THE Supreme Court judgment in the McKenna case has thrown the Government's plan for the reform of political funding and election spending into disarray.
The terms of the deal, agreed at different times between Fianna Fail, the Labour Party, Fine Gael and Democratic Left, provided for an annual payment of £1 per vote received to registered political parties and to Independent TDs. This payment was to balance an anticipated shortfall from the corporate sector. Its estimated cost was £2.1 million a year.
This State outlay will be cut to about £1 million if Brendan Howlin has his way. The Minister for the Environment is said to be nervous of a public backlash against State funding for politics. His fears, and those of some Labour Party backbenchers, are a reaction to the battering the party took as a result of crude fund-raising efforts last year.
The Attorney General, Mr Dermot Gleeson, has advised that the Electoral Bill, now before the Dail, is probably unconstitutional because of the McKenna judgment, as funding does not favour all candidates equally. The same holds, true for the £600,000 provided each year in party leaders allowances, the bulk of which goes to opposition parties. Independent TDs and parties with fewer than seven members are excluded from benefit.
In bringing proposals before the Government next week Mr Howlin is expected to propose an amalgamation of the two funding systems, and a new Bill may be required. A Government source said that all Dail parties, with the exception of the Progressive Democrats, were committed to State funding.
Five years ago the idea of State funding was the hottest issue around. The objective was to get rid of political sleaze and allegations of "golden circles" through the disclosure of all substantial donations received by political parties. That way, financial transparency could counteract claims of political pull in business and of the personal enrichment of politicians.
When dealings within Irish Sugar/Greencore and Telecom Eireann were revealed to a scandalised public, the appetite to clean up politics grew within all parties. And that was before the beef tribunal began its trawl through the murky affairs of agribusiness.
But you couldn't just choke off the traditional funding mechanisms for political parties and leave them heavily in debt: Fianna Fail's overdraft stood at £3.5 million at the time and Fine Gael's at £1.3 million. To make up any shortfall from the corporate and business sector, the State would have to provide funding for parties along European lines.
Thus, when the Labour Party entered government with Fianna Fail in 1992, Eithne Fitzgerald was given responsibility for an Ethics in Public Office Bill. And Michael Smith had charge of the Electoral Bill.
The threatened disclosure of personal financial matters caused great dissension within Leinster House. The legislation was delayed and it wasn't until after the Fine Gael/Labour Democratic Left Government was formed in 1994 that the Bills were finalised.
Last year, a much-diluted Ethics in Public Office Act finally became law. And the Electoral Bill (with its proposal to establish a Dail and European Parliament boundary commission; provide for the payment of political parties; arrange for the disclosure of substantial donations to individual politicians and political parties; and limit expenditure at election time) only reached Committee Stage in the Dail early this year.
Then the Supreme Court ruled in the McKenna case. On the face of it, the judgment had nothing to do with the funding of political parties. The case had been taken by the Green Party MEP, Patricia McKenna, to prevent the Government funding a biased Yes campaign in the divorce referendum. But when the court ruled that equal funding, or none, should apply in areas of political contest, the fallout was devastating.
Dermot Gleeson advised the Government that the Electoral Bill was flawed because it proposed to fund only successful Dail candidates and political parties. He also questioned the legality of the present system of leaders' allowances, which is slanted in favour of the opposition parties.
Payments under this heading, for research, scriptwriting and the staff of a leader's office, amount to £296,745 for Fianna Fail; £147,429 for the Progressive Democrats; £104,804 for Fine Gael; and £45,079 for the Labour Party. Independents and small parties get nothing. According to the Supreme Court ruling, such discrimination is now unconstitutional.
SOMETHING had to be done. And the man in the hot seat was Mr Howlin. Labour Party backbenchers favoured stripping out the State funding mechanism altogether, leaving the requirement to register sizeable political donations and to limit expenditure at election time.
Traditionally, Labour TDs never benefited from business funding, so what they never had they wouldn't miss. But such a selective course of action would be unacceptable, for different reasons, to Fianna Fail, Fine Gael and Democratic Left. And the Progressive Democrats, heavily dependent on corporate funding, are implacably opposed to the Bill's provisions.
Changes in the way party leaders' allowances are computed and awarded are also likely to give rise to political friction as the built-in bias towards opposition parties is removed.
Some of the urgency has gone out of the situation for Fianna Fail and Fine Gael. For them, the fund-raising bandwagon has already rolled. The largest party is said to have raised more than £2 million in private contributions over the past two years and to have cut its debt to less than £1 million. And Fine Gael has wiped out its £1 million debt in the past year.
But 1997 is an election year. And political parties need all the money they can get. In those circumstances, Mr Howlin will be encouraged by his Cabinet colleagues to salvage as much as possible from the wreckage of the Electoral Bill.
