The scandal over the unlawful use of parliamentary funding continues, now with revelations that all spending from the Parliamentary Service budget since 2000 may have been unlawful because of their failure to get the Speaker's written authorisation for it. If this whole area of rules about party spending seems incredibly disorganised and muddy, it’s because it has been purposefully designed to be so. All of the mess is not due to oversight or incompetence, as some politicians and commentators maintain, but due to the fact that the parties in Parliament have consciously designed this scheme under their control to allow them to milk the state to carry out party political functions without ever making rules that clarify this covert funding. It is telling that the parties have made the Parliament Service exempt from the Official Information Act.
For more on how the rules work (or don’t), read more below from my PhD about the nature of Parliamentary Service Commission rules:
The Parliamentary Services Commission Rules
The criteria and parameters of how parliamentary resources can be used by the parties are made by the Parliamentary Services Commission (PSC), which is the cross-party parliamentary body that controls the Parliamentary Service and Ministerial Services. It is therefore a case of the recipients of the resources devising the rules on how they themselves can use them, something which might usually be viewed as a conflict of interest. As MP Jim Anderton has pointed out to Parliament, ‘It is not a good look for political parties to design schemes for party funding to get around the laws that they themselves are responsible for making’ (quoted in Sunday Star-Times, 6 May 2001: p.A2). This ‘poacher as gamekeeper’ situation appears to have led to a lax and dubious regime where parties are easily able to convert the lucrative resources into political tools. A 1999 review of the Parliamentary Service, however, suggested that every three years there should be an independent review of parliamentary resourcing. In the eyes of the General Manager of the Parliamentary Service, this proposal sought ‘to address this issue of this perception of parliamentarians making decisions in their own interests when they are the recipients of the result of their decision-making’ (O’Sullivan, 1 Jun 1999). The first such review took place in 2002 and its brief did not contain anything about addressing the PSC’s conflict of interest. In fact, of the review panel’s three participants, one was an ex-Labour MP and one was an ex-National MP. It is not surprising, therefore, that it recommended large increases in funding for the parties, and gave the clearance for a trial of bulk funding arrangements.
The Parliamentary Service and Ministerial Services have a difficult role in administering the rules for what is effectively a covert system of state funding of parties and politicians. The two administrative bodies have little autonomy from the political parties as they are both controlled by the PSC. In 2003, the new General Manager of the Parliamentary Service, Joel George, ‘said the rules were "pretty permissive" but they were set by MPs and it was up to MPs to change them’ (Taylor, 2003d). This typifies the position of the administrators – they do not have the power to make or adjust the rules about the use of resources, but merely have to work with the rules made by the parties. In a sense their role is one of ‘corruption management’, in that they are expected to allow the parties who make the rules to misuse the funding for party-political purposes.
The rules developed by the PSC are supposed to distinguish between parliamentary business and party-political business – a distinction described by former Prime Minister and Attorney General Geoffrey Palmer as ‘unreal’ because ‘most of what goes on in Parliament is party political’ (Palmer, 1992: p.139). Former Parliamentary Service General Manager John O’Sullivan has admitted that there are grey areas in the rules about the use of taxpayer resources, and that ‘separating parliamentary business from party business was often difficult’ (Laugesen, 1994c: p.1). In fact, it could be argued that not only are there grey areas, but that the whole parliamentary offices and resources are predominantly dedicated to party-political work rather than carrying out the neutral servicing of members of Parliament. Although the use of parliamentary resources for party-political activity is officially prohibited, the PSC actually has a very narrow definition of what constitutes party activity. The rules simply say that resources cannot be used to solicit money, membership, or votes. This vague rule still allows a very wide use of the resources.
The use of billboards by parties in 2003 illustrates that they can easily solicit votes simply by avoiding the use of the directive to ‘vote’ for the party. Instead, National’s taxpayer-funded billboards featured the campaign slogan ‘One standard of citizenship for all’, and New Zealand First’s billboards had a photo of Winston Peters, with three fingers raised and the slogan: ‘Immigration’s up, Treaty costs up, crime’s up; had enough?’ A spokesperson for the Parliamentary Service confirmed such billboards corresponded with the rules (McLoughlin, 2003d). The PSC rules are designed to be vague enough to allow parties ‘to promote a policy’ which, strictly speaking, these billboards did. According to the parties, the resources can also be used for the ‘testing of policies’, and therefore National said its 2003 billboards were being used to ‘to test one of National’s key messages – one standard of citizenship for all’ (NZPA, 2003o). Commenting on it, Labour Party president Mike Williams said, that the parliamentary rules must be ‘incredibly loose’ (quoted in NZPA, ibid). Progressive Coalition leader Jim Anderton was amazed at the new development: ‘It looks remarkably like electioneering to me but as long as you don’t ask for votes or ask for money, you can do it’ (quoted in Milne, 2003b). Anderton added that his party would have to consider using parliamentary resources to purchase billboards too.
In the same way, the narrow definition of party political activity also allows parliamentary leaflets to be sent out that heavily promote a party and allow the recruitment of members. They do this by asking voters to send back a parliamentary freepost reply if they want to know more about the party. Likewise, the rules allow newspaper advertisements to be purchased that appear little different to those purchased in election campaigns. For example, United Future’s 2003 full-page advertisements outlined reasons to support the party and ways to contact it, albeit without actually saying ‘Vote United Future’ or ‘Join United Future’. Green Party co-leader Rod Donald was clearly of the view that although the ads did not breach the rules, they were ‘party political propaganda being paid for by taxpayers’ (quoted in McLoughlin, 2003e). Donald also said, ‘Political parties are asking for trouble when they highlight the lack of rules in this way’ (ibid).
The rules about such expenditure state that the advertising must relate to parliamentary business and not promote the party. Certainly to the voters viewing these various forms of propaganda, the advertising would have the appearance of being paid for by the political parties rather than being state-funded material dealing with parliamentary business. The advertisements, leaflets and billboards are all heavily branded with the respective parties’ colours and logos. In respect of this, the Parliamentary Service rules only say that where parliamentary-funded advertisements use party logos, they must also either include the MP’s parliamentary contact details or display the Parliamentary Crest (Parliamentary Service, 2001: p.9). For instance, Act’s website, Richard Prebble’s Letter from Wellington email newsletter, and Act’s campaign/electorate buses all incorporate the Parliamentary Crest because they have been funded by the Parliamentary Service. The crest is supposed to be the same size as the party logo used and the logo ‘should not be the dominant feature’ (ibid: p.6). Generally, however, this rule appears to be disregarded or inadequately observed.
The Parliamentary Service appears to take little interest in containing this trend. Furthermore, while the Parliamentary Service recognises that the party research units undertake party work, it is unconcerned about this use. It seems that the Parliamentary Service turns a blind eye to staff doing party work, partly because it realises they have little power to exert any control over the misuse. As Klinkum points out, the way that the rules have been set up, the Parliamentary Service ‘is beholden upon the parties in Parliament to ensure that resources are used for the intended purposes’ (Klinkum, 1998a: p.214). Now the rules appear to be becoming even more flexible. For example, since the late 1980s the research units have been given control of their own budgets, and this occurred, according to Klinkum, ‘Partially in recognition of the fact that the General Manager was unable to exert any control and therefore unable to take responsibility for research unit spending’ (ibid).
In addition, despite the rules against operating electorate offices as party offices, the Parliamentary Service takes little interest in the rules being broken, yet the misuse is far from secret. It is common for party activity (including electioneering) to be carried out in conjunction with electorate offices. For example, during the 2002 election, Progressive Coalition Party candidate (and Alliance parliamentary whip) Grant Gillon advertised in his electorate newsletter for volunteer help with his election campaign, saying, ‘If you would like to help with the campaign please contact my Northcote electorate office’ (Gillon, 2002). The Parliamentary Service also allows MPs to share their electorate offices with party organisations. In some circumstances, MPs rent office space in buildings owned by the political parties or MPs themselves. The Parliamentary Service’s main concern in this arrangement appears to be to get arms-length evaluation arrangements done to ensure that a fair market rent is charged (O’Sullivan, 1999). The MPs are also asked to make a clear physical demarcation between the various activities. MPs are not allowed to list the electorate offices as phone numbers for party-political contact, nonetheless this appears to occur. More commonly, in their propaganda, parties list the contact details of their parliamentary offices for interested voters.
O’Sullivan denies that political parties use parliamentary resources in the electorates to organise their parties, saying that ‘the current rules certainly make it quite clear that [the electorate offices] are not meant to be used as party organisation offices. Resources that are provided by the taxpayer are not intended to provide for party organisational issues’ (ibid). He admits, again, that ‘grey areas’ exist on this issue, but denies that parties contravene the narrow rules as to what is party-political work:
There has always been an interface between the out-of-Parliament offices and the party organisation, because a Member of Parliament by definition is a member of the party…. Having said that it is a very grey line between, for instance, developing policy for a party and spilling over into purely party activities. It is quite clear that you can draw a line about what they are – that you can’t use the resources for fundraising activities and you can’t use them for electioneering on the basis of, say, ‘Vote for me’. They also can’t be used for actually running the party – that is to solicit members and all of that sort of process and things (ibid).
Even this very wide definition of parliamentary work – which only rules out a very limited amount of party activity – is transgressed by the parties. Yet the Parliamentary Service takes little interest in monitoring the situation. As O’Sullivan admitted in 2001, ‘Under the present arrangements and levels of resourcing the Parliamentary Service has little opportunity of knowing, on a day to day basis, just what activities are undertaken within party leaders’ offices and out-of-Parliament offices’ (O’Sullivan 2001: p.7). Instead of a systematic monitoring regime to prevent the misuse of resources, the Parliamentary Service relies on only a few safeguards against misuse. First, all contracts of employment and job descriptions need to be approved by the Parliamentary Service. Second, all bills and expenditures that are charged to the budgets of the parties are processed by the Parliamentary Service and thus monitored (O’Sullivan, 1999). Third, the Parliamentary Service relies on the idea that ‘there is quite a lot of scrutiny that is exercised between the parties as to what people are doing… there is a bit of competition to ensure honest use’ (ibid). This form of monitoring only works, however, to the extent that not all the parties are doing the same thing. If they were acting similarly, they would be less likely to act as watchdogs on each other. Fourth, the Parliamentary Service relies on the goodwill and honesty of the parties concerned. As O’Sullivan admits, ‘The present system relies heavily on the Parliamentary parties voluntarily complying with the rules, i.e. on trust’ (O’Sullivan, 2001: p.6). Such safeguards appear to be inadequate. Even the Auditor General criticised them in a report on MP allowances and reimbursement expenses (ibid).
In a sense, it appears that the main issue that concerns bodies like the Parliamentary Service is parties’ ‘equity of access to resources, not whether or not resources [are] appropriately used by all parties’ (Klinkum, 1998a: p.217). In the past, the Auditor General has taken a similar approach. A good example occurred when Social Credit MP Bruce Beetham asked the Auditor General to inquire into the possible misuse of taxpayer funds by Labour MPs who used travel privileges to canvass in the marginal seat of Hamilton and the Nelson by-election of 1969. According to Klinkum ‘The Auditor General refused to do so on the basis that a special parliamentary committee set the rules and that providing no one side was doing things the other side was not able to do then there was not a problem’ (Klinkum, 1998: p.217). Similarly, O’Sullivan was pragmatic about transgressions of the rules: ‘you’ve got to bear in mind that at the end of the day politics and politicians are involved in political processes and political processes don’t necessarily have tidy boundaries. There will always be some area of discretion about the margins that are going to be in judgement’ (O’Sullivan, 1999). This chapter shows, however, that the infringements are not only occurring at the ‘margins’ of parliamentary activity, but at its very centre.
It is notable that a 2001 investigation by the Parliamentary Service into the Alliance’s parliamentary offices found many inappropriate uses of parliamentary resources. However, this investigation only took place after the party started to split, and the party leader, who was defecting from the party, took the unusual step of complaining to the General Manager about the activities of his own staff. Even then, O’Sullivan took no action to investigate, instead choosing to give the staff a warning. It was only after the leader’s dispute with staff became public that the Speaker of the House was forced to intervene and ask for an investigation into the use of resources. It is also notable that O’Sullivan’s subsequent investigation was largely a whitewash that uncovered only a relatively small amount of the inappropriate use of resources. He failed to interview most of the staff involved and delivered a report obviously designed to produce little change in the status quo (O’Sullivan, 2001). Similarly, in 1996, when allegations arose that ex-National MP Graeme Lee was using his parliamentary office as the Christian Coalition election campaign headquarters, the Parliamentary Service chose not to carry out a thorough investigation, but only to question Lee about the situation (O’Sullivan, 1996b).
The use of parliamentary resources for party activities is also perpetuated by the fact that National and Labour have ensured the Parliamentary Service and Ministerial Services are exempt from the Official Information Act. This means that information about the parties’ use of state funds is generally not available to the public. Furthermore, ‘no parliamentary body or external agency believes it necessary or appropriate to inquire into the way in which parties use their state resources’ (Klinkum, 1998b: p.427). The public is therefore kept in the dark about the situation.
