There was interesting Herald story a couple of weeks ago suggesting that the National Party may be beginning to feel some heat about their affiliations with, and excuses for, and funds flowing from, the People’s Republic of China (or people with close associations thereto). The story drew on a speech given by National’s spokesman on electoral law, longserving MP Nick Smith, to the Nelson Rotary Clubs. In that speech Nick Smith argued as follows
4.2 Banning Foreign Donations
The second change I want to promote is a ban on foreign donations. This proposal was floated by former Attorney General and SIS Minister Chris Finlayson in his valedictory speech last month with him forcefully arguing that New Zealand’s democracy is ours and should not be open to manipulation by any foreign influence. This risk has been highlighted in recent overseas elections.
The existing electoral law does put limits on foreign donors, but needs strengthening. Only kiwi citizens and residents should be able to donate to political parties or to campaigns that seek to influence an election outcome.
Such a change would need to be done with finesse so as not to discourage political participation by new New Zealanders. The issue is not about ethnicity. It is about New Zealand not allowing its democracy to be inappropriately influenced by overseas interests.
It isn’t that I disagree with Nick Smith on this specific, just that in raising it (and not other issues around electoral donations) he seems to be avoiding – probably consciously and deliberately – some of the real specific issues that are apparent in New Zealand.
The Herald article summarised the current law this way
Current electoral law prohibits non-citizens or residents from donating more than $1500 to political parties, but these can be avoided by donating through New Zealand-registered corporate entities – such as companies, incorporated societies and trusts – which are allowed to donate regardless of whether they are owned or controlled by New Zealanders.
and in a recent commentary, Simon Chapple, director of Victoria University’s Institute for Governance and Policy Studies observed
Currently in New Zealand foreign donations to a party of up to NZ$1,500 are permissible. Moreover, foreign donations below this amount are not individually or collectively disclosed.
It would be easy for a foreign state or corporate body seeking political influence to channel a large number of donations into the system just under the threshold via numerous proxies. Whether such interference has been happening is unclear, since New Zealanders do not know how much money currently comes in to political parties via foreign actors.
Even if foreign donations are not a problem now, one could rapidly develop. A strong argument can be made that foreign money has no place in democracy, including New Zealand’s.
New Zealand would not be going out on an international limb by banning foreign donations. Foreign donations to political parties are not permissible in the [United Kingdom, Ireland and the United States. They are also banned in Canada but unfortunately a significant loophole exists. Australia is currently in the process of banning foreign donations.
And I’d certainly agree with Simon on that general point: foreign money should have no place in funding election campaigns or political parties.
So there probably is a good case for a blanket prohibition on donations (in cash or in kind) to political parties by non-resident non-citizens. But that looks mostly like pre-emptively closing a possible source of a problem (although perhaps real in the case of Phil Goff’s last mayoral campaign) – and thus looking as though you care – when the real actual issues New Zealand faces in this area would not be addressed at all. For example, the largest single (acknowledged) donation to the National Party a couple of years ago was from a New Zealand registered company owned and controlled by a PRC billionaire. That is foreign money in New Zealand politics, and shouldn’t be allowed. It would be bad enough if it were from donors in countries that generally shared New Zealand values and democratic norms. It is far worse when the donor is from the PRC – or, if you like, North Korea, Equatorial Guinea or other repressive authoritarian states – and (according to the media coverage) clearly in the good graces of Xi Jinping. Personally, I would probably favour banning all corporate donations to political parties – people are citizens, companies aren’t – but at very least we should apply the same restrictions to foreign-controlled companies that we apply to non-resident non-citizen individual donations.
But laws can take you only so far, and I’m not convinced they can deal with what appears to be the rather bigger issue around New Zealand political party financing (probably mainly National, although it seems likely that Labour now in government will be seeking to get in on the act). That requires decency, integrity, and a willingness to make a sacrifice – in this case, not to take money from people – not even New Zealand citizens or residents – with close associations with, declared support for, political regimes with values so inimical to, and inconsistent with, those that have underpinned New Zealand democracy, and its fairly free and open society.
It seems to be widely understood that National Party Jian Yang is the party’s biggest single fundraiser. Jian Yang, as is now widely known, served in PLA overseas intelligence system and was (perhaps is) a CCP member, who eventually acknowledged that he misrepresented his past to get residency and citizenship in New Zealand. In all his years in Parliament he has never once criticised the PRC – not even over Tiananmen Square (perhaps there is an opportunity for him on the 30th anniversary in a few months time) – he is observed to be very close to the PRC Embassy, and even a former diplomat (now a lobbyist, so hardly someone deliberately trying to stir up trouble) declared that he was always very careful what he said in front of Jian Yang. It is, to put it mildly, hard to be confident that he is primarily serving the interests of New Zealand and New Zealanders.
I’ve noted previously comments made last year by serious senior people at a Chatham House rules event I was invited to
There was clear unease, from people in a good position to know, about the role of large donations to political parties from ethnic minority populations – often from cultures without the political tradition here (in theory, if not always observed in practice in recent decades) that donations are not about purchasing influence. One person observed that we had very much the same issues Australia was grappling with (although our formal laws are tighter than the Australian ones). Of ethnic Chinese donations in particular, the description “truckloads” was used, with a sense that the situation is almost “inherently unhealthy”. With membership numbers in political parties dropping, and political campaigning getting no less expensive, this ethnic contribution (and associated influence seeking) issue led several participants to note that they had come round to favouring serious consideration of state funding of political parties.
These will probably (almost) all be donations made by New Zealand citizens or residents, and nothing in what Nick Smith (or Chris Finlayson) was saying would even touch on them.
And thus late last year, Yikun Zhang sprang to brief public prominence, when Jami-Lee Ross revealed the tape-recording of his discussion with Simon Bridges about the $100000 donation(s), and the possible bid by one of Yikun Zhang’s associates for a place on National’s list. I’m not mostly concerned with the question of whether this donation (or set of donations) was appropriately disclosed – although in general I think there is a strong case for a lower, and more binding, disclosure threshold, tying all material donations back to identifiable natural persons – but about the affiliations and identifications of Yikun Zhang and his associates. We learned at the time the story broke that Yikun Zhang – despite being a long-time New Zealand resident (and citizen) doesn’t speak English. We learned a lot about his involvement – at senior levels – in various United Front bodies, and the strong ties he appears to have with CCP entities back in the PRC. It is, to put it mildly, hard for a dispassionate observer to be confident that he primarily has at heart the interests of New Zealand and New Zealanders. Given the nature of the regime he enthusiastically and repeatedly assoicates with, no decent political party should voluntarily have any but the most formal relations with such a person, and certainly shouldn’t be soliciting money from, or through them. It isn’t what decent people, with any regard for the integrity of our system, do.
In fact, of course, not only do they take his money, but Phil Goff, Jian Yang, and former National MP Eric Roy got together to nominate Yikun Zhang for an honour, something bestowed last year by the current government. In effect, it appears, for services to one of the more evil – most evil, judged by the numbers it rules – regimes on the planet.
And of course we know that not just MPs but party officials seem to fall over themselves to praise that same regime, and run interference whenever there is a suggestion of problems (think of Todd McClay running Beijing propaganda lines about “vocational training camps in Xinjiang). Peter Goodfellow, the National Party president, seems to work very closely with Jian Yang to pander to the regime, and keep the local donation flow going. And on the Labour side, Nigel Haworth seemed to be little better.
So by all means, take up the specific suggestion to ban completely foreign donations. It would be a small improvement on the current situation, but it would not even begin to tackle the deep corruption of the our political system around the PRC regime. People who were long-serving senior ministers – Nick Smith and Chris Finlayson – know that very well, even if they are genuinely well-meaning on their specific proposal.
But attempting to fool the public otherwise seems to be a bit of new theme. That Herald story where I first saw reference to Nick Smith’s speech included this gem
In a related move, Parliament’s justice select committee have issued a rare invitation to the country’s intelligence agencies to give a – likely closed-doors and secret – briefing to MPs about “foreign interference” in local elections.
Nick Smith, a member of the committee and his party’s spokesperson for electoral law reform, confirmed the committee as a whole late last year sent a letter to the New Zealand Security and Intelligence Service (NZSIS) and Government Communications and Security Bureau (GCSB) inviting them to give evidence.
Smith yesterday said he hoped the NZSIS and GCSB would be able to provide insight on the local risks posed by issues such as the hacking the public officials’ communications, foreign donations, and anonymous and politicised social media campaigns.
“There is the issue of funding, and whether foreign governments are either directly, or indirectly through shelf companies, are using funds to inappropriately influence outcomes,” he said.
Smith said the invitation to the NZSIS and GCSB offered evidence to be given in secret if required. He conceded this would be an unusual move for usually-open committee meetings, but was justified: “I think this is a really important issue,” he said.
So a committee chaired by Raymond Huo, he of various United Front bodies, he who chose a slogan of Xi Jinping’s for Labour Chinese-language compaign in 2017, with a senior National MP promoting only the narrowest reform (while providing cover for Jian Yang) will invite the intelligence agencies to provide advice on foreign influence issues, but in secret. Perhaps – but only perhaps, because the fact of this hearing might be used to simply play distraction – it is marginally better than nothing, but we don’t need intelligence agencies to tell us there is an issue around the PRC. Both main parties know what they are doing – who they associate with, who they take money from, who they honour, who they seek closer relations with, and who they refuse ever to criticise, no matter how egregious the regime’s abuses. All the minor parties keep quiet and go along too.
There was column this week on Newsroom by political scientist Bryce Edwards argues that it is “urgent” that we start having a proper debate in New Zealand about the PRC and the relationship with New Zealand. I don’t really disagree with him, although he seems to want an “elite” debate, and seems scared by the idea that the public might have a (strong) view (an “overly simplistic one” apparently, like ideas of good and evil perhaps?).
Obviously, we can’t rely on the politicians to lead that [debate] – they’re too compromised, and they’re just too inclined to suppress the discussion. Instead it has to be other parts of the public sphere – especially the media and other public figures – that needs to step up to examine and discuss the issues.
But it seems like wishful thinking. Sure there is the occasional voice from the margins – whether Edwards or Anne-Marie Brady – but there doesn’t seem any sign that anyone in “elite New Zealand”, anyone who commands serious respect, is about to break ranks from the “keep quiet, keep the deals and donations flowing” sickening consensus of the last few decades. Not former leading politicians, not church leaders, not leading business figures, no one. Even if a few people mutter quietly – even Fran O’Sullivan had some recent encouraging comments about donations – no one seriously breaks ranks. The taxpayer even funds bodies that condemn taking action on Huawei. So who does Edwards seriously think might lead such a debate?
As he says, all politicians have all sold their souls. I was exchanging notes earlier this week with someone about Jian Yang. It is easy to blame John Key and Peter Goodfellow for Jian Yang – they either knew his background or should have, and didn’t really care (or worse) either way. But the story of Jian Yang has been public for almost 18 months now and no one in politics has disowned him, called for his resignation, called for the National Party to remove him from their caucus. Not Jacinda Ardern or Andrew Little, certainly not Bill English or Simon Bridges, not James Shaw or Marama Davidson, not David Seymour, not even (despite occasional timorous hints) Winston Peters. Not even Jami-Lee Ross, who was at the centre of the whole donations business. Not a single backbencher, of any party, was willing to break ranks and declare the situation unacceptable. Fixed with knowledge, by their silence they now share responsibility.
It is little different on any of the other aspects of the PRC relationships:
- the effective PRC control of the local Chinese language media,
- the refusal to say a word about the Xinjiang abuses (or Falun Gong or Christian churches),
- the refusal to say anything in support of Canada over the abduction of two of its nationals.
Probably most of these so-called leaders like to think they are somehow serving New Zealand interests. People fool themselves that way, sometimes without necessarily fully realisng what they are doing. They aren’t.
So, much as Bryce Edwards might deplore the prospect of an “overly-simplistic” serious public debate, or swelling tide of discontent, I’d cheer on the fact that it was happening at all. Corrupted systems are rarely, if ever, upended and reformed without a strong strand of – almost unreasonable – public outrage. It hasn’t happened here yet. I’d like to say it was only a matter of time, but I’m a pessimist. What would turn things around now after all these years in which our “elites” have degraded our political system (to complement their failures on other fronts, notably productivity)? Labour and National are, after all, two sides of same coin on such issues, and together they seem to have a stronger hold on the political system (vote share combined) than we’ve seen for some decades. We don’t have politicians of decency and integrity, and the public show little sign of (effectively) demanding something different. The PRC Embassy must be pleased.
UPDATe (4/2): There is a new column by Simon Chapple and a co-author on reviewing the rules around political donations. I’m pretty sympathetic to the sorts of changes they propose, although as I argue above the PRC-influence issues around donations or more about atttitudes and integrity – knowing what is right and wrong and eschewing the latter – than something formal external (eg statutory) rules can deal with.