Podcast: The Detail

How to buy political influence

How worrying are New Zealand's soft-touch political donation laws? 

Fresh fears over foreign interference in New Zealand’s political system are sparking calls for an outright ban on foreign donations.

Here’s an example.

On the face of it, an Inner Mongolian horse-trading heavyweight and New Zealand’s National Party are an odd coupling.

So news that Chinese billionaire Lang Lin gifted the party $150,000 - through the Inner Mongolian Ride Horse Industry Group – raises eyebrows, and questions.

The first: why would he want to donate to New Zealand’s political system?

The second: how? Overseas donations are supposed to be capped at $1500 – so how did a Chinese company manage to make a fully-declared and legal donation 100 times the legal limit?

Basically, it’s because he made the donation through a New Zealand based company controlled by the Chinese company – so technically, it’s a local donation.

The story was broken by New Zealand Herald investigative journalist Matt Nippert.

“He appears to be a reasonably big wheel in the Chinese horse industry – he runs China’s largest horse farm. Certainly, he’s a wealthy man,” says Nippert of Lang Lin.

“He appears to love being pictured with MPs of various stripes.”

Nippert says Lang’s payment raises issues with the current electoral rules.

“The question isn’t whether this is legal – it’s whether the laws governing this sort of behaviour are sufficient to capture the obvious concerns.”

Concerns like that of Prime Minister Jacinda Ardern, who says that the donation is “outside the spirit” of the law; and those of the country’s spy agencies who say they know of “troubling” foreign donations and relationships across the political spectrum.

That fear of foreign interference is shared by the director of Victoria University’s Institute for Governance and Policy Studies, Simon Chapple.

“There are a variety of ways in which foreign actors – and these may be individuals, companies, or they may be foreign governments – can, in theory, donate infinite amounts of money into New Zealand politics.

“It’s almost certain that none of these donations are buying any specific policy.

“It’s part of a form of gift exchange where long-term relationships are being created, and it becomes you-scratch-my-back, I’ll-scratch-yours as a long-term thing.

“Basically, you don’t criticise your friends, and donating money creates a relationship that is… of the form of friendship.”

Chapple says the rules around electoral donations, covering domestic and foreign donations, need another look.

“If we do nothing about it, we’re going to get more of it. We’re in an environment where, internationally, we’ve got more foreign governments who are actively intervening in elections across the world.”

Chapple wants a cap on domestic donations, and regarding overseas donors, suggests New Zealand follow Canada’s example and only allow those on the electoral roll to donate.

“This means New Zealand businesses, NGOs, trade unions, and foreign businesses, cannot put money into New Zealand politics.

“We don’t give them the right to vote – why should the have the right to try and influence the democratic process through the expenditure of money in the election.”

Want more from The Detail? Find past episodes here.

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