Election probe to look into secret donations

By JOHN ARMSTRONG Political Editor

Parliament's inquiry into last year's election will investigate tightening the law on disclosure in the wake of large donations from anonymous sources to Labour and National campaign coffers.

The Weekend Herald revealed that TV3 had donated $25,000 to both parties before last year's election.

Smaller parties have protested at the television company's largesse, saying it "skews political debate."

Prime Minister Helen Clark said yesterday that the large unsourced sums listed with the Electoral Commission raised questions about transparency and had left her feeling uneasy.

"Clearly we don't get full reporting."

Since 1997, parties have been required to declare national campaign contributions of more than $10,000. But they are allowed to accept anonymous donations as long as the sums are recorded on their post-election returns.

Returns filed with the commission last week show most of Labour's donations came from anonymous sources. Of the $1.1 million in campaign contributions to the party's head office, nearly $825,000 was from unknown donors.

The party's biggest donors were all anonymous. The biggest was $195,000 and several were over $100,000.

National declared anonymous donations of $370,000 out of a total of $1.2 million. But National's largest sourced donation was $570,000 from the New Zealand Free Enterprise Trust, a right-wing think-tank widely seen as a front organisation allowing the party to conceal its donors' identities.

Helen Clark expected Parliament's justice and electoral law select committee to examine the use of loopholes and seek advice from the Ministry of Justice on closing them. The committee starts its standard inquiry into the running of last year's election on Wednesday.

Committee chairman Tim Barnett said the public had a right to expect the law to operate effectively. He expected that the disclosure of donations would be a priority for the inquiry.

Saying greater transparency was in the public interest, Helen Clark agreed that one option would be to require companies to disclose donations above a certain dollar value in their annual reports.

But she warned that tightening the law could result in parties getting fewer donations. That would force state funding onto the agenda.

And trying to close loopholes was like trying to find the proverbial needle in a haystack. "It is a never-ending battle."

Mr Barnett said experience from the United States was that the whole area of election donations could be "extremely scandalous" unless it was watertight.

"If this is an early warning, then it is incumbent on us to do something about it."

The Alliance's Matt Robson said his party would discuss the TV3 donations at its caucus.

"I would be surprised if they thought it was a good idea."

Green Party co-leader Jeanette Fitzsimons also attacked the contributions.

"I feel very uneasy about that sort of money passing between the media and political parties, because elections depend so crucially on the way the media report them.

"And, of course, party policies affect broadcasting media quite centrally."

Jeanette Fitzsimons said that before the televised leaders' debate - which excluded the Greens - her party had reached 4 per cent in the opinion polls.

But after their exclusion they dropped to 1 per cent and had a huge struggle to pull their way back up.

The media needed political parties for stories and political parties needed the media to get their messages across, she said.

Act leader Richard Prebble said the contributions had compromised TV3 as a news-gathering organisation.

For a media organisation to fund all political parties as a good corporate citizen was defensible, "but to give to just two parties ... leaves them in an impossible position when they attempt to tell us that they cover election campaigns in an unbiased fashion."


Who is filling the coffers


Labour received sourced donations from the following: Engineers Union ($80,000), Lion Breweries ($50,000), Natural Gas Corporation ($30,000), Brierley Investments, TV3 Network Services ($25,000), Saturn Communications, TransAlta ($20,000), AMP, Clear Communications ($15,000), and Tower Ltd ($11,000).

National's named donors were: NZ Free Enterprise Trust ($570,000), Brierley Investments ($50,000), Natural Gas Corp ($30,000), the Wellington Businesshouse Committee ($26,000), Barry Brill, Sir Roger Bhatnagar, and TransAlta ($25,000), Saturn Communications, Isaac Construction ($20,000), Clear Communications, Pub Charity Trust, Giltrap Group Holdings ($15,000), and Tower Ltd ($11,000.)