Written By: - Date published: 4:26 pm, October 25th, 2018 - 21 comments
Categories: Abuse of power, capitalism, corruption, democracy under attack, electoral commission, parliamentary spending, Politics - Tags: corruption, donations, influence
While the Jami-Lee Ross saga has quietened down as National hopes, there are many issues raised that have not been resolved including the central question of political party donations.
Whether the $100,000 donated by Chinese-born New Zealand businessman Zhang Yikun to the National Party was illegally redistributed by members of the “Cathedral Club” is now in the hands of police.
What is clear from the tape recording of National Party leader Simon Bridges with Ross is that money buys influence and that matter needs to be addressed.
The sum of $100,000 might seem a lot to give away to a political party, but in the greater scheme of things it is relatively paltry given, as the tape strongly suggested, it would buy one extra parliamentary seat for China’s interests.
Aotearoa already has relatively tight laws regarding anonymous donations to political parties with a $15,000 limit. It may be simply a matter of ensuring the law is upheld.
The issue of money wielding influence is best seen in the US. Political donations in the US were also tightly controlled until a 2010 Supreme Court decision declared that spending money on political causes qualified as free speech protected by the First Amendment. The decision opened the floodgates for unlimited political expenditures by corporations and unions so long as they didn’t give to campaigns directly.
That decision, according to the independent tracker of political money in the US, Open Secrets, opened the door for individuals and companies to pour millions of unregulated and uncapped “soft money” into what is called Super Political Action Committees (Super PACs) to influence the outcomes of elections without contributing to an individual candidate.
Super PACs can accept “dark money” from donors that shield their identities through shell corporations and political nonprofits which don’t have to reveal their donors.
The political donation activities of the Koch brothers, David and Charles, are most notorious. Sons of Fred Koch, who founded Koch Industries, the second largest privately held company in the US, of which they control 84%, the brothers make mind boggling financial contributions to libertarian and conservative causes, often through so-called “think tanks”. They contribute to the American Legislative Exchange Council, which promotes laws limiting lawsuits from people with terminal illness as a result of asbestos. Koch Industries own Georgia Pacific, which has been subject to these lawsuits.
Through non-profit Americans for Prosperity, the Koch brothers have organised to defeat public transit projects in several cities, (Government-funded transit contradicts the brothers’ free-market, small-government views, and they also profit from people using cars.)
A network of like-minded donors organized by the Kochs pledged to spend $US889 million from 2009–2016 and its infrastructure has been said by Politico to rival that of the Republican National Committee.
They actively fund and support organizations that contribute significantly to Republican candidates and in particular they lobby against efforts to expand government’s role in health care and combating global warming.
Among Open Secrets’ list of the top 10 donors this year is Sheldon Adelson’s Las Vegas Sands casino operation, which has contributed over $US200 million to conservative candidates and causes in recent years.
Not all big donors support conservative and right wing causes. Hedge fund operator Tom Steyer, founder of Fahr, has donated $US29 million to the current election cycle so far in his quest to impeach US President Donald Trump and back Democrat candidates in next month’s elections.
George Soros’s Soros Fund Management has put $US14 million in 2018 into his Take Back America campaign.
And Michael Bloomberg, the billionaire former New York mayor and founder of Bloomberg News plans to spend $US80 million through the SuperPac , Independence, this year to ‘flip’ the House election the Democrats way.
These examples show us the corrosive effect of what can happen when money is used to wield influence.
That it can be used by a foreign entity such as China to exert its so-called “soft power”, as has been alleged in the case of Zhang Yikun and others in New Zealand, is even more disturbing.
The question is what can be done to limit such behaviour?
Since the Jami-Lee Ross affair broke, a number proponents ranging from the New Zealand Herald editorial to former British Labour Party deputy leader Bryan Gould favour public funding of political parties.
Victoria University political scientist and media darling Dr Bryce Edwards, has come out in a blog on Newsroom against this idea.
He notes political parties already get around $130 million of government funding through such vehicles as Parliamentary Services and this has caused parties to be less responsive, coinciding with a plunge in party membership, with National down to 20,000 from 200,000 and Labour down to 10,000 from 100,000.
“This state funding has already had a very strong impact on the parties.
Undoubtedly, it has reduced the organic attachment of political parties to society,” he writes.
He also argues that many on the Left favour state funding of political parties “because of the misconception that money equals power and only wealthy parties can compete”. He cites the success of unmonied parties like the Alliance, NZ First and the Greens and the failure of monied parties such as ACT, TOP and the Conservatives as refuting that argument.
Greater state funding will make the political system more moribund, entrenching the power of existing parties, Edwards says.
Gould says New Zealand should be very protective of its low level of corruption and high level of transparency, assets that are very easily undervalued.
“In cultures less accustomed than our own to the rules as to how democratic politics should function, it is natural to assume that political support can be bought,” he says.
He recalled how, when he was an MP in the UK, constituents from immigrant communities sought help bearing gifts and saw nothing wrong about expressing their gratitude for services rendered or anticipated in this way.
“The current saga is just one instance of the murky waters in which we could become swamped if the notion became established that the way to political influence lay through political donations,” Gould says.
Whether we like it or not, parties are an essential part of our democratic infrastructure and their proper functioning is central to any democratic system worth the name, he says.
“The opposition to public funding seems to stem from the view that political parties are voluntary organisations which must be responsible for their own welfare and survival, and should not therefore look to the taxpayer for support. But this is unrealistic; their role as public institutions should not be obscured by the fiction that they are private associations.”
“As the current scandal demonstrates, that fiction places us all at risk. We cannot afford to tolerate a situation where private money buys influence in public affairs. A properly functioning democracy is the responsibility of all of us; some of us might give up our time and effort to ensure that the necessary infrastructure is in place, but others should, as taxpayers, be ready to make a similarly valuable financial contribution to that essential purpose.”
The Green Party has long advocated both stricter rules on anonymity of donations and increased public funding.
“The fact of the matter is, as long as political parties are accepting donations from powerful vested interests, there is a constant risk of corruption,” said Co-leader Marama Davidson.
Prime Minister Jacinda Ardern says she is open to taxpayer funding for political parties if there were public appetite for it. Asked if the climate was right, she was equivocal, saying she was open to having the debate if that was something the public wanted.
National will almost certainly oppose public funding because it would give away the huge funding advantage of the rich favouring National.
Germany, Sweden, Israel, Canada, Australia, Austria and Spain have subsidised party activity for decades. More recently among others France, Japan, Mexico, the Netherlands and Poland have followed suit.
An important consideration in the debate is that the rich are getting richer and are therefore more easily able to wield their influence. In 2005, the Koch brothers had a combined net worth of around $US 9bn – now they’re worth over $100bn. Mike Bloomberg has added $46bn to his fortune during this same period. $20 million doesn’t make much dent in such fortunes.
And while some super rich support the progressive side of politics, polls show the wealthy are invariably socially conservative, which explains why very little money, even from left-of-centre donors, goes to support work that strongly challenges inequality.
(Simon Louisson reported for The Wall Street Journal, AP Dow Jones Newswires, New Zealand Press Association and Reuters and briefly was a political and media adviser to the Green Party.)