ODT on Electoral Finance Act
May 12th, 2009 at 8:45 am by David FarrarI have been amazed at how many people have jumped to wild and wrong conclusions about “loopholes” with donations disclosure because the level of donations disclosed is less than the level of spending disclosed.
Parties are not obliged to list all income. This is not a loophole – it is a deliberate design. They are only obliged to list donations abover $10,000 – the level at which it is though influence might be purchased.
Personally I am interested in the notion of whether or not a party should disclose its total income in bands (such as x donations over $10K, y donations between $1k and $10K, and z donations under $1k) but this would be a radical change to our current laws.
Anyway let us first look at what the ODT says:
The general election last year was the only one in our history to be conducted under the mysterious fog of the Electoral Finance Act, a piece of legislation brought in by the Clark government at the behest of the Green Party as an exercise in forcing disclosure of funding sources, and in hope of nobbling political opponents, but which no-one – least of all its architects – fully understood.
The intention indeed was to silence the critics. And the Greens remains supporters of the oppressive law which made it illegal to say “I don’t support the Green Party” on a non-blog website unless you disclosed your name and address.
The distance between what the major parties spent on their election campaigns and what they listed in their donations returns is so great as to suggest sufficient loopholes still existed to legally exploit.
It is not a loophole. For example National receives between $1 and $2 million a year in small donations from its 40,000 or so members. That is not some bad thing exploiting a loophole – that is a good thing.
Likewise what could well be the case with many parties is that they received many donations at just below the disclosure limit. Parliament has said we only need to know your identity if you give over $10,000. So it is not surprising many donors then give under $10,000.
The commentators who call this a loophole reveal an ignorance of the law. It has never been a law to disclose all income – political parties are in fact private bodies. It has been a law to reveal large donations over a certain limit.
So complaining that donations revealed does not match expenditure revealed is like complaining that your household expenses are larger than the interest from your investments – and overlooking yur salary. They are not comparing apples and oranges.
The EFA also supposedly prevented secret trusts from making large donations without declaring the source, but herein lies a conundrum: there was nothing to prevent one entity making many donations which were under the $10,000 disclosure barrier.
Yes there is. The ODT does not understand the law. All donations from a source are totalled up. You can not avoid the $10,000 disclosure barrier by say giving $5,000 a month.
There are some loopholes to the donations regime – such as different companies with the same shareholders all donating – but that is not the same loophole as the ODT claims above.
The need for transparency is the one aspect of the EFA which must be retained when the cross-party committee eventually reaches its recommendations.
That means all donors to parties should be named, and that what constitutes electoral advertising is clearly defined, including publicity by a government in office during an electoral campaign.
I hope they don’t mean all donors. Forcing parties to reveal every $50 donor will effectively out tens of thousands of party supporters and infringe their right to privately support the party of their choice. The disclosure level should be at the level of which infleunce could be suspected by the size of the donations.
Related posts:
- Electoral Finance Submission
- SST on secret donations
- The myth that the Electoral Finance Act would stop what NZ First does
- NZ Herald on Electoral Finance issues
May 12th, 2009 at 9:08 am
>Personally I am interested in the notion of whether or not a party should disclose its total income in bands
Personally I am interested in whether parties should be forced to declare work, such as tiling, done for free or for rates of pay much less than the minimum wage for the party or its MPs. It is alleged that this bought plenty of influence from the last Labour Government in the area of immigration favours. None of it was declared.
Vote:May 12th, 2009 at 9:32 am
National’s disclosed declarations went from about $1.8m in 2005 to $207k in 2008. I am struggling with this, why is this a good thing. Why doesn’t National take a principled stance and open its books so that the public can see how it is funded.
It seems that all that has changed is the means of hiding the source of funding. Instead of using one big private trust now it is using a number of smaller donors who are hiding under the radar.
A healthy democracy needs full disclosure of all funding sources. Of course we could avoid the need by having a true contest between equally funded major parties by bringing in state funding of political parties.
[DPF: Oh yes the socialist cry for taxpayers to be forced to fund political parties - wonderful way to make parties even less accountable and responsive
You want parties to be ruled by parliamentary elites with no accountability to the membership]
Vote:May 12th, 2009 at 9:43 am
People donate anonymously to all sorts of causes for all sorts of reasons, there’s no reason why donations to political parties which couldn’t possibly be regarded as buying influence should be delcared. And what’s that sum? Stephen Franks had a post suggesting $50,000 here:http://www.stephenfranks.co.nz/?p=1887
Vote:May 12th, 2009 at 10:01 am
It is really simple. ALL donations should be declared, and donations can ONLY be made by natural persons (regardless of the source of the money). Individuals that donate on behalf of others should state the names of those others. Donations are to be made through an agency that maintains a website which lists all donations. The only exception can be genuine membership and related subs, which can be capped if need be.
This would be the easiest system to track which organizations are behind large donations, and weed out the skewed influence of unions.
There is no problem with party members being “outed”, as these are typically the people having several square metres of hoardings in their gardens anyway.
[DPF: Only a small fraction of members and supporters will have a hoarding. And the idea of a state agency processing all donations to parties is insane - why should me giving $50 to the Nats direct mail appeal have to go via a Govt Dept]
Vote:May 12th, 2009 at 11:02 am
Does the ODT just not get it? They seem to get these matters wrong with alarming regularity.
Vote:May 12th, 2009 at 11:53 am
the problem with limits is that you can set up multiple vehicles to hid the total contributed by an indiviual or small group.
Yes we need to know not just money contributions but those in kind and favours rendered
the guts is about disclosure and transpernacey
I want to know if a pollie does a favour because they have been rewarded to do so
Nothing mor nothing less
And unless I get the info I cant trust the current system
Vote:May 12th, 2009 at 12:49 pm
If I donate $10 to a political party that is no-one’s business but mine and theirs.
Well, mickey, one of National’s principles is respect for privacy. And it is an invasion of privacy to have media, Nigerian scammers, perverts and activists of other parties sniffing all over my wallet and nosing into private information such as my home address.
If I donate $1 million to a political party, my right to privacy is the same. BUT, the public good in such a donation being transparent becomes large enough that it trumps that right to privacy.
Declaration of large donations yes. Declaration of trivial ones, no.
Vote:May 12th, 2009 at 2:24 pm
But DPF … in 2005, the National Party declared receiving $1,880,000 in donations over $10,000 and Labour declared $930,000 in donations over $10,000. Most of National’s declared money came from the Waitemata Trust (and other trusts), most of Labour’s was “anonymous”.
In 2008, National only reported receiving $207,000 in donations over $10,000, with Labour reporting $420,000. So either the parties have managed to replace a large chunk of their income that previously came in disclosable (i.e. over $10,000) chunks with smaller donations (possible … but really is that big a turn-around in only 3 years likely) or some of the money previously given to trusts/to the parties anonymously has been rerouted in ways that are not disclosable. Isn’t this the real problem?
[DPF: First of all compare apples with apples. I would compare donations of 2003-2005 with 2006 - 2008. Parties raise money over a three year cycle. National obviously raised some of its money early.
Secondly I suspect many donations went to the Trusts that did not have to - it was just more convenient. So some of those sub 410k donations are now made direct.
Thirdly I would suspect some donors are encouraged to give $10K a year rather than say $25k in election year only. I don't treat that as a loophole because the Govt deliberately set the law to be annually, not per electoral cycle (unlike anon donations). A loophole is getting six company cheques for $10K as the Velas did, or making a $1,000 anonymous donation per week.
I do enjoy the squeals of horror from pro-regulation people who when the EFA reveals there is no big money in politics, they declare well we need more laws to find it!]
Vote:May 12th, 2009 at 4:18 pm
DPF:
Yes, both National and Labour cleared money out in 2007, as their returns for that year show ($704,000 and $1.3 million respectively). But all this shows is that these parties used pre-EFA flexibility in the law to load up large for 2008 …
I simply don’t buy your claim it was “more convenient” to give to a trust to give to National than to the National Party direct … especially as there are National fundraising officials on record as advising donors to use this route to avoid disclosure. Yes, some people may have given less than $10,000 to these trusts. But why would National have continued to use them, with all the political ammunition they gave the left, if mere “convenience” were the only reason.
True, giving $10,000 a year is not a “loophole”. But it is $30,000 of undisclosed donations. Which is quite a bit of money.
Finally, I actually agree there isn’t all that much “big money” in NZ politics – but I still think when you have donors giving the equivalent of 1/3rd of the average income to a political party, there should be full disclosure of that person’s identity. Especially when you have donors who admit the reason for giving such donations is “”getting one in each of the different parts of the country so that our members in that area can go and talk to them about issues that affect our industry.” (http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10566887)
Vote:May 13th, 2009 at 1:08 pm
DPF
You said to mickysavage;
Well since mickysavage wants the country ruled by parliamentary elites with no accountability to the public it’s no surprise he wants the same people to fund themselves directly from our back pockets.
Vote: