ODT on Electoral Finance Act
I 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.