Worrying fall in disclosure of funding by parties


ANALYSIS:Political parties would earn moral authority if they published full financial statements, writes ELAINE BYRNE

IN THREE weeks the Council of Europe body, the Group of States against Corruption (Greco), will meet Irish political parties and ask them 29 questions about the transparency of their funding.

This report will then be available at www.coe.int. Reports on 13 of our European neighbours have already been completed. When I worked with the UN Anti-Corruption Unit I got to know the Greco organisation and these guys are thorough.

In advance of their visit I went through every disclosed donation made to the standards commission since it was set up. Graph 1 clearly demonstrates a pattern by political parties to disclose less. The turning point for disclosure occurred in 2001. The Electoral (Amendment) Act 2001 prohibited the acceptance of foreign donations.

Some 56 per cent of Sinn Féin’s donations (€674,866) before this Act had come from “Friends of Sinn Féin America” and “Friends of Sinn Féin Australia”. All its donations now come from elected representatives. Since 2003, this has included €340,405 from Northern representatives. Political parties in the North are still permitted to receive foreign donations under UK legislation and in 2007 Sinn Féin received £195,000 from “Friends of Sinn Féin USA”.

The Electoral Act 2001 also introduced a cap on the value of donations for the first time. Political parties are not permitted to accept a donation over €6,348 from the same person and must disclose the identity of the person if the donation exceeds €5,079.

In theory, Irish legislation represents international good practice. Many of our European neighbours, including the UK, do not have donation limits and never publish the donor’s identity. In practice, these positive initiatives are of no consequence because Irish legislation does not provide for a publicly available full income and expenditure annual financial statement by political parties.

The absence of full disclosure has made the existing legislation meaningless. It has unnecessarily created the perception of political impropriety and is wholly counterproductive. For example, of the €10.1 million spent by parties and candidates in the obligatory three-week accounting period before the 2007 general election (never mind that spent in the previous two years!) just €1.3 million was disclosed to the standards commission.

That’s €8.8 million in donations that were not disclosed.

Graph 1 more or less bottoms out after 2002. Fine Gael has returned a nil disclosure to the standards commission since 2001. So too have the Progressive Democrats since 2003. The donation statements of the Labour Party, Green Party, Sinn Féin and the Socialist Party are almost entirely composed of donations from the salaries of elected representatives. This robbing Peter to pay Paul system, where political representatives fund their own political party, is a short-term unhealthy method of financing democracy.

Money received from the party leaders’ allowance and under the Electoral Act is not permitted for election purposes. So where did the undisclosed €8.8 million come from to fund the 2007 election?

Labour, Sinn Féin and the PDs have given me full access to their financial accounts for the 2007 general election campaign.

The Green Party has provided its 2008 accounts. Fine Gael has provided accounts for 2006 understood to be comparable to 2007. Fianna Fáil have not given access to their complete accounts. At their ardfheis this year they declared that €659,050 was raised from their fundraising superdraw and €536,000 from their national constituency collections in 2008.

It is understood that this amounts to approximately two- thirds of their annual income.

Fine Gael’s national draw was the party’s biggest earner at €1.4 million in 2006. Membership fees came to €323,189. Three corporate dinners contributed just over €200,000. The London, Dublin and Cork golf classics netted €100,905. Five other fundraisers netted €123, 729. Contributions by the parliamentary party to the “party fund” were €53,000. Donations under the legal disclosure limit of €5,079 totalled €28,382. Fine Gael borrowed €2.25 million to finance the 2007 election.

The Labour Party’s largest source of income in 2007 was €232,474 from members’ contributions. The majority of Labour’s donations were under the legal disclosure limit and netted €144,534. Trade union affiliation fees came to €60,107 while other fundraisers netted €112,255.

The Progressive Democrats’ national draw netted €478,481 in 2007. All of the party’s €426,003 in donations was under the disclosure threshold. The party also recorded a golf outing at €47,130 and an “election income” of €162,739.

The Green Party is dependent on subscriptions from its elected members. In 2008 they received €46,552 from this source, €1,097 from donations and membership and €24,391 in fundraising.

Sinn Féin is the only political party which makes available its full accounts on its website. Almost all of the €209,367 in donations received in 2007 was derived from the salaries of their political representatives. Their annual national draw and other fundraisers netted €177,936.

In the 10 years since disclosure to the standards commission was introduced, Fianna Fáil has been in receipt of 55 per cent (€1.48 million) of all disclosed donations – 40 per cent of this coming from developers and construction-related donors. Individual and business interests comprise approximately a third of donations. The remaining third arose from the hospitality sector, drinks industry, solicitors, auctioneers and the motor sector.

The Electoral Acts distinguish between donations made to political parties and political individuals (TDs, Senators and MEPs). Fianna Fáil TDs, Senators and MEPs were by far the largest beneficiary of all political donations, receiving 62 per cent (€1.7 million). As Graph 2 demonstrates, its representatives attracted almost twice as much as all the other parties combined during the 2002 and 2007 general election.

Since the 2001 legislative change, political parties have entirely altered their method of fundraising. They are no longer reliant on the large political donations. Fundraising is largely membership driven, derived from party affiliation fees, annual national draw, church-gate collections and small fundraisers.

As the Taoiseach told delegates at the ardfheis last February, “my target is for us to be funded by as many small individual contributions as possible”.

Fianna Fáil has proposed to reduce the annual donation declaration limit to €2,500 and the maximum allowable donation to €4,000. The Taoiseach has said that the standards commission should have the power to independently examine and publish every political party’s accounts. This must be complemented by the adoption of common accounting procedures.

Better late than never, these are welcome initiatives.

Why wait for legislative obligations to publish a full income and expenditure annual financial statement on each political party website? Such an act would earn the moral authority to challenge other political entities, such as Libertas, to do likewise.

A loss of confidence in Irish public life can be challenged by instances of voluntary transparency. A meticulous evaluation by an international body on how Irish politics funds itself will hopefully be embraced as a turning point from the corruptive secrecy of the past.