Power Play: Calls for a re-examination of the laws governing party election contributions are a cop-out.
The new Serious Fraud Office allegations are a reflection of the players, not the scheme.
This is the third round of allegations relating to campaign contributions in recent years; there are also lawsuits pending in the courts against National and New Zealand First.
These most recent ones concern a $34,840 contribution to the Labour Party in March 2017. Six people face 12 charges: a social worker, an attorney, two traders, a civil official, and a site manager. They are not being called for the time being because they may attempt name suppression.
However, the SFO mentioned that none of them are present or former Labour Party leaders, nor are they sitting MPs.
“This isn’t a good environment for anyone, for no political party, but nor for New Zealanders, they want to have confidence in the system so let’s look at the law.” Prime Minister and Labour leader Jacinda Ardern replied.
Instead of pondering if the laws should be tightened, party officials should be inspecting their own house – obviously, the SFO is paying close attention to how parties handle contributions – and one activity in particular.
Under the rules, a party has to declare the names and addresses of people who donate more than $15,000 within a year. Even if they make several smaller donations through the year, as soon as the amount tops $15,000, that donor has to be identified.
The SFO also charged the organisation associated with the Labour Party donation with presenting five names in order to “create the illusion” of five contributions totalling less than $15,000 in order to “conceal the full amount of the donation and the identity of the actual donor”
Does this sound familiar? Four men are facing charges in relation to a National Party contribution, including former MP Jami-Lee Ross, as well as two $100,000 contributions containing related claims.
The SFO accused them of using a “fraudulent trick or device” to divide the contributions into smaller amounts less than $15,000, which were then deposited into the bank accounts of several separate individuals before being paid into a National Party electorate account.
The men have both pleaded not guilty. Labour and National all claim to have observed the legislation.
Although these are all accusations, the complaints show a trend and an intent to arrange contribution transfers in such a manner that they do not require transparency.
That would suggest a good understanding and knowledge of the rules, rather than offences being committed in ignorance.
Politicians’ ‘default position’
It’s a default position of political parties to call for a review of the rules when trouble arises.
That’s resulted in changes to the donations regime over the years, the most notable removing the ability to use blind trusts to funnel money anonymously to political parties and making third party donations more transparent.
Some smaller parties claim ignorance or lack of political knowledge when they suddenly have to deal with donations and the disclosure regime, but National and Labour have no such excuse.
They are both well-known parties with a wealth of experience and capability. Both have been tasked with running the government, so they should be able to administer their donations competently.
What would be interesting is the dissection of how these major political parties treat contributions, what goes on behind the scenes. Since the SFO has broad authority, the practises of these groups will be revealed through the legal proceedings while the complaints against the persons are pursued.
A legal case against the New Zealand First Foundation is also on the horizon, which will shed light on how New Zealand First, which is no longer in Parliament, handled its supporters and contributions.
When the hearings were launched, all political parties promised to completely cooperate, but the amount of legal and media pressure that will be brought to bear will make some people uncomfortable.
The Mori Party has also been forwarded to the SFO for an audit in connection with contributions of more than $300,000.
All of this erodes public trust. To have cases linked to National, Labour and New Zealand First, either before the courts or heading for them, is an indictment on the politicians and those parties, not the system.
The public would hope the fact the SFO is taking a very active interest in this area might encourage them to change the way they act, instead of changing the system.