationals writing cheques from abroad. It left untouched the New Zealand-registered company with overseas beneficial owners, which may give without limit and is named, if it is named at all, by its trading name. Voters learn that a company gave. They learn nothing about who stands behind it.

The third is the route Reform's people were filmed taking. A donation need not be money. Polling, advertising, research, staff, and services all carry value, and when a third party pays the supplier directly the party can maintain that nothing was ever received. Our law reaches such benefits in principle. Two failed prosecutions suggest the practice is another matter.

Sitting over all of this is a timing problem that makes disclosure close to ornamental. Annual donation returns for 2026 will not be published until May 2027. Voters will cast their ballots in November knowing the identity only of donors above $20,000, and will wait half a year to learn who funded the campaigns that persuaded them.

Parliament has just widened the opening. The Electoral Amendment Act 2025, in force since January, lifted the naming threshold from $5,000 to $6,000 and doubled the reporting window for large donations from 10 working days to 20. The government called it an inflation adjustment. Labour, the Greens and Te Pāti Māori voted against. In the same period, parties have banked $468,160 through the protected disclosure scheme, which allows a donor to give substantial sums without being named publicly, with National taking about two-thirds of it. New Zealand still places no cap of any kind on how much a single person or company may give a political party. Transparency International rates our donation rules among the weakest in the developed world.

Fixing this does not require suspicion of ordinary citizens who support the parties they believe in. It requires precision, and most of the work is technical.

Lower the naming threshold to $1,000, and keep aggregation so that repeated gifts from one source are captured. Require every company and trust that donates to disclose its ultimate beneficial owners, and treat any entity controlled by overseas persons as an overseas donor bound by the $50 limit. Write offences into the Electoral Act that are actually usable, aimed at concealment and coordination, so that prosecutors stop reaching for the Crimes Act and losing on the meaning of benefit. Bring goods, services, and payments made to third parties squarely within the definition of a donation, with the party carrying the obligation to declare a benefit it arranged and did not pay for. Give the Electoral Commission the investigative powers and the staff to test patterns of sub-threshold giving rather than merely receive returns. Publish donations continuously through the regulated period, so that disclosure informs a vote rather than a historian. Cap the amount any one donor may give.

Reputation for integrity is an asset. It is also an anaesthetic. New Zealand has spent a decade discovering, case by case, that money reaches its parties through channels the law does not see, and has responded by raising the threshold at which anyone has to look. The people who study these systems already know where the openings are. So do the people who use them. Nine weeks out from an election, the question is whether Parliament will close them before someone with more at stake than a television crew comes looking.

Popular posts from this blog

The Haka, the Hurt, and the Work We Owe

  The Haka, the Hurt, and the Work We Owe An Indian in Aotearoa reflects on resistance, complicity, and the solidarities we have yet to build Mohan Jyoti Dutta I watched the haka. I watched it several times, in fact. Each time, I tried to sit with what I was feeling before reaching for what I was supposed to think. Let me be honest about who I am in this conversation, because that matters. I am an upper caste, upwardly mobile Indian man. I am a professor at a university in Aotearoa. I carry the accumulated privileges of Brahminical socialisation, of English-medium education, of institutional access that was never designed for the communities I now write about and alongside. I say this not as confession but as orientation — because where you stand shapes what you see, and I have learned, through years of working with communities at the margins, that the refusal to name your own location is itself a colonial habit. The haka directed at Parmjeet Parmar did not offend me. It ...
Read more

Whiteness, NCA, and Distinguished Scholars

In a post made in response to the changes to how my discipline operates made by the Executive Committee of the largest organization of the discipline, the National Communication Association (NCA), one of the editors of a disciplinary journal Rhetoric and Public Affairs (RPA), Professor Martin J. Medhurst, a Distinguished Scholar of the discipline, calls out what he sees as the threat of identity (see below for his full piece published in the journal that he has edited for 20+ years, with 2019 SJR score of 0.27). In what he notes is a threat to the "scholarly merit" of the discipline, Professor Medhurst sets up a caricature of what he calls "identity." In his rhetorical construction of the struggles the NCA has faced over the years to find Distinguished Scholars of colour, he shares with us the facts. So let's look at the facts presented by this rhetor. It turns out, as a member of the Distinguished Scholar community of the NCA, Mr. Medhurst has problems with w...
Read more

The Substack and the Slur: How a Manufactured Crisis Toppled a Wahine Māori Political Editor

  The Substack and the Slur: How a Manufactured Crisis Toppled a Wahine Māori Political Editor On the architecture of the Aotearoa culture-war machine, and the danger it poses to a democracy heading into 2026 There is a particular cadence to the afternoon on which the career of a senior Māori journalist  at TVNZ is finished. It is unhurried. It begins with a tweet — in this case, a single image of a typed statement, posted by Maiki Sherman, the now-former political editor of TVNZ, on the afternoon of Friday, 8 May 2026, announcing that she had parted ways with the broadcaster. The post was terse, dignified, and final. As RNZ later reported , Sherman wrote that the scrutiny of the previous week had placed enormous pressure on her and rendered her role "untenable." The first wahine Māori to lead a major broadcaster's political team was gone. The story that finished her had not, ten days earlier, existed in any newspaper, on any wire, on any website you would consider mai...
Read more