New Zealand foreign minister quits over fraud inquiry

August 29th, 2008 - 2:46 pm ICT by IANS  

Wellington, Aug 29 (DPA) New Zealand Foreign Minister Winston Peters stepped down from his post Friday pending investigation into allegations that donations to his political party “did not reach their intended destination.”Prime Minister Helen Clark said Peters had offered to stand aside and told her he would cooperate fully with investigators who said Thursday they had reason to suspect “serious and complex fraud” had occurred.

Clark said she hoped the investigation would be completed expeditiously and attorneys for Peters, who leads the nationalist New Zealand First party, would have their first meeting with Serious Fraud Office agents Saturday morning.

Clark said she was taking over Peters’ responsibilities as foreign minister in the meantime and would reappoint him to the post if the investigation found him innocent of any wrongdoing.

Observers said it was not clear whether the investigation would be completed before the general election, which Clark must hold by mid-November. She has not yet named the date.

Her Labour Party, which has led a minority coalition government since 1999, is trailing the main opposition conservative National Party badly in opinion polls.

New Zealand First supports the government on key votes in return for Peters holding the foreign affairs post but is not part of the formal coalition.

Political observers said there was no risk of the government falling after Peters stepped down, but the affair has not improved the election prospects of either party.

Peters offered to step aside after talks with Clark in Auckland, having earlier told Radio New Zealand that the allegations against him were “vile, malevolent, malicious and wrong.”

He said he would not be hounded from office as result of a plot to vilify him and his party before the election.

Serious Fraud Office Director Grant Liddell said Thursday that the inquiry would centre on donations made to the New Zealand First party by millionaire property developer Sir Robert Jones and the Vela family of companies.

He said it was entirely possible that there were “innocent and honest explanations,” but added, “The allegations concern important matters relating to the funding of a political party, which go to the heart of the democratic process, and involve a minister in the government.”

Liddell said his agency’s investigation would not include a 100,000 New Zealand-dollar ($70,000) donation to Peters from expatriate New Zealand billionaire Owen Glenn, which is the subject of a separate continuing investigation by parliament’s privileges committee, because it was clear it was donated for the minister’s legal expenses.

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