"peek a boo" - How They Hide The Loot From You.

CONCEALING THE ORIGINAL SOURCE OF DONATIONS

It is absurd that after a decade of the internet era there is still no legislation requiring immediate and full disclosure of donations, particularly the bigger donations. But there is a reason for this. A leading academic author in the field of Australian electoral law has pointed out that our so called funding disclosure laws are "ineffectual by design".* That is, both Labor and Liberal governments have created disclosure laws that are intentionally set up and administered in a way that aids the concealment of who are the original sources of big donations. It is a legalized systemic scam of national proportions.

The major parties have also created "front" organisations to act as "intermediaries" in fund-raising. The operation of these intermediaries effectively hinders the tracking of who was the original source of donations. The end result is that the intermediary and the party merely declare the total amount of the fund-raiser. Revenue from an array of fundraising dinners, "roundtables" and "forums" pull in huge amounts for both the Liberals and the ALP, yet disclosure is often lax. The "parties sometimes treat payments as ordinary receipts, and the payers often treat them as business expenses rather than donations."**

The ALP has utilised a professional fundraising organisation called Markson Sparks. This organisation held events that included auctions that raised hundreds of thousands of dollars which was then channeled to the ALP. There were reports of donors paying huge sums for worthless "auction" items. Being at arms length from the ALP and not being legally defined an ALP "associated entity", neither the Markson Sparks nor the ALP were required to detail who were the original donors and how much they paid.

Probably the most notorious case of an associated entity not declaring who its donors were was a trust fund set up by Tony Abbott, hilariously called "People For Honest Politics". It was basically set up as a political attack fund to mount legal action against Pauline Hanson and the One Nation Party. Ironically, their "honesty" did not extend to as far as coming clean with the Australian people as to who was actually funding "People For Honest Politics". The pathetically unrigorous policing by the Australian Electoral Commission (AEC) and the weakness of the legislation was revealed by the AEC's acceptance of Minister Abbott's assertion that "People For Honest Politics" was not an associated entity of the Liberal Party and therefore there was no need for a disclosure of where the money was coming from.

Attempts to hold the AEC to public account over its lack of action on the "People For Honest Politics" issue led one well known investigative journalist, Margo Kingston, to conclude "The AEC is not administering the Electoral act in accordance with its goals or its duty. It's part of the closed shop of the big parties. It's on their side, not the peoples." ***

What Australia desperately needs is a well funded independent Electoral Commission with real teeth to follow the money trail and ensure proper and full disclosure. The AEC is currently light years from playing that role.

The fines for breaching the federal disclosure laws are strangely low and are not an effective deterrent;

For failure to make timely returns, $5,000 for party agents, $1,000 for others.
For incomplete returns - $1,000.
For intentionally misleading returns - $10,000 for party agents, $5,000 for others.

The AEC is coy about what actions it may have taken, but prosecutions at least in the last decade are unheard of.

But lately, even the Australian Electoral Commission is expressing concerns about the system it oversees;

"In the view of the AEC, if the disclosure provisions in the Electoral Act are to deliver transparency in the financial relationships of political parties, candidates and others associated with them, then a comprehensive review of the legislation and the principles underpinning the legislation is required. There is a need to move beyond the "ad hoc" pattern of the last 20 years of introducing amendments as individual deficiencies are identified."
(2004 submission from the AEC to the joint standing committee on electoral matters - Inquiry into Disclosure of Donations)

To cover itself, the federal parliament has been running an "inquiry" into donation disclosure for over 5 yearsÉ..but with still no final report expected anytime soon, if ever. This is the typical Machiavellian method of "shelving" an issue. It suits both the major parties.

Whatever the case, as another academic has concluded, "No matter how perfect the disclosure laws are, if the sale of political favors is accepted as part of the "commerce" of politics, then politics collapses into a business, not a public endeavor."****

The point here is that by just ensuring the full disclosure of all donations will not banish corruption or undue influence. One answer to this problem is to put an upper limit on what any single donor can contribute. - $2,000 is increasingly being suggested as an appropriate upper limit.

A funding and disclosure legislative framework surely should aim to ensure that no wealthy individuals or institutions have, because of their donation, an undue power or access in the political process.

Of course, the donors and the politicians almost always deny there is a causal link between donations and preferential treatment. Blatant prima facie corruption is hard to prove. But in the end, an understanding of human nature and the nature of politics should bring any reasonable person to the conclusion that links between big donations and preferential treatment is inevitable.

The time is well overdue for these issues to be publicly resolved. Indeed, academic observers are worryingly concluding that the practice of big donations to political parties is now become "normalized" within Australian political culture and that big donations are now seen as being unexceptional, even when equally huge donations are made to both parties by the same donor. It seems the Australian public have been shocked so many times by the revelations of these donations that they have now become anaesthetized to the serious threat that they pose. Democracy Watch believes it is vital that the Australian public are awakened to the fact that what is happening is not "OK". This is not how a mature and decent democracy should function.

*Joo-Cheong Tham in Patemore. G 2001 p78-80 and p123-124.)

**Dr Graeme Orr. Griffith University Law School p114 2005

***Margo Kingston. AEC claims secret political donations no business of voters. September 2, 2003. Web-diary

****Dr Graeme Orr. Griffith University Law School p114 2005

***** Joo-Cheong Tham in Patemore. G 2001 p78-80 and p123-124.)