Reform seems necessary to create greater transparency on political donations

By Max Rashbrooke and Lisa Marriot*

New Zealand Proposed Changes political donation rules shed light on the donors who give thousands and the motivations they have for their generosity. Our current research on the political donation system in New Zealand aims to shed light on this often murky process.

Last year, a little more NZ$2.73 million was donated ten of New Zealand’s 15 registered political parties.

Current rules require public disclosure of any donation over $15,000. The government has proposal to quit this public disclosure threshold at $1,500 (a measure opposed by the National and Act parties).

The proposed reforms to the rules on political donations follow investigations by the Serious Fraud Office into the treatment of donations received by the National, Labor and NZ First parties. All three investigations resulted in legal proceedings, with the first case having just ended with the judge reserving his decision.

Given the apparent confusion and contested legal requirements for transparency, a fundamental question must be asked: why do wealthy New Zealanders donate to political parties?

The motivation for political donations

As part of our research on political donations, we interviewed several party donors across the political spectrum.

We asked them why they made a donation, whether they expected to exert any influence from their donation, and what opinions they had on other features of the current system, such as disclosure of their name and the size of their Don.

Our interlocutors were not concerned about transparency. Having each given more than $30,000, their names were published online within ten days of their donation.

All have accepted this transparency as a necessary element of a democratic system. Some even thought it had positive effects, such as encouraging others to donate.

Personal interest or public interest?

The reasons respondents gave varied. Most invoked a desire to “participate”. Participation took different forms – from supporting a party that held values ​​similar to those of the donor, to simply participating in the political process.

Perhaps unsurprisingly, academic research suggests that political influence is waiting for donations – although support for existing policies is also a factor. But the donors we spoke to said they didn’t gain additional influence from their donation, nor did they seek it out.

However, some precautions are in order. The fact that they agreed to be interviewed by researchers may suggest that our interviewees were more comfortable with their donations than other donors.

Second, even while insisting that they did not gain additional influence, some made other comments suggesting that some level of influence was a consequence of the donation. One noted interactions with several prime ministers and party leaders, some directly related to fundraising. These characters had, for example, gone to the donor for meals.

Another donor said that a large donation would make it possible to arrange a face-to-face meeting. Even if politics is not explicitly discussed in such contexts, donors and politicians clearly establish close relationships.

These are the conditions under which the interests and beliefs of political leaders can gravitate towards those of donors, especially since ordinary voters generally do not enjoy such privileged access.

Some donors have alluded to such closeness. One said, speaking of the party he is donating to, “They’re nice to me, and I’m nice to them.”

Another acknowledged that although donations were made for self-interest, “self-interest is [seen as] public interest.” That is, donors rationalize actions designed to serve their own interests by arguing that it overlaps perfectly with the public interest, even if such a correlation is far from guaranteed.

Do our rules need to be more robust?

Some would argue that the process for regulating donations is working, as evidenced by ongoing court cases. However, these cases were triggered by whistleblowers, and not because of regulatory oversight in the first place. We cannot rely on whistleblowers to report all cases of suspected wrongdoing.

Much electoral reform work is currently underway, including contested changes to donation disclosure rules and a broader independent review of election law.

With two more donation court cases coming this year, pressure is mounting to change the way political parties are financed.

Such reform seems necessary to create greater transparency about donations and ensure that trust in Aotearoa New Zealand’s political funding system is not permanently eroded.

*Max RashbrookResearch Associate, Institute for Governance and Policy Studies, Te Herenga Waka — Victoria University of Wellington and Lisa Marriotttax professor, Te Herenga Waka — Victoria University of Wellington

This article is republished from The conversation under Creative Commons license. Read it original article.