Kim Dotcom Campaign Donation Fells Minister in N.Z. Government

A campaign donation by Internet entrepreneur and alleged copyright pirate Kim Dotcom has forced the resignation of a New Zealand government minister.

John Banks resigned yesterday as minister for regulatory reform and small business after the Auckland District Court ordered him to stand trial over allegations of electoral fraud relating to Dotcom’s NZ$50,000 ($42,000) donation.

Banks is accused of knowingly filing a false election return in his failed 2010 Auckland mayoral bid, listing donations from Dotcom and casino operator SkyCity Entertainment Group Ltd. as anonymous when he knew who they were from -- an offense under the Electoral Act. He denies the allegations.

Banks’s resignation as a minister in Prime Minister John Key’s government is the latest twist in Dotcom’s New Zealand story. Armed police stormed the German’s Auckland mansion in January last year after the U.S. alleged his Megaupload cloud-storage Internet site was at the center of the biggest copyright infringement case in its history. Key was later forced to apologize to Dotcom -- who still faces extradition to the U.S. - - over the government’s illegal spying on him.

Dotcom gave evidence that Banks asked him to split his donation into two NZ$25,000 checks after Banks was flown in Dotcom’s private helicopter to his mansion in 2010, Fairfax Media reported.

Helicopter Ride

“I was offended, I don’t mind if people know,” Dotcom told the court, according to Fairfax. Banks told him, “Kim, if I help you in the future it’s better no one knows about your donation,” Fairfax quoted Dotcom as saying.

Banks has said he can’t recall the helicopter ride and is innocent of the charges.

“I have nothing to fear and I have nothing to hide,” he told state broadcaster Television New Zealand yesterday.

Banks is the leader of the ACT Party, which supports Key’s minority government. Banks did not hold a Cabinet-level position and remains in parliament, meaning the resignation of his portfolios doesn’t pose a risk to the government.

“Mr Banks maintains his innocence but realizes this is a distraction for the government,’’ Key said in a statement yesterday. “If Mr Banks is successful on appeal or proved to be not guilty at trial, it is my intention to reinstate him as a minister.’’

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