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Government to ban foreign donations to political parties

Written By: - Date published: 12:19 pm, December 3rd, 2019 - 66 comments
Categories: Andrew Little, democratic participation, labour, national, nz first, Politics - Tags: ,

I wonder if this is related to news about the New Zealand First Foundation and the possibility that it and the National Foundation could receive donations from overseas and through the very simple technique of investing the money and paying the income to a political party avoid restrictions on overseas donations?

Or the other loophole whereby an overseas individual could set up or use a company incorporated under New Zealand law and donate to their heart’s content?

Whatever the reason Andrew Little has announced that the Government intends to introduce legislation this afternoon under urgency to change the Electoral Act so that all payments from overseas over $50 will be banned.

From the Beehive website:

The Government is taking action to protect New Zealand from foreign interference in our elections by banning foreign donations to political parties and candidates, Justice Minister Andrew Little announced today.

Legislation will be introduced to Parliament this afternoon and passed under urgency.

“There’s no need for anyone other than New Zealanders to donate to our political parties or seek to influence our elections,” Andrew Little said.

“The risk of foreign interference in elections is a growing international phenomenon and can take many forms, including donations. New Zealand is not immune from this risk.

“The Justice Select Committee has heard there are credible reports of interference campaigns in the elections of other countries, and these attempts are increasing in their sophistication.

“A recent Canadian Government report found half of all advanced democracies holding national elections had their democratic process targeted by cyber threat activity in 2018. That’s a threefold increase since 2015. We must protect New Zealand as best we can from this risk to our democracy.

“We need to protect the integrity of our elections. These changes will reduce the risk of foreign money influencing our election outcomes.

“We don’t want our elections to go the way of recent overseas examples where foreign interference appears to have been at play.”

The text suggests the changes may not address these areas but I have not seen the bill yet.  These are areas which require urgent attention and it will be interesting to see what the definition of “overseas person” and “contributions” is.

It should be an interesting afternoon.  And dare I say this but Jami-Lee Ross has done the country a service by disclosing the sorts of rorts that are used to hide overseas donations.

Update:  Here is the bill.  It goes part way to addressing problems.  The  Inner Mongolia Rider Horse Industry (NZ) Ltd company will continue to be able to make donations for now.  And the use of foundations can continue in their current form.  Little mentioned further policy work in these areas and hopefully they can be addressed well before the next election.

66 comments on “Government to ban foreign donations to political parties ”

  1. tsmithfield 1

    I actually agree with the sentiment of this legislation. But I think it will be nigh on impossible to enforce. There are so many ways to cloak donations to appear as if they have come from NZ, so someone from overseas who is motivated to donate to political parties for whatever reason will find a way to do so whatever the legislation I expect.

    • A 1.1

      It would be a large transaction. Wouldn't it be covered by the anti money laundering legislation?

    • gsays 1.2

      "But I think it will be nigh on impossible to enforce."

      I have an answer, ban all donations to political parties.

      State funding is the way forward.

    • SPC 1.3

      Certainly given the way they are going about it – it's more a sop to our security friends and their local partners SIS/GCSB. But our Trumpian "nationalists" do so like the yuan yuan – whether on their way into power or on their way out.

  2. Stuart Munro. 2

    It's an important move. The use of laundering trusts however, must also be curtailed if it is to be effective, and I can think of a couple of parties that might oppose that.

    • alwyn 2.1

      I can think of three that would oppose any such thing.

      Winston First would oppose it because that is how they launder their money.

      Labour would oppose it because Winston would order them to.

      And the Green Party would oppose it because Winston would kick their behinds out of the beemers unless they also did what he ordered.

      • Stuart Munro. 2.1.1

        You missed the main one – it's the Gnat's trust Winston borrowed his model from.

        With the death of “Nick” Zhao a lot of rocks are going to be turned over.

        • alwyn 2.1.1.1

          What is this National Party trust to which you refer?

          And I mean a current one. Telling me about the Waitemata Trust, or the Ruahine trust is hardly relevant unless they still exist, which I do not think is the case.

          So, what is this fabled beast? Pray tell all.

          While you are about it who is this "Nick" Zhao you talk about? The only person of that name I have ever heard about was a car dealer in Melbourne who died about a year ago. He obviously can't be the person you mean.

          After all, would you think it fair to blame the New Zealand Labour Party for all the sins of the NSW branch of the Australian Labour Party. If they were to be held responsible for that groups' misdeeds they would all be in jail for very long terms.

          • Stuart Munro. 2.1.1.1.1

            Good Lord – you can't expect me to keep up with every devious switch of the Gnat trusts – They mutate like chameleons! That's a job for the fraud squad.

            Nick Zhao is part of the trail of evidence of a well-funded infiltration of the Oz parliament that bears some resemblance to the arrival in ours of Jian Yang, among others. The spooks are all in a lather about it.

            • adam 2.1.1.1.1.1

              Do love how the right can be bought off by the CCP, and it just passes over their supporters heads.

              • Stuart Munro.

                When one's country really is being infiltrated by a hostile foreign power, a bit of McCarthyism is not misplaced.

                If anyone ever did the sums on how much the Mango Mussolini has ceded in terms of global influence they'd throw him in Gitmo.

  3. Gosman 3

    Changes to anything around the electoral system should NEVER be done under urgency (unless there is something that is deemed an emergency) and really need to get broad based support.

    • Stuart Munro. 3.1

      There'll be no broad-based support from a party increasingly reliant on offshore bribes donations. No point in respecting process when your opponents won't respect bona fide.

      Or maybe not!

      ‘National will support the bill to ban most foreign donations because “it’s the right thing to do” Simon Bridges says.

      Foreign donations would be a lonely hill to die on.

    • observer 3.2

      It's a fair point about process (NRT makes a similar point) but presumably the politics of this is to say to the opposition "You have objections on principle? Just say so".

      And it's working:

      1) National will support the bill to ban most foreign donations because "it's the right thing to do" Simon Bridges says. (Herald reporter)

      2) National electoral reform spokesman Nick Smith said he was appalled at the Government's lack of process. (Stuff)

      • mickysavage 3.2.1

        The proposed changes are straight forward ones. I was hoping they would go for the more difficult ones that I highlighted in the post but I agree that it is best they go through a full select committee process.

        • gsays 3.2.1.1

          Hi Mickey, I am curious where you sit on the idea of banning all political donations.

          You make good points about foreign influence on our politics. Surely logic says local donors expect outcomes for their 'investment'. Thereby undermining democracy.

          What say yee?

          • mickysavage 3.2.1.1.1

            State funding? Yep bring it on. I have been involved in a few campaigns myself and have accepted donations, all but one which was below the applicable threshold.

            Putting to one side my legal approach to the issue, yep, if someone gets more than say a thousand in a donation it should be declared. Whether for Local Board, Council or Parliament.

            • alwyn 3.2.1.1.1.1

              Out of curiosity did David Cunliffe ever tell us who was behind the financing of his campaign to become the Labour Party Leader?

              Didn't he accept rather a lot of money which wasn't originally disclosed because it went to a trust? And was then returned to the donors who were then not named. That sounded rather like claiming you weren't guilty of a crime because you had returned the stolen goods when the Police caught up with you.

              I hope you weren't involved in that little fund raising endeavor.

              • mickysavage

                Did you see where I said “[p]utting to one side my legal approach to the issue”? The practice of law requires you to work within legal constraints. And yes he did.

                • alwyn

                  Hey, I'm not suggesting it was illegal.

                  It was the fact that while Cunliffe was trying to make the case that National was trying to do something dodgy he was doing exactly what he claimed was iffy in his own campaign.

                  That really has to be stupid. Legal but stupid.

      • Wensleydale 3.2.2

        Has there ever been a time when Nick Smith hasn't been appalled by something?

    • weka 3.3

      "Changes to anything around the electoral system should NEVER be done under urgency"

      I tend to agree, but a potential issue here is that if the Bill went through a normal process there would be time to organise overseas donations for next year.

      • Gosman 3.3.1

        Then the government should have made this a priority back in 2018

        • McFlock 3.3.1.1

          <s>2018</s> 1993.

          But then even in 2018 it wasn't so obvious that a number of parties were looking to copy the worst excesses of US political influence. All very well saying that it's just Aussies asking for cash from the NRA, but it's looking like that shit will end up on our doorstep, too.

      • Cricklewood 3.3.2

        I heard on the radio it won't come into effect until Jan 1 2020… I'm struggling to see the point of urgency the bill doesnt make any substantive change. Find it a bit confusing tbh

        To add it seems foreign donations are already banned for amounts over $1500 so urgency over $1450 more confused than before as to why urgency is needed.

        • A 3.3.2.1

          Oh, well if that's correct then it does seem a bit pointless.

        • Naki man 3.3.2.2

          True, lowering the limit from $1500 to $50 after Jan 1st 2020 won't stop Winston first laundering donations through the foundation. The law change will achieve bugger all.

    • mac1 3.4

      I suspect that the delays being experienced by the stalling within the Justice Committee by National which is investigating foreign interference in NZ politics, may be the reason why urgency is being used. The following article gives background.

      https://www.newsroom.co.nz/2019/08/09/745658/foreign-interference-inquiry-becoming-a-farce

    • SPC 3.5

      Requires broad based support is code for those with interests to protect (fund raise more money) should be able to block real change.

  4. cleangreen 4

    I think anything done now is better than nothing Gosman.

    Australia has also just announced an emergency changes to rules of foreign interference too.

    We could also expand our rules further in line with Australia again too.
    We already have a chinese MP who was involved in the Chinese spy system before entering into parliament here.

    https://www.sbs.com.au/news/what-is-really-in-australia-s-new-foreign-interference-laws

    The prime minister says the package of foreign interference reforms is set to be “the most important overhaul of the nation’s counterintelligence framework since the 1970s”.

    It comes after a year of damaging media reports about efforts by actors linked to the Chinese Communist Party to influence politics, media and academia in Australia; as well as “grave warnings” stemming from a classified Australian Security Intelligence Organisation report to the prime minister.

    Amid debate about the extent and nature of the problem, security expert Rory Medcalf from the National Security College in Canberra called Beijing's efforts "the sharp power of intrusive influence".

    “Our agencies lacked the legislative tools they needed to act,” the prime minister declared as he introduced the package of bills to parliament on Thursday night, “and it’s fair to say that our system as a whole had not grasped the nature and the magnitude of the threat.”

    The changes will make it much easier to prosecute foreign nationals intentionally interfering with Australia's political system, but some commentators fear they will have unintended consequences.

    [Reformatted text to make it easier to read and see what’s quoted]

  5. UncookedSelachimorpha 5

    This is a small step in the right direction, good stuff.

    All political donations should be banned, regardless of source. Why should anyone at all be allowed to purchase influence, while others cannot afford to do so?

    A fixed party membership fee (say <$100 p.a.) should be allowed and the rest funded by the state in proportion to either party membership or vote share.

    • Wensleydale 5.1

      But… but, then rich people won't be able to purchase political influence and gain preferential treatment. How are they supposed to skew the playing field in their favour if they're actively prevented from bribing… did I say bribing? I meant 'incentivising'. Yes, incentivising politicians. This is shameful legislation and so profoundly unfair. Like Nick Smith, I am appalled!

    • SPC 5.2

      That would be fair, but those with more money like to have all the advantages that offers – including in politics.

    • gsays 5.3

      Spot on US, I have sprayed a similar opinion upthread. (The second homebrew cider is kicking in..)

      We don't want foreigners interfering in our elections, but it's ok for our class enemies, be it unions or the roundtable, to undermine our democracy.

      The urgency thing sticks in my craw, not only do we get ineffective legislation, it is done in a 'Keyesque' way.

    • pat 5.4

      so many loopholes as to be worthless….why would we let politicians design the rules around donations to political parties and expect anything else?

      Self regulation on the grandest scale

  6. Karol121 6

    Oh Dear.

    LOL.

    • stigie 6.1

      So does that mean donations from Greenpeace are out..?

      • Karol121 6.1.1

        Not too sure about that, Stigie.

        But my thoughts on it are that if that organisation was engaged in lobbying and even activism of any variety identified as being consistent with their stated and reputed objectives, even as an interest group collective or even a society in it's own right (with stated objectives), it should not be subject to any interference by government in relation to donations or subscription revenues.

        Of course, there would be tax implications to consider, but on reason, that would be about that when it comes to financial scrutiny, surely?

        Such an organisation may well be recognised as being strongly sympathetic to one or other political party and that party's stated objectives, but hey, that's just the way politics goes. In a way, when this occurs, it is often considered to be both a healthy approach and a healthy association.

        If the interest group organisation provides any registered political party organisation with any resource assistance gratis, or if it provides funds by way of donations then it would still surely be exempt from the type of scrutiny or restrictions such as are being discussed in this thread.

        It would be up to the donee (political party organisation receiving same) to declare such assistance or funding, not the donor as an interest group organisation.

        If, and only if it became an identifiable political party in it's own right would it/should it generally be considered as requiring to be subject to the oversight regime and the requirements imposed by government pertaining to funding.

        But I'm not a lawyer, and a legal practitioner with an in depth knowledge and experience in these matters might well have a different point of view in relation to this.

  7. Cinny 7

    This is a great start, well done to the coalition.

    It's even made one of the leading stories on Al Jazeera !

    https://www.aljazeera.com/news/2019/12/zealand-ban-large-foreign-political-donations-191203022020592.html

  8. riffer 8

    Much as it sounds good, I fear it's just too easy to circumvent. Better to ban all donations from companies with ownership outside of NZ too. Why hasn't that been enacted?

    • SPC 8.1

      Rich individuals can also use locals (say an ethnic association well known to the Botany MP) to launder money onto the sponsored vassal/political party.

  9. SPC 9

    At least we know the Scots won't be involved.

    a recent letter to a newspaper from an Aberdonian which said

    "If you print any more jokes about mean Scotsmen I shall stop borrowing your paper."

  10. peterlepaysan 11

    Foreign ownership/interest in NZ companies is an open door.

    Actually all private donations should be banned.

    All donations should be shared equally.

    Not hard. Some donors/ benefactors might bitch.

    A common pool that all parties have some access to has some appeal (not necessarily to the wealthier funded parties).

    New or minor parties could, for example, have access to 50% of the pool. Divvied by the number of applicants.

    Does this sound like a taxpayer funded pool of money for political parties? Of course.

    How else do we, the people, keep the egotists honest?

  11. Descendant Of Smith 12

    The best idea for transparency I've heard is to have all donations paid through a party trust account held by the Department of Internal Affairs and then forwarded immediately onto the party.

    Any payments made directly to the party for any reason would be banned.

    All payments and their source to be published.

    • Sacha 12.1

      Someone also suggested using that approach but keeping the donations anonymous both to the parties and the public – harder to buy influence that way. Imagine the flow slowing right down..

  12. David Mac 13

    Re-arranging the deckchairs on the Princess of the Seas. I'm wary of turkeys voting for an early Christmas.

  13. Karol121 14

    They could go the whole hog, I guess.

    That is, taxpayer funded and state management of campaign and even party funds, but with a twist.

    Separate individuals or groups could also be allowed to augment party funds by paying into the aforementioned state manged pool, but stating a preference for those funds to be applied to favour a particular individual candidate him/herself, or a party for specified and legitimate party purposes separate again from the costs associated with election campaigns.

    Should political parties be allowed to operate slush funds is another question.

    Going with the above suggested state managed way, it would all be transparent at government level, and up to the people to insist on whether or not the separate funders should or should not be identified, along with the amounts pledged or donated.

    In relation to confidence and trust, a point raised by SPC in this thread, it would, as it always does, depend on how trustworthy and unbiased the general public would consider central government to be in relation to such procedures.

    • Descendant Of Smith 14.1

      That's why it should be transparent from day one – absolutely no discretion.

      Still I think all the people who got paid out as part of the South Canterbury finance bail out should be public as well as well as all wages and salaries esp in the public service and all trusts and their accounts should be public with a register of beneficiaries.

      • Karol121 14.1.1

        Agreed and agreed,

        Total transparency may be considered by many (or perhaps most) to be a desirable thing, but in reality, it's considered to be more of an ideal than much else.

        They all need their various slush troughs to trot over to from time to time so as to fuel the hype and to oil those wheels and cogs which churn out so much garbage (not that all of it is garbage, mind you).

        On the SCF bailout. It's almost as if for some strange reason, they were likened by the bailout funding people as being; "too big to fail" in their own right.

        A really peculiar, oddball one, that.

        • Descendant Of Smith 14.1.1.1

          Too big to fail or the "right" people had money in there – who had invested, particularly in the four weeks leading up to the bailout + interest I hear is likely to be quite interesting. Certainly there are plenty of suggestions around about who was in the "know" that interest would be paid out as well.

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