Money from a NZ First-linked slush fund was reportedly spent for campaign purposes and kept secret from party officials and MPs.
It's claimed $38,000 of money donated to the New Zealand First Foundation went toward NZ First's campaign headquarters. Financial records seen by Stuff show the money covered expenses such as rent, furniture, swipe cards and the purchase of a shredder - with none of the spending declared to the Electoral Commission.
Invoices showed $325,000 was spent by the foundation in the 18 months to March this year, most of it directly benefiting NZ First, according to Stuff.
It follows revelations yesterday that the NZ First Foundation appeared to have hidden almost $500,000 in political donations, which were not disclosed to the Electoral Commission.
Law experts say if the allegations are proven the party and foundation may have fallen foul of electoral law.
While the Electoral Commission is looking into the allegations, it has limited powers, and there are calls for Prime Minister Jacinda Ardern to involve police in an investigation.
NZ First leader and Deputy Prime Minister Winston Peters said in a statement yesterday he was "confident that New Zealand First has operated within electoral laws, now and for the last 27 years".
"Declarable donations were declared to the Electoral Commission.
"Our system of democracy is based on the secrecy of the ballot and privacy of party memberships and donations within specified limits.
"We look forward to discussing this matter with the Electoral Commission."
National leader Simon Bridges told Newstalk ZB's Kate Hawkesby this morning the saga went to the heart of the Government's integrity.
While Ardern could stand down NZ First leader Winston Peters, who is Deputy Prime Minister, that would not let her "wash her hands" of the matter, Bridges said.
"What we need is a full independent investigation," he said.
"It's a pretty simple situation - she's talked about the spirit of the law. This isn't the spirit of the law, it's the black letter of the law."
There has been speculation Ardern could call for a snap election. Bridges said National would welcome that but it was unlikely.
"Turkeys don't vote for an early Christmas."
Bridges still wouldn't rule out working with NZ First after the election - saying it was "premature" to do so before an investigation was complete.
"It hardly makes it more likely that we're going to go with NZ First...there's smoke, if the facts are made out there's fire here."
Take your Radio, Podcasts and Music with you
