The Electoral Commission has decided that only natural persons (individuals) rather than legal persons (which includes organisations) can be found to be ineligible to be registered as third parties, and has approved the third party registration of the EPMU. This means that any person or persons, no matter their political involvement, can become a third party by forming an unincorporated society, a company, or an incorporated society.
Due to that decision, based on Crown Law advice, they have not made any decision on whether the EPMU is involved with administering the affairs of the Labour Party. My arguments on the issue are here.
I obviously think their decision is wrong, because it massively undermines one of the stated intentions of the Electoral Finance Act, which is to stop parallel campaigning. This has opened up huge loopholes, as both incorporated and unincorporated societies can now register as third parties regardless of their involvement in a political party.
ACT on Campus could arguably register now as a third party as one example. But it goes way beyond that. One could set up an unincorporated society called the National Future Club. Its membership could be the entire Board of Directors of National, and it could register as a third party and spend $120,000 on election ads (so long as they do not endorse a political party).
In fact just two people can form an unincorporated society. Helen Clark and Michael Cullen could form the Labour Leadership Society and that would be eligible to register as a third party under this ruling.
Another example is that the six Wellington candidates for National could form a group called “Wellington needs National”. That group could register and run a campaign attacking Labour’s politicisation of the public service, without it counting towards the spending cap of National, or of themselves as candidates. It could spend $120,000 campaigning against the Labour Party and its candidates ($4,000 cap per candidate) in Wellington.
So the ruling basically removes significant teeth from what was the stated main intention of the Act. I find it bizarre. I personally have no objection to the EPMU being able to campaign in election year. My target is the law, not the EPMU. I would in fact have no restrictions (except those of transparency) until the last 90 days. This decision will probably make things less transparent though as organisations (who do not have to reveal their membership publicly) will be formed to be able to register.
The ruling is based on an opinion from the Crown Law Office, which also famously declared that the original Electoral Finance Bill did not breach the Bill of Rights – an opinion very strongly disagreed with by the NZ Law Society and Human Rights Commission. I say this not to criticise them, but to point out their opinions are obviously not beyond dispute.
Ironically this takes us closer to the United States situation of campaign finance. Over there restrictions were put on how much could be donated and spent by political parties. This has seen the growth of 527s which can run their own campaigns, and much of the money has flowed to them. And which group was the (off memory) second largest 527 on the centre right side in 2004? It was the College Republicans who raised and spent US$13 million.
Even though I disagree with the decision, I make no suggestions of bad faith by the Electoral Commission in making their decision, and would ask others to refrain from doing so. But having said that, I am reserving the right to test this issue in court, because the electoral agencies do not always get it right. In fact the Tauranga electoral petition found several areas in which the official advice from the electoral agencies was wrong. So did the earlier Wairarapa electoral petition.
My thanks to the Electoral Commission for an advance copy of their decision.