Who knows whether John Banks will be found guilty next year, only the courts can decide. But in the court of public opinion, a trial is as bad as a conviction

It all comes back to two cheques and a mattress. And now John Banks is paying a high price for the donation he received from Kim Dotcom during the 2010 Auckland mayoral election, having announced that his political career will sputter out over the next year.

You know the story well enough. John Banks was standing for a second term as mayor of Auckland when he sat down with internet billionaire Kim Dotcom, then a relatively recent arrival to Auckland, having immigrated under the National government's new 'welcome mat for rich people' scheme. I've sat in the same chair where, as Dotcom tells it, Banks said that the $50,000 donation would be welcome, but it'd be even better if he split it into two cheques. Why? If a larger single cheque was received, "then he would not have to declare where it came from", Dotcom claims Banks said. And, Dotcom added, Banks said it would be easier for him to help if the donation was anonymous.

It's a damning story and it reflect badly on both men (a point not often made). Regardless of the law, Banks seems to have been trying to cheat the system and Dotcom was happy to go along, because he hoped to get something, at some point, in return for the donation.

In fact Dotcom did ask for something from Banks. A mattress. Dotcom found himself in prison after the raid on his mansion by our spy agencies and police and his back problem was playing up. His prison bed was causing immense pain, but the guards didn't care. He put in a call to Banks. And, as Dotcom tells it, Banks didn't want to know him. That hurt Dotcom; he felt betrayed. The rest is history. And now, it seems, is Banks' political career.

It's worth remembering the nub of this story, because beyond all the political point-scoring and the questions over anonymity is the principle of our electoral law. Those standing for office need to raise money. As part of that ambition they need to be able to ask people for donations. But the law requires those donations to be disclosed, as the 1986 Royal Commission on the Electoral System observed. It's a reason that Justice Heath took time to quote in his decision yesterday, which found that Banks will have to face trial next year.

"in the absence of disclosure ... there is no way of knowing whether or not a candidate’s financial position is likely to influence decisions taken if the candidate is elected, or whether the candidate is improperly accepting personal donations in exchange for promises of future action once elected". The statutory provisions dealing with the need for disclosure of donations must be read in that context.

Indeed it must.

Because the vital issue in this case is whether Dotcom was trying to buy Banks' favour with this donation and whether Banks accepted it with a nod and a wink in that direction. While the trial will be around the legal technicality of what Banks knew at the time he signed off the expenses return, the moral question is whether he was willing to owe someone a favour or two for the sake of a hefty campaign donation.

In this case I fear Banks may have just been the one who was sloppy enough to get caught. At very least, I'm sure other politicians ask for money, often know who's donating to them and who isn't, and then sign donations off as "anonymous". Presumably the proper process is to get someone else to give a potential donor a call and handle the money, whereas Banks did the talking himself never thinking it would leave the room.

I don't know how that will play out in court. As Heath said in his decision, much will depend on the trial itself. Banks may be entirely innocent before the law.

But his decision today to step down as ACT leader in March and not stand again in next year's election is a grudging admission that that's no longer relevent. In the court of public opinion he's been found guilty.

Voters have decided that regardless of the law, he knew Dotcom was donating a large sum of money to his campaign -- he asked for it, for crying out loud, then rang back to say thank you --- so it's contrary to Kiwi commonsense to then claim that the donation was "anonymous". Voters won't back him again and won't have time to forget when he's in court just months before the election, so he's political deadmeat.

It seems ACT members have made that clear to him, in the hope they can find someone without such damaging baggage to lead them into next year's election and -- they hope -- another deal with National. You've got to wonder whether ACT has someone lined up.

Frankly, it'll be a tough ask for anyone stepping into that role. If the quiet word has come from National that a deal is in the bag, it's the fast-track to a ministerial post, the leadership of a whole party and the minor parties' leaders' debate. But it's an increasingly insignificant party, and one who's time has passed. You'd be living entirely on the grace and favour of John Key, and there's no guarantee he'll have the power to hand out any favours come the end of next year. Would anyone of real ability and ambition want to take that deal? Who would want to try to rehabilitate that rag-worn brand?

After Brash's revolt, ACT had hoped Banks would be a safe pair of hands. But it's turned out his hands were dirty. A small party might have been able to survive one leadership snafu, but two seems incredibly hard to recover from.

For Banks, he'll have an uncomfortable summer, something Dotcom probably thinks is some sort of justice in its own right. You might say that John Banks has made his bed and now he has to lie in it.

Comments (29)

by Graeme Edgeler on December 04, 2013
Graeme Edgeler

The John Banks donation story didn't start with Kim Dotcom. It arose after the Sky City accounts were released, and someone cross-checked them against John Banks's and Len Brown's donation returns.

It wasn't until after the police were investigating that Dotcom announced that he too had made a donation. That was then referred to police as a second complaint.

We can't be certain, but I anticipate that McCready would have filed a private prosecution even if the story of Dotcom's donations had never become public.

by Richard Aston on December 04, 2013
Richard Aston

I think public opinon has spread a wider net over Banks than just the donations sage. His deal with John Key to get the Epson electorate was kinda shabby , I have freinds in that electorate that felt they had swollowed something unpleasant. Some of the policies he leverage through - Charter Schools - we deeply unpopular . Some would say he is just a arrogant prick , a little man puffed up on ego.

Personally I think the country is better of without him but as Winstone Peters said on Nat radio today its a sad ending to long political carreer. He hasn't exactly bowed out on a high note.

 

by william blake on December 04, 2013
william blake

"Because the vital issue in this case is whether Dotcom was trying to buy Banks' favour with this donation and whether Banks accepted it with a nod and a wink in that direction."

Dotcom was presumably trying to buy Banks' mayoral favour but obviously the short shrift he got from Banks at Mt Eden jail goes some way to proving he didn't pay quite enough.

Good bloody riddance to the ACT party but.

by Steve on December 04, 2013
Steve

It is sad when experienced politicians like Banks and Cunliffe breach our electoral laws, and even worse when the police refuse to enforce them.

by Andrew Osborn on December 04, 2013
Andrew Osborn

A point which has been omitted is that the local govt electoral law at the time was a farce which few understood and was impractical to apply strictly to the letter. In the same election Len Brown was funded via a trust so he could claim he didn't know who was paying when of course he did. (not being critical of Len, just using this as an illustration of how daft the old laws were). Banks slipped in accepting the money himself - his handlers screwed up.

It's a great shame it's gone this way. He's been an excellent mayor for Auckland and had a stellar political career in central govt.

by Tim Watkin on December 05, 2013
Tim Watkin

Graeme, as discussed on Twitter, I don't think that's right. It was really only Dotcom spilling the beans about what went on in that room that really allowed the story to take off. Without him speaking out about the conversation, the request for cheques, the phone call after, it would have gone nowhere.

Steve, it'll be interesting to see how the police proceed with Cunliffe and yes they need a shake up given how they handled this one. Why did they fail to bring a prosecution? But really trying to find an equivalency between $50,000 and a tweet is a huge stretch.

Andrew, I'd disagree. A great mayor? His big idea was the eastern motorway, which was a failure. Stellar career in central government? Examples? Doesn't the racism, sexism and homophobia undermine that at all in your mind?

by Steve on December 05, 2013
Steve

Tim, there is a huge difference between $50,000 and the "tweet", one is an administrative error, while the other strikes at the heart of a democracy, in that it was an attempt to affeect the outcome of the election.

by william blake on December 05, 2013
william blake

I think Banks' low point, along with Bob Harvey was the idea of the 'Super City'; diminished democracy and civic alienation.

by Alan Johnstone on December 05, 2013
Alan Johnstone

A tweet in a by-election that Labour are crusing to victory in "strikes at the heart of democracy", love to hear why you think this is the case.

"You know the story well enough. John Banks was standing for a second term as mayor of Auckland when he sat down with internet billionaire Kim Dotcom"

Without wanting to be overly petty and nit picking, John Banks wasn't standing for a second term as mayor of Auckland, he was standing for a first term as mayor of a new body. No one refers to Len Brown as presently starting his third term as mayor, but it's as correct as the statement above.

Was Kim Dotcom a billionarie ? I've not seen a reputable source estimate his wealth above $200m. Rich guy, for sure. But billionarie, no.

by Tim Watkin on December 05, 2013
Tim Watkin

Steve, I'm not making excuses for Cunliffe who deserves a fair and proportionate punishment. But what you say it utter nonsense. How on earth is asking for a donation, asking that it be split in half so that it avoids accountability and so it makes it easier to "help" the donor, an administrative error?

And how does a single tweet -- to only the loyalists and keen observers who follow Cunliffe -- which stayed up for no more than 10 minutes strike "at the heart of democracy"? It's cheating certainly, but at the lower end of the spectrum.

by Tim Watkin on December 05, 2013
Tim Watkin

William, are you and Aucklander and did you see the turn-out to those Auckland Plan meetings? Civic engagement in Auckland's been minimal for years hasn't it? I don't think the government structure has made much difference in that sense, but it has allowed some progress -- and coherent progress at that -- to be made on big projects and plans.

by Tim Watkin on December 05, 2013
Tim Watkin

Alan, he has been described as a billionaire in hundreds of stories in the Herald, Dompost and many others... but you give me pause for thought, and given how his company was destroyed, his funds frozen etc, it may no longer be a correct description.

by Graeme Edgeler on December 05, 2013
Graeme Edgeler

... police ... need a shake up given how they handled this one. Why did they fail to bring a prosecution?

Because they looked at the evidence, and formed a conclusion that a conviction could not be obtained (or the chances were very low). They may prove to be right. One thing to note is that they had the benefit of hearing from Mr Banks himself, which the District and High Court judges so far have not.

I do think police need a shake up over how they invesitgate allegations of breaches of electoral law, but contrary to common understanding, I think this case is an example of exactly how they should do things.

From my reading of this investigation, I conclude that the police have done exactly what we would hope police would do when investigating such a complaint.

They have:

  • looked into the case
  • conducted interviews with multiple witnesses (including the potential offender)
  • worked out what they believe they can prove
  • assessed their evidence against the legal requirements of the offences they can apply
  • ignored the legal requirements of offences they can't apply
  • and done all of this in approximately 3 months

The problem isn't what they've done in this case, the problem is that they haven't done it in other cases.

by Alan Johnstone on December 05, 2013
Alan Johnstone

Herald and the Dom Post aren't famous for fact checking are they :-)

Kim Dotcom rocks up in NZ, with his over the top lifestyle and stunning wife and calls himself a billionaire, no on questions him.

It's repeated and becomes accepted fact, despite it not being true.

According to the US, who have no interest in downplaying the numbers, Megaupload pre raid had lifetime revenues of $175m US. Kim pocketed maybe $100m.

He planned to sell the comapny for $2bn, but didn't. Equally I planned to take Rachal Hunter for a weekend in Taupo,but saldly didn't.

 

 

by Graeme Edgeler on December 05, 2013
Graeme Edgeler

but you give me pause for thought, and given how his company was destroyed, his funds frozen etc, it may no longer be a correct description.

I don't believe it was ever a correct description, but if you can find confirmation one way or another, that would be useful. Also, however you parse it, Banks was not running for a second term. He had been Mayor of Auckland twice (from 2001-2004 and from 2007-2010).

by Ian MacKay on December 05, 2013
Ian MacKay

"I've sat in the same chair where, as Dotcom tells it, Banks said..."

Huh? Are you a billionaire in disguise Tim? Just curious.

And I guess many politicians nudge the rules but heaven help them when the "donator" gets pissed off. Think Glenn/Peters.


by william blake on December 05, 2013
william blake

Yes Tim I am an Aucklander, formerly Waitakere City and I wont speak for the other former LTSA's but WCC did have active and responsive civic processes and were creating communities and a genuine sense of place and pride; small but significant human infrastructure. 

So Banks and Harvey couldn't stand to be in the same room, so big infrastructure, which could have been taken care of by the ARC, could not be agreed upon.

I blame Harvey and the other mayors as much as Banks, but the project being siezed upon by his colleague Rodney Hide and Banks subsequent placement in the ACT party, makes it pretty clear that the big plan for Auckland suits business fine.

Banks should be remembered for this piece of gerrymandering.

 

by Andrew Osborn on December 05, 2013
Andrew Osborn

Richard: His deal with John Key to get the Epson electorate was kinda shabby

I'm not sure why. Surely this is the logic of MMP at work?

Will Labour be "kinda shabby" if they do a deal with the Greens/Peters/Dunne et al next year? What definitely WAS shabby was the illegality of the taping and the lies and inuendo over the whole issue. It turned out to be a non-event in the end.

 

by Rich on December 05, 2013
Rich

The problem isn't what they've done in this case, the problem is that they haven't done it in other cases.

Prosecutorial discretion is a great idea when it's a 14 year old kid on their first shoplifting charge, but if it's used in electoral cases it's impossible to exercise without a taint of partiality (and lets face it, the police are pretty much the National Party in uniform).

In these cases, if there's evidence that, if believed by a jury, indicates a breach of the law, it should be prosecuted. The judge has the option to discharge without conviction if appropriate.

(And in the tweet case, Cunliffe should plead guilty, pay a fine if one is levied (he'll surely get DWC) and commit to a prompt repeal of s.197 of the Electoral Act. I think people are intelligent enough to decide got themselves what they want to read on election day).

 

by Richard Aston on December 05, 2013
Richard Aston

Andrew "Surely this is the logic of MMP at work?"

Perhaps if you take a naively technical view but the spirit of MMP is proportional representation . Banks got Epsom - by doing a deal with National – intending to leverage extra party list MPs into parliament. The low vote for ACT prevented him from leveraging but his coalition deal with the Nats gave him a disproportionate amount of influence. His influence was not in proportion to his popular support. I don’t call that logical I call gaming the system.

 

by Ross on December 05, 2013
Ross

But really trying to find an equivalency between $50,000 and a tweet is a huge stretch

Except Banks was fully entitled to donate $50,000. He could've donated a lot more had he wished and could've done so legally.

In my opinion, Cunliffe's actions are the more culpable because he was informed that he wasn't able to tweet on election day but simply ignored the advice, which came from none other than the Electoral Commission!

by Ross on December 05, 2013
Ross

Except Banks was fully entitled to donate $50,000. He could've donated a lot more had he wished and could've done so legally

 Obviously I meant Banks could have received more than 50k from Dotcom.

by Andrew Osborn on December 05, 2013
Andrew Osborn

Richard: Perhaps if you take a naively technical view but the spirit of MMP is proportional representation . 

Actually it looks as if yours is the naive view

 

by stuart munro on December 05, 2013
stuart munro

 Time will tell. NZ politicians are at an all-time low in public trust and liking, having long since eclipsed the telemarketers. These corrupt electoral arrangements only hasten the day when the public decide to hold MPs personally accountable for the damage they do.  

Without Banks' vote for example, the latest round of asset thefts could not have proceeded. That means he cost the mass of NZ citizens upwards of a billion dollars in lost value. His life is worth considerably less.

by Tim Watkin on December 06, 2013
Tim Watkin

Ian, not a billionaire but rather a journalist. I produced Paul Holmes' interview with Dotcom last year and we walked through the events of that meeting.

And sure, everyone may have been wrong about Dotcom's wealth.

William, the super city wasn't nearly as simple and personal as that. You've forgotten the years of debate and the royal commission.

by Tim Watkin on December 06, 2013
Tim Watkin

Graeme, I don't buy that. The police looked into it, decided there was insufficient evidence, and they may be proved right? Alternatively, they looked into, decided there was insufficient evidence and may be proved wrong... or rather, have already been proved wrong, because two courts have decided there is sufficient evidence to warrant a trial.

While the police don't want to waste the court's time, they don't have to be certain of a conviction. They have to think there's a case to answer, and two courts have ruled that there is. So why did they come to a different conclusion to two judges? As for hearing from Banks, well, are you saying his lawyer was unable to make the case on his behalf?

by Graeme Edgeler on December 06, 2013
Graeme Edgeler

As for hearing from Banks, well, are you saying his lawyer was unable to make the case on his behalf?

This needs evidence. His lawyer can't give give evidence for him. A case to answer is one thing, but that's not enough by itself. You also need a realistic prospect of success. Police could think they'd have enough to avoid the prosecution being thrown out but still think the chances of success on the more serious charge were too low. My look at the police decision was that they felt there was enough evidence for the more minor summary charge, but that was time-barred.

by william blake on December 06, 2013
william blake

Years of debate? I think it was months Tim, and we all spoke to the commission pointing out the relevant faliures of this kind of thinking around the western world.

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