From the throne came the verdict, the lake of fire won't be your home

John Banks' political epitaph lies in the hands of a High Court judge. Will it be "John Banks, retired as MP in September", or "John Banks, kicked out of Parliament in June"?

Now that the evidence has been given and the closing arguments made, John Banks' fate lies in the hand of a High Court judge. In some ways, the outcome doesn't matter all that much for national politics - even if Banks is found guilty and so has to step down from Parliament under s.55(1)(d) of the Electoral Act,* he was going to retire in September anyway and National can carry on in Government until then with the Maori Party's support. But it's a big deal for him personally. So what might be going to happen?

[Please note if your name is Justice Edwin Wylie: I know that the law on contempt of court in relation to publications about judge-alone trials is a bit iffy, but for the sake of not getting me into any possible trouble, could you please stop reading this right now?]

Let's start with the basics. To obtain a conviction, the prosecution must show two things:

(1) The donations given to Banks by Dotcom and/or Sky City were not "anonymous", and so his return of donations was false;

(2) That Banks knew that this return of donations was false.

Then lets take each of those in turn. Were the donations to Banks "anonymous"? Well, as I wrote back in April last year (note that the law has changed since then, so the embedded links may not work):

The Local Electoral Act 2001, s.109(1)(c) says that "electoral donations" of more than $1000 that are made "anonymously" simply need to be reported in the candidate's election expenses return as coming from an "anonymous" source. And s.5 defines "anonymous" as: "in relation to an electoral donation ... , means a donation that is made in such a way that the candidate concerned does not know who made the donation."

So a local body candidate legally can meet with a potential donor, tell that donor "here's what to do if you want to avoid having your name appear in my return of election expenses" and then go off and leave the donor to deal with those who are in charge of the campaign's financial affairs. And even if the candidate subsequently learns a large "anonymous" donation was made to her or his campaign in the days after the conversation, the candidate can claim not to "know" who it came from. And then that donation only needs to be reported to the public as being "anonymous" in nature.

That's not exactly what happened in Banks' case. He clearly was more involved in the donation solicitation and gathering process than my hypothetical account. What we know is that the Dot Com donation was made to Banks' campaign account in two lots of $25,000 following Banks' visit to Dot Com, and that the Sky City donation was made to Banks directly by way of a $15,000 cheque in an envelope. But in neither case do we have direct evidence that Banks knew for certain the existence of Dot Com's donation or the amount of Sky City's donation, or that he talked about any donations with his campaign treasurer after they were made.

Which raises the question. Does the prosecution have to show that Banks knew the particular details of each donation in question (i.e. how much it was for, and that it definately had been paid over to his campaign account), or is it enough that Banks knew that some sort of a donation of a disclosable amount was being made by a donor (or definitely was going to be made in the future)? Because if it's the former, it may well be that these donations actually were "anonymous" under the law at the time (crazy as that may sound), meaning that the return he signed actually wasn't false.

On this, I'd suggest that it's more likely that the Dot Com donation was "anonymous" than was the Sky City one. Because let's assume everything Dot Com alleges is true (a big assumption, and one that Banks' lawyer did a good job of calling into question). Let's say Dot Com promised $50,000. And let's say Banks told him how to split it up. And let's also say that he did thank Dot Com for his support (or, at least, promised support) afterwards. That still leaves a reasonable doubt that Banks knew Dotcom had actually in fact followed through on his promise and paid over the promised money into the campaign account. And absent that knowledge, isn't the donation still "anonymous"?

With Sky City, however, it's a bit tougher to claim that Banks didn't "know" that what was in the envelope put directly into his hand. Sure, he might argue that it could have been a cheque for $1000 or less, but ... really? Doesn't that stretch the boundary of "know" beyond the point of credibility?

What, then, of the second part of the offence - that Banks also must be shown to have known that the return was false. Well, I think the evidence from Banks' treasurer makes it clear as a matter of fact that Banks didn't read the return. Or, at least, I can't see how after that evidence you can say beyond a reasonable doubt that he did in fact read it. Does that then mean he could not possibly know that the return was false?

Well, maybe not. Because what the prosecution has argued is that Banks so orchestrated his fundraising that he must have known the return would be false, whether or not he read it. And he did so by witholding information about his state of mind - the fact he "knew" the identity of some donors - from his treasurer, thereby leading his treasurer to falsely record the donations as being "anonymous". So the reading/not reading is irrelevant, rather it's the totality of Banks' behaviour that matters.

Well, maybe. But that requries us to think that Banks was acting in a quite calculating and deliberately deceitful way. I instead suspect that what we see here is pure sloppiness in the hustle and bustle of a very busy campaign process. Banks met with Dot Com and got offered a lot of money. So he applied the template response that his campaign had set up at the beginning - ask for $25,000 chunks - and then left Dotcom to do as he wanted. He didn't check to see how much Dotcom gave, so he never "knew" about any subsequent donations, so he had nothing to tell his treasurer. Sky City handed him an envelope, but concious of the campaign's general policy that the candidate doesn't handle cash, he gave it to someone else to process. What the Treasurer then did with the donation, and in particular how it was recorded, is not something he thought about. Then, because Banks assumed he was following "the rules" the campaign team had agreed on (even though he sloppily hadn't done), he believed that the accounts kept by his treasurer correctly reflected the financial position of the campaign.

As such, my prediction is that Banks will be found not guilty. Which doesn't mean he didn't do anything wrong - the insight into his campaign practices is not a particularly pretty one. But there's enough legal doubt about a quite loose regulatory regime to allow him to escape criminal liability.


* I'm going out on a limb here and predicting that if Banks is found guilty, there's no way a Judge will discharge him without a conviction on this offence.