Thursday, September 27, 2007

Election funding: why we need transparency

The biggest flaw in the government's Electoral Finance Bill is its failure to control anonymous and laundered donations to political parties. While donations to third parties are subject to an extremely robust transparency regime, the law on donations to political parties is left unchanged - meaning they can receive hundreds of thousands of dollars "anonymously" or laundered through trusts which allow the party to know very well who the donor is while the public is kept in the dark. The reason we need such transparency is to prevent political corruption and the exercise of undue influence by the wealthy over policy, and to allow the public to hold politicians accountable for any sign of the above. All this sounds a little theoretical, but over on Frogblog, Green co-leader Russel Norman gives a concrete example of the need for transparency: because of National's privatisation plans:

So if National gets control of the treasury benches after the next election, and they move to flog off state assets to their mates for a song (like Labour and National did last time), how will we be able to scrutinise them to determine whether they are giving our public assets to their mates in who funded National’s election campaign? Or to those mates who funded a third party campaign in parallel with National’s campaign?
Anyone questioning whether those previous privatisations were corrupt should check out their history. Jane Kelsey's The New Zealand Experiment has the dismal details: public assets were sold at a fraction of their value - often as low as 25% - to the usual group of cronies, including Alan Gibbs, Ron Trotter, Michael Fay and David Richwhite (the latter pair often acting as consulants and picking up enormous fees when they weren't the buyers). One case even had an explicit quid pro quo: while in the process of buying New Zealand Steel at a bargain basement price, Equiticorp CEO Alan Hawkins gave Roger Douglas a donation for the Labour Party of $250,000 in "recognition of the good work he had done". It wasn't declared, there being no requirement in those days, and the only reason the public learned of it was because he gloated about it in his biography. And unless we bust the trusts and ban anonymous donations, we will have no way of knowing whether such corruption is happening again.

Privatisation is a hot-button example, but the same principle applies to the whole of government. The New Zealand government controls billions of dollars of spending a year. A change in policy can make or break a businesses' fortunes. I want that power to be exercised on behalf of the people of New Zealand, not of wealthy donors. And the best way to ensure that it is is to have transparency and public scrutiny. Sunlight is the best disinfectant, and any politician who is afraid of it does not deserve to be elected.