China, political interference and the matter of whether the Nats should give back $150,000

A terse – almost cryptic – statement from an unnamed person in the National Party alerted Point of Order to independent MP Jamie-Lee Ross’s focus on foreign political donations and foreign interference in New Zealand politics during a Parliamentary debate yesterday.

Using the legal protection afforded by Parliamentary privilege, Ross accused the National Party – to which he once belonged – of receiving “large amounts of foreign donations” linked to the Chinese Communist Party.  He called on National to return about $150,000 of Chinese money.

The National Party statement simply said:

The National Party is unaware of what Mr Ross was referring to today in Parliament and have not seen the document he referred to.

We stand by our previous statements on this matter and are confident that the Court will establish the clear facts.

Until that Court process is complete it is not possible for us to say more at this stage.

Point of Order was unaware of what “Mr Ross” they were talking about (although we had a pretty good idea), let alone whatever he might have said to occasion this response.

We checked with Hansard and established that  Ross had put a few questions to Foreign Affairs Minister Winston Peters at Question Time.

JAMI-LEE ROSS (MP—Botany)to the Minister of Foreign Affairs: Has he received any reports of foreign interference activities in New Zealand from foreign State actors of the type described by Canterbury University Professor Anne-Marie Brady in her paper “Magic Weapons” as united front work carried out by the Chinese Communist Party; if so, what efforts is the Government making to protect New Zealand’s interests?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): Foreign interference is not a new threat and New Zealand isn’t immune to such attempts. Yes, I have seen reports to that effect, but I can’t discuss specific countries, operational details, targets or methods, or systems of surveillance. But I can assure the member that this Government takes the threat very seriously and has robust measures in place to protect our democratic values, institutions, and our economy.

A follow-up question brought political funding into considerations:

Jami-Lee Ross: Does he share the view of SIS director Rebecca Kitteridge that one vector of foreign interference in elections is “Building covert influence and leverage, including through electoral financing;”, and if so, what advice does he have for New Zealanders concerned about this foreign interference?

Rt Hon WINSTON PETERS: The member will, I’m sure, appreciate the fact that we cannot single out any one specific country. The important thing is that we have flexible and adequate mechanisms, we believe, in place to protect our democratic values, institutions, and the economy. The witness and evidence that he has recited in his question is some testimony to that, but the reality is we have open channels to raise issues with countries if and when we ever need to do so. But it behoves political parties not to be undermining this Government’s serious purpose to protect our democratic institutions.

Hmm.  Nothing there to get the National Party unduly excited, we thought.

What else did Ross have to say?

Ah.  He popped up during the debate on the Prime Minister’s Statement.

It transpires that yesterday was the ninth anniversary of Ross’s first being elected to Parliament. And nine years ago, he said, he never expected to be the centre of a debate over foreign political donations.

In the Prime Minister’s statement, that we are debating, the Prime Minister lists as one of her Government’s achievements the banning of foreign political donations. It’s true that the new $50 threshold for overseas donations is an improvement. But, as I’ve said previously in the House, I doubt it will do very little to deter those determined to find other ways around the ban, including … using the wide-open gap we still have where foreign State actors can funnel funds through New Zealand registered companies.

The foreign donation ban is one of the few recommendations that has spun out of the Justice Committee’s inquiry into foreign interference activities in New Zealand elections. That has been picked up.

Ross highlighted a submission to the inquiry from Professor Anne-Marie Brady, of Canterbury University, and evidence from Security Intelligence Service director Rebecca Kitteridge.

Ms Kitteridge rightly pointed out in her evidence that the challenge of foreign interference to our democracy is not just about what occurs around the election itself. Motivated State actors will work assiduously over many years, including in New Zealand, to covertly garner influence, access, and leverage.

She also specifically pointed out the risks we face from foreign State actors through the exertion of pressure or control of diaspora communities and the building of covert influence and leverage, including through electoral financing.

Ross then recalled that – after Pansy Wong resigned from Parliament – Ross was selected as the National Party candidate for the by-election nine years ago.

It was made very clear to me at the time that I had to put a big emphasis on getting to know the Chinese community. It was also pointed out to me very early on that I must make good connections with the Chinese consul-general. Madam Liao at the time was very influential with Chinese New Zealanders, and important to my own success as well. In hindsight, it was naive of me to not think carefully about the pull that a foreign diplomat had on a large section of the population in my electorate.

The consul-general in Auckland is treated like a God, more so than any New Zealand politician, except probably the Prime Minister of the day. Each successive consul-general seemed to be better and more effective at holding New Zealand residents and citizens of Chinese descent in their grasp. Consul-generals Niu Qingbao and Xu Erwen were also treating us, as MPs—not just myself, others—as long-lost friends.

All this effort, if you read Professor Brady’s paper called Magic Weapons, is a core plank of the Chinese Communist Party’s deliberate and targeted efforts to expand political influence activities worldwide. It’s also the very risk that Rebecca Kitteridge warned the Justice Committee about.

The Chinese Communist Party’s targeting of Chinese New Zealanders should be concerning enough but the targeting of politicians and New Zealand political parties needed to be taken seriously, Ross said.

Both Professor Brady and director Kitteridge had warned about the risk of foreign interference through the funding of political parties, he noted.

Then he recalled the allegations he had made about donations in 2018.

I have said publicly already that the donations I called out were offered directly to the leader of the National Party at an event I was not in attendance at. I did not know at the time that those donations were made that they were in any way unlawful. I never had any control over those donations and I have never been a signatory of any National Party bank account in the time that I’ve been an MP. I never benefited personally from those donations. I was never a part of any conspiracy to defeat the Electoral Act. And the point at which I blew the whistle on these donations—first internally, then very publicly—that point came after I learned new information that led me to question the legality of the donations.

After raising these issues publicly, they were duly investigated first by the police and then the Serious Fraud Office. The result of those allegations is already public and I can’t traverse much detail here, but I will say that I refuse to be silenced and I will keep speaking out about what I know, and have seen, goes on inside political parties. I refuse to be quiet about the corroding influence of money in New Zealand politics.

Last year, Ross said, after taking his concerns to the proper authorities, he had been made aware of donations linked back to the Chinese Communist Party.

What I learnt was that large sums of money adding up to around $150,000 coming directly out of China in Chinese yuan over successive years ended up as political party donations. Two individuals, _________, were used as conduits for the donations.

These funds eventually made their way to the New Zealand National Party. The New Zealand National Party still holds those funds. The National Party is still holding at least $150,000 of foreign donations received in two successive years. I call on the National Party to return those foreign donations that it holds or transfer the money to the Electoral Commission. I doubt the National Party knew at the time that the money was foreign—I certainly didn’t either—but now that they will have that information to hand, they need to show leadership and do the right thing.

To avoid doubt, this $150,000 dollars’ worth of foreign donations is not the same as the $150,000 from the Inner Mongolia Rider Horse Industry company that they raised last year.

The foreign donations all had connections to the Chao Shan General Association, whose founder and chairman was Auckland businessman Zhang Yikun, Ross said.

The largest party in this Parliament has been the beneficiary of large sums of foreign money.  That money is linked to an individual who is linked to one of the top three Communist Party United Front representatives in New Zealand.

Ross recalled Professor Brady’s concluding remarks in her submission to the Justice Committee.  She said  foreign interference could thrive only if public opinion tolerated or condoned it.

We must not tolerate or condone any foreign interference activities. We must also not stay silent when we see problems right under our nose. It’s time for the political parties in this Parliament to address seriously the political party donation regime that we have.

I realise that both the two main parties in this Parliament often have to agree, but perhaps it’s time to put that out to an independent body. It’s too important for us to ignore, and it’s not right that we should allow these things to go on under our nose.

Ross then sought leave to table two charts which – he said – showed a flow of money from China into New Zealand and to the New Zealand National Party.

The Speaker asked for an assurance that the charts were not integral to any matter before the courts.

Ross said they had been prepared by the Serious Fraud Office and could not give that assurance.

The Speaker’s ruling that he would not put the question without the assurance prompted a series of points of order.

One of these, from New Zealand First leader Winston Peters, challenged the Speaker’s application of the sub judice rule.

The Speaker said the rules as they exist in Standing Orders had to be applied.

Ross and three Auckland businessmen – one of them is Shang Yikun – have all pleaded not guilty in the Auckland District Court to charges laid by the Serious Fraud Office. The charges relate to two $100,000 donations paid to the National Party in 2017 and in 2018.