NZ POLITICS DAILY: The John Banks guilty verdict

The verdict is in. The Act Party’s sole sitting MP, former minister John Banks, has been found guilty of knowingly filing a false electoral return during his unsuccessful 2010 campaign to become mayor of Auckland. 

Should Banks resign?

While Banks has been found guilty of an offence punishable by two years in prison – the threshold given in the Electoral Act requiring an MP’s resignation, regardless of what sentence is actually handed out – the fact that no conviction has been entered allows Banks to stay on in Parliament for now. Inevitably, this has led to debate over the legitimacy of Banks staying in parliament despite the guilty verdict and thus ensuring the government retains a majority without needing to rely on the Maori Party. The issue is summarised well in Radio New Zealand’s Opposition calls on John Banks to resign, which includes links to interviews with Labour leader David Cunliffe and Act leader Jamie Whyte, who naturally take opposing views on Banks staying in parliament.

While the political reaction is predictable, commentary pieces over whether Banks should resign immediately or not are more nuanced. One of the most thoughtful comes from National supporter and Kiwiblog author David Farrar, who comes out in favour of Banks resigning now: ‘Constitutionally there is no question that Banks is entitled to remain an MP until such time as he is convicted, and he has not yet been convicted – only found guilty. Many people get discharged without conviction. However politically I think the honourable thing to do would be to accept that a guilty verdict has been rendered, and to resign from the House of Representatives before sentencing and the decision on a discharge. Not doing so would be a significant distraction for the Government, which should be talking about the economy, better schools, more operations, welfare reform etc, rather than having to be defensive on an MP remaining in Parliament after he has been found guilty of an offence which would result in a loss of his seat once if a conviction is entered.’ – see Waiting v resigning.

A scathing assessment of the trial outcome is made by left-leaning commentator Gordon Campbell: ‘So far though, what have been the consequences of Banks being found guilty of this offence? Zilch. So far, his guilt has not been recorded and will not be until August, pending pre-sentencing reports and other matters. Thanks to this technicality, a by election may be avoided, subject to timing as to whether Parliament will, or won’t need to re-convene to deliver a 75% vote to avert the need for one.’ – see On the John Banks verdict.

Newspaper editorials are also fairly critical of the Banks trial verdict. In the signed Timaru Herald editorial, Grant Shimmin writes: ‘Does it not seem that Mr Banks is still in the house on a technicality - the fact that a conviction has not been entered, pending an application - having been convicted of a serious charge? It does to me.’ – see: Banks situation a right mess. The Dominion Post focuses on the wider consequences of the Banks trial verdict for other politicians and uses the potent corruption label: ‘It would help if the law was stiffened still further. The Electoral Commission should be able to fine parties and politicians for minor infringements, such as filing a late return. For more serious ones, where the spending limits have been seriously flouted or apparent lies have been told, there should be even tougher penalties than the two years' jail and $10,000 fine faced by Banks. Political corruption is intolerable.’ – see Political corruption is a serious crime.

Predictably, and especially in election year, political reaction to the verdict has fallen down party lines. Labour leader David Cunliffe is quoted in a Herald article by Adam Bennett as calling Banks ‘a person who is guilty of electoral fraud and they are going to know that this Government is being propped up by a rotting political carcass who has lost all moral legitimacy’. John Key, who has no power to sack Banks as an MP, is quoted in the same article in Banks’ defence, saying ‘In the end, Mr Banks may appeal. I don't know the details of that but in my experience of dealing with him over the period of time that he's been both the leader of the Act Party and in Parliament, and in my previous dealings with him, I've always found him to be very honest.’ – see Act seat secure until conviction.

Other political figures’ reaction to the verdict are contained in a useful summary by 3 News and NZN – see Reactions to the John Banks guilty verdict. These include the Green Party’s Gareth Hughes’ statement ‘John Banks is not fit to be an MP - he is a discredited criminal’, Kim Dotcom’s tweet ‘Shame on the New Zealand Police for not charging John Banks or the GCSB and its spies for their criminal conduct’ and Act Party president John Thompson’s view ‘We believe that he can carry on in doing his constituency work ... It would be more pleasant if there was a different verdict, yes’.

Effect on the election

The unusual nature of the Banks trial outcome – a guilty verdict, but no conviction – may have a particular effect on the election campaign. The timing of the Banks sentencing, set down for 1 August, means that if Banks is then convicted, parliament may have to reconvene in order to forestall a by-election that needs to be held unless 75% of parliament agrees not to hold it in light of the impending General Election. Two legal experts discuss the implications in Banks case throws by-election into the mix. 

Also from a legal perspective, law professor Andrew Geddis weighs in with Banks redux: ‘I'm conflicted about how outraged I should be at Banks' actions. Yes, Banks is guilty of deliberately trying to hide from the world the identity of donors to his campaign that (for whatever reason) he thought might prove embarrasing down the track. This is a bad thing for politicians at any level to do. However, Banks' opponent at the relevant mayoral election was also busy hiding from the world the identity of those who funded his campaign ... he just did it more cleverly by utilising a trust as a conduit. So is the real issue here that Banks just didn't obey the letter rather than the spirit of the law?’

Effect on the government and the Act Party

On the wider impact on the election, the consequences for the Act Party are also being evaluated. The Herald’s John Armstrong asks, ‘How long can National keep expecting its long-suffering supporters in Epsom to keep ticking Act on their ballot paper when that party continues to be a seemingly neverending all-round embarrassment? As David Cunliffe has noted, Banks' disgrace is now a dead albatross hanging around the neck of David Seymour, Act's would-be successor in the blue-ribbon seat.’ – see National left nursing party that’s a neverending embarrassment. But the NBR’s Rob Hosking believes the damage to Act has already been done: ‘Act is still polling only around 1% or below: the impact from yesterday’s decision is less about more damage but rather whether it constrains Act’s ability to grow its vote during the election campaign.’ – see The impact of the Banks verdict (paywalled).

Fairfax political editor Tracy Watkins believes that the delay to deciding the final fate of Banks will do the government ‘no favours’, despite the fact its majority will be retained for now: ‘The timing of Banks' sentencing may help National avoid a messy vote against holding a by-election in Banks' Epsom seat. But it opens the curtain on what is likely to be a chaotic and ugly few weeks before the election campaign proper gets under way. Key will be forced to front up in Parliament and explain why his Government won't cut Banks loose. He will have to explain why he refused to delve deeper into the allegations against Banks even as the former ACT leader's memory blanks over donations to his Auckland mayoralty campaign, including one from internet entrepreneur Kim Dotcom, stretched credulity. And dots will be joined between Banks and other recent scandals embroiling National MPs, including Maurice Williamson and Judith Collins.’ – see John Banks is clinging to the wreckage. In another piece, Watkins considers the fallout of the Banks case for John Key in particular  - see The worst political comeback ever. 

For the Act Party’s view on the verdict, see Jamie Whyte’s interview on TV3’s Firstline, in which he calls Epsom voters a ‘minority group’ of ‘highly-taxed people’ who deserve representation in parliament – see Epsom voters a minority group. Also commenting on Firstline were National MP Jamie-Lee Ross and Labour MP Jacinda Ardern – see the video John Banks’ trial – serious or sideshow.

Role of the police

One of the many interesting aspects of the Banks case has been that it came from a private prosecution taken by retired Wellington accountant Graham McCready. The police had previously investigated Banks but decided there was no case to answer. Now that Banks has been found guilty, several commentators are questioning the police’s decision. Still asking for answers, broadcaster Rachel Smalley points out the circumstances were not clear-cut: ‘what I found most baffling about this investigation at the time, and I still do. The inquiry went on to say there was a statutory limit of six months from the time of the mayoral election to when a complaint could be made, and that had passed. So police couldn’t consider charges anyway. So why didn't they leave it at that? Why did they also state there was insufficient evidence to consider a prosecution when they couldn't prosecute anyway?’ – see Banks verdict triggers more questions than answers. 

Left-wing blogger Martyn Bradbury lists the police’s role as one of The 3 questions now John Banks has been found guilty, while the Dominion Post editorial is also scathing of the police: ‘The Banks case is also deeply embarrassing for the police and Crown prosecutors. They refused to bring the case against Banks, just as they have so often refused to bring prosecutions over other alleged breaches of electoral law. It took a retired accountant to shame them into action, by bringing a private prosecution. The guardians of the law should not need to be reminded of their duty by the actions of an eccentric outsider. The police and the prosecutors must now start taking their responsibilities seriously.’ – see Political corruption is a serious crime.

Political theatre?

Aside from the deeper analysis, it is worth watching the events surrounding yesterday’s High Court verdict for a sense of the occasion. Both major television channels led with packages containing the reading of the verdict, the bizarre songs sung by Graham McCready, the retired accountant who brought the private prosecution against Banks, and reaction from Banks himself – see TVNZ’s Banks 'disappointed, surprised' at guilty verdict and TV3’s John Banks guilty in donations case. 

In print, the Herald’s David Fisher summarises the judgment – which is usefully embedded in the report – and notes the key role that the estranged wives of both Kim Dotcom and John Banks played in the trial – see I'll take the Dotcoms' word over the Banks' – judge. The impact of Dotcom is also noted in an account that includes extracts from the judgment, from Labour adviser Greg Presland – see: Dotcom 2 Banks 0. For a concise history of the saga in quotations by the key players, including Banks, McCready, Dotcom and John Key, see John Banks in quotes.

Banks in retrospect

Now that Banks’ political career appears to be all but over, several interesting pieces looking back at his life in politics have been published. These include Adam Bennett’s Guilty verdict blights John Banks’ 34-year career and a timeline at Radio New Zealand in John Banks – a life less ordinary. The Press editorial on Banks places the guilty verdict in context: ‘Banks was the child of an alcoholic back- street abortionist and a hard-core criminal involved in the sly-grog trade. One story he told was of being present when associates of his father fired off a few rounds from the machine-gun later used in the notorious Bassett Rd murders. Given that background it would have been no surprise to anyone if he had followed in his parents' footsteps. Instead, with remorseless energy and ambition he went into legitimate business and built himself a large fortune. He followed that with a lengthy, if turbulent, political career, including several stints as a government minister and twice being elected against considerable odds to the mayoralty of the country's largest city.’ – see Verdict ruins a reputation. Also worth watching is an interview on the Paul Henry Show with a personal friend of Banks, Graham Wall – see John Banks’ painful end to a 34-year career. 

Finally, the past 24 hours has seen Twitter come alight with insights, reflections and one-liners on the Banks trial verdict. I summarise these in my blog post Top tweets about John Banks being found guilty.