Political donations and council election probes

Queensland’s anti-corruption fighter the Crime and Corruption Commission (CCC) is still investigating issues relating to the 2016 local government election held 12 months ago on 19 March 2016.

The Gold Coast City Council was the initial focus of attention with a CCC inquiry announced on 5 September 2016 after 60 reports about political donations published by the Gold Coast Bulletin.

In January 2017 the Courier Mail revealed that Ipswich, Moreton Bay and Logan local government elections were also being investigated.

In February the CCC advised “…we have an ongoing corruption investigation into allegations relating to the 2016 local government election” to a parliamentary committee investigating proposed laws to improve transparency of political donations.

The CCC has provided the Queensland Government with clear advice and recommendations on changes to election laws which will improve transparency and reduce the perception of corruption in local government.

But some of the CCC’s recommendations are being ignored by the Government even though the CCC is insistent that tighter disclosure rules are necessary.

CCC proposes new laws

Government ignores key CCC recommendation

In late 2016 the Queensland Government proposed laws to improve transparency of political donations based on some of the CCC’s recommendations.

Key points in the proposed local government political disclosure laws are that:

• Political donations at the local government levels would have to be reported on-line in close to real time as is now the case for political donations at the State level.
• The threshold for reporting a donation would increase from $200 to $500 to align with gift reporting requirements in the Local Government Act.

But the Government ignored two CCC recommendations.

In its Explanatory Notes to the draft legislation the Government said:

The Government did not endorse that part of recommendation 5 that requires local government candidates to submit an expenditure return in addition to a donations return. The Government responded that the administrative burden of that requirement outweighs any additional public benefit given the vast majority of candidates spend minimal amounts, mainly on advertising.

The Government did not support CCC Report recommendation 6 that the Government strengthen the obligation upon councillors, chief executive officers and senior executive employees (relevant persons) to declare funds, gifts or benefits provided to another entity which could be perceived to provide the relevant person with a benefit.

The Government’s comment that the “vast majority of candidates spend minimal amounts” distracts attention from the fact that a few candidates, the ones running for the job of mayor, spend vast amounts and if they are successful they have enormous power to influence local government decision-making.

Mayors and political donations

To win a mayoral election in a south east Queensland city you need money, lots of it. Mayors are directly elected by all of the city’s voters so to get elected a city wide advertising effort is required which means spending on signs, t-shirts, how to vote cards and other advertising.

Mayors often promote a team or ticket of councillor candidates who they want elected, because they are expected to provide the mayor with voting support in council meetings.

If you are not hugely wealthy then you need other people’s money to become a successful mayoral candidate.

Political donation regulations require the total amount received by local council candidates to be disclosed, eventually. This gives us some idea of how much is invested in mayoral campaigns.

Winning mayors in many of the larger cities around Brisbane get political donations totalling hundreds of thousands of dollars. It seems that to win office, on average you need to raise more than fifty cents for each person living in your city.

For the 2016 local government elections two winning mayors got more than a dollar per head of population in their respective cities. Logan Mayor Luke Smith got $1.22 per person and Ipswich Mayor Paul Pisasale got $1.15 per person.

Redlands Mayor Karen Williams was the high achiever in the 2012 election, getting just under a dollar ($0.92) per person.

Political donations declared by elected mayors

Council	Population	2012 election	2016 election
Gold Coast City	555,608	$340,445	$24,849
Moreton Bay Region	425,482	$255,200	$188,087
Logan City	308,681	$75,000	$377,833
Sunshine Coast Region	287,539	$169,243	$179,353
Ipswich City	193,015	$128,140	$221,080
Toowoomba	163,232	$78,273	$52,722
Redland City	149,989	$138,372	$81,605

Committee ignores CCC on expenditure disclosure

A parliamentary committee recently published a report on its inquiry into the draft local government electoral transparency laws informed by 41 submissions and two public hearings.

In a submission to the inquiry the CCC reiterated its recommendation that the government expand the regulation of donations to include the expenditure of donations and a requirement to account for unspent donations by either only using the funds for campaign purposes or transferring them to a registered charity.

At a Committee public hearing, CCC Executive Director Dianne McFarlane said:

In terms of declaration of campaign expenditure, the CCC considers that full disclosure is important for utmost transparency with respect to the candidate’s election campaign re expenditure. While dedicated bank accounts address the issue to some extent, we continue to maintain the viewthat the disclosure obligations governing donations should be expanded to include the expenditure of those donations. It is all about transparency and the perceptions of corruption. The CCC has recently seen a high level of noncompliance with candidates either not operating a dedicated account or expenditure for the campaign coming from their dedicated account and/or a mixture of other personal accounts. This often happens where candidates say they are self-funded. The reality is that much of the scrutinising of the expenditure of the election campaign comes from members of the public, other candidates and/or the media rather than from oversight bodies such as the QAO, the CCC or the Electoral Commission in Queensland. The scrutiny relies upon transparency of where funds are coming from and where they are being directed to.

While the proposed amendments will provide greater accountability in relation to the receipt and expenditure of funds, it will not in our view give greater transparency to the issue. The CCC is of the view that by showing both sides of the ledger—that is, the candidate’s incoming funds and the expenditures—would give stakeholders greater visibility of the campaign funding. The CCC considers that there is also a strong public interest in seeing how candidates spend their funds—for example, consideration of payments to family members and/or vehicles, electronic devices and the like.

The CCC’s views on this matter were supported by a majority of other submissions.

But in its report the Committee did not even address this matter.

Please explain the rationale for a $500 disclosure threshold

In its report the Committee says:

While the majority of submitters supported increased transparency, submitters presented conflicting views regarding the nature of the amendment to disclosure thresholds. Some submitters supported the amendment as ‘reasonable for candidates and third parties in a local government election’, but a large number of submitters expressed the view that the threshold should remain at $200.

The Committee chose to not make a recommendation on this issue but published a request for the Government to clarify its rationale for aligning the disclosure threshold at $500 rather than $200.

What will State Parliament do?

Queensland has a minority Government which means anything can happen when debate resumes on legislation to improve local government election transparency.

Many councillors and voters will be interested to see what new rules are finally adopted, and the CCC will also be watching closely.

Redlands2030 – 19 March 2017