Current Loopholes in Party Donations Procedures Open Way for Corruption
By Patrick Brogan
Sick of hearing about elections? Yeah, I feel the same. The problem with the run up to the election and politics in general is that nothing meaningful or concrete is ever said. All we hear is buzzwords and abstract concepts. Seriously, what the fuck is the fiscal space? Don’t answer that. I think something that would interest people is where political parties are getting their money from in this election.
What the Parties Will be Spending
So, what will be spent? I was kind of surprised by how low this figure was. Fine Gael will be spending somewhere in the region of €3 million, by far the most. An estimated €1.7 million of this will be spent by the party and then the remainder will be spent by individual candidates.
Fianna Fail are next with €1.9 million and Sinn Fein and Labour are expected to spend in and around the €1.5 million mark. Before we get onto donations and funding there is something else I want to discuss.
Yes, the same one Denis O’ Brien is trying to silence. Her blog is interesting and touches on a number of topics. The figures next mentioned are from her site. She points out that there is an advantage elected TDs and their parties have over those starting it out and it is tax payer funded. As Catherine writes; “Direct payments under the Electoral Acts paid to all registered political parties which poll 2% or more of the first preference vote at the preceding General Election. This money is awarded to fund electoral activities only. All qualifiying parties recieve a basic set rate of €126,574 per annum. In addition, there is a set pot of annual funding of approximately €4.8 million which is distributed amongst all qualifying parties according to the share of the first preference vote they have received, so Fine Gael receive 36.1% of the fund, Labour 19.5% and so on.”
She then goes on to point out further payments the bigger parties are entitled to. “Payments made under the ‘Parliamentary Activities Allowance‘ scheme (formerly known as the Leaders Allowance). This money cannot be used to fund electoral activities. It is not paid directly to party TDs, instead it is paid to the party. It’s awarded to parties only according to the following formula, and is subject to audit:€64,368 per TD for the first 10 TDs, €51,493 per TD for the next 20 TDs, €25,754 per TD for the remainder of TDs in a parliamentary party. The legislation is written so that even if a TD leaves or is expelled from his or her party, that party keeps receiving the money awarded based on the fact that the TD in question was elected as a party TD.” In short, any new political party looking to change things up is swimming against the stream. If you really wonder why the political culture seems resistant to change this should go some way to explaining it.
Donations can come in many shapes and forms. The Labour Party, in both Ireland and Britain, depend heavily on contributions from the various unions. Not all political donations go to the parties either. Lobby groups like the IFA and Edelman, for example, receive donations which in turn is used to influence decisions in the Dail and Seanad. I contacted both these groups to get their opinions on donations. Neither responded.
The donations political parties receive varies. The bigger parties again getting the larger share. There are very specific guidelines on making donations to political parties although they can become a bit fuzzy as I found out later. The point of this research was to find out if the rich could bankroll political parties and then influence their decisions when they got into government. Or corruption as it is also known. Initially I didn’t think this was possible, but I realise it is very possible and likely on some level.
Most of the political parties make it easy on their websites to make a donation. There is usually a big button that says “donate”, very conspicuous. Most of the political parties were very clear about the regulations donations too, although AAA/PBP and Direct Democracy Ireland didn’t do this which I think is a little naive. I think this leaves them open to criticism in this regard. AAA’s website instead mentioned “being politically persecuted because of our uncompromising opposition to austerity.” Renua also felt the current system “is designed to lock in the status quo, and to make it as difficult as possible for change to take place.”
The rules are seemingly straight forward. No company can make a donation over €200. An individual or private organisation can make a maximum donation of €1,500 unless they register with the Standards in Public Office Commission, then this can be upped to €2,500. The Green Party’s website mentioned they keep a record of any person that gives more than €600. Just in case you don’t believe me; “Donors who give more than €600 to the Party in one calendar year will have their details included in our Donations Statement to the Standards in Public Office Commission.”
Not everybody sees corruption as this straight forward though. There is an interesting article on the McGill website about this very topic. “Clearly, all illegal transactions are not corrupt and, surprisingly, all instances of corruption or bribery are not necessarily illegal. For instance, abusing sick leave, as seems to be common in the public service, is not illegal but is surely a from of corruption. And what about the medics who make sick certs freely available? Conversely, someone in extreme need stealing food in a supermarket to feed their family would be engaged in an illegal but not necessarily corrupt activity. So, a better definition of political corruption is the inappropriate use of power and authority for purposes of individual or group gain at public expense.”
If we look back at the history of this state, it becomes clear we have had a problem with corruption in this country. Neil Collins and Mary O’ Shea wrote on this matter in 2003. “Corruption in political and business life has become a prominent issue in Ireland in recent years” and this led to “a decline in the standing of politicians.” They point out that it is not just a modern problem. “In 1967, George Colley, a leading Fianna Fail deputy, warned of low standards in high places.”
Commentating on the various tribunals that came about because of corruption they said; “Each incident would have been a source of public disquiet on its own, but coming together they seriously undermined the general assumption in Ireland that corruption was not a significant political problem.” This can have wide ranging and disastrous consequences on a society and I refer back to the McGill article again; “In a democracy like ours which is fundamentally based on the trust of the people, an increase even in the perception of corruption can be particularly divisive. Because at its heart, political corruption undermines some of the most basic democratic principles such as: the right of an individual to be treated with fairness, respect and openness by government institutions and officials in regard to all aspects of decision-making. Political corruption corrodes the essential concept of equality of citizens before government and public institutions and, if unchecked, contributes in no small way to the delegitimisation of democratic and institutional systems.”
There are clear examples that this is not just in the past. Primetime made a programme about political corruption just a few months ago and it was very disturbing. The behaviour of Hugh ‘I want loads of money’ McElavaney was particularly so. Here was a man asking for money on tape in a very blatant manner for political favours. Corruption is by no means just confined to Ireland. There was the case of the three Labour ministers in the UK, one of them telling an American lobbyist; “I’m like a cab for hire, for up to £5,000 a day.” How is this allowed to continue? Then we see the likes of independent candidates Maeve Yore and Michael Fitzmaurice on the news telling us their campaigns are funded solely by personal Credit Union loans and Avril Power has turned to crowd funding to get elected. How is this fair? Anybody without a party fundraising machine behind them will find it difficult to get elected.
What the Parties Had to Say
Naturally enough I wanted to hear what the political parties had to say on the matter. I sent most of the main political parties an email asking them four short questions on the issue. Only The Green Party and Labour responded. Both were friendly enough and both felt that their parties had done enough to help curb corruption. I wasn’t totally satisfied with that and felt if I wasn’t a journalist the answers would be somewhat different.
A few days after the emails I came up with an idea. Rather than ring up and being honest, I was going to pretend I was a businessman looking to donate €10,000 to their parties. Dishonesty begets dishonesty. When I rang all the fundraisers were on break. Never make phone calls just after two o’ clock. Over the next few days two of the calls were returned. Both went along the same lines. I told them I had €10,000 to donate. They responded that the maximum an individual can donate is €1,500. Then I asked one is there no away around this? Then it got interesting. I could give all that money to the party if I was willing to give less than €600 to individual candidates. This is something the second fundraiser confirmed.
Anything under €600 does not have to be registered, I mentioned The Green Party’s website were the only party to note this earlier, yet it hadn’t occurred to me then what the implications of this could be. If there was a party running a candidate for every seat in the Dail I could donate €99,600 to that party and nobody would be none the wiser. As it stands, Fine Gael are running the most with 88 candidates, so hypothetically a person could give Fine Gael €55,300 and only declare €2,500 if registered with SIPO. A healthy chunk of change.
Transparency International and SIPO
These are the two watchdogs that are supposed to point out and ultimately stop corruption. According to Transparency, Ireland is ranked 18th in its list of corruption. That’s 18th least and not most corrupt. We are tied with Japan and Hong Kong, whilst Denmark, Finland and Sweden make up the top three. I was hoping that I could get some answers from the Irish chapter of Transparency International, but I never got one. I did ring, but the person best suited to answer these questions was not available. Bummer.
I did contact and eventually get through to SIPO though. I sent them a number of questions and told them that the fundraisers of two major political parties told me that there are loopholes in their system that can be exploited. I get the feeling they are not really bothered as none of these questions were addressed and I received numerous links to pdf files on their procedures. I thought what the fundraisers told would me at least prick their interest. No. It didn’t.
I got the impression that I was sent the links to muddy the waters and send me down a rabbit hole, but I did find something worth noting. One of the reports noted that; “Since the commencement of these provisions of the Act on 1 January 1999 up until 31 December 2007 six individuals only had furnished Donation Statements to the Standards Commission (or to its predecessor the Public Offices Commission).” Only six. I find that hard to believe. Can you guess who one of the six was? “Mr Denis O’Brien — Donation Statement for 2000 in respect of donations made to Fine Gael and its members.” I thought that too.
There was something that looked really serious that just seemed to blow over without any actions from SIPO. “Mr O’Meara’s Donation Statement discloses 18 separate donations totalling €17,635 which were made to Fianna Fáil and its members during 2007.” Now that is well over the maximum €2,500, if registered with SIPO, that any individual is allowed to give. I started to do a bit of digging on O’ Meara. One of the donations, a check of €1,000, was given to Lisa McDonald, a Senator from Co. Wexford. When asked why she didn’t declare this money in her accounts she claimed it was “a gift” from O’ Meara. This is something later corroborated by Mr. O’ Meara. They both said that it wasn’t intended for political purposes even though O’ Meara’s original report claimed that’s exactly what it was for. You can see how easy it is to get around this and shell out large sums of money and why SIPO doesn’t appear to be fit for purpose.
How to Stop it
Obviously this needs to stop. Businessmen will only hand out money if they feel they are getting something in return. An investment if you will. This may seem anti-business, but consider the culture of business people and financiers today. Their bottom line is profit. If this wasn’t the case then there would be more money going to charitable organisations then there is. And what do the politicians get out out of this? Well, we have already seen that politics is heavily reliant on capital and cash. This is why banks are bailed out rather mortgages and politicians look at countries solely as economies rather than societies.
We have all seen the strain this puerile behaviour and short sightedness leads to, but stopping it is another matter. The McGill website brings up an interesting thought; “The ancient Greeks who invented democracy over two and a half thousand years ago were obsessed with keeping their officials legally accountable for their actions while in office. At the end of each year public officials had to stand up before the Assembly of citizens and provide a public account of their actions while in office. Any citizen could speak out and bring a charge against the official, and if the board of auditors (the direct translation of the Greek word in English is ‘the straighteners’) found there was a basis for the accusation, the official was indicted and tried. The Greeks, who knew a thing or two about human nature, were not seeking transparency — they recognised the frailties in human behaviour and put in place clear and robust mechanisms for detecting and punishing political corruption.” This is an interesting thought, but the author, Frank Flannery came up with a more contemporary solution; “We should introduce something along the lines of the European system of ‘investigating magistrates’. This would be a type of investigating officer but with extensive powers to compel witnesses, whose initial proceedings would be held in private (with lawyers present to protect individuals rights) and whose final sessions would be held in public and a report issued. Realistic sanctions for corrupt behaviour should apply in a timely fashion.”
I would suggest something far more simpler. If we took the money out of politics what would that mean? Imagine, all the parties and candidates are given equal time on television and radio and equal column inches in the papers. We could do away with the posters and all candidates are given the same budget for leaflets and fliers. No donations or fundraisers are allowed. This would level the playing field and that way the people with the best messages and solutions are heard. Will this ever happen? Well it’s up to us because the politicians will never change it of their own accord.