JOHN BANKS: The centre of a police investigation into campaign donations.

ACT leader John Banks told a lawyer he couldn't help Kim Dotcom publicly because of his ''support'' for his election campaign, police files allege.

Gregory Towers, a partner at Simpson Grierson, told police Mr Banks telephoned him in February - a few weeks after Dotcom was arrested on US anti-piracy charges.

Only a few days earlier he had told media he hardly knew the internet tycoon.

GRAHAME COX/Fairfax NZ BANKS DONOR: Megaupload founder Kim Dotcom.

In fact, Dotcom gave a $50,000 donation to Mr Banks' campaign to be Auckland supercity mayor in 2010, which was declared as anonymous.

Police yesterday opened files from their investigation into two $25,000 donations from Dotcom and a $15,000 donation from SkyCity, also registered as anonymous.

A witness statement from Mr Towers reveals he contacted Mr Banks, by then MP for Epsom, on February 8, to ask for his help in getting an additional mattress for Dotcom's Mt Eden cell. Mr Banks called back the next day.

"John Banks said that as much as [he] wished to publicly support Kim that may backfire on Kim if it became known about the election support," Mr Towers said. "He said he was very supportive however of Kim's case."

Mr Banks has always denied knowing the donations came from Dotcom. Police found Mr Banks solicited the donations but didn't have sufficient evidence under current legislation to charge him.

A witness statement from Dotcom also reveals Mr Banks twice confirmed he received the donation. He has previously revealed Mr Banks called to thank him for the gift.

But in an interview with detectives he revealed he was anxious to know if the cheques were banked. "So I asked [bodyguard] Wayne [Tempero] to make sure it had been received. Wayne told me that he had called Mr Banks and that Mr Banks had confirmed that he had received the money."

Mr Banks has denied phoning Dotcom to thank him, saying he "could not have, as any such contribution was anonymous".

Dotcom was also "a little offended" by Mr Banks' suggestion that the donation be anonymous.

"I felt it implied that he did not want to be seen to be associated with me. I told him I didn't have a problem with it being known."

Mr Banks told him: "I want to help you Kim and I can help you more effectively if no-one knows about this donation."

Mr Tempero confirmed the conversation with Mr Banks. "I remember that around this time I had a conversation with John Banks. I would have asked 'Have the cheques been cleared or not' and he said yes, they had been cleared," he told police.

The Government moved yesterday to tighten the rules around local election laws. Anonymous donations will be capped at $1500 and rules around disclosure strengthened to bring them in line with parliamentary elections. They will be in place for next October's local authority elections.

Mr Banks welcomed the move. "No candidate for public office should go through what I had to go through."

BANKS' DONATION INQUIRY

The police files also reveal:

On meeting Dotcom's wife, Mona, John Banks declared her "the most beautiful woman I have ever seen". Dotcom told police: "I was surprised he would say that with his own wife [Amanda] present."

Mr Banks was given a $15,000 cheque from SkyCity, in a SkyCity envelope, at a 10-minute meeting in the casino.

SkyCity also received a receipt from Mr Banks' treasurer in May 2010.

Mr Banks looked "a bit shocked and impressed" when Dotcom offered him $50,000.

Dotcom had offered to run an advertising campaign for Mr Banks but his lawyers advised against it.

Bodyguard Wayne Tempero had about six phone conversations with Mr Banks who also rang him after reading he faced firearms charges.

Mr Banks' campaign team targeted people on the NBR rich list and aimed to raise $1 million - including 10 donations of $25,000.

Mr Banks was interviewed by police for three hours but his witness statement was not released.

Police costs during the inquiry totalled $726.68 in flights, accommodation and a rental car.