Lessons in camouflage for political donors

By PAULA OLIVER

The faceless cheques keep sneaking through - despite talk that people have a right to know who is bankrolling political parties. More than half of the money Labour and National will use to fight next month's general election is likely to come from anonymous sources.

The cheques - at the last election one was as high as $570,000 - could make their way to party accounts through trusts. Or they could come from donors who make several small contributions through different sources.

Anonymous donations have long been a conundrum for politicians. In the previous decade many calls have been made for greater transparency. Prime Minister Helen Clark once said sizeable anonymous contributions made her uneasy and that greater transparency was in the public interest.

Back in 1995 New Zealand First leader Winston Peters put forward a private member's bill requiring greater disclosure from the companies that gave cash and from the parties that received it.

The disclosure requirement in the 1996 Electoral Act came into force after a heated debate. The then National Government admitted it was wary of enforced disclosure because it could stop people donating and put state campaign financing on the radar screen. The Labour Opposition proposed lowering the threshold for disclosure to $2500.

Loopholes in the law that eventually passed let parties receive a considerable amount of their 1999 election funding from sources that were impossible to identify.

Parties have to file annual returns to the Electoral Commission detailing contributions and the names of those who donate more than $10,000. But they are allowed to accept anonymous donations providing they record them on their returns.

A flood of donations, including the controversial Fay, Richwhite payment to the National Party investigated by the Serious Fraud Office, scraped into party coffers just before the new law came into effect.

Act leader Richard Prebble says it is nobody's business where the money comes from. In 1999 Act received $805,000 - all from unknown donors. Its 1996 funding came from trusts backed by wealthy supporters such as Craig Heatley, Trevor Farmer and Alan Gibbs.

Labour has received more declared anonymous donations than National, and the amounts are increasing. In 1996 Labour received $225,000 anonymously. Three years later the figure had tripled to $824,000. The National Party declared no anonymous party donations for 1996, but in 1999 the figure was $370,000.

But the party received $570,000 from the New Zealand Free Enterprise Trust. The group, headed by former party president Sir George Chapman, told people to send their cash to the trust if they wanted to give anonymously.

Since the introduction of the disclosure law, both National and Labour have benefited from sizeable donations from companies such as Contact Energy, Natural Gas Corporation, Westpac Trust and Brierley Investments.



Dissatisfaction with the loopholes is widespread. In a submission to a select committee review of MMP in 2000 the Labour Party even suggested a ban on anonymous donations of more than $1000.

When the justice and electoral law select committee released the report of its inquiry into the 1999 general election, committee chairman Tim Barnett noted there was general unease about anonymous donations. The committee planned this year to investigate state financing for political parties. Indeed as far back as 1986 the Royal Commission on the electoral system recommended a form of state funding.

Last year the chief executive of the Electoral Commission, Paul Harris, called for the law to change after a series of donations made through trust accounts hit the headlines.

But the justice and electoral law select committee has been stalled in its attempts to look more closely at changing the system.

When the Government responded to the committee's inquiry it opted against going ahead with the further inquiry in an election year, saying that electoral officials and staff should be concentrating on the election instead.

The issue of anonymous donations is likely to rise again immediately after the election. It will then be the new select committee's decision whether to investigate further.

Many have pointed to Australia as a model New Zealand could follow. Parties there receive a grant for their campaigns, based on their share of the vote at the previous election. That system could cost as much as $6 million each election.

In Britain, the parties must reveal where donations have come from, and some sources cannot donate. Shareholders must approve donations from listed companies, and there are limits on election spending.

British donations are now detailed on a website, although it is not yet as sophisticated as the internet resources dedicated to donations to United States parties. There, you can search by name to see if someone has made a donation, the cash is broken down into industry sectors, and you can see where the money goes.

New Zealand's Electoral Commission says it plans to put donors' names on its website after the election. Just how many names will make it remains to be seen.

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