Peters set to front media on donations claims

He has assured me he's done nothing illegal - Clark

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FOREIGN MINISTER FESTIVITIES: East Asia Summit foreign ministers join hands during the East Asian Summit. Left to right: Yu Myung-Hwan of South Korea, Indian deputy foreign minister Anand Sharma, Stephen Smith of Australia, George Yeo of Singapore, Yang Jiechi of China, Masahiko Komura of Japan, Winston Peters of New Zealand, Sahas Bandidkul of Thailand.

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NZ First leader Winston Peters plans to front up at a press conference this afternoon to answer allegations of covert party funding that have dogged him for two weeks.

Prime Minister Helen Clark has rejected calls to grill Mr Peters over donations to NZ First, saying he has assured her he has done nothing illegal.

Today he will have to explain the apparent existence of secret funds, what they were used for, and why they were not declared to election officials.

Mr Peters flew back into the country this morning from Singapore - straight into a political storm - as he prepares to meet United States Secretary of State Condoleezza Rice tonight.

The controversy over NZ First funding - which includes what happened to the $25,000 property magnate Sir Robert Jones has confirmed giving in 2005 - threatens to overshadow the biggest coup of Mr Peters' time as foreign affairs minister.

National leader John Key said Miss Clark had to get to the bottom of serious questions surrounding the funding before Mr Peters met Dr Rice.

NZ First insiders were last night planning for Mr Peters to answer media questions before his talks with Dr Rice - a sign Miss Clark wants the issue dampened down by then.

The Dominion Post reported yesterday that Jones' $25,000 donation was paid to the Spencer Trust, administered by Mr Peters' brother, Wayne. No donation from Sir Robert or the trust appeared in disclosures to the Electoral Commission in 2005 or later years.

On Sunday, Mr Peters was told through a spokesman that The Dominion Post had information about a trust run by his brother Wayne and that the trust sometimes paid NZ First bills.

"That is a lie," Mr Peters said.

The Dominion Post has seen a copy of a receipt issued by Whangarei law firm Thomson Wilson. Wayne Peters was a partner there for nearly 20 years till he set up his own firm last year. Dated August 18 2005, the receipt shows a credit to the "Spencer Trust" for a $25,000 "donation" from Sir Robert's Tirohanga Holdings Ltd.

Sir Robert said he was "at a loss" as to why Mr Peters should deny the existence of the trust and the donation, and he could only assume "a memory lapse". His company also has a copy of the original cheque.

Sir Robert hoped his donation reached NZ First "but doubtless we will find out in the course of time".

He said Mr Peters knows "I no longer support him, primarily due to our strongly divergent views on Asian migration".

Mr Peters also faces questions over at least $150,000 from accounts linked to the Vela family between 1999 and 2003 in amounts below the $10,000 disclosure threshold.

Mr Key said the allegations were serious and smacked of hypocrisy. "[Mr Peters] is opposed to secret trusts - these allegations go to the heart of that."

But Miss Clark said she was not concerned about the latest reports. She had been assured that "he believes everything he has done is legal and he is coming back to New Zealand ... to clear the matter up".

Mr Peters' office said he would answer questions "posed in an orderly manner" when he arrives in Auckland today.

Miss Clark rejected claims she was treating Mr Peters more leniently than other ministers who have faced allegations because of the need to preserve the relationship with NZ First. She said it was for Mr Peters to decide whether it was sensible for a party leader to approach someone for a donation, as Sir Robert says Mr Peters did.

Mr Peters will also field questions about $100,000 donated by expatriate billionaire Owen Glenn, which was used to help pay his legal bill when he tried to overturn the 2005 Tauranga election result.

Barrister Brian Henry said today that tax was paid on that donation.

The National Business Review reported Mr Henry saying all appropriate taxes were paid as part of his normal business but his comments made it clear the money was not treated as a gift for tax purposes.

Mr Henry, who approached Mr Glenn for his help, said the money went directly to him.

"It's my fees. It goes into my fees bill that goes to the IRD in the usual way."

However, Mr Henry argued that there was no legal obligation for Mr Peters to pay him fees so the money was not a donation.

The money went towards legal costs of a bid to overturn the 2005 Tauranga election result, when Mr Peters lost the seat to National's Bob Clarkson.

Mr Henry said there was no debt until he issued a final invoice to the instructing solicitor in the case who would bill Mr Peters.

Asked why in that case the money went straight to one of his accounts, Mr Henry said: "There doesn't have to be an invoice - he can pay on account of costs. He says 'I can afford to pay you this today' and I say 'thank you'."

Bar Association president Jim Farmer QC told the NBR interim payments should not be accepted by barristers except for work actually done.

- with NZPA

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