National MP Todd McClay has responded to accusations over a $150,000 donation in 2016 that the Prime Minister has described as "outside the spirit of the law".
In 2016, in his capacity as Trade Minister, McClay first met multi-millionaire Chinese businessman Lin Lang in China - the man who donated the money to National.
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Known as Mr Wolf, Lin Lang's a big-time Chinese buyer of New Zealand race horses and a donor to the National Party.
His company, Inner Mongolia Rider Horse Industry NZ, is Chinese-owned but New Zealand-registered.
McClay said there was "never any question about support for a political party raised" when he first met with Lang in 2016.
A year later, McClay slipped off his ministerial hat and invited Lin to his Rotorua electorate.
He admitted that Lang did then "raise that he would like to support the National Party".
Prime Minister Jacinda Ardern has levelled serious allegations at the National Party over the $150,000 donation, describing it on Tuesday as "outside the spirit of the law".
McClay responded: "I don't believe that I have."
National leader Simon Bridges agreed, saying: "The rules are the rules - this was a New Zealand company, we disclosed, so old news."
Ardern said what happened was legal, "but arguably it was equally outside the spirit of what the law intends when it comes to foreign donations".
It's illegal for foreigners to donate more than $1500 to political parties.
"Now we have an example of someone who's been able to give a much larger donation from someone who, for all intents and purposes, is someone who's based offshore," Ardern said.
"They've been able to do that lawfully and that raises questions about whether or not there are loopholes in our current law."
The Government's using the donation to say the system's broken.
Justice Minister Andrew Little said in Parliament it "exposed vulnerability for New Zealand's political donation regime".
Foreign donations have been flagged by the heads of the GCSB and NZSIS as posing a threat to our democracy. They warned MPs about foreign interference again on Tuesday.
"We're talking about covert malicious threatening undermining behaviour, that's what our focus is - by a foreign state," GCSB boss Andrew Hampton said.
Ardern said New Zealand "doesn't want foreign interference in our elections".
Newshub.
