Amid the stench of political donations, a whiff of reform

 Well in some places at least.

You may have missed the final report delivered to NSW Premier Baird on 24 December on options for long term reform of political donations by a panel chaired by Dr Kerry Schott.

By Martin Kingsley from Melbourne, Australia (Cashmoney) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

NSW already has the strictest election funding laws in Australia, but the report puts forward 50 recommendations for legislative change and a new more vigorous approach to implementation of the law and oversight by the regulator.

 Nicole Hasham in the Sydney Morning Herald said the report revealed 

"a political donations system riven with loopholes, weaknesses and corruption opportunities. ...The panel ... found "systemic failures" in laws that govern electoral funding disclosure, spending, caps and bans. It called for an immediate review. The archaic, paper-based system of delayed donation disclosures should be replaced by an online system where disclosures were made in real time, allowing meaningful scrutiny of potential relationships between donations and government decisions, the panel said.

No media release from the Premier accompanied publication but Hasham reports Premier Baird said "the government would consider the report and respond before the March election" adding that it "is understood that most recommendations will be supported."Nothing from Labor so far but NSW Greens welcomed most recommendations
 
NSW with an election on 28 March, ten Liberal members of parliament sidelined by the party because of revelations about breach of the donation rules as a result of revelations in ICAC last year, and Labor carrying the dead weight of former ministers Eddie Obeid and Ian McDonald, the integrity issue is unlikely to sink from sight in NSW as is the fate of most Christmas period releases. 

Some Schott recommendations are subject to the outcome and impact of a High Court decision later in the year in the McCloy case which is challenging an existing NSW prohibition on donations by developers.

That case has the potential to slow down national action on political donations also, something the Panel regards as essential for meaningful reform. (Alas the Federal government is yet to show a flicker of interest in this or anything else on the integrity front.)

As long as the rules governing political donations differ across Australia, there is a risk that any NSW law will be circumvented. The evidence brought to light by the ICAC in Operation Spicer shows how the lack of regulation of political donations at the federal level can be exploited to avoid the bans and caps on political donations that apply in New South Wales. We note that the Premier has recently introduced a new anti-circumvention provision targeted at those who deliberately seek to avoid the election finance laws, as recommended by the Panel in its Interim Report. The federal structure of some political parties creates opportunities for avoiding NSW restrictions on political donations. We believe that the Premier should support greater co-ordination of election funding laws across jurisdictions. A co-ordinated approach to disclosure would be a useful start. We recommend that the Premier seek to put the issue on the agenda at COAG. We also recommend that the Premier report to the NSW Parliament on progress against implementation of our recommendations, to ensure that the current momentum for change is maintained.

Labor and others are pushing integrity and accountability issues in the Queensland campaign leading to the election there on 31 January, just prior to this conference  on the subject in Brisbane on 9 February. Plenty of big donations are being accepted by the LNP Newman government from companies pushing controversial resource developments, caps on donations have been scrapped and disclosure thresholds increased twelvefold.

Unlike NSW and Queensland, Victoria does not regulate political donations and disclosure except for a cap of $50,000 on donations from casino proprietors. But on the good news side perhaps the Andrews government includes Special Minister of State Gavin Jennings listed third in the cabinet line up who will oversee government transparency, accountability, integrity and public sector administration and reform, supported by the Department of Premier and Cabinet.

In addition, the department portfolio now includes providing support in relation to the Auditor-General, the Commissioner for Privacy and Data Protection, the Freedom of Information Commissioner, the Independent Broad-based Anti-corruption Commission, the Local Government Investigations and Compliance Inspectorate, the Public Interest Monitor, the Victorian Electoral Commission, the Victorian Competition and Efficiency Commission, and the Victorian Inspectorate.

Political donations, lobbying, getting the BACC fit for purpose, and long overdue freedom of information reform have to be in there somewhere.

NSW Premier Baird takes a step towards restoring trust

NSW, already with the toughest laws in the country regarding political donations is to go further. If the Federal and other state governments don't follow please ask why:

Legislation to be introduced into Parliament today will:

• Broadly double penalties for a range of offences under the Election Funding, Expenditure and Disclosure Act;
• Prohibit third party arrangements being used to avoid donation and expenditure caps – carrying a maximum penalty of 10 years imprisonment;
• Allow for prosecutions for all future offences to be commenced up to 10 years after the offence was committed – up from the current three years; and
• Require parties to disclose political donations received from 1 July 2014 to 1 February 2015 – this disclosure must be made within one week of the end of this period to the Electoral Funding Authority, to be made public before the election.

Mr Baird said a new, fairer public funding model will be introduced to reduce the corrosive influence of donations in the political system. Under changes to be introduced, the government will lower caps on political donations and spending caps for political parties and third party campaigners while a new model of public funding will be introduced that rewards performance rather than spending.

Update-Parliament passed the bill on 21 October. A fair bit of criticism as reported by Sean Nicholls  including late changes that do not reduce the amount of private donations able to be raised and spent by parties. On the transparency front parties will have to disclose donations received between July 2014 and March 1, 2015 before the election on March 28 next year. The initial proposal was for the disclosure period to end on February 1.

Voices for integrity, transparency and accountability

Are politicians everywhere listening?  

Senator John Faulkner in his address Public Pessimism, Political Complacency: Restoring Trust, Reforming Labor (pdf) and the NSW Panel of Experts chaired by Dr Kerry Schott in the Interim Report-Political Donations sang from the same integrity, transparency and accountability songbook this week with a refrain that should be heard in the Federal and all state jurisdictions: the current rules regarding political donations erode public trust and confidence and contribute to the perception of corruption. 

Senator Faulkner (who had plenty to say also about reform of the Labor Party) recalled his reform proposals of 2009 (that never made it through the Senate) including measures

• to reduce the donations disclosure threshold from its current level of $12,800 to $1,000 and remove indexation;
   
• prohibit foreign and anonymous donations;
   
• limit the potential for 'donation splitting' across branches, divisions or different units of parties;
   
• require faster and more regular disclosure of donations; and
   
• introduce new offences and significantly increase penalties for the breach of electoral law.

The Panel established by NSW Premier Mike Baird indicated action is needed to ensure closer to real time time disclosure of reportable donations so that voters are aware of fundraising activity before an election; increased penalties for serious breaches of election funding laws, a longer time period for commencing prosecutions and a new anti circumvention measure-disqualification from office for those who deliberately seek to avoid election finance laws; and mandatory education programs for candidates and members of parliament on ethical conduct and compliance with the Election Funding, Expenditure and Disclosures Act (NSW). A final report with recommendations is due in December; the NSW state election in March 2015.

Transparency failings in regulating the exercise of power and influence

I don't think I've written anything about our pathetic Commonwealth disclosure laws for political donations since noting in 2010 that donations made then would be made public in February 2012, and lamenting the absence of anything close to real time disclosure. Here we are now at the due date with plenty of media attention to the details of who gave what to whom.

But Bernard Keane nails it in Crikey today

"..at the Commonwealth level, the laws about electoral donations are a complete disgrace. That we are only finding out 17 months after the 2010 election who donated to the major parties is a blight on our democracy — one the mainstream media, normally quick off the mark to denounce any lack of political transparency, seems to ignore. That blight is there because the Coalition and Steve Fielding blocked reforms proposed by John Faulkner during the Rudd government that would have significantly accelerated the reporting cycle for donations, as well as reducing the reporting threshold back to $1000, rather than the current $11,500 threshold created by the Howard government. To its credit, Labor reports according to the $1000 threshold. The Coalition — complying with the law — does not...."

Pathetic is also the word that comes to mind regarding the current level of transparency in the related field of lobbying. Last year Special Minister of State Gray announced these results of a year long consultation about "improvements" to the registration scheme. No one seemed to find any newsworthy angle-and rightfully so.

The minister showed not even a hint of interest in meaningful reform such as disclosure requirements concerning lobbyist activity canvassed in this post, or in ideas floated in this NSW ICAC report.

Ah, but in the absence of more transparency, the register of lobbyists was to be given something of a lift (?) by placing responsibility with a parliamentary integrity commissioner, part of the agreements with the independents/ third parties after the 2010 election.

We have no commissioner-PM&C manages the scheme. And as The Australian reported on 30 December, the federal parliament would not have one or "a code of conduct for politicians until late next year (2012) at the earliest, despite Julia Gillard having pledged to put these anti-corruption measures (sic) in place by last September."

Update: a reader points out that the Senate Finance and Public Administration Committee is conducting an inquiry into the operation of the Lobbying Code of Conduct and the Lobbyist Register, to report by 1 March. Not surprisingly lobbyists (including former senator Guy Barnett) are well represented in published submissions. Others suggesting significant change, some along the lines of the NSW ICAC report, include Dr Bob Such the Member for Fisher, Action on Smoking and Health, NSW Greens Political Donation Project, the McCusker Center for Action on Alcohol and Youth and Mike Ahrens (of TI International).

And of particular interest, weighty submissions from the Accountability Roundtable, and the Queensland Integrity Commissioner Dr David Solomon AM, who has the benefit of experience with such things in that state and is strongly critical of Australia's regulatory effort, pointing out what should be done to lift our game:

Governments have publicly justified the regulation of lobbyists on the basis that this is required by “public expectations of transparency, integrity and honesty”, as the Commonwealth’s lobbyists code of conduct puts it. If that intention is to be met, it is desirable that the regulation should not leave gaping holes that can be exploited by entities that wish to lobby but to avoid being caught up in the regulatory scheme. Creating a level playing field should be one of the aims of the scheme. As explained above that should include broadening the categories of lobbyists who are required to register (or required to adhere to the requirements of the Code of Conduct, in the case, for example, of in-house lobbyists); it should also cover the lobbying of legislators who are not Ministers or parliamentary secretaries. The scheme should also make it possible for the public generally, and others in the lobbying business, to monitor what lobbying is occurring. To be effective, that will probably require publicly accessible registers, to which both government representatives and lobbyists should be required to file reports of lobbying contacts. It is desirable that there be sanctions introduced, for breaches of the Code, and for lobbying by unregistered lobbyists. There is also a need for rules that govern the time that former Ministers and other government representatives are banned from lobbying activities in areas where they have previously had official dealings.

Achieving these aims will require legislation. It would be desirable if the Commonwealth and the States could agree on uniform legislation. This would reduce red tape and the burden on lobbyists and the entities they represent, making it possible to have, for example, a mutual recognition regime and removing the need for multiple registrations. But in any event, if regulation is to be effective and backed by sanctions, legislation is necessary and desirable.

In the interests of transparency and accountability, it is also desirable that the scheme should be administered by an independent person, and preferably an officer of the Parliament, reporting to a parliamentary committee.

An exchange with NSW Greens Dr John Kaye, MLC, about disclosure of political donations in NSW.

Email 13 March 2011.

Dr Kaye,
Last November when changes were passed to the NSW laws regarding political donations I emailed you asking why the disclosure requirements, previously every six months had now become a 12 month obligation, and why we weren’t within a bull’s roar of real time disclosure. I never received a reply. Can you tell me how this fits with  a commitment in The Greens platform to “prompt and transparent disclosure of all donations on a public website maintained by the electoral office.”  To jog your memory here is what I wrote at the time:
http://foi-privacy.blogspot.com/2010/11/nsw-makes-welcome-start-on-political.html

Peter Timmins.

Reply 22 March 2011

Hi Peter,

I located your email from November and I am sorry that I did not reply. It was a hectic end to the year.

You are right about the reduction of  donations disclosures from twice yearly to once a year. The Greens still support continuous disclosure by political parties and candidates on the internet and our party will be disclosing its reportable donations on the web prior to the election.

There were extensive negotiations with Labor over the bill and we were keen to achieve some donations and electoral funding reform rather than lose the whole bill by failing to reach agreement. I acknowledge that the reversion to yearly disclosure was a step backwards and in supporting the bill we did compromise to the Labor party's position on that point. Our view was that it was more important to implement the bans on tobacco and for profit gambling and alcohol industry political donations and limit the size of other donations. The caps on election expenditure were also a step forward.

Its our understanding that donations disclosure for the period in the lead up to the fixed March state election date, when the bulk of state election donations are made, will remain the same. There will however be a delay in public access from Election Funding Authority records for federal and state election related donations made in the July to December period of each year.

We are hopeful that there will be further electoral funding reform under an expected Coaliton Government. We will endeavour to hold Barry O'Farrell to his promise of a complete ban on corporate political donations and end their corrupting influence.

The Greens are willing to move amendments to the Election Funding, Expenditure and Disclosure Act for real time disclosure of reportable donations and as a fall back position revert to six monthly disclosure.

Thanks for raising the issue.

Regards,

John