Winston Peters' lawyer is threatening to sue the National Party for $30 million if MPs repeat allegations about New Zealand First donations that were made in Parliament.
And in a bizarre twist, the New Zealand First leader says he knows nothing about it.
Peters initially avoided questions about the allegations on Thursday as he attended a police graduation ceremony with Prime Minister Jacinda Ardern.
"Ask me about this matter first," he told reporters.
But Peters' lawyer and trustee of the secretive New Zealand First Foundation Brian Henry has ramped things up exponentially.
National MP Nick Smith told Parliament that Henry had threatened to sue him and National leader Simon Bridges "if statements made in Parliament are repeated outside the House".
The email - seen by Newshub - invited them to repeat allegations they made in the House - which is protected by parliamentary privilege - or apologise.
If they repeat the comments outside Parliament Henry says he'll sue for defamation with damages as high as $30 million.
"Those sorts of numbers are scary and worrying for my family and I think those sorts of emails have no place in a democracy like New Zealand," Dr Smith told Newshub.
Dr Smith's speech in Parliament had laid out claims that the New Zealand First Foundation received donations and then used that money for party expenses without declaring it.
He treated the allegations as fact.
"Our electoral law makes it a corrupt practice for political parties to organise their affairs to try and avoid disclosure," Dr Smith said. "This is a rort with a capital R."
Peters says he knows nothing about the legal threat. "With respect, I've got no idea what you're talking about," he said.
One donor Newshub spoke to from the horse racing industry, Garry Chittick, donated $5000.
"All I assume is it helped them on their way to get elected."
Newshub asked Chittick if it was made clear to him that the money was for the New Zealand First Party, and he said: "Oh for sure, for sure, otherwise I wouldn't have given it to them."
He says he was asked for cash from Doug Woolerton, a former New Zealand First MP and also a trustee of the foundation.
Woolerton wouldn't answer any questions Newshub put to him, saying, "I think you've got everything plus more."
The Prime Minister said it's a matter for the Electoral Commission.
"I'm not the arbiter of whether the law has been upheld here," she said. "It's not a determination for me."
