John Banks' answers to the Dotcom donations have been incredible, but have left the Prime Minister with no choice but to back him. But the differing versions of events are so stark, let's not pretend that everyone can be telling the truth

It's all about standards -- that crucial question in politics of where you draw the line of acceptable behaviour. When it comes to Kim Dotcom's donation to John Banks' mayoral campaign, Prime Minister John Key can sit uncomfortably but safely on the legal side of the line. For now. But the thing about politics is that lines have a habit of changing.

The Dotcom donation is yet another storm around ministerial judgment that National is going to have to weather, in what can now be called the 'tradition' of Phil Heatley, Pansy Wong, and Nick Smith amongst others.

Voters have been patient with National thus far and in this case the fact the minister is (officially at least) the leader of another party means John Key has the potential to limit the damage to himself and National.

For now, you'd think Key has done enough. And he couldn't do much more.

Yes, the political incentive for Key is to keep Banks in place; he wants the vote and a partner to his right. But for now he's also acting fairly.

First, John Banks has given him and the public his word that he acted legally. A Prime Minster must reasonably expect to trust his minister's word. Second, the actions happened when Banks was not in parliament and not a member of Key's cabinet. If we want the PM to be the moral guardian of his team -- and to some extent we do -- there's still got to be a limit how far back his responsibility lies.

To stand Banks down at this stage, when a police inquiry may take months and central facts are in dispute, would seem to a rush to judgment. Banks' ethics are  questionable, but as yet unproven. But Key has his own ethical principle to hold to -- that of trusting a partner in the first instance, which is the decent thing to do as well.

Wouldn't we all want our colleagues and friends to give us the benefit of the doubt, initially at least?

The problem for all of us trying to judge this case -- Key included -- is that we have two conflicting versions of events. Or at least, on one side a version of events which has clear implications and on the other, no version of events but a denial of those implications. It's he says/he says.

What it's not -- I'm looking at you, Richard Prebble -- is just a Labour beat-up. These are allegations from a billionaire businessman, albeit one on bail facing chanrges.

The good news for the confused is that with such clear denials, only one man can be telling the truth. The bad news is that if both of them stick to their guns, the police may struggle to prove a thing.

Dotcom could not have been clearer. Banks knew about the donation, the amount, and was in the room when the cheques were written. Dotcom says Banks later called him to say thanks.

Banks rejects the purpose of the phone call -- saying he rang to thank Dotcom for the fireworks display he paid for -- and says "I was not aware that Mr Dotcom had made this donation to my campaign". That implies he wasn't in the room and didn't have the alleged conversation. Or, if taken purely technically, could mean Dotcom's version was correct but that Banks is claiming he didn't know for sure the offer had been followed through on.

Which is pathetic, but there you go... On all the other matters, Banks has refused to answer.

Nevertheless, on such disputed events, the Prime Minister cannot be pre-emptive. That's not to say that his position doesn't come at a price.

Where his moral high ground starts to erode is that he's not exactly making much effort to become better informed. To simply have your Chief of Staff make a phone call and not make time for a one-on-one suggests an indifference to the issue of political donations or a willful desire to remain ignorant as long as possible. Neither's an example of great leadership.

His political worries stem from the fact he promised a higher standard of ethics for his lot than the previous lot, yet clearly they're not performing. So it looks as though his standards are slipping and becoming all too convenient.

If you genuinely hold to a high standard of ethics -- as required by the Cabinet Manual -- AND a "higher standard of ethics" -- as required by his promise to voters -- you surely want to get to the bottom of things. No, you can't interfere in a police investigation (one reason why Labour might have wanted to have delayed), but you can reasonably demand answers from a member of your executive team.

Key's other core problem is that by using the law as his threshold, he'll look inconsistent and unprincipled if he doesn't continue to stick to that line.

Key was forced in parliament today to say that Banks was "OK as long as you are in accordance with the law". That's a long, long way from "higher ethical standards".

But having backed Banks so long as he's not found guilty of a crime, he's now going to have to defend Banks for all his sins up to that point.

Banks could well be convicted in the court of public opinion without being convicted in a court of law, and to be consistent Key will have to stand by him as the public turn against him. That's not somewhere Key wants to be, but it looks like he's all-but boxed himself in there.

Sure, if it's a matter of saving himself he'll find a way out. But it'll cost him.

John Banks sits amidst similar thorny issues. He can use the cover of a police inquiry as a way of avoiding asking any more questions (another reason why Labour might have wanted to wait another day or two before laying the police complaints!). But the way he has evaded questions thus far looks guilty.

It's remarkable that after the story broke on Campbell Live on Friday night, he hadn't cobbled together a better line of answers than the silence and giggling he used on Q+A on Sunday morning.

Laughing in the face of serious questions isn't wise. Claiming repeated lapses is the best way to look like a scoundrel. Not answering a simple, direct question is evasive. Many will simply draw the conclusion that that's because he doesn't have answers.

As David Shearer pointed out in the House today, who forgets a helicopter ride to Auckland's largest mansion? And is someone with such a poor memory fit for cabinet?

Key had only one word answers, a sure sign of his discomfort. He wouldn't answer whether he was satisfied with Bank's incomplete answers to the media -- and Deputy Speaker Eric Roy let him dodge that.

The PM could only say that Banks has his confidence as long as he has his confidence. Which really is the least he could say.

That leaves us stuck between two versions, waiting for other voices to help paint a clearer picture. You've got to think it's only a matter of time.

Comments (12)

by Tim Watkin on May 01, 2012
Tim Watkin

This list of quotes from Labour today shows the conundrum John Key is in:


“He once said: ‘The issue has never been one of legality as much as ethics. The criminal code is the bare minimum standard for society. For MPs we expect behaviour well beyond that’.

“He now says: ‘There is quite a wide definition of ethics…the test I have to apply is the law’.


“He once said ‘it is no longer acceptable or credible for Helen Clark to assert a façade of confidence in her Foreign Affairs Minister and to fail to ask the plain questions of him that she has a duty to the public to ask.

He now says:That’s not my responsibility [to ask the questions]. If somebody thinks John Banks isn’t telling the truth, there’s a very simple remedy, they go to the police. That’s not my job to do a forensic examination.


“He once said: “Helen Clark must stand Mr Peters down as a Minister. That is what I would do if I were Prime Minister.

“He now says: “Well, why would he [stand down]. I mean unless he’s misleading me, if he’s misleading me, that’s a different story, you know, ministers from time to time mislead Prime Ministers, they always get the boot, don’t they but that’s not what I think is going to happen here.”


“He once said: Unless he [Winston Peters] can provide a credible explanation about this serious issue, he should be unacceptable to Helen Clark as a Minister in her Labour-led Government.

He now says:  “No [I haven’t asked whether he knew Dotcom made the donation] and the reason for that…umm…it’s probably worth clarifying that my office asked him the question. But the point that’s probably worth clarifying there is that that’s not my responsibility”


“My advice to John Key is to book in another cup of tea with John Banks and just ask him the question,” said David Shearer.

by Tim Watkin on May 01, 2012
Tim Watkin

Two key questions remaining:

Did Banks see the cheque written? Dotcom's account to the Herald says "Mr Tempero asked the chief financial officer to come into the room to write the cheque".

If Banks saw the cheque(s) written, he can hardly maintain the defence that he even though he discussed a donation, he didn't know for sure whether a donation had been made. Hard to prove, but if everyone else in the rooms remembers differently...

Second, did Banks call Dotcom shortly after the cheques were deposited in his account? There's no way of knowing the content of the phone calls, but the timing would be too remarkable for the public to accept a coincidence. Easier to prove, with phone records. Duncan Garner spells it out here.

Those are the things that could change and allow the PM to act.

by Richard Aston on May 02, 2012
Richard Aston

I don’t know about drawing lines here – that seems to be what Banks and Key are doing drawing very fine legal lines around a dirty little piece of bribery.

I’d rather draw circles.

In that circle would be Banks and Key stitching up the Epsom electorate to gain political leverage, Banks lobbying Maurice Williamson on Dot com’s behalf (he was just acting for an ordinary citizen – yeah right), manipulating donations into multiple anonymous amounts to hide the truth, Banks’ arrogant divisive style when he was mayor – we were so glad to be rid of him. To name a few.

Nick Smith was gone by lunchtime so why is Banks still here breakfast the next day?

by Graeme Edgeler on May 02, 2012
Graeme Edgeler

It appears the list of quotes includes one quote that was from David Farrar, and not the PM.

by Richard Aston on May 02, 2012
Richard Aston

Which one Graeme ?


by BeShakey on May 02, 2012

Most of the commentary around this seems to miss an obvious point - there are two issues here.  Firstly, has Banks done something illegal.  The second is whether he has attempted to manipulate the system in such a way that he has undermined the intention of the law, without doing anything illegal.  The second issue would give a partial explanation of Key's caution - I'd be surprised if National (and most other parties) don't do similar things in terms of soliciting 'anonymous' donations, with a pretty good idea of who they come from. 

This is also why the line that everything is ok as long as things are legal doesn't work - the public don't like information being hidden from them whether legally or not.  It looks to me like a classic example of the chattering classes missing the elephant in the room.

by Tim Watkin on May 02, 2012
Tim Watkin

The first quote: “He once said: ‘The issue has never been one of legality as much as ethics. The criminal code is the bare minimum standard for society. For MPs we expect behaviour well beyond that’.

Shearer was forced to retract it in the House. See this.

Shakey, the PM's line has been that everything is OK so long as it's legal. Which I'd agree is insufficient, but then the question becomes what threshold does someone in his position use to judge his executive? It needs to be fair and consistent. The law is the easiest marker in that regard; any other standard is subjective. That's true for the media too - a person's view of whether he has "attempted to manipulate the system in such a way that he has undermined the intention of the law" could depend a lot on which party you support.

On the other hand, having some subjective line that you hold to is arguably what personal ethics are all about. And yes, people do hope for more than the bare minimum from politicians, although they are often disappointed.

by BeShakey on May 02, 2012

The threshhold (or at least one) is pretty well established - does the PM have confidence in him?  This doesn't need to be subjective (nor do lots of other potential standards).  While the PM hasn't explicitly described this standard in detail, he has made some comments, such as that this standard will be higher than Helen Clark's.  I think the point Shearer is making is that Clark was ruthless about suspending people in situations like this (a useful comparison might be David Parker), making Key's position look unprincipled.

by Tim Watkin on May 03, 2012
Tim Watkin

Surely one person's confidence in another is entirely subjective. That confidence depends on where that individual draws a line and every PM's line will be different. For example, as you say, Key has said his will be different from Clark's.

And that's the problem – which line do you choose? How do you find a line that doesn't change from one event to the next?

by BeShakey on May 03, 2012

I think we were talking past each other there.  By saying it wasn't subjective I meant that it could be objectively judged, in the sense that if he stated it explicitly we could all agree on how to judge if the line has been crossed, even if it wasn't actually the line we'd use.

That seems to me to be the problem - Key has given some pretty clear indications of where his threshhold is, but now seems to be dramatically lowering the threshhold to 'anything is ok as long as its legal'.  Whether or not the threshhold he implied through the various quotes being bandied about is one we'd use in the same situation isn't the point, the issue is that he is changing without giving any clear explanation of why (leaving people to assume the worst).

by stuart munro on May 05, 2012
stuart munro

I have a feeling that the bad PR around this will continue to taint the government, and may force Banks out irrespective of legalities. If that is the case, the best as well as the most honourable thing for Key to do would be to proactively get rid of him.

The byelection in that case'd be a walk for National. But if Banks stays until public pressure squeezes him out like some kind of pimple, the odium of dirty hands can spread. Get NZ angry enough and all kinds of secrets will come out. Case in point Mfat, ACC. NZ is a very small town, it's hard to keep secrets here. The Nats might have a few too.

by Frank Macskasy on May 08, 2012
Frank Macskasy

What I find interesting is that everything Dotcom has said, has either been confirmed, or not repudiated.

On the other hand, Banks has been evasive, back-tracked, and belatedly "remembered" things.

As for John Key, his worst 'sin' is, as Tim wrote, not having a face-to-face with Banks and leaving it instead to his Chief of Staff. If this is some attempt for Key to keep his distance and claim plausible deniability - I think this will backfire on him rather badly.

@ Stuart: "NZ is a very small town, it's hard to keep secrets here. "

100% spot on.

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