Police will not be charging Epsom MP and ACT leader John Banks.
Mr Banks was under investigation after Labour allegations he had "knowingly transmitted a false electoral return".
The allegations followed complaints about returns filed relating to donations from Sky City Casino, internet mogul Kim Dotcom and a radio advertising donation to Mr Banks’ 2010 Auckland Super City mayoralty campaign.
Assistant police commissioner Malcolm Burgess says there is not enough evidence to consider a prosecution under s134 (1) of the Local Electoral Act 2001.
“The inquiry has established the return was compiled by a campaign volunteer who assured Mr Banks it was accurate before Mr Banks signed and transmitted the return."
In respect of s134 (2) relating to transmitting a false return, police have also dropped their investigation.
"There is a statutory limit of six months from the time of elections when complaints must be laid. Police first received the complaint for investigation on April 27, 2012, well after the expiry of six-month period.”
Mr Banks says he is keen to put the matter behind him.
"We have always maintained that our 2010 electoral affairs were conducted within the law.
"I want to acknowledge the very professional and diligent way in which the police have approached this investigation, and the way they have interacted with me and members of my campaign team."
Meanwhile, Labour leader David Shearer is repeating his calls for Mr Banks to be stood down.
“It is no longer credible for John Key to keep John Banks on as a minister in light of confirmation from police that he personally solicited at least $80,000 in donations but can’t seem to remember it.
"John Banks has essentially escaped prosecution because he claims to have forgotten receiving any money. And John Key seems to think that’s okay. He is the only person still standing by John Banks.
“The prime minister’s so-called higher ethical standards are in tatters today. On the basis of his memory lapse alone, John Banks is not fit to serve as a minister.”
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