Political donations appear to have been hidden inside a secret slush fund controlled by a coterie of Winston Peters' trusted advisers.

NZ First officials and MPs were kept in the dark while $38,000 was spent on campaign headquarters and staff overtime by the party's political slush fund, the New Zealand First Foundation.

Expenses records for the foundation seen by Stuff show it collected more than $500,000 in donations from April 2017 to March 2019 that could be in breach of electoral donation laws, particularly if the foundation was paying party expenses.

Many of these apparent donations to the foundation do not appear on the party's electoral returns.

ALDEN WILLIAMS/STUFF Lawyer Brian Henry is a trustee of The New Zealand First Foundation which has collected donations which could be in breach of electoral law.

Invoices, seen by Stuff, reveal the foundation spent $325,000 in about 18 months to March 2019 - with most of the money appearing to directly benefit the NZ First Party.

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This included renting and furnishing the party's campaign office for the 2017 election as well as advertising material, reimbursements for travel, internet bills, legal advice and consultancy work.

Abigail Dougherty Former NZ First MPs, candidates and officials say they were kept in the dark about party finances.

About $28,000 was spent with Prime Property to rent campaign headquarters. Emails arranging to obtain swipe cards to the headquarters show the staffer collecting them identified himself as working directly for NZ First leader Winston Peters.

The same staff member bought $1736 worth of office furniture and later added a $169 document shredder and a $99 coat rack.

Another $10,000 was spent on staff overtime and $920 on a picture of lost sheep.

It does not appear this spending was declared to the Electoral Commission by the party.

A dispute over the internet bill, which the foundation forgot to disconnect after the 2017 election campaign resulting in an overdue account, revealed the $1300 expense was for campaign use.

Foundation trustee Doug Woolerton emailed Vodafone on November 23, 2017, at 9.38am saying: "This broadband was set up to service the NZ First campaign office, which was a temporary situation."

Other connected incidents include a $5000 event at the Wellington Cup Day in 2018 to rent a 20-person tent. This was billed directly to MP Clayton Mitchell's parliamentary office, but documents show that it was ultimately paid by the foundation.

A 2017 invoice of $22301.95 was billed by a staffer for "overtime worked during the campaign".



The $920 sheep picture was a payment to Getty Images for the right to use a "picture of snowy hills behind a flock of sheep trying to find grass in a field" for a political campaign.

PETERS: ALL WITHIN LAW

Peters said on Tuesday that his party had always acted within the law.

He said he was looking forward to discussing the matter with the Electoral Commission, which announced following Stuff's story on Tuesday that it would be contacting NZ First to discuss the matter.

"Allegations raised this morning by [Stuff] concern a party matter but I am confident that NZ First has operated within electoral laws, now and for the last 27 years. Declarable donations were declared to the Electoral Commission," Peters said.

"Our system of democracy is based on the secrecy of the ballot and privacy of party memberships and donations within specified limits."

NZ First senior MP and former deputy leader Tracey Martin said she knew nothing about the foundation when asked on her way into caucus on Tuesday.

PARTY KEPT IN DARK

Former NZ First MPs, party officials and candidates say they were kept in the dark about party finances.

"At times, we would ask for the financials and they would give us percentages but not the numbers that made up the percentages," a former party official said.

"No-one was given the totals. If anyone asked too much, they would get dumped or moved around. If anyone challenges Winston they are moved out."

One former MP said that discovering details about the foundation "slush fund" undermined the work of NZ First's volunteer fundraisers.

"For many, many years a lot of elderly people have baked cakes, stitched quilts and contributed pay to the party," they said.

"All the while this foundation has been receiving significant donations.

"I think the supporters will be incensed."

Former NZ First treasurer Colin Forster said the accounts were disorganised and inaccurate when he took over the role in 2008.

"All of the accounts were all written in a A4 exercise book, like a child would use for school," he said.

"It would be fair to say they were inaccurate."

Forster said he had questioned the party's income at meetings and he could not figure out where the money came from.

"A lot of people have given a lot to this party and they have been kept in the dark."

In October 2019, Lester Gray resigned from his position as NZ First Party president after refusing to sign off on its financial statements.

Gray said in a letter to the NZ First board that he had not been shown documentation he requested and therefore could not sign off the returns.

"I refuse to sign off the 2019 financial reports with the information I have been provided," he wrote to the board.

"As president, the limited exposure I have had to party donations and expenditure leaves me in a vulnerable position.

"This type of operation does not align with my moral and business practice values, and I am therefore not able to support the party any longer."

Former MPs say the financial reports and party expenses were never presented to members.

NZ First Party presidents - who are ostensibly in charge of the organisational wing of the party - are not welcome at caucus meetings.

While the NZ First constitution states that "the president has the right to attend any party meeting", a party spokesman said it was a "longstanding convention since the inception of NZ First" that party presidents did not attend caucus.