Former National MP Jami-Lee Ross has claimed the party's MPs face "repercussions" if they fail to meet fundraising targets.
The Botany MP told Newshub Nation on Saturday MPs might not get to be a minister and candidates would miss out on selection if they didn't attract enough money from donors.
"In the National Party when I was there we were set targets," the Botany MP explained to host Simon Shepherd.
"If you did not fundraise your $30,000 or $20,000, you weren't allowed to go to selection. Every MP was also expected to ensure there were donations going into the National Foundation.
"John Key sat in caucus one year and put a rocket up us and said, 'If you don't donate through your electorate to the National Foundation, then we're going to ensure there may be repercussions - you may not be a minister or there may be other issues. MPs are expected to donate."
The claims come amid allegations over New Zealand First's equivalent foundation, which have been referred to the Electoral Commission for investigation.
Ross said NZ First's foundation was actually modelled on National's, operates in largely the same way, and there's little the Electoral Commission can do.
"The Electoral Commission can politely say 'show us your documents' but they have no power to require that... the only bodies that can actually do anything is Police or the Serious Fraud Office. They have to have a reason to refer their concerns, and if they're not provided any information because they have no power to require it, they can't pass anything on."
National Party president and chair of the National Foundation board Peter Goodfellow told Newshub Nation they had no idea how NZ First runs their affairs.
"All donations to the National Foundation are treated exactly the same way as donations to the National Party. We record all donations and fully disclose, where required, in line with the provisions of the Electoral Act."
The Serious Fraud Office has been investigating Ross' claims last year of the party's alleged wrongdoing.
"To be clear, if someone was to donate $10,000 to the National Foundation, and $10,000 to the National Party, within a calendar year, they would be disclosed as a donor exceeding $15,000 as required by the Electoral Act," said Goodfellow. "A donor cannot escape donation disclosure by donating to the Foundation rather than the party."
Newshub contacted Simon Bridges' office, which declined to comment on Ross' claims about "repercussions".
The party acknowledged targets do exist.
"It is correct that our local party electorate committees are set and supported to achieve KPIs before proceeding to a candidate selection," said Goodfellow. "These KPIs include campaign planning operations and objectives, membership, volunteers, and of course fundraising. This is to ensure that when a candidate is selected, the local party campaign infrastructure is ready to go on day one.
"Our members and local party electorate committees are also encouraged to donate to the National Foundation if they can. The National Foundation is a capital protected fund, managed by a board of trustees, that generates income to help ensure the ongoing financial stability of the National Party into the future."
Ross declined to comment on the Serious Fraud Office investigation into National.
Changing the system
Ross is now an independent MP, and sits on the Justice Select Committee, which is looking at how political party funding could be improved.
"One of the things I've been pushing on the Justice Committee is that we should have greater powers for the Electoral Commission to require information and also to have the ability to prosecute... I also think we should consider having an independent commission against corruption. It exists in Australia, even Fiji has [one]."
Ross said political party foundations exist only as a way of obscuring donors' identities and should be abolished.
"If everything is declared... what is the very purpose of having a foundation? ... They have these foundations there so they can find ways through the electoral law in a way that isn't as transparent as the public would expect...
"I'm of the view that if you can't vote in an election you shouldn't be able to make a donation, you shouldn't be able to make a loan. Politics and democracy is about people - it's not about foundations or companies or other organisations. It should be restricted to people."
Ironically when he was a National MP in Government, the job of securing donations that could slip through the cracks often fell to Ross, as he wasn't a minister and therefore not subject to the Official Information Act. He said he was a "product of the National Party" but has changed his views.
"I guess I was effective at doing [it]. But having been through the wringer, having looked at it now from the outside... I say these things are wrong... Over time [money] corrupts the way politicians think about the political system. Politicians are driven to seek donations. It's a fiction when you hear political party leaders say MPs and politicians have nothing to do with money. MPs are expected... to raise money, and you end up looking at organisations and people through the lens of how much money you can raise out of them."
Ross is up against former Air NZ boss Christopher Luxon in the Botany seat at next year's election.
"I don't have a plan B," said Ross. "I'm working as hard as I can for Botany."