Dirty political money – why isn’t it illegal?

Written By: - Date published: 7:30 pm, November 26th, 2014 - 38 comments
Categories: David Farrar, greens, national, political parties, russel norman, same old national - Tags: ,

This press release came through from the Greens today. Embargoed until 1930. Suffer through the usual tortured prose beloved of press release writers. It is however quite revealing about the effort National makes to keep their donors anonymous to the public compared to other parties.  The numbers are here.

National pockets over $3 million in undisclosed donations

New research shows that the National Party used a loophole in electoral funding laws to pocket over $3.3 million in undisclosed donations in the three years before the 2014 election, Green Party Co-leader Russel Norman said today.

Dr Norman released the findings while giving the Rod Donald Memorial Lecture in Christchurch this evening. His speech, Democracy in New Zealand: Who broke it, who bought it, and how do we fix it? explores the issues of dirty politics and the National Party’s erosion of democracy.

“National pocketed $3.375m in undisclosed donations in the lead up to 2014 election,” Dr Norman said.
“Almost 80 percent of National’s donations are undisclosed. They know who’s paying them but the public doesn’t.”
Analysis undertaken by the Parliamentary Library for the Green Party shows that in the period 2011-2013 political parties received $6.5m in undisclosed donations, with the majority going to National and its support parties, ACT, The Maori Party and United Future.

An undisclosed donation is when a political party knows who gave them money, but because the donation is less than $15,000 the party does not have to declare the identity of the donor. You could give $15,000 a year for three years, a total of $45,000 and the party doesn’t have to reveal your identity.

“National was the worst offender of any political party; almost 80 percent of the donations they received were undisclosed,” Dr Norman said.
“The large number of undisclosed donations is not good for our democracy.
“Since National has come into power there have been several scandals where questions have been raised about the link between political donations and political favour.

“National Party Cabinet Club cash for access, Maurice Williamson and Donghua Liu, Judith Collins and Oravida, John Key and SkyCity are all examples where money and politics have intersected.

“Our democracy is not for sale and unless we bring in transparency, it will continue to go down a slippery slope with National.

“In Government the Green Party is committed to cleaning up undisclosed donations, including lowering the threshold for disclosure to $1000.

“Rod Donald showed us that by fighting for our democracy we can win. We need to hold undisclosed donations up to the spotlight and remove the corrosive impact the cash for access has on our democracy,” said Dr Norman.

It does shed light on the process whereby National hoovers up ‘anonymous’ money from a variety of carefully crafted sources that it knows, bit no-one else does. It then expends it on people like Jason Ede, David Farrar, and probably over the last three years on Cameron Slater – the arsehole of blogging and politics.

After all it looks suspiciously like money was being funneled through some of Nationals favourite PR companies to fund attacks by Cameron Slater on various political targets.

How easy is it to make a legally combined donation of $45k over 3 years. Pretty damn easy.

How easy is it for individuals and companies to make donations of several hundred thousand? All you need is to do is make donations from your partner, the kids, the shelf company that you have for taxes, the trusts for your buildings, or through the multiplicity of ‘private’ contractors beholden to larger companies.

I agree with the Greens. To me this looks like a systematic flow of money to National for legislative favours.

Dirty money funds the arsewipes of politics. Drop the limit to something quite low and make donating to political parties public and transparent. It’d probably clean up politics like nothing else would.

38 comments on “Dirty political money – why isn’t it illegal?”

  1. Macro 1

    Drop the limit to something quite low and make donating to political parties public and transparent.

    Yes, $1000 should be the absolute maximum.

    It won’t happen while National are in office though.

  2. Zolan 2

    The threshhold should be at a level below which most citizens could contribute, so the lack of reporting is balanced by distributed participation. $1000 is an entirely reasonable and pragmatic compromise.

    Is it any surprise that National’s dark money alone was more than the highly transparent funding of the Internet Party by KD (to build it from scratch)?

  3. Draco T Bastard 3

    Drop the limit to something quite low and make donating to political parties public and transparent.

    Drop the limit to about $500, make it so that legal entities (Businesses, unions, charities, etc) can’t donate at all and that anyone under 18 can’t either.

    Transparency is the only defense we have against the corruption of political parties selling policy.

    • weka 3.1

      why no legal entities (assuming they’re visible)?

      • Lanthanide 3.1.1

        Draco’s argument (from the past) has been that businesses and other entities can’t themselves hold political opinions. If a chairman on a company is right-wing and wants to donate to National, they should use their own private money, not the company’s, to do so.

        It’s an interesting argument, but on the whole I don’t agree with it. If it is the best interests for a company that political party X wins an election, then it seems that using company money to donate to that political party would benefit everyone in the company. For example there were several timber mills that said if Labour won the last election, they would have the confidence to expand and start up new sawmills etc, because of Labour’s focus on their industry. Even if you’re a worker at such a sawmill and you support National, it doesn’t seem too ‘unfair’ that the company you worked for donated money to a party you didn’t support, because the company is doing it because they see it in their best interests.

        Now, if a company is donating to political parties at the whim of their executives / board members, and such donations are not actually in the best interests of the company, I don’t think the response is to ban all companies from donating, but rather that individual company needs to justify the donations to its shareholders etc and can be held accountable through internal company processes.

        Of course another angle is that if roading companies or casinos donate lots of money to a particular party, then that party in government might show favouritism to those companies / industries. But I don’t see moving the donation responsibility to individuals instead of companies changes that situation too much; of course the argument is that it’s very easy for a board member to spend *someone else’s money* (company money), rather than their own.

        • Draco T Bastard 3.1.1.1

          If it is the best interests for a company that political party X wins an election, then it seems that using company money to donate to that political party would benefit everyone in the company.

          But it’s not the company that’s making those decisions but the directors of that company.

          Now, if a company is donating to political parties at the whim of their executives / board members, and such donations are not actually in the best interests of the company, I don’t think the response is to ban all companies from donating, but rather that individual company needs to justify the donations to its shareholders etc and can be held accountable through internal company processes.

          And I’m pretty sure that the shareholders of Enron thought that the directors were doing the best for the company and had justifications for what they were doing – right up until they were indicted.

          Of course another angle is that if roading companies or casinos donate lots of money to a particular party, then that party in government might show favouritism to those companies / industries.

          And that is the big one. The fact of the matter is that big money buys big influence.

          But I don’t see moving the donation responsibility to individuals instead of companies changes that situation too much; of course the argument is that it’s very easy for a board member to spend *someone else’s money* (company money), rather than their own.

          If a company is donating it helps hide the actual influence and how it’s being spent whereas individuals donating would such influence would be easy to track.

          • RedLogix 3.1.1.1.1

            So how would draw the distinction between a union and a company for these purposes?

            • Draco T Bastard 3.1.1.1.1.1

              I wouldn’t. That’s why I specifically said legal entities (Businesses, unions, charities, etc). None should be allowed to donate to political parties.

        • weka 3.1.1.2

          Thanks Lanth.

          It seems like there is such a wide range of possibles covered by ‘legal entities’ that a straight ban would be unfair. On the other hand, we could just fund political parties via the tax take.

          • RedLogix 3.1.1.2.1

            How about a formula where all donations went into a common pool – and were then divvied up in proportion to the votes the party received in the last election?

    • Chooky 3.2

      +100 DTB “Drop the limit to about $500, make it so that legal entities (Businesses, unions, charities, etc) can’t donate at all and that anyone under 18 can’t either.”

      • Molly 3.2.1

        Agree.

        As journalists investigating tax frauds have found, the use of entities can “hide” the ultimate benefactors of those companies, trusts etc. Immediate loss of transparency from the start.

        Besides, democracy is about one vote per person.

        Owners/directors of businesses already have the same influence as everyone else, they do not need more in a democracy that intends to be a true democratic system.

  4. adam 4

    Hear, Hear.

    People who see me post on open mic regularly, will know I put up posts from this site.

    http://www.publicintegrity.org/

    The Centre for public Integrity. This wonderful collection of researchers and journalist – go after the money. It is donations which have crippled and perverted the United States political system.

    I say we are not American, nor are we a cheap Republic than can be bought and sold by the highest dollar. Or indeed we weren’t, now I’m not so sure. We always were so polite about our corruption.

    The Hollow men and Dirty Politics are what happens when you have a system, hell bent on ideological purity, and greed as the prime motivator.

    I think it is way past the time we dropped the cap to $100 dollars per election cycle – put you politics on the table.

  5. weka 5

    Anyone know what year the current $15,000 threshold was set?

    • wtl 5.1

      I don’t have time to check right now, but I recall Andrew Geddis doing some posts on this threshold on Pundit. I think he mentioned when it was changed but I can’t recall when it was. If you search through the Pundit archives you might find something.

    • alwyn 5.2

      The limit was raised from $10,000 to $15,000 in 2011.
      That is only for donations to a party. Donations to a candidate are much lower.

      I may be cynical but I think Russel’s real aim is to try and remove any donations at all, and then run campaigns with compulsory contributions from the taxpayer.
      That way the Green Party wouldn’t have to persuade anyone that they were really worthy of support.

      • lprent 5.2.1

        Or he can’t see any point in having publicly anonymous donations.

        • alwyn 5.2.1.1

          No I think he would really like to discourage all donations and use that as a spur to push for public financing.
          If any donation to a political party was publicly reported and became a matter of permanent record I think a lot of people would be dissuaded from ever giving money to a party. I know I wouldn’t do it. I don’t want somebody, on a blog say, bringing it up years later and attacking me on the basis that I once did so.
          I am therefore thoroughly in favour of allowing donations, at least up to some limit, being allowed to be anonymous. What the limit is may be a matter of debate but I don’t think anonymity is debatable. If Norman wants that he should be opposed.
          I have only seldom made such donations, and they have never been large. One I did make would never have happened if I had thought it would be published. I made a donation to Hone after he made a wonderful speech on the Electoral Finance Bill back in 2007. I wouldn’t have done it because I was never really sure what Hone might do in the future. He was, after all, already something of a loose cannon.
          The speech was
          http://www.parliament.nz/en-nz/pb/debates/debates/speeches/48HansS_20071122_00001008/harawira-hone-electoral-finance-bill-%E2%80%94-second-reading
          It was, at least in my view, the highlight of his career in Parliament. It is still relevant to what Norman appears to be trying to accomplish.

      • weka 5.2.2

        thanks for the date and fuck off with the GP trole slur 🙄

  6. RedBaronCV 6

    How much of the NACT money comes from non citizens or residents? Are people from overseas buying our politicians?

    • NZJester 6.1

      Overseas people buying our politicians, what ever do you mean (Cough Sky City).
      Do you really think something like that would be going on (Cough Warner Brothers).

    • alwyn 6.2

      I really wouldn’t get to excited. I know some of our politicians may be cheap but I don’t think they are this cheap.
      According to the party returns, and they must tell how much they get from overseas interests, the total for the years 2011-2013 was, taking deep breath.
      National $2,900
      Maori $1500
      ACT $960
      Mana $306
      Libertarianz $227.40
      New Zealand First $116.18
      I think fears of being bought out are pretty low aren’t they? And yes it surprised me too how little was involved.
      The figures are from the source referenced at comment 11.1 in this post.

  7. NZJester 7

    How easy is it for someone to funnel even more money than that to National by having them-self pay for a seat at a dinner table and each of their family pay for a seat at a dinner table at each of those National party fundraising dinners? Are any under 18 children attending those dinners and thereby also donating to National?
    I also wonder how easy it would be for someone to attend multiple events and actually funnel multiple $15,000 per year and still have been able to remain anonymous. As no one outside of National insiders know who is attending each of these events they could easily have passed far more than $15,000 per year by hiding behind those anonymous dinners.

  8. NZJester 8

    Any donation from a business account no matter how small should be excluded from the right to be made anonymously.
    Only private individuals making a donation under the limit should keep the right to remain anonymous.
    No more $15,000 from me and $15,000 from each of my real or shell company businesses for well off National supporters to hide behind.

  9. Manuka AOR 9

    It is ironic that one common reason given as to why the IMP was wiped out is that voters “Don’t want someone buying influence in NZ politics”. Yet this seems to be what we have now.

    The difference is that with KDC, it was all “out there” with everyone knowing exactly who was paying for it. Instead we now have a governing party largely funded by secret donors. Who is hiding, what are they hiding and why?

  10. fambo 10

    The Greens do excellent press releases – an excellent way to keep up with things for those who subscribe to them. They come out very quickly after events and are pretty much always on the money

  11. Rosie 11

    Bloody hell. Its a week of it for the nats.

    “Almost 80 percent of National’s donations are undisclosed. They know who’s paying them but the public doesn’t.”

    We have a right to know whose behind the 80% – we know Key’s govt is nothing but a puppet show so we need to know whose pulling the strings, whose really running the country.

    And as an aside:

    “Analysis undertaken by the Parliamentary Library for the Green Party shows that in the period 2011-2013 political parties received $6.5m in undisclosed donations, with the majority going to National and its support parties, ACT, The Maori Party and United Future.”

    Geez. I had wondered where UF, a 0.2% polling party with a weak membership got all that dosh for putting up such massive billboards, including one on an expensive advertising site in Kaiwharawhara. Now we know, funnelled from the 80% via the nats. Dunne is on one helluva cushy ride.

    • alwyn 11.1

      The statement you quote
      “with the majority going to National and its support parties, ACT, The Maori Party and United Future.”
      is, like many of the press releases issued by Dr Norman deliberately misleading. There is almost nothing in the category he is talking about that has gone to either United Future or the Maori Party. He wants you to think otherwise though which is why the release is worded so carefully. He relies on the fact that most people take these press releases at face value.
      If you look at the material referenced here
      http://www.elections.org.nz/parties-candidates/registered-political-parties/party-donations/party-donations-year
      you will discover that the Green Party have received more than they did.

      • RedLogix 11.1.1

        And if you look at the actual Green Party returns you will see that the bulk of their donations >$15k come from their own MP’s.

        It’s been well known that this has been GP practise for ages.

        • alwyn 11.1.1.1

          But these donations of over $15,000 are, like all parties, reported by donor because they must be.
          Look at the ones that are less than $15,000. The Greens have quite a lot of money there whereas the Maori Party and United Future don’t. Of course National do but combining them with the other parties is deceptive.
          It is these donations that Norman was complaining about.

          Combining amounts would let me say something like “RedLogix and Bill Gates have a combined income of $5 billion a year and yet that mean bastard RedLogix pays less than $50,000 a years in tax. Why aren’t the IRD doing him over?”

          And no I don’t mean it seriously and I have no idea of your finances.

  12. Michael 12

    I think elections should have a ‘matching system’ for public financing. Basically, for every dollar donated by a private individual – it’s matched five-to-one with public financing. There could be a cap of something like $200. So, for example: Someone donates $50 to the Greens. That money would be worth $300 to the party, of which $250 is public financing.

    This way, money from corporations and wealthy people just isn’t attractive. A lot of people can donate $10, $20, $50, $100, etc. If there’s a 5-to-1 multiplier from public financing, that becomes very attractive. That way, politicians will actually listen to the grassroots – not special interests. If 1,000 people each donate $50 each to a party, that’s worth $300,000 for the political party. And they’re accountable to ordinary people, who they’re supposed to represent – not special interests.

    And I think that will be agreeable to political parties, too. They’d most likely be better off, in terms of campaign financing. It’s not like parties are pandering to big business or the wealthy just because they’re wealthy and big business – it’s because they have money to donate. If ordinary people, collectively, can do better than that, then the wealthy interests aren’t that interesting anymore. So, parties win. People win.

  13. Rosie 13

    Another aside.

    Funding for favours perhaps? Are we taking a leaf out of Chris Christies book?

    Watched Jon Stewart’s The Daily Show last night (I know, I know, he’s all out of fashion now that his old sidekick John Oliver is the new buzz but Jon Stewart is still worth a watch) and saw an article about how NJ governor, Chris Christie is close to vetoing a bill that would ban sow crates in the state of New Jersey, despite a poll that indicated that 91% want sow crates banned and despite a promise by Christie to “always represent his people and respect their views” (paraphrasing)

    Vetoing it because he potentially has his eye on the funding and votes for his presidential bid from the pig farmers of Iowa, the USA’s largest pork producing state with approximately 20 million pigs, to NJ’s approximately 7,000.

    Kind of like Cabinet Club with the doors open.

  14. Molly 15

    How easy would it be for National supporters to directly fund dirty politics tactics without anything having to be declared at all by National.

    If Cameron Slater receives donations, he can continue his misdirection etc. The same can be true of any corporation or organisation that supports National. The Taxpayers Union would be an obvious example, but others can be hidden quite easily.

    The media needs to be more discerning on the information they source and enable.

  15. philj 16

    There is no justification for any funding for political parties. Get out on the street corners to electioneer! The MSM is bought and paid for too, so only Community halls and street corners. The current system works perfectly for the most powerful, which is the problem. Power corrupts always. Can’t see any change coming soon.

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