NZ minister to face electoral fraud charges, resigns portfolios

WELLINGTON Wed Oct 16, 2013 2:37am EDT

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WELLINGTON (Reuters) - The leader of a small party providing a majority for the New Zealand government resigned as a cabinet minister on Wednesday after being sent to trial for alleged electoral fraud.

John Banks, leader and sole elected member of the free-market ACT party, resigned his portfolios after a court ruled he should answer charges he improperly disguised political donations from Internet tycoon Kim Dotcom and a casino company.

The alleged breaches relate to Banks's unsuccessful bid to become mayor of Auckland, the country's biggest city, in 2010.

Prime Minister John Key, whose centre-right government relies on the support of Banks and two other small parties for a majority, said he accepted Banks's decision to stand down.

"Even though the events occurred before Mr Banks entered parliament in 2011, this is totally the right call and I have accepted Mr Banks's offer to resign as a minister," Key said in a statement.

Banks, helped by National to secure a seat in the 2011 general election, was given junior ministerial responsibilities.

He said he would stick by his deal to support the government on financial and confidence votes, ensuring the government's one-vote majority in the 121-seat parliament.

The charges followed Banks' signing electoral documents listing the donors of NZ$65,000 ($54,600) to his mayoral campaign as anonymous, when he allegedly knew their identity.

The court ruled there was sufficient evidence for the case to go to a criminal trial. The offence carries a maximum sentence of two years in jail.

"I believe the decision ... was wrong and I will be contesting the charge. However, I do not want this to be a distraction from the government's program," Banks told reporters outside the court.

Dotcom, the founder of Internet storage company Megaupload who is fighting extradition to the United States on Internet piracy charges, said Banks asked him to split a NZ$50,000 donation in two so the donor's identity would not have to be disclosed.

Banks also said he did not know that casino operator Sky City Entertainment Ltd had donated NZ$15,000, even though he was given an envelope containing a cheque by the company's chief executive.

His lawyer argued Banks did not read the documents before signing them and so did not know Dotcom and the casino company were listed as anonymous. The case was brought as a private prosecution by a Wellington man after police investigated but took no action.

(Reporting by Gyles Beckford; Editing by Ron Popeski)

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