Don Brash MP
National Party Leader
4 October 2006
National asks police to explain on pledge card probe
National Leader Don Brash has sought an explanation from the police about the glaring inadequacies in their inquiry into
the Labour Party’s spending on its pledge card and brochure.
Dr Brash has written to Police Commissioner Howard Broad outlining a list of concerns about the investigation.
“After looking at the documents on the investigation, National cannot understand how the police failed to prosecute the
Labour Party - because Labour clearly breached the spending cap of $2.38 million by $418,000.
“Labour ‘strategist’ Pete Hodgson admitted at the weekend that the spending was ‘of course’ electioneering, and Labour’s
own auditors accepted that if the pledge card was election spending, then Labour breached the cap.
“For reasons which totally escape us, the police failed to lay charges over Labour’s pledge card overspending.
“Having carefully considered the material obtained about the investigation, it is my view that questions remain of such
seriousness that they challenge National’s ability to retain confidence in the police.
“The police failed to reach the standards of excellence required of them in deciding not to charge anyone from Labour.
“My letter details specific areas of concern relating to the police’s failure to understand the Electoral Act, the
police’s failure to take Crown Law advice, the police’s failure to prosecute Labour when there was such a clear breach,
and the police’s failure to deal adequately with the concerns of former Chief Electoral Officer David Henry.
“While I’m aware that the time limit for prosecution under the Act has now well passed, I‘m releasing this letter to
show how seriously National views police conduct of this inquiry.
“We await Commissioner Broad’s explanation with intense interest.”
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Attached: Letter to Police Commissioner Howard Broad
2 October 2006
Commissioner Howard Broad
Commissioner of Police
Police National Headquarters
PO Box 3017
Wellington
Dear Commissioner
I am writing to you to seek your explanation of Police conduct in relation to the investigation into the New Zealand
Labour Party regarding offences under S214B of the Electoral Act.
Having considered the material now available to us, it is our view that questions remain of such seriousness that they
challenge the ability of the New Zealand National Party, the official Parliamentary Opposition, to retain confidence in
the New Zealand Police. Because these matters are in the public domain, and raise questions of serious public interest,
it is my intention to release this letter to the news media, and to invite your public response.
On 17 March 2006, Acting Assistant Commissioner Roger Carson reported, among other matters, that he had decided not to
prosecute the New Zealand Labour Party under S214B of the Electoral Act. Since that time my office has obtained and
examined:
- The Police files, under the Official Information Act.
- Correspondence and a file note of a meeting between the Police and the former Chief Electoral Officer.
- A copy of a draft report of the Controller and Auditor-General into the spending of parliamentary allocations
for parties and members on advertising during the election period.
- A legal opinion from the Solicitor-General dated 19 April 2006 on the question of what is an election expense.
An examination of these documents causes me to have the most serious concerns about the actions of the Police. For this
reason I feel compelled to write to you to seek an explanation before determining the steps that I should properly take
in the circumstances. It is my intention to briefly detail these concerns for your response.
First, may I say that I write this letter with great reluctance. The National Party collectively, and I personally,
strongly support the rule of law and the role of the Police in our society. Public respect for the Police is one of the
essential pillars of our society. However, that respect must be earned. In relation to the matters I shall now outline,
the actions of the Police appear to fall short of the standard that is required to maintain public confidence.
1. A Failure to Understand the Law
The most serious allegation against the Labour Party to be investigated by Police was the allegation that the party had
breached S214B of the Electoral Act. Breaches of this section are described as corrupt practices or illegal practices
(depending upon whether the breach was committed knowingly) and carry a range of very serious penalties. Fundamental to
my concerns is the fact that the Police did not appear to understand the meaning of this section, failed to seek advice
from anyone who did, and therefore failed to give even the most rudimentary consideration as to whether offences had
been committed.
My office obtained many documents from the Police on this investigation, including the report of Bill Peoples, Acting
National Manager of the National Bureau of Investigation Support, and the Memorandum to the National Manager, Crime
Services, from Detective Inspector Harry Quinn.
Inspector Peoples’ report dealt very briefly with the S214B complaint against the Labour Party. It seemed to indicate
that because Mike Smith, the Secretary of the Labour Party, had not paid for the expenses in question then no offence
had been committed.
Whether or not the material in question was an election expense, there is almost nothing in the hundreds of pages
released to us to indicate what investigations had taken place into the S214B breach. While all the other complaints
appeared to have many pages of information relating to them contained in the file, there was almost nothing on the S214B
issue.
Inspector Quinn’s memorandum was even more concerning. In it he asserts that the law on this issue is unclear (it is not
unclear), that parliamentary rules on spending are not clear (they are clear, and are not even relevant to an
examination of whether or not the Electoral Act 1993 was breached), and that since the Labour Party did not believe they
had breached the Electoral Act there was no “wilful contravention” of the law, and therefore no offence.
Inspector Quinn then asserts that outside the lead-up to an election, political parties’ promotional materials are all
paid for by the taxpayer, and that “during an election campaign additional campaign funding is provided to political
parties but it is strictly limited”. With all due respect to Inspector Quinn, this statement suggests a serious
misunderstanding on his part of both electoral law and the funding of political parties in New Zealand.
It is also concerning that Inspector Quinn seemed to be suggesting that because, in his opinion, there was no guarantee
of a conviction, and given that a negative result for the Labour Party would impact on the integrity of the 2005
election, he felt to proceed with a prosecution would be “reckless”. This suggests the Police were unwilling to proceed
with a prosecution that would potentially damage the Labour Government.
2. The Failure to take Crown Law Advice
This inability to grasp the simple meaning of S214B of the Electoral Act is almost unfathomable to me in light of the
Crown Law advice now made available by the Auditor-General. That advice, dated 19 April 2006, makes very clear what must
be regarded as an “election expense” within the meaning of the Electoral Act, and what is acceptable as a “Parliamentary
expense” according to the rules of the Parliamentary Service Commission. The Crown Law opinion leaves no room for doubt:
the Labour Party pledge card was clearly an election expense.
For the final Crown Law opinion to have been available to the Auditor-General on 19 April, it is obvious that the Crown
Law view of the law in this area, based upon well-established case law, must have been well settled in the previous
weeks during which Police were finalising the investigation of the pledge card. Indeed, the certainty with which the
Chief Electoral Officer, Mr David Henry, was able to assert the clarity of the law under S214B in late August and early
September 2005 suggests that Crown Law may well have provided advice on this matter as early as that time.
Acting Assistant Commissioner Carson, in some of the released documentation, refers to the need for an “early review” by
Crown Law. He further, in a subsequent press release, states that “Crown Law’s involvement in this case has been and
continues to be to provide legal advice”.
I find it incomprehensible, given the clarity of Crown Law advice to other agencies in respect of this very same section
of the Electoral Act (S214B), that Police could have sought and followed Crown Law advice in deciding not to prosecute
the Labour Party under this section. I want to know, and I believe the public have a right to know, what advice was
sought from Crown Law, when such advice was sought, and why the clear statement of the law set out in Crown Law’s advice
to the Auditor-General was not applied to the New Zealand Labour Party.
3. The Failure to Prosecute the Labour Party
It is clear from the Crown Law opinion of 19 April that the expenditure of the NZ Labour Party on the pledge card was an
election expense within the meaning of the Electoral Act. Accordingly, the Labour Party was required to include the cost
of the pledge card in its return of election expenses. Such inclusion would clearly have seen the returned expenditure
exceed the allowable cap. Under S214B this gives rise to a corrupt practice where the breach has been committed
knowingly, and an illegal practice where the offence has been inadvertent.
There is, under S214B, no room for doubt or argument. If an expense is an election expense then it must be counted as
such. A simple process of arithmetic determines whether the prescribed cap has been breached. I ask you to explain how,
in such circumstances, it was possible for the Police to arrive at any conclusion other than that the Labour Party was
in breach of this section.
4. Police Assertions Challenged by Mr Henry
The fuzziness in the Police logic behind their decision was even reflected in Acting Assistant Commissioner Carson’s
public statements at the time of the announcement of the decision not to prosecute. In the Weekend Herald of 18 March
2006, Mr Carson reportedly stated that “a lot of the problems evolved from a misunderstanding of the electoral rules”.
These statements were read with interest by the then Chief Electoral Officer, Mr David Henry.
Mr Henry sought a meeting with Mr Carson, and my office obtained a file note of this meeting from the Chief Electoral
Office. In the meeting, Mr Henry made it clear that in fact the law was clear; that for the purposes of the relevant
provisions of the Electoral Act it was irrelevant that Parliamentary Services had paid for the Labour Party material,
and that he had sought a Crown Law opinion on this before referring complaints to the Police. Mr Carson then agreed
that, in fact, the law was clear, but that there was confusion amongst political parties about the rules for using the
leader’s fund for advertising.
This brief exchange between the Acting Assistant Commissioner and the Chief Electoral Officer is truly telling. The
Chief Electoral Officer, Mr Henry, as we now know, had warned the Labour Party verbally on 30 August 2005 and in writing
on 2 September, that the pledge card was an election expense that must therefore be returned as such. Mr Smith, on
behalf of the Labour Party, gave an assurance, subsequently recanted, that this would be done.
It is apparent that Mr Henry then sought Crown Law advice before referring the matter to the Police. The fact that Mr
Henry felt compelled, in light of Assistant Commissioner Carson’s remarks when announcing that no prosecution would
occur, to seek a meeting to correct Mr Carson’s statements is somewhat revealing.
Mr Henry, as the senior public servant presiding over the conduct of the election, appears to have behaved with total
professionalism. Having taken all of the steps available to him to warn the Labour Party against breaching S214B, then
taking further legal advice after he was ignored by them, Mr Henry took the only remaining step available: he referred
what must have appeared an open-and-shut case to the Police for prosecution. He was entitled, as all New Zealanders were
entitled, to look to the Police to process that case in a competent, professional and impartial manner. I now call upon
you to explain why Police failed to take appropriate steps to pursue Mr Henry’s referral.
5. Restoring Public Confidence
I am aware that the time limits imposed on prosecution under the relevant sections of the Electoral Act are well past.
On the facts now available to me, I have to say that it is my honest belief, subject to any explanations you may be able
to provide, that the New Zealand Police have failed to reach the standards of excellence that New Zealanders would
expect in deciding not to press charges against the New Zealand Labour Party. Because of the statutory time limits, that
damage is done. However, the debate over the related matter of use of taxpayer funding for the pledge card continues.
That should serve as some indication as to the seriousness with which we, and the New Zealand public, see these matters.
As I have observed, it is now too late to rectify the specific shortcomings that I have identified. It is not too late
to minimise the impact of this saga on public confidence and parliamentary confidence in the Police. I therefore invite
your full response to the matters I have raised.
Yours sincerely
Don Brash
Leader of the National Party