Thursday, January 24, 2019

Banning foreign donations

So, afte rewriting electoral law to reduce transparency over party funding, National's Nick Smith suddenly wants to ban foreign donations to prevent "foreign interference". It's pretty much a no-brainer, but what would it actually entail? At the moment, the law prohibits foreign donations above $1,500, but there are two obvious ways around it: making multiple "anonymous" donations below the $1,500 threshold, and using a New Zealand-based corporate shell to launder the donation. The first is easily fixed: reduce the threshold to a nominal level, and align it with the party and candidate disclosure thresholds, so that every non-trivial donation is publicly declared and subject to scrutiny. The latter would require effectively banning some or all corporate donations. There's a strong argument that the right to donate should be limited to natural persons - eligible voters - but people should also be able to do collectively what they are entitled to do individually, which suggests there should be some exemption for democratic, membership-based organisations such as incorporated societies and unions. while that is also potentially open to abuse, it seems a lot less so than at present, when anyone can set up a New Zealand company and use it to launder donations to whoever they wish.