Donation queries continue to swirl

JOHN BANKS: Says he hardly knew Kim Dotcom – and the sum total of his conversations with him would have been 20 minutes.
JOHN BANKS: Says he hardly knew Kim Dotcom – and the sum total of his conversations with him would have been 20 minutes.

ACT leader John Banks continues to be dogged by controversy over donations he received while contesting the Auckland mayoral campaign in 2010. A police investigation concluded that electoral laws were broken, but there was insufficient evidence to prosecute. Andrea Vance examines the claims and counter-claims.

When internet multimillionaire Kim Dotcom revealed John Banks knew he was the source of a $50,000 donation - declared as "anonymous" by Mr Banks' campaign team - Prime Minister John Key sought assurances from the ACT leader.

Mr Key, who stubbornly refuses to read the police report into the saga, says he accepts Mr Banks at his word, that he complied with the law. However, he has also said that Mr Banks would lose his job if "Mr Dotcom could prove Mr Banks was not telling the truth". The police investigation concluded the law was broken - but there was insufficient evidence to prosecute.

Police say they were unable to establish that Mr Banks had the "necessary knowledge" that the donation had been recorded as anonymous in the return before he signed and submitted it.

Opposition parties insist that Mr Banks misled both the prime minister and the public.

Mr Banks will not comment further, other than to say: "There was an extensive police investigation. No charges were laid." Dotcom stoked the scandal this week by visiting Parliament, to see Mr Key grilled by opposition parties - Mr Banks was ominous by his absence.

The following is Mr Banks' public comments on the donation saga - and what the police file shows.

“I'm a car enthusiast and he had a nice collection of cars. I got to speak to him for a few minutes." January 24.

Following the dramatic raid at Kim Dotcom's rented Coatesville mansion in January, the world's media scrambled to find out more about the German internet tycoon. Small Business Minister John Banks told reporters he once had lunch at Dotcom's property and met him at property developer David Henderson's apartment, where Mr Banks went to watch the 2010 New Year's Eve party. Mr Banks said he hardly knew Dotcom - and the sum total of his conversations with him would have been 20 minutes.

“I don't remember that . . . I can't recall whether I did or not.” April 27.

In mid-April 2010 Mr Banks and an unnamed friend were picked up from Mechanics Bay in Dotcom's leased helicopter and flown to the Coatesville estate for lunch. Mr Banks also attended Dotcom's birthday party and was filmed making a toast to him. Four days later Mr Banks' memory returned, after talking to friends and checking his records. "I'm a helicopter pilot and I've done hundreds and hundreds of flights in and out of properties around Auckland over many, many years. At the time I was asked, I did not recall. It wasn't a big issue for me."

"I want to help you Kim and I can help you more effectively if no-one knows about this donation." June 9, 2010.

On June 9, Mr Banks drove back to Dotcom's mansion with his wife Amanda. Over a meal he raised his ambitions to be the new Auckland super-city mayor - and Dotcom offered a $50,000 donation. Dotcom says Mr Banks told him to split the donation into two cheques so that the gift could remain hidden from the public. His electoral returns show five anonymous payments for $25,000. A member of the Banks campaign team told police that the fundraising plan included approaching 10 people, including some on the NBR Rich List, to ask each for $25,000.

“Well I met with them, I know them, but I can't recall discussing money with them." April 27.

Mr Banks denies he knew the $50,000 donation came from Dotcom. Dotcom and his bodyguard Wayne Tempero told police that Mr Banks twice confirmed in phonecalls that he had received the two cheques. Two days later Mr Banks told reporters: "If someone says to me, ‘How can I put money into your campaign?' what would be wrong with telling them . . . if you want to put money into my campaign, you can put it in two ways. You can put it in anonymously or you can put it in and have it declared.' It's quite legitimate," he said on April 29.

"If all the people who said they'd make donations to my campaign had made donations to my campaign, I would have probably raised five times as much as I did." May 1.

Auckland lawyer Gregory Towers told police that on February 9, Mr Banks told him he couldn't publicly back Dotcom in his fight against extradition. "John Banks said that as much as [he] wished to publicly support Kim that may backfire on Kim if it became known about the election support," Mr Banks has repeatedly refused to answer questions about this conversation.

"To the best of my knowledge I gave him some advice about applying for residency." January 24.

In his statement to police, Dotcom says Mr Banks twice offered to help the family with their residency application. His lawyers advised him not to take up the offer.

Dotcom has also alleged Mr Banks told him he was "close" to Land Information Minister Maurice Williamson, whose approval was necessary for the purchase of the home he was renting. On May 1, Mr Williamson confirmed Mr Banks called him to advocate on behalf of Dotcom's application to the Overseas Investment Office to buy the $30 million Coatesville property. "I said to Mr Dotcom I would give him advice on that and I did," Mr Banks said, confirming he twice called his former National Party caucus colleague.

"I have nothing to fear and nothing to hide and I welcome the inquiry and everything will come out in the wash." April 29.

Two days later, Mr Banks admitted to press gallery reporters that he had "obfuscated" over questions because of legal advice. Last week, when police files were released, Mr Banks' statement to investigators was withheld. Mr Banks blamed police - but a police spokesman said he had not authorised its release.

"I was absolutely pedantic about paying for everything in Hong Kong myself . . . It was a very expensive week and I paid it all with my wife's credit card." May 2.

Mr Banks took a Christmas holiday with wife Amanda two weeks after he was sworn in as a minister. He stayed at the Grand Hyatt, where Dotcom lived for six years. Mr Banks insists he haggled a discount on his $678-a-night hotel room.

Dotcom told police Mr Banks contacted Mr Tempero at the end of last year asking for a hotel recommendation. "I had told Mr Banks that I had stayed in . . . the Hyatt . . . for six years . . . it was clear to me that he was seeking my help in getting him a good rate at the hotel." Dotcom said he rang the hotel to tell them Mr Banks was a VIP and should be treated as such.

"Thank you very much for your hospitality in Hong Kong. We have enjoyed our stay in ‘your town' very much . . . warmest best." Letter from John Banks to Dotcom, December 30, 2011.

Dotcom sent a luxury hamper to Mr Banks during the Hong Kong holiday. Containing whisky, champagne, chocolates and truffle pate, its worth is estimated at more than $1000. Mr Banks said he gave it away to staff. He issued a statement on May 17 which said he had amended the MPs' registry of pecuniary interests to include the gift basket.

"How can anyone be reasonably expected to comply with a law that cannot be understood - even by the legal profession?" September 12.

Mr Banks welcomed a Government announcement that the local electoral laws are to be amended. He said they were "unfair" and "unworkable". But campaign volunteers, including his treasurer, told police Mr Banks had employed lawyers - and insisted he was kept at arm's length from the finances.

"We had a legal firm that advised us on the legislation behind donations and we took advice from them," one said.

Fairfax Media