We’re likely to see movement this parliamentary term to amend the Commonwealth’s shambolic and near-useless political donation disclosure laws — but the big parties are already moving to ensure their business models are protected from any changes.
Labor’s Sam Dastyari is only the latest politician to have been found accepting donations from foreign sources, but both sides now have a literally rich history of taking donations both from Chinese business figures — whose contributions usually come with an extra zero or two compared with local business donors — and the Chinese-Australian business community. Helpfully, Chinese-Australian businessman Huang Xiangmo, who is closely aligned with the Beijing regime, has recently complained about not getting enough in return from his big donations to both sides — thereby illustrating that rare is the donor who offers money to politicians without an expectation of something in return. Indeed, the ABC revealed today ASIO took the step of warning the major parties about accepting donations from Beijing-linked donors.
As Crikey noted yesterday, complaints from Liberals about foreign donations ring rather hollow given they voted against Labor’s proposed ban on foreign donations in 2009. At that time, Labor led the Chinese fundraising stakes fairly easily, especially with Kevin Rudd’s background, but the Liberals have since caught up and have been tapping the lucrative fundraising potential of Chinese businesses as effectively as their opponents.
Dastyari’s troubles will add to the growing pressure on both sides for reform, especially with the ongoing problems of the NSW Liberal Party and the Free Enterprise Foundation (hilariously, during the election campaign, Arthur Sinodinos promised to look at donations reform post-election; hopefully he hasn’t forgotten by now), the Parakeelia affair and the growing media interest in donations — which has been accompanied by an understanding of just how ridiculous the Commonwealth annual disclosure system is.
But both sides at the state and federal level have been moving to future-proof their fundraising models to ensure any reforms that expand disclosure and transparency are stymied. The strategy is to rely much more heavily on fundraising bodies that act as a buffer between donor and recipient. As the Free Enterprise Foundation model illustrates, this may help obscure who is contributing to whom. But the real benefit is to delink donations from individual events and attendees. Increasingly, parties are pressuring donors not to donate directly, or to buy access to individual fundraising events, but to purchase a membership of a fundraising body such as Progressive Business Association or the Nationals Policy Forum, which provides access to multiple events where donors can mingle with senior party figures without any direct link being made between a donor and a politician they may want to lobby. Becoming a “member” of a political party fundraising entity looks more innocuous than buying a seat at a particular fundraiser. It also delivers the parties a bigger up-front sum.
It also has the benefit that donors aren’t required under Commonwealth law to report such contributions — they’ve purchased a good or service from the party, rather than made a donation to it. The parties still have to report the contribution, but it becomes very hard to establish what donors attended individual fundraisers (donors must include the data of their donation in their return), and without donor returns there’s no way to check if a party branch has failed to include a disclosure, which they’ve been known to do. Just ask Bill Shorten.
The growth of such bodies is why, increasingly, political party returns are dominated by the line item “Other receipt” or “Subscription” and outright donations are becoming scarcer. “Other receipt” is especially useful because any payment of any kind other than a donation — such as a tax refund, bank interest or a legitimate asset sale — gets lumped into that category, further reducing the clarity of disclosure.
Unless reforms to donation laws impose much stricter requirements for disclosing memberships of fundraising vehicles, the parties will continue to move more and more of their fundraising into that space — and companies and individuals who prefer to stay out of the donations spotlight will follow them.