New Bill will regulate corporate donations but this is no ban

Provisions may reduce influence of corporate donors but rules can be circumvented

THE GOVERNMENT congratulated itself this week for finally getting around to publishing legislation which, it argues, when passed will significantly curtail corporate and wealthy donations to political parties.

Proposals for an outright ban on corporate donations have floated around the political system with cross-party support for many years. The Fianna Fáil/Green government repeatedly promised to introduce such a ban, always appeared to be about to do so, but never actually did it. Both Fine Gael and Labour promised last February that a ban on corporate donations would be a government priority. Notwithstanding this, until yesterday there were no concrete proposals about how they would implement this commitment.

It was getting to a stage where one was entitled to speculate that the reason for the delay had more to do with the desire of Government party fundraisers to fill their coffers before the ban became effective than drafting difficulties.

Fine Gael and Labour have now had nine months in government and a presidential election to continue to fundraise under the existing systems. At the earliest it will be Easter before this new legislation passes through the Oireachtas. Then preparatory arrangements for the new system will have to be put in place, giving party fundraisers ample time for one last fundraising push.

The Government parties have now had to accept that a total ban on corporate donations would be open to constitutional challenge. In their programme for government they promised to change the Constitution if necessary to enable this. They have now abandoned this commitment and instead have proposed a cumbersome mechanism that makes it more difficult for corporate bodies to make such donations but not impossible. This Bill amounts to a significant regulation of corporate donations but not a ban.

The new Bill defines corporate donors widely to include, for example, trade unions. It allows such bodies to donate up to €200 a year to a political party without any regulation. This is a reasonable provision which, for example, enables a local company to buy a raffle ticket or donate a spot prize without triggering the procedures set down in the Act.

In order to donate more than €200, however, a corporate body would have to have made a formal decision to make the donation in question, have registered with the Standards in Public Office Commission and appear on a published list of such donating bodies. The corporate body would also have to publish the detail of any such donation above €200 in its annual report.

As well as these new procedures for corporate donations the Bill dramatically reduces the total amount that any donor can give to a political party in any given year from the current limit of €6,348.69 to €2,500 and to an individual candidate or Oireachtas member from €2,539 to €1,500.

There is a similarly dramatic reduction in the threshold at which donations to political parties must be published from €5,078 to €1,500.

Peculiarly the Bill proposes only a minimal reduction to the threshold at which donations to individual candidates would have to be published. Currently any donation to a candidate above €639 is published. The Minister proposes simply to round this down to €600.

The proposed legislation includes a new requirement that, in order to get their State funding, political parties must have their accounts audited and provide an “accounts statements” to the standards commission which would then be made public. This sounds like it has the potential to bring a new transparency to the income and expenditure of political parties but much depends on how it is implemented. This new requirement extends to national party accounts only, and thereby excludes constituency or individual candidate organisations.

Cumulatively, the new arrangements may initially reduce the extent to which wealthy or corporate donors can exert financial influence on politics. The economic downturn has already impacted on this in any case. One can already see, however, how the parties and donors could design schemes to circumvent even these new provisions. All the limits in the Bill are annual limits so wealthy donors can simply disperse their donations over several years in the gaps between general elections.

The Minister’s proposal falls very far short of the recommendations of the Moriarty tribunal, which in its final report last October called for full disclosure of the fact, size, origin and context of all but the most modest of political donations.

While he has been cautious in his reform of political fundraising, the Minister, Phil Hogan, has been braver in seeking to incentivise gender equality in the choice of candidates offered by political parties to voters in Dáil elections.

I have long argued that gender quotas should only be considered as a last resort. It is time to accept, however, that we are now at that point in the Irish political system. Twenty years ago there was reason to hope that organic change would give rise to greater female participation but this has not happened. The proposal in this Bill is a first step at leveraging the State funding of political parties to achieve the socially desirable objective of greater female representation.

On its own this proposal will have only limited effect but it may herald even more dramatic initiatives in future.