What can you buy with 5x$10,000?

Written By: - Date published: 11:15 am, October 1st, 2009 - 25 comments
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National has released its proposals for election law. Labour has criticised the $10,000 level above which donations must be disclosed as too high. National Party campaigner David Farrar gets very defensive on Kiwiblog every time people argue for a lower level in the interests of transparency.

Farrar estimates that you need to give at least $50,000 to buy influence. He’s an National Party insider so he probably knows – that may be their going rate.

To those who point out that the National Party only disclosed donations of $130,000 in election year 2008 compared with their spend of $2,200,000, Farrar says that the donations were captured in 2007.

He’s right about that to some extent – Ruth Laugesen wrote in the SST in late 2007 that

The National Party pulled in 11th-hour funding from its secret trusts and anonymous donors in a bid to escape new election campaign finance rules, the Sunday Star-Times has been told.

A former major anonymous donor to the National Party told the Star-Times that party president Judith Kirk approached previous anonymous donors late last year seeking donations before the law took effect on December 20.

Setting aside the fact that Judy Kirk knew the names of “the previous anonymous donors” so they weren’t anonymous after all, this shows that the National Party arranged its affairs to bring in $704,100 in 2007, of which $424,100 came undisclosed from the Waitemata Trust.That Trust did not declare any donation to National in 2008.

But in 2004 and 2005 the Waitemata Trust gave National  a combined total of $1,435,922. There’s a million dollars difference we know nothing about – that buys a lot of influence by Farrar’s standard.

What the $10,000 limit makes it easy to do is to arrange affairs so that many lots of $10,000 can be given by the same person through separate legal entities – they could be companies or trusts set up for the purpose. It would all be perfectly legal. Multiple donors of $50,000 – five lots of $10,000 – could be known to the National Party. We have absolutely no idea how much influence could have been bought this way in 2008.

Bill English has shown that National people do arrange their affairs to gain benefits while claiming that they are legal. What Bill did may or may not be legal but it wasn’t right.

Simon Power has said he is willing to consider changes to make donations more transparent. That would be the right thing to do.

25 comments on “What can you buy with 5x$10,000? ”

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  1. Ianmac 1
    1 October 2009 at 11:41 am

    John A: “Bill English has shown that National people do arrange their affairs to gain benefits while claiming that they are legal.”
    And there lies the key (ha) to future strategies. Every time questions of transparency comes up the Opposition can point to the lack of Bill transparency.

  2. David Farrar 2
    1 October 2009 at 11:44 am

    If the Trust had given $1.4 million of its own money it would be influential. But as it was just a conduit for multiple donations from multiple sources the trust as an entity has no influence. I fully support the law change to stop donations going through a trust without revealing the original source.

    You make a good point about multiple donations from companies owned by the same person, avoiding disclosure. This is what Winston did with his donors.

    It is arguable that the current law now prohibits this as you have to require disclosing who a donation is on behalf of, if you are a conduit. But I agree that a stronger law is needed – something that groups companies and trusts with similar shareholding or control together. I think that concept already exists in other laws. So I am going to advocate for that change, and encourage others to do the same. The more who submit, the more likely of a good result.

    There are some practical difficulties. The onus is on political parties to disclose, and a political party may not know two companies are owned by the same person. Now if we take the Winston example, they obviously knew all the donations were from the Velas as their name was in all the company names. But if the companies were called ABC Ltd and DEF Ltd, a party may be unaware.

    However it is rare a party does not have some idea of who the actual donor is, so I think the law change is worth pursuing and again encourage people to submit in favour of a change so that all donations from closely related persons and companies be grouped together for disclosure purposes.

    • Draco T Bastard 2.1
      1 October 2009 at 12:58 pm

      But as it was just a conduit for multiple donations from multiple sources the trust as an entity has no influence.

      You’re right, the trust doesn’t have any influence but I’m sure all the people who put in to the trust do. The whole reason why they put in to the trust is so that influence would be hidden.

  3. roger nome 3
    1 October 2009 at 12:03 pm

    “If the Trust had given $1.4 million of its own money it would be influential. But as it was just a conduit for multiple donations from multiple sources the trust as an entity has no influence.

    Mr Farrar – all you’ve done is argue a technical point that isn’t germane to the argument – i.e. a distraction. So typical.

    You claim to be for transparency, yet you argue against a disclosure threshold that’s lower than $10,000 – hmmm. Disingenuous much?

  4. mickysavage 4
    1 October 2009 at 12:18 pm

    This is the real reason that National so vociferously opposed the EFA. It had nothing to do with freedom of speech but everything to do with hiding contributors identities.

    I think the law should be amended so that donations over the threshold made at any time should be disclosed.

    I hope that Simon Power considers this as an option.

    Should I hold my breath?

  5. Herodotus 5
    1 October 2009 at 12:19 pm

    I like simple rules that are all enclusive. Why not make the same threashold for individuals AND other bodies, then it does not matter what entity you donate it all gets declared. There should be a min amount to easy disclosure and I think for what it is worth $1000 per election cycle.

  6. felix 6
    1 October 2009 at 12:28 pm

    However it is rare a party does not have some idea of who the actual donor is…

    Indeed, David. Indeed.

    If anything a gross understatement. National knows exactly who donated that mill-and-a-half – who, when, and in what amounts.

    • Mark M 6.1
      1 October 2009 at 12:35 pm

      and Labour knows who donated what to their coffers and Winstons , even though they denied it.
      Labour also knows what promises they made to people in return for money i.e consulships in Monaco , Governor General etc.

      Dont write drivel about one party being the only one using rules for their benefit.
      They all do it.
      Some are just more devious about it than others

      • Pascal's bookie 6.1.1
        1 October 2009 at 1:12 pm

        No Brash, No cash.

      • felix 6.1.2
        1 October 2009 at 1:21 pm

        Labour also knows what promises they made to people in return for money i.e consulships in Monaco , Governor General etc.

        [citation needed]

        Who got a “consulship” in Monaco? Who paid to become Governor General? What the feck are you talking about?

  7. burt 7
    1 October 2009 at 12:36 pm

    So when we were told that Labour spending $800,000 more on electioneering than it was legally allowed to made no difference to the outcome of the election then either we were being told expedient lies or DPF is correct that even $50,000 isn’t going to make a lot of difference.

    • Armchair Critic 7.1
      1 October 2009 at 12:51 pm

      No difference compared to the GST that the ex-governor of the RB “forgot”, and the million or so that the EB spent on National’s behalf?
      I thought you RWNJs were all for giving the full story, burt – is it just forgetfulness on your part that you consistently omit things, or is it deliberate?

    • felix 7.2
      1 October 2009 at 12:53 pm

      Come on burt, you can do better than that.

      This is about a person or persons buying policy influence by giving large amounts of money to a political party.

      How a party spends that money to attract votes is an important but very different issue.

      • burt 7.2.1
        1 October 2009 at 1:00 pm

        I take you are talking about situations like undeclared Vella family donations to NZ1 which we never knew about till years after the tax cuts for the racing industry ?

        • felix 7.2.1.1
          1 October 2009 at 1:19 pm

          Absolutely. Any and all.

          But again, that has nothing to do with parties spending on electioneering.

          It’s about donations to parties in exchange for influence.

          Like the payments which saw ACT morph from “The Liberal Party” into the “The Death-Penalty / Anti-Science Party”.

    • burt 7.3
      1 October 2009 at 12:56 pm

      Armchair Critic

      Yes the $100,000 of “ahem” forgoten GST is indeed valid in this context. Cheers for bringing it up.

      I picked the $800,000 because it was the biggest amount and because it stood out as being similar to the reported amount spent by the EB’s that was a dramatic assult on democracy.

      • outofbed 7.3.1
        1 October 2009 at 1:03 pm

        Burt is like a stuck record
        Can you moderate him ?
        It’s so tiresome

      • burt 7.3.2
        1 October 2009 at 1:30 pm

        Armchair Critic is right, I’m making it really hard to re-writing history when I keep reminding people of the context associated with the decisions of the time.

      • Daveosaurus 7.3.3
        1 October 2009 at 6:13 pm

        I hear that $800,000 isn’t going to be the biggest amount for long… there was a report in the paper a few days ago about the Government planning to retrospectively validate away close to a million dollars’ worth of DOC liabilities. I’m surprised you aren’t spitting tacks about that.

        • burt 7.3.3.1
          1 October 2009 at 11:22 pm

          Daveosaurus

          I’m also hoping much much more than $800,000 will be retrospectively validated in the next budget for aid to Samoa.

  8. John A 8
    1 October 2009 at 2:26 pm

    @ David Farrar. Ruth Laugesen dealt with the question of the influence of the Waitemata Trust in the article cited. “The biggest of National’s fronts for campaign fundings is the Waitemata Trust, which last election pumped $1.4m of donations into the party’s coffers. The trust’s only identifiable face is accountant Robert Browne, whose firm, MH&K, administers the trust’s books.

    Browne is a long-standing business associate of National campaign strategist Murray McCully and is a former National appointee as chairman of Transit New Zealand.”

    That’s probably the source of McCully’s vaunted influence as well.

    There are indeed practical problems with any related parties approaches.

    @Herodotus. I agree; and that’s the way to fix the practical problems.

  9. Herbert 9
    1 October 2009 at 2:32 pm

    Why have a threshold for disclosure at all? Why not just disclose?

    • Herodotus 9.1
      1 October 2009 at 2:50 pm

      Practicability, otherwise imagine the paperwork.
      The cake stalls that NZ1 will initiate. What do they record, the person who baked the cake for free or the giver of the donation in return for the cake?
      Have some pity on the respective treasurers of al political parties !!

      • Herbert 9.1.1
        1 October 2009 at 3:31 pm

        I wonder if the cakestall analogy is a distraction? I would not suggest disclosing either the baker or the buyer but only the profit from the cakestall. No doubt the treasurers are already recording cakestall profits and I don’t see the problem with having the books open to public view. Unusually profitable cakestalls would show up readily enough, I suspect. On the otherhand, the ability to hide behind trusts and $1-less-than-the-threshold donations would disappear.

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