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Jami-Lee Ross, pictured here at parliament in 2020, has pleaded not guilty to crown charges in the Auckland High Court. (Photo by Hagen Hopkins/Getty Images)
Jami-Lee Ross, pictured here at parliament in 2020, has pleaded not guilty to crown charges in the Auckland High Court. (Photo by Hagen Hopkins/Getty Images)

PoliticsJuly 26, 2022

‘Sham donors’ and ‘fairy dust’ on opening day of donations fraud trial

Jami-Lee Ross, pictured here at parliament in 2020, has pleaded not guilty to crown charges in the Auckland High Court. (Photo by Hagen Hopkins/Getty Images)
Jami-Lee Ross, pictured here at parliament in 2020, has pleaded not guilty to crown charges in the Auckland High Court. (Photo by Hagen Hopkins/Getty Images)

Jami-Lee Ross is one of seven defendants facing charges of obtaining by deception following a Serious Fraud Office investigation into political donations to both National and Labour. Toby Manhire reports from the Auckland High Court.

On the night of October 15, 2018, then National MP Jami-Lee Ross drove from Auckland to Wellington. He stopped at Warehouse Stationery to print a statement, and continued on to parliament, where he read aloud its contents at a press conference on the tiles. That extraordinary moment, during which Ross accused his then leader, Simon Bridges, of being a “corrupt politician”, set in motion a cascade of claims and counter-claims, revelations and investigations, leading all the way to the Auckland High Court, where a major, multifaceted political donations trial got under way this morning.

On trial are Ross and three businesspeople – Yikun Zhang and twin brothers Shijia (Colin) Zheng and Hengjia (Joe) Zheng – as well as three other individuals whose identities have been suppressed by the court. The charges relate to separate donations to the National and Labour parties. On the delayed opening day of a trial which was adjourned yesterday after one of the defendants returned a positive Covid test, the Crown introduced a case that has it its heart, it says, “sham donors”. 

Evidence to be presented would reveal, said prosecutor John Dixon QC, the “manipulation and ultimately the subversion” of political donation rules. He said the Crown would show how party secretaries, the Electoral Commission and the public had been deceived through a series of episodes that included split payments by tactical “transmitters”, cover-ups, paintings, an auction that never happened, hundreds of cases of wine and an imperial robe.

The Crown has laid “obtaining by deception” charges under the Crimes Act, alleging attempts to deceive by way of a “fraudulent device, trick, or strategem”. At issue are two $100,000 donations to National, one in 2017 and the other 2018, and a donation of “at least $34,840” to Labour in 2017. All seven defendants deny the charges. 

Simon Bridges is among the witnesses the Crown intends to call, along with current cabinet ministers Andrew Little and Michael Wood, Jacinda Ardern’s chief press secretary Andrew Campbell and former senior party officials from both National and Labour. 

‘Kept in the dark’

Appearing before Justice Ian Gault, Dixon said that in the Labour example, auctioned paintings were used to keep sums below the thresholds for donation, while in the case of National donations sums were split into smaller amounts among friends and family members who had been “persuaded to be the natural donors” and duck beneath the disclosure level. The “effect is the same in either case”, he said. Zhang was the “true donor”, the Crown contends, and the means employed meant the party officials, authorities and the public were “kept in the dark”.

Zhang and the Zheng brothers face charges over donations to both parties, with Jami-Lee Ross linked only to National Party donations and the three other defendants with name suppression only to Labour’s. Joe Zheng also faces charges of “supplying information knowing it was false or misleading” during interviews conducted by the Serious Fraud Office. 

Dixon said the Crown would also show that the defendants whose names are suppressed had engaged in a “cover-up” when Labour attempted its own internal investigation, sparked by SFO action over the National donations, to determine whether they had received donations from the men involved.

In 2018, Yikun Zhang was appointed a member of the New Zealand Order of Merit, for services to New Zealand-China relations and the Chinese community, reflecting in part his work as founder and chairman of the Chao Shan General Association, a group representing the region of China where he was born and raised. That Zhang had been pursuing the honour, said Dixon, suggested a “possible justification, a motive to engage in the offending”, insofar as “the public was denied knowledge” to which it was entitled. 

The accused respond

Kicking off short preliminary statements on behalf of the defendants, John Katz QC, acting for Yikun Zhang,  said the National and Labour donations were “two very different cases”. His client did not dispute that he paid for the paintings in the Labour fundraising, and that the party’s annual return was simply incorrect. There was “no intent to deceive anyone” and “no benefit of which anyone in the position of Yikun Zhang could possibly be aware” was obtained. He rejected, meanwhile, having made the donations to National – “the $100,000 was not money donated by him or on his behalf”, in either the 2017 or 2018 example. 

Colin Zheng’s representative, Paul Dacre QC, said his client accepted that he was involved in the three donations, though they were “quite different situations”. Zheng “did not invite and was not aware of what the Crown describe as fraudulent strategies”, said Dacre. He “believed he was acting lawfully and was entitled to act in the way he did”. He considered he was partaking in a democratic process and there was “no attempt to gain benefits”. 

Joe Zheng’s counsel introduced his defence in similar terms, stressing a lack of any intent to deceive, adding that as far as the SFO interview was concerned, Zheng “did not supply any information knowing it was false or misleading in a material particular”.

Marc Corlett QC, who is acting for the man who purchased the paintings related to the Labour donations case, said the SFO case appeared to have been “reverse-engineered to meet a preconceived investigative assumption that there must be a parallel ‘structure’ between the Labour Party and National Party cases”. The prosecution, he said, was asking the court to “draw inferences … that cannot be drawn without rabid speculation and a disregard of the burden of proof and the presumption of innocence”. The case against his client, he contended, was “the product of a fertile investigative imagination which has harnessed the innocuous and ridden the high horse of confirmation bias to a land of fantastical conclusion”.

The case, Corlett continued, was “a theory in search of evidence … animated by predetermination, fuelled by speculation, and dependent on some Eurocentric, cringe-inducing cultural assumptions.” He pledged that the substantive trial meant “it no longer suffices for the Crown to throw up fairy dust and say – ‘see, this evidence is consistent with our fertile imagination of what [the suppressed defendant] might have done’”. 

Representing Jami-Lee Ross, Hannah Stuart said her client “routinely advised donors that donations over $15,000 must be disclosed”, but he was involved in no discussions with any of the defendants about splitting any donations. His attacks on Bridges had emerged from “a political falling out between the two men”, she said, but neither had “any knowledge of split donations nor the source of donations”. They would establish, she said, that “Mr Ross had no involvement in any fraudulent scheme”. 

Covid in the air

The winter Covid wave has been felt in the courtroom – and not just in the form of the masks and hand sanitiser on the benches. A positive test for Yikun Zhang brought an early adjournment yesterday and the introduction of a remote video facility so that he could participate from home. Shortly before lunch, another defendant discovered that a household member had tested positive. He remained briefly in court, having been determined an essential worker by the court, but subsequently also returned home and joined proceedings via video link. 

The Crown and seven defendants are represented by 20 lawyers in the modestly sized courtroom, with the middle row squeezed in shoulder-to-shoulder. Ron Mansfield QC, who leads Ross’s legal team and is seated at the far end of the row, said this morning, “When Mr Corlett got into full flight yesterday I was pushed right off the desk.” The court has undertaken to reshuffle the room for the remainder of the judge-alone trial.

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