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New details on Labour intern scheme

Newly released documents have shed light on a troubled intern scheme linked to the Labour Party, with the party’s secretary telling electoral officials the scheme’s organiser “had not been forthcoming” in disclosing how it was funded.

The Campaign for Change, launched by former Labour official Matt McCarten, hit the headlines in June when about 85 overseas students recruited as volunteers complained to Labour officials about the state of their accommodation and the quality of the programme.

Labour stepped in to take over the scheme, which was billed as a non-partisan drive to boost voter enrolment but included some time campaigning for Labour candidates.

The Electoral Commission undertook an investigation after Kiwiblog founder and National Party pollster David Farrar wrote to it in late June, raising concerns about whether the money spent to fund the scheme should be declared as a donation to Labour. It ruled in late August the funding did not need to be declared as an election expense, but it did need to be included as a donation for the candidates who benefited from the interns.

“It seems abundantly clear that this activity was organised over many months by Labour Party staff and office holders to help Labour’s campaign.”

In response to a letter from the Electoral Commission, Labour Party general secretary Andrew Kirton asked for a meeting to discuss the “unusual and complex situation”, accompanied by Kensington Swan lawyer Hayden Wilson.

'Mr McCarten has not been forthcoming'

The Electoral Commission’s notes of the July 5 meeting record Kirton as saying McCarten’s vision “appears to have been to create an independent entity supported by unions etc”.

Kirton estimated McCarten had spent $104,000 on the intern scheme, with the funding believed to come from “a private funder who he has not disclosed”.

“Andrew believes that Mr McCarten would not have funded any of the costs himself. Andre [sic] and Hayden indicated that Mr McCarten has not been forthcoming...

“Andrew and Hayden’s view is that the costs incurred were by Matt. They have stepped in to honour the bills but at law they have no obligation because Matt was responsible [and] had unilaterally entered into these agreements and had no authority to incur costs on behalf of the party.”

The Electoral Commission then wrote to McCarten on July 10, asking him to provide information on who provided the funding for the campaign and the extent of Labour’s involvement.

After he did not respond to a July 17 deadline, the commission wrote to him again on July 19 saying it was considering whether to refer the issue to the police “given the amount of money involved and the seriousness of [the] allegation”.

Scheme 'set up by mates'

McCarten replied two days after a new July 24 deadline, saying he had been “out of circulation for the last few weeks”.

He told the Electoral Commission the campaign had been set up by “a few mates of mine” after Labour decided not to run an official internship programme, and he had agreed to personally cover or raise the costs for the scheme.

McCarten said the campaign focussed primarily on voter enrolment, and the groups it worked with were assured it would be non-partisan with no campaigning for particular parties.

While the interns were to spend half of their time working as part of local Labour campaigns, McCarten said the Campaign for Change had “no direct management responsibility for that part of it”.

In a follow-up letter on August 1, McCarten said Farrar and media had made “a series of assumptions that then lead to inaccurate conclusions”, and the scale of the project was far smaller than had been suggested.

“The project was an individual initiative by me, and despite speculation all costs were covered by me.”

“The Commission is unconvinced by the suggestion that the interns, being partly engaged campaigning for Labour Party candidates and partly to enrol voters, are likely to have been scrupulously non-partisan in fulfilling the later role.”

He had spent $65,094 on the scheme “paid directly out of my personal bank accounts”, including nearly $37,000 on accommodation and food as well as over $10,000 on rental cars and vans.

He had contacted organisations keen to support a non-partisan enrolment campaign, and had received some promises of financial contributions once it was up and running.

McCarten said he was not working for Labour when he set the campaign up, and believed the interns would not have seen themselves as being part of the party’s national campaign.

In an August 14 response to McCarten, the Electoral Commission said it did not believe there had been election expenses incurred for Labour, as no printed materials were produced backing the party or candidates.

However, it ruled he had made donations to Labour candidates in 12 Auckland electorates by paying for costs to support the volunteers as they campaigned for the party’s representatives.

“The Commission is unconvinced by the suggestion that the interns, being partly engaged campaigning for Labour Party candidates and partly to enrol voters, are likely to have been scrupulously non-partisan in fulfilling the later role.”

It asked him McCarten to provide a breakdown of the amounts donated to each candidate, and tell them so they could declare it in their donations.

However, McCarten did not meet an August 17 deadline to hand over the information, with a follow-up email from the Electoral Commission on October 3 - nearly two months later - asking him to provide a timeframe for a response.

An Electoral Commission spokeswoman confirmed McCarten had still not provided it with the final donation figures.

Private donor remark 'tongue-in-cheek'

McCarten told Newsroom he had provided Labour with a breakdown of the costs, which he would pass on to the Electoral Commission.

Asked why he had said he secured a private funder for the scheme, McCarten replied:

“Because I just felt like it really, to be honest - it was really kind of tongue-in-cheek between myself and [the reporter]...I meant it more as a joke but of course there’s no jokes in these matters.”

He had “no idea” why Kirton had described him as not being forthcoming, and did not want to comment further on whether he had any regrets regarding the scheme.

“As citizens we’re entitled to do what we like as long as we comply by the rules, which I have.”

Kirton said the party had only recently received the information from McCarten, and had to “go through the motions” with the various electorates to include the donations in their returns before early next year.

He said he had had “a very functional line of communication” with McCarten, with some “tidy-up things” that took time to sort and practical issues such as McCarten being out of the country.

“Things don’t go right all the time, and what's important is when they don't go right is that you do right when you find that out.”

“I wouldn't characterise it as being difficult, it might have just been at the time we were waiting for the questions to be answered in terms.”

Kirton said he told the Electoral Commission the funding had come from a private donor, as that was what McCarten had told the NZ Herald.

‘That was the information I had, and I had nothing to go by that told me it was any different to that.

“As it turns out, Matt’s made his position clear on it i think, that’s what we can go by - I’m not in a position to guess all these sorts of things and understand an individual’s personal finances.”

The failed scheme “wasn’t a good look” for the party, but it had stepped in to take over and help the affected interns as soon as it became aware.

“Things don’t go right all the time, and what's important is when they don't go right is that you do right when you find that out.”