Can party donation scams be prevented?

I don’t think we will ever get a perfect way of dealing with political party donations, but there is scope to do much better. The Electoral Commission and SFO actually taking serious action over alleged breaches is a start.

NZ First donations are under increased scrutiny and are currently being investigated by the SFO. Jami-Lee Ross is being prosecuted, Lianne Dalziel, Phil Goff are under SFO investigation over donations.

National is linked to the Ross and three other prosecutions (the donations were made to the National Party).

Labour has been accused of questionable donation practices

Four out of every five dollars donated to big parties in secret, sparking new push for transparency

Smaller parties like the Greens publicly disclose who provided most of their funding, but the big parties are secretive. 83 per cent ($8.7m over six years) of the money donated to National is from anonymous donors, and 80 per cent ($2.8m) of that donated to Labour.

The worst offender is NZ First: Most years, it allows every single one of its donors to remain secret.

https://www.stuff.co.nz/national/politics/95945991/new-push-for-transparency-with-four-out-of-every-five-dollars-donated-to-big-parties-given-secretly

Artworks used to funnel secret donors’ contributions to the Labour Party

The Labour Party is hiding tens of thousands of dollars in donations behind over-inflated art auctions – and naming the artists as donors instead of the secret individuals handing over the big bucks.

The artists had no idea the party was naming them as the donors – they never saw a cent of the money. They say their works are auctioned off at well above market value to wealthy benefactors who want to keep their support for the party secret.

Labour says the practice complies with electoral rules.

https://www.stuff.co.nz/national/politics/95891686/artworks-used-to-funnel-secret-donors-contributions-to-the-labour-party

That was in 2017.

Andrea Vance suggests: Keep politicians in the dark over election donations

Politicians write the rules they so blatantly flout. The parties manage their own accounts and the cash that flows into them.

Now it’s pretty obvious they can’t be trusted, it’s time to take away that power and ban them from accepting donations directly.

The only way to transparency is for an independent body to handle and process the donations, which would not be disclosed publicly or to the party.

That way the donor maintains their anonymity and privacy – and the law-makers cannot be in anyone’s pocket.

The perception of influence and corruption would also be removed.

If donations remain allowed then this is one way of tidying things up a bit, but it wouldn’t prevent what NZ First appear to have done, having donations paid into a separate NZ First Foundation and paying party expenses directly from the Foundation.

Would channelling donations through an independent body (the Electoral Commission has been one suggestion) mean that limiting the size of donations wouldn’t be necessary?

An independent handler would impact on all parties (especially the Greens) using donations drives as a part of  member recruitment and communications.

It wouldn’t stop donors advising parties they had donated certain amounts to the party via the independent handler.

I don’t think there are any simple solutions to this.

The Electoral Commission and the SFO actually investigating and prosecuting will help, electoral rule had appeared to have been broken with impunity in the past.

We can’t trust parties to set their own rules on this, they have proven to be too self-interested.

But I think there should still be some sort of independent review of how donations are handled. Perhaps by an independent panel of experts, but this could be informed by some sort of ‘people’s panel’.

Leave a comment

5 Comments

  1. Zedd

     /  1st March 2020

    what can be expected.. in a capitalist society where; majority are ‘looking after their interests’ ?? :/

    Reply
  2. Duker

     /  1st March 2020

    Often the reason for the ‘donation by buying something’ scam is used is to make it tax deductible, when ordinary donations arent.
    Key used to run dinner nights at Antoines where the dinner might cost $5000 ? per couple, and the entire night would be declared as from the owner of the restaurant for $75000. The donors just put it down as ‘hospitality expense’ and get a tax deduction. Similar for when Key would auction ‘ a round of golf with him’.

    The law should be changed to make a donation the primary purpose, rather than using the auction or dinner or some other event tied in with money./

    Reply
    • Kitty Catkin

       /  1st March 2020

      I don’t object to that as long as it’s open, which these obviously were and everyone knows what’s happening. It’s only a scam when it’s hidden. I have been to fundraisers, like when a party rents out a cinema for an evening.

      Reply
      • Duker

         /  1st March 2020

        yes but the donation per head for that is quite small.
        A night out at Antoines alone might $150 + per head and then the donation is in the $1000s.

        I think Nats Cabinet club works along similar lines , an ordinary meal is provided some speakers and a talk and handshakes from the main man/woman and you have $500 gone. Again goes on the accounts as hospitality as you meet fellow national party supporters.

        Reply

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