Transparency in local body elections

The decision this week of Local Government Minister David Carter to request advice from officials on funding rules for local body elections is welcome.

If nothing else, the publicity surrounding the John Banks-Kim Dotcom donations affair appears to show the current law - as it pertains to anonymous donations - is something of an ass.

For there is no doubt that Mr Banks' campaign benefited to the tune of $50,000 from the largesse of the troubled cyber entrepreneur - in the form of two cheques of $25,000 each.

Evidence of this, including photocopies of the cheques themselves, has been published and widely disseminated with no suggestion these are fakes; nor does it seem likely Mr Dotcom invented his donation discussions with Mr Banks, although the recollections of those present at the time may differ as to the detail.

But while the Local Electoral Act 2001 stipulates that any donation over $1000 must be declared, and if the source of the donation is known, then that, too, must be advised on the funding returns, the way the Act is worded leaves scope for what might be called "plausible deniability".

Section 5 of the Act, addressing interpretation, states that "unless the context requires otherwise, - anonymous, in relation to an electoral donation (as defined in section 104), means a donation that is made in such a way that the candidate concerned does not know who made the donation".

The Banks mayoral campaign funding arrangements have been subject to complaint and there is a police investigation under way as to their propriety.

In the meantime, it has been pointed out by commentators, including University of Otago Professor of Law Andrew Geddis, that Mr Banks may well have solicited funds from Mr Dotcom, he may even have instructed him on how the donations might be best presented, but if he did not personally receive the cheques, nor knew precisely which $25,000 donation came from which of the donors he had approached - having distanced himself from the reconciliations process - then under the legislation as it is currently configured, technically, he can legitimately declare the donations as "anonymous".

This is contrary to the spirit of the law and contradictory to the rationale for having disclosure rules on donations to political candidates.

Broadly speaking, the trajectory of these is towards increasing transparency so that any notion of influence-peddling, not to say corruption, can be dispelled or at least subjected to rigorous scrutiny.

While opponents who fought bitterly against it will be loath to admit it, Labour's reviled Electoral Finance Act - fine-tuned by the present Government - did much to open up secret funding arrangements in national politics.

Any donors of funds over $1500 to political parties must now be identified and declared in funding returns.

The trusts through which large donations were "laundered" so as to remove traces as to their origins equally can now no longer be deployed.

And while individuals or organisations determined to remain anonymous yet wanting to donate large amounts of money to a particular party can do so by making multiple donations of less than $1500, the rules have been much tightened.

Similar constraints should be applied to local body campaign funding as a matter of principle.

(The present Mayor of Auckland, Len Brown, had anonymous funds for his campaign funnelled through a trust.)

That this appears to be increasingly supported across the political spectrum coincides with, in some cases, the growing power of local councils.

The Auckland super city is a case in point. Mr Brown presides over a council with a vast annual budget and an enormous "electorate".

The political influence of the office is now acute. As other cities and regions consider the advantages, or otherwise, of amalgamation, electoral funding assumes significance of a different order.

Regardless, healthy local democracy requires transparency. All politicians require funds to mount their campaigns and to help disseminate their views and policies.

That is necessary and accepted.

But in an era of enhanced information flow and availability, catalysed at least in part by digital and social media, large "anonymous" election donations are an anomaly which must be addressed.


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