The man who banked two cheques from German multimillionaire Kim Dotcom to John Banks has described how he deposited $50,000 in Queenstown so the donation would come from "as far away as possible" and would appear to be anonymous.

The former Dotcom employee – who doesn't want to be named – also says he knew the cheques had gone through because Mr Banks, who is now the ACT party leader and a minister outside Cabinet, rang Dotcom's bodyguard, Wayne Tempero, to thank him for the donation.

Police are investigating whether Mr Banks knew the source of two $25,000 donations from Dotcom and a $15,000 donation from SkyCity towards his failed 2010 mayoralty campaign which were declared as anonymous.

The former employee said he was not at the meeting in April 2010 at the Dotcom mansion in Coatesville, northwest of Auckland, when Dotcom offered to donate to Mr Banks' campaign, but personally wrote two cheques for $25,000 which came out of the account of the Megaupload founder's company MegaStuff.

"It was pretty clear I was told to make out two cheques so that it could go through anonymously."

He said he was instructed to split the donation by Mr Tempero or another staff member, John Low.

The former employee said he personally deposited the cheques at a bank in Queenstown, where he was having some time off. "I said, `Look, we'll just bank them down there, as far away as possible'."

Dotcom's staff knew the cheques had been cleared because Mr Banks called them.

"I got a phone call from Wayne saying the funds had gone in because John phoned to thank him. You don't have to be a genius to figure out that [Mr Banks] knew."

Under the Local Electoral Act, candidates must declare if they know the source of any donation over $1000.

Mr Banks has said he does not recall discussing a donation with Dotcom and denies he rang him to thank him. "I did not call him [Dotcom] to thank him, as the donation was made anonymously," Mr Banks said on Monday.

Through a spokeswoman, Mr Banks said yesterday that he had nothing further to add.

Prime Minister John Key has said he will strip Mr Banks of his minis-terial warrants if he is found to be lying over Dotcom's donation.

The former employee confirmed reports that Mr Banks had met Dotcom four times: an initial meeting in April 2010 when Mr Banks was brought to the Coatesville mansion by helicopter, a lunch meeting with his wife in June 2010, watching the New Year's Eve fireworks display that Dotcom sponsored, and Dotcom's birthday party.

The United States is trying to extradite Dotcom on charges including internet piracy and money laundering.

Dotcom thought Mr Banks would help him understand "how New Zealand worked", the former employee said.

He was attracted to Mr Banks because he was a "pretty interesting" character. "Kim certainly likes having more flamboyant characters around him than quiet."

Asked what he believed were Dotcom's motivations for speaking publicly about the donation, the former employee said Dotcom was a person who was "true and correct".

His former boss had called him recently to check his recollection of events.

Dotcom was likely to have records of his incoming and outgoing phone calls with Mr Banks, the former employee said.

"We were certainly not in the business of recording phone calls."

- © Fairfax NZ News