‘Fake donors’ and ‘fairy dust’ on opening day of donation fraud trial
Jami-Lee Ross is one of seven defendants charged with obtaining by deception following a Serious Fraud Office investigation into political donations to the National and Labour. Toby Manhire reports from the Auckland High Court.
On the night of October 15, 2018, National MP Jami-Lee Ross drove from Auckland to Wellington. He stopped at Warehouse Stationery to print a statement and continued on to parliament, where he read its contents aloud at a press conference on the tiles. This extraordinary momentduring which Ross accused his then-leader Simon Bridges of being a “corrupt politician”, set off a cascade of claims and counterclaims, revelations and investigations, leading to the High Auckland Court, where a major, multifaceted political donations trial opened this morning.
Ross and three businessmen – Yikun Zhang and twin brothers Shijia (Colin) Zheng and Hengjia (Joe) Zheng – along with three others whose identities have been suppressed by the court are put on trial. The charges relate to separate donations to the National and Labor parties. On the day of the delayed start of a trial which was adjourned yesterday after one of the defendants returned a positive Covid test, the Crown brought a case which it says is at its heart ‘fictitious donors’ .
The evidence to be presented would reveal, prosecutor John Dixon QC said, the “manipulation and ultimately subversion” of the rules on political donations. He said the Crown would show how party secretaries, the Electoral Commission and the public had been deceived by a series of episodes including split payments by tactical ‘transmitters’, cover-ups, paintings, an auction which never happened, hundreds of cases of wine and an imperial robe.
The Crown brought charges of “obtaining by deception” under the Crimes Act, alleging attempted deception by means of a “fraudulent device, trick or scheme”. These are two donations of $100,000 to the National, one in 2017 and the other in 2018, and a donation of “at least $34,840” to Labor in 2017. The seven defendants deny the charges.
Simon Bridges is among the witnesses the Crown intends to call, alongside current cabinet ministers Andrew Little and Michael Wood, Jacinda Ardern’s chief press officer Andrew Campbell and former senior Cabinet officials national and labor party.
“Kept in the Dark”
Appearing before Judge Ian Gault, Dixon said that in the Labor example, paintings sold at auction were used to keep sums below donation thresholds, while in the case of national donations, sums were further divided small amounts between friends and family members who had been “persuaded”. be the natural donors” and stoop below the level of disclosure. “The effect is the same either way,” he said. Zhang was the “true donor”, argues the Crown, and the means employed meant that party officials, authorities and the public were “kept in the dark”.
Zhang and the Zheng brothers face dual-party donation charges, with Jami-Lee Ross only related to National Party donations and the other three charged with name suppression only at work. Joe Zheng also faces charges of “providing information knowing it was false or misleading” in interviews conducted by the Serious Fraud Office.
Dixon said the Crown would also show that the defendants whose names are deleted engaged in a ‘cover-up’ when Labor attempted its own internal investigation, sparked by the SFO action on national donations, to determine if they had received gifts from men. involved.
In 2018, Yikun Zhang was made a Member of the New Zealand Order of Merit, for his services to New Zealand-China relations and the Chinese community, reflecting in part his work as founder and chairman of the Chao Shan General Association, a group representing the region of China where he was born and raised. Zhang’s pursuit of the honor, Dixon said, suggested a “possible justification, a motive for committing the offence”, in that “the public was denied the knowledge” to which they were entitled.
The accused responds
Launching short opening statements on behalf of the defendants, John Katz QC, acting for Yikun Zhang, said the National and Labor donations were “two very different cases”. His client did not dispute that he had paid for the paintings as part of Labor Party fundraising and that the party’s annual report was simply incorrect. There was “no intention to deceive anyone” and “no advantage of which anyone in Yikun Zhang’s position might be aware” was obtained. He, meanwhile, denied having made the donations to National — “the $100,000 was not money donated by him or on his behalf,” in the 2017 or 2018 example.
Colin Zheng’s representative, Paul Dacre QC, said his client had accepted he was involved in all three donations, although they were “quite different situations”. Zheng “did not invite and was unaware of what the Crown describes as fraudulent strategies,” Dacre said. He “believed he was acting lawfully and had the right to act as he did”. He considered that he was participating in a democratic process and that there was “no attempt to obtain advantages”.
Joe Zheng’s attorney presented his defense in similar terms, emphasizing the absence of any intent to mislead, adding that regarding the SFO interview, Zheng “did not provide any information knowing that she was false or misleading in any material respect”.
Marc Corlett QC, who acts for the man who bought the paintings linked to the Labor Donations case, said the SFO case appeared to have been “reverse-engineered to meet a preconceived investigative assumption that there must be a parallel ‘structure’ between the affairs of the Labor Party and the National Party.” The prosecution, he said, was asking the court to “draw conclusions … which cannot be drawn without rabid speculation and regardless of the burden of proof and the presumption of innocence”. The case against his client, he argued, was “the product of a fertile investigative imagination that exploited the innocent and rode the high horses of confirmation bias to a country of fantastic conclusion”.
The case, Corlett continued, was “a theory in search of evidence…driven by predetermination, fueled by speculation, and dependent on some cringe-inducing Eurocentric cultural assumptions.” He promised the substantial trial meant “it’s no longer enough for the Crown to throw pixie dust and say – ‘see, this evidence is in line with our fertile imagination of what [the suppressed defendant] could have done”.
Representative Jami-Lee Ross, Hannah Stuart said her client “regularly advises donors that donations over $15,000 must be disclosed,” but that he was not involved in any discussions with any of the defendants about the distribution of donations. Her attacks on Bridges had emerged from “a political squabble between the two men”, she said, but neither had “any knowledge of the split donations or the source of the donations”. They would establish, she said, that “Mr. Ross was not involved in any fraudulent scheme.”
Covid in the air
The winter surge of Covid has been felt in the courtroom – and not just in the form of masks and hand sanitizer on the benches. A positive test for Yikun Zhang prompted an early adjournment yesterday and the introduction of a remote video facility so he could participate from home. Shortly before lunch, another defendant discovered that a family member had tested positive. He remained in court briefly, after being found an essential worker by the court, but later also returned home and joined the proceedings via video link.
The Crown and seven defendants are represented by 20 lawyers in the modestly sized courtroom, with the middle row squeezed shoulder to shoulder. Ron Mansfield QC, who leads Ross’s legal team and sits at the other end of the row, said this morning: ‘When Mr Corlett took off yesterday I was pushed out of the office. The court proceeded to redistribute the room for the remainder of the judge-alone trial.