Mayors Lianne Dalziel and Phil Goff are being investigated by the Serious Fraud Office. (Composite image)

The Serious Fraud Office (SFO) has opened formal investigations into Christchurch and Auckland mayors Lianne Dalziel and Phil Goff over their election expenses.

Police referred a complaint about Dalziel's donations to the agency last month after it emerged she had failed to identify donors who made significant contributions to her campaign for re-election in October.

Electoral rules allow candidates to accept anonymous donations under $1500 and say they must name those who contribute more than that sum.

JOHN KIRK-ANDERSON/STUFF Christchurch mayor Lianne Dalziel is asked about the Serious Fraud Office investigation into her electoral funding. (Video first published March 1, 2020)

A similar complaint about Goff – though it is not clear what it specifically relates to – was referred by police on the same day, February 28.

READ MORE:

* No action by police over complaint about Christchurch mayor's 2016 election donations

* Christchurch mayor Lianne Dalziel 'disappointed' not to be told of SFO case

* Christchurch mayor in the dark over Serious Fraud Office investigation

* Widespread investigations under way into allegations of electoral fraud

* Auckland mayor Phil Goff referred to Serious Fraud Office over election expenses

It is believed to be the first time the organisation has received such complaints about mayors.

Confirming the SFO probe on Wednesday, a spokesman said: "The Serious Fraud Office has commenced separate investigations into donations made in relation to the Auckland and Christchurch mayoral elections."

The investigation means authorities are looking into potential election fraud by the leaders of the country's two biggest councils.

The SFO is also investigating the NZ First Foundation over allegations it held a slush fund of half a million dollars for the NZ First party.

And former National MP Jami-Lee Ross, now an independent, is among four men facing SFO charges over two $100,000 donations to National that were allegedly made in smaller amounts to avoid meeting the threshold for disclosure.

Chris McKeen/Stuff Auckland mayor Phil Goff said he had "nothing to hide" on Wednesday, hours before the Serious Fraud Office announced a formal investigation into his election donations.

According to the Department of Internal Affairs, there is no legislation giving power to stand down a mayor while an investigation is under way.

Mayors' and elected members' behaviour is dealt with through code of conduct rules under the Local Government Act.

Their position is vacated, potentially forcing a by-election, if they are convicted of an offence punishable by a term of two or more years in prison.

The Taxpayers' Union called for Dalziel and Goff to temporarily stand down and let their respective deputy mayors stand in while the SFO investigation is under way.



"We sincerely hope that both of these senior politicians are cleared of wrong-doing and that nothing comes of the SFO investigations," spokesman Jordan Williams said.

"But until that is the case, they should both be stepping down, as would be expected by any public servant in such serious circumstances."

Earlier on Wednesday Goff, who like Dalziel is a former Labour Cabinet minister, said he had "nothing to hide" and was not worried about the police referral.

"We've kept, to the best of our knowledge, within all of the rules," Goff said. "The SFO haven't contacted me – I've got no idea what it's about."

He said he would "fully co-operate" with any SFO investigation, saying: "If they do decide to do that I will front up to them."

Dalziel has been contacted for comment.

The SFO is the lead law enforcement agency for investigating and prosecuting serious or complex financial crime, including bribery and corruption.

Under a formal agreement the SFO and police consult on matters of alleged corruption to determine which is the most appropriate agency to undertake potential investigations.

Dalziel defeated businessman Darryll Park and political activist John Minto to win her third term as mayor in October.

Minto complained to electoral officer Jo Daly in December after Dalziel's election return listed only her husband, lawyer Rob Davidson, as a donor at a campaign fundraiser in July.



But after coming under public pressure she revealed the names of six people – all who have connections to Davidson and many who have links to China – who donated more than $1500 by buying auctioned wine for prices above market value.

Christchurch mayor Lianne Dalziel initially failed to identify six donors who gave her campaign more than the $1500, the limit at which electoral law requires people to be named.

Among them was Davidson's China-based business partner, as well as a businessman who has property interests in Christchurch and owns a Chinese-speaking newspaper in New Zealand.



One donated $17,000, more than 11 times the $1500 limit that must be declared under the Local Electoral Act.

Minto said he was "very pleased" the SFO had launched its probe and was taking the complaint seriously.

"I wrote to the SFO about 10 days ago and gave the reasons why I thought they should begin investigating, and I am pleased that they have done that.

"It's just really important for voters, it's critical for our democracy and I look forward to what they come up with."

Police said earlier this month they would not investigate a complaint laid in the lead-up to last year's election about Dalziel's 2016 campaign donations.