liberation

Fixing political finance with a civil society approach

I’d like to think that Jane Clifton of the Listener has been reading my writings on political finance and state regulation of it, as her latest Listener Politics column puts forward very nicely my basic argument that state regulation of money in politics never actually works very well, and that we are better off with a civil society approach to ‘regulating’ the income and expenditure of political parties and interest groups. Of course, I doubt that Clifton has read anything I’ve written, and is instead actually just conveying what is actually a very common sense approach that should be obvious to just about anyone – even if very few politicians seem to comprehend it. [Read more below]

The impact of the Electoral Finance Act on third parties in the 2008 New Zealand election campaign

Throughout the New Zealand Labour Government’s recent three terms in office (1999-2008), issues of political finance were particularly controversial, culminating with the Electoral Finance Act 2007 (EFA) being widely debated as either a cure or poison for fair elections. But just how much impact did the now-defunct EFA have on the actual 2008 general election campaign? In particularly, how did the new regime impact on the electoral participation of civil society via its various interest groups (now commonly referred to in political finance discussions as ‘third parties’)? Did the predictions made in 2007 that the EFA would put ‘democracy under threat’ come to pass?  Certainly during the campaign, many commentators noted that third party organisations were having less input into the campaign debate. Opponents of the EFA  complained that the new rules were stymieing freedom of expression and political debate. Some talked of a ‘litigious bomb waiting to go off’ (Otago Daily Times 2008), while other commentators declared that ‘The EFA’s dampening effect on the current election campaign is so serious, it is anti-democratic’ (Clark and Nicholls 2008). Furthermore, just nine weeks out from election day, the head of the Electoral Commission declared that the uncertainty resulting from the legislation was having a ‘chilling effect on the extent and type of participation in political and campaign activity’ (Electoral Commission 2008a). The commission also made a number of controversial decisions during the campaign that suggested the EFA was indeed affecting the campaign. There were minor controversies about the legality of everything from Tui beer billboard advertising to Act Party leader Rodney Hide’s yellow jacket, with a host of other legal rulings and court cases highlighting the legal uncertainty and complexity of the EFA. Yet it was possibly in the area of civil society’s organised interest groups such as trade unions, sector groups, and business associations that the impact was most strongly felt. Below is a draft paper I've written on this issue, which I'm presenting at an academic conference at the end of September. This paper weighs up the evidence, pinpoints where the EFA had the most impact on civil society, and details some of the Electoral Commission’s more controversial and salient decisions. As usual I welcome your feedback and corrections via email or as comments at the end. [Read more below]

David Lange's expose of Philip Field's dodgy political finance

The conviction of ex-MP Philip Field for corruption, reminded me that David Lange had once regarded Field as unscrupulous in terms of political finance back in the 1990s. In a remarkably unusual attack on a fellow party member, Lange wrote the following lengthy expose of Field in one of his newspaper columns, suggesting that he was guilty of illegal electoral practices:

Mr Field returned expenditure of $14,996, accounting for his spending on posters, pamphlets, hoardings and signwriting. He did not declare the costs of advertising two campaign fundraising socials and a campaign rally, or the costs of the food, drink and entertainment which were offered at these events. He made no allowance for the running costs of his campaign van, or for its purchase price or its depreciation.  On the other side of the ledger, he returned a donation of $5000 from the Otara Labour Party Trust, but did not disclose another sum of $15,000 given to him by the same trust.  These matters were referred to the Electoral Office, which referred them to Mr Field. After considering his reply, the Electoral Office decided that it would not refer Mr Field’s return to the police, because it was not satisfied that any offence against the Electoral Act had been committed.  The act broadly has it that campaign spending need be returned if it relates exclusively to the campaign for the return of the candidate (spending which relates to the return of two or more candidates is to be apportioned). Mr Field told the Electoral Office that the advertising left out of his return did not relate exclusively to his campaign.  "The fund-raising social," he declared, "was held to raise funds which were used for a variety of purposes including for the Labour Party as a whole. Proceeds also went towards funding the Mangere Labour Party organisation, including its local committee activities, meetings and levies payable to the party’s head office."  According to the Electoral Office, the undeclared advertising for the campaign rally promoted not only Mr Field’s candidacy but also the launch of Labour’s Pacific Island policy, noting that in respect of the campaign social, the member had stated that this "was also not a function exclusively related to the campaign for my return as the candidate for Mangere".  The costs of the vehicle, Mr Field advised, were not declared because it was purchased while he was not only candidate for Mangere but MP for Otara, and needed the van for his electoral work as well as his election campaign (David Lange, ‘Law Made in an Age When MPs Did Not Behave like Tax Laywers’, Press, p.11, 29 July 1997).

In this, Lange alerted us to the potentially corrupt nature of Field, but also to the difficulties in policing New Zealand’s political finance regulations. The Electoral Commission has very few powers to investigate discrepancies or to check that the parties are following the rules. The system essentially relies on the honesty of the parties and politicians. Lange showed that the Electoral Commission must take the parties at their word on any regulation inconsistencies and problems.

(I see that Poneke has also drawn attention to Lange's disputes with Field).

Review of New Zealand politics in 2008

Every year the European Journal of Political Research publishes a political date yearbook which gives a review of politics in a number of western countries. I contribute the section on New Zealand to the journal – last year’s publication on New Zealand politics in 2007 can be read here. Below is the first draft of my review of New Zealand politics in 2008. It still requires a bit of abridging and editing, and as always I’m interested in feedback and suggestions, which you can leave in the comments section or email me (edwards.bryceATgmail.com). [Read more below]

Apology to Assoc Prof Andrew Geddis

Recently I wrote a blog post that sought to analyse the now-defunct electoral finance review process that was launched in 2008 after having been initiated by the Labour and Green parties. As well as causing a very healthy and robust discussion throughout the last week while I was on holiday, my analysis was also taken to task by Associate Professor Andrew Geddis of the Law faculty of the University of Otago, primarily because I failed to extend to him the courtesy of discussing my analysis with him before putting in on my blog. In the following blog post I therefore offer a total apology to Andrew and attempt to clear up some of the issues from the original blog post. [Read more below]

Axing the electoral & political finance review

Alongside axing the awful Electoral Finance Act (EFA), the new National Government has also axed the supposedly more credible electoral and political finance review, which included a so-called Expert Panel and Citizens’ Forum. This blog post examines what was behind the review, and why the exercise was always going to be more about window dressing than democracy. Although expert panels and citizens’ forums are not without merit, when compared to similar exercises carried out elsewhere, the planned Labour-Green model for New Zealand was designed to be incredibly weak and undemocratic. What’s more the process by which it was brought about was just as poor as the one that produced the EFA. The National Party campaigned on axing both of these, and is now well within its right to do that. [Read more below]

[political finance] The inequitable allocation of TV advertising

The television election advertising for the political parties have just started screening. Once again, the inequality of the system is made obvious, with those parties that least need the exposure being given the vast bulk of public money to advertise what the public already knows, and those parties that are struggling to get their message heard are marginalised by the Electoral Commission. By choosing to reward Labour and National with a million dollars each and plenty of broadcast time, but only giving a few crumbs to the parties outside Parliament, the Electoral Commission has once again shown why they are part of the problem rather than the solution to issues of political finance and today’s uneven electoral playing field. A truly democratic and fair system would have seen the advertising monies and broadcast time divided up evenly, as it happens in many other countries. Instead our election campaign continues to operate under a cartel model of political finance designed by Labour and National. [Read more below]

State servants and democracy

There is increasing awareness that the Electoral Finance Act is anti-democratic. However, many other elements of New Zealand’s electoral law are also problematic and need to be addressed. The Electoral Act 1993 and Broadcasting Act 1989 have all sorts of very important rules that decrease electoral participation, democracy, and generally infringe civil liberties. The barriers placed on state servants standing in elections is finally getting some attention. Today’s NZ Herald opinion piece by Pat Baskett entitled Election-time rules for state servants mildly threatening provides a decent flag in the air. Baskett argues that the directions given to state servants (ie teachers, defence personnel, government department workers, police, etc) about standing in elections, joining political parties, expounding a party line, or having a political bumper sticker on your car are rather draconian. [Read more below]

[political finance] Glenngate 3: Mike Williams’ corporate deals

In 2005, Labour Party President and chief-fundraiser Mike Williams was gloating in the media about Labour's new billionaire financial friend Owen Glenn. Three years later he was handing in his resignation due to his public deception about a political loan from Glenn. Not only has the ‘Glenngate’ scandal raised some fascinating issues about Labour and political finance but also about Mike Williams’ role in helping keep Labour operating as a ‘corporate party’. [Read more below]

[political finance] Glenngate 1: Summary of the scandal

The dust has now settled on the Owen Glenn political finance scandal, which means it’s probably an appropriate time to make some observations and conclusions about Glenn and his involvement with political parties in New Zealand. Future posts will show how this political finance scandal illustrates that the Labour Party is every bit as much of a corporate-sponsored party as National is, and that Labour is hypocritical and self-serving when it comes to the issue of political finance and regulation. This post is the first of five about ‘Glenngate’. This first post attempts to provide a summary of what actually occurred. [Read more below]

[political finance] EPMU and Labour

A Labour Party-affiliated trade union, the EPMU, Is attempting to register as a ‘third party’ under the Electoral Finance Act (EFA), even though it isn’t required to and isn’t necessarily eligible to. This raises some interesting questions about the relationship between unions and the Labour Party, and about further problems with the EFA. [Read more below]

[political finance] Anti-Labour website shut down

ePolitics meets political finance in the case of Andrew Moore’s Don’t Vote Labour website being shut down after the Electoral Commission informed Moore that he stood to be fined up to $10,000 if he continued to publish it without providing his personal details. In stark contrast, the Commission has also publicly stated that political party websites don’t necessarily need to comply with the same rules. The shutting down of this anti-Labour website is the first case under the EFA that shows just how ridiculous and anti-democratic the EFA is. [Read more below]

[political finance] State intervention in the democratic process: the case for less, not more

With the introduction of the Electoral Finance Act (EFA) it’s timely to examine the implications of the shift toward greater state regulation of politics. In this draft article I put forward the case against a highly regulated political process in New Zealand, that the EFA should be repealed, and why the state’s intervention in the democratic process should be reduced. I welcome any constructive feedback on this draft.

[political finance] Political finance and inequality in New Zealand

We live in a very unequal society, but are inequalities of political party funding a major influence on this? Moreover, does ‘money buy elections’? The answers to these questions have important implications for the state’s regulation of political activity. This blog post evaluates different sources of political party funding, its influence on New Zealand parliamentary politics, and cautions against taking for granted some of the common understandings of political finance in New Zealand. While business interests have been able to exert an incredibly strong influence over politics during the last 25 years, this leverage is better understood by a structural analysis of economic power than by arguments about the direct influence of the wealthy over political parties. The political power of wealth does not exert itself effectively via the direct purchase of political influence in the party system, but by the structural role of business in the national economy. To the extent that money is directly important in the party system, it is actually backdoor parliamentary state funding that is having the most influence on political configurations. [Read more below]

[political finance] Money is no guarantee for political success

Party finance law reform - such as that currently proposed in New Zealand - is normally based upon the idea that the influence of money in politics can be used to 'buy elections'. But the fact is that there is very mixed evidence on the usefulness of money in elections. In this regard, the Economist has commented this week on the fact that the 2008 US presidential primary is shaping up to be easily the most expensive in history, by suggesting that how much money matters is not exactly clear:

Money is not a guarantee of success nor is lack of it a guarantee of failure. Phil Gramm and Steve Forbes have both proved that truckloads of money do not necessarily translate into political momentum. And Bill Clinton proved that you can win the presidency without being the big money candidate. Howard Dean has gone one better and proved both that you can succeed without money and fail with it. He came from nowhere to dominate the money primary in 2004. But his $40m treasure chest did not prevent him from imploding during the Iowa primaries.

And just in case you think this view is just the rantings of the rightwing Economist magazine, note the recent Guardian article entitled Money isn't everything by Ben Whitford, who argues that although the configurations of money in politics (and the US primaries in particular) can tell us a lot, ultimately 'there's more to the money primary than just the bottom line'. He says:

Money tells us a few specific things about candidates: how effective a political machine they can assemble, what kind of popular support they have, whether they're capable of mounting a serious campaign. But at the end of the day, despite the hype, elections come down to votes: it doesn't matter how rich a candidate is if they don't have the charisma and broad political appeal to back it up.

[political finance] The public debate on reforming party finance rules begins

A new coalition has formed to push for tough party finance law reform. It's taken on the name of a group formed in 1979: the Coalition for Open Government (COG). Their formation is to be welcomed, even if their initial key policies if enacted would possibly lead to less open government and an even less politically diverse party system. [Read more below]

[political finance] Electoral Law horse trading and cartel building

Although the public know little about it, the Labour Party is doing the classic horse-trading over substantial amendments to the Electoral Act that the Government is about to introduce to Parliament. The changes, which could be passed under urgency to avoid widespread public debate, will award all the parties with legislation that suits their political interests. Essentially Labour is quietly building up a cartel of parties to support its moves, which are likely to involve significantly increased state funding for the parties, limits on donations to parties, and restrictions on third party political campaigning.

At the moment Labour is building up a majority - or 'cartel' - in the House by negotiating with NZ First, United Future, the Progressives and the Greens. They have left out the Maori Party, Act and National, who are feeling aggrieved, as the usual process for electoral alterations is to seek a broader cartel of parties so that they would all agree on the benefits. It is highly significant - and unusual - that none of the parties in the new cartel have been willing to talk to the media about the upcoming legislation and negotiations.

The behind-the-scene horse trading is likely to involve Labour buying off the small parties by considering changes to the allocation process for election advertising. The Electoral Commission currently includes Labour and National representatives in deciding how to dole out the cash, and it normally leads to highly contentious divisions of the state funding.  Meanwhile, the Auditor-General Kevin Brady has said he expects a sweeping review of parliamentary state funding. I imagine this is unlikely to happen, and if it does it will be merely be done in way to ensure that more funding rather than less is made available to the parties in Parliament.

[political finance] Rich and poor and electoral laws in Russia

Rigorous new electoral laws are helping the Russian state reduce opposition to the Vladimir Putin's ruling party, and critics say that such electoral laws merely represent part of a Kremlin campaign to crack down on dissent. Already two political parties have been suspended by the state. First the Nationalist Bolshevik Party was suspended. And the Guardian now reports that 'Russia's supreme court announced that it had liquidated the small Republican Party, claiming that it had violated electoral law by having too few members'. The Kremlin's new electoral law requires parties to have at least 50,000 members, which the Republican Party don't (although they have MP in the Duma).

Thanks to electoral laws and other non-competitive practices, there is now very little opposition to the Government. According to the Guardian, 'In theory, the opposition includes Russia's Communist party and the far-right Liberal Democratic party. In reality, they rarely if ever voice opposition to the Kremlin, observers point out.' In another recent article - Win, win - a journalist visits a Russian city for their elections and initially finds that there is seemingly 'a genuine choice between two different political parties', only to discover that both United Russia and Just Russia are pro-Kremlin, and voters have no real choice. The writer agrees with sceptics who complain that the state have invented the parties 'merely to take away votes from Russia's genuine opposition parties'.

Undoubtedly related to the Kremlin's unrivaled rule, the gap between rich and poor is still surging, alongside the growing prosperity. As reported here recently, Russia now has 53 billionaires, yet 20% of Russians are below the poverty line, and the new oil and gas wealth refuses to trickle down to the poor.

[political finance] The farce of democracy on the Representation Commission

If you want an example of how electoral law and regulations are normally the result of party political self-interest (rather than fairness or democracy), look no further than how Labour and National continue the farce whereby they take seats on electoral agencies such as the Representation Commission - see this press release from Electoral Commission. After each census, this body meets to review and alter the electorate boundaries. National and Labour have made the rules such as that no other party is on the Commission. [Read more below]

[political finance] Electoral law is 'victor's justice', not fairness

Rather than being about fairness, electoral law is often nothing more than "Victor's Laws" - written and implemented in the interests of the ruling political parties. A good example of this can be seen in today's news that the British Labour Government is intending to 'push through legislation which will put strict caps on the amount parties can spend on national and local election campaigns' because the Labour Party 'is ridden with debt' and fears 'that the Tories are preparing to outspend Labour', according to the Guardian report, Labour plan to ambush Tories on funding.  According to one Labour source, 'We have to act. The Tories already have their candidates in place in the marginals.... So far as the Tories are concerned, the election campaign is already under way. We cannot afford to leave things as they are.' Such examples make it obvious that parties in government use their access to the levers of electoral law to benefit themselves and disadvantage their opponents.

National's weasel repayment scheme denies 'One law for all'

National is doing it's best to show it can weasel as good as any other party in it's latest attempt to avoid prosecution for its gst breach of the Electoral Act. To pay back the $112,000 it owes to broadcasters without incurring Electoral Commission action, National plan to pay the broadcasters the money to provide free advertising for charity groups. This benevolent-appearing action means that National have spent over the legal limit on broadcasting and don't get penalised for it. Amazingly, the Electoral Commission already appears to have OKed the plan. And broadcasters such as CanWest have indicated they'll take the money but provide no more charity broadcasting than already attended. Other broadcasters who do provide extra charity broadcasting, will essentially be doing it out of their own pocket. It seems clear that National should be avoiding such weasel schemes and just pay the money back - as countless commentators and editorials have recommended - see here and here. National passed the law pertaining to broadcast spending limits and penalties - and now treats these with disdain. Once again, it's clearly not 'one law for all'.

[political finance] Retrogressive electoral law reform coming

The Government is looking to institute a number of electoral law reforms - all of which are likely to be retrogressive. They revolve around the key issues of: donations, state funding of parties, expenditure caps, and third party funding. As the Herald points out, unfortunately there is unlikely to be an inquiry into the 2005 election - as correctly demanded by many.

Australia: Electoral bill blocks registration of new parties

With the demands for tighter electoral and party funding laws being raised at the moment in New Zealand, it's worth looking at what's happening in Australia to see how such state intervention and rules can often lead to very anti-democratic practices. The Howard Government has just introduced sweeping new electoral laws that aim to suppress any electoral challenge to the mainstream political parties. The new legislation automatically de-registers all nonparliamentary parties and blocks the registration of new ones. In a classic example of a cartel, the legislation was passed with the help of all the other parties including the Democrats and Greens. As the World Socialist Website rightly argues, 'To block parties that have not contested previous elections, or that failed to win seats when they did, makes a mockery of the electoral process'.