The Dim-Post

May 12, 2014

The thing about Cabinet Club and anonymous donations

Filed under: Politics — danylmc @ 2:07 pm

. . . Is that Oravida and Donghua Liu both publicly donated large sums to the National Party, and Cabinet Ministers appear to have favored these donors in ways that even the Prime Minister admits created ‘a perception of a conflict of interest.’ Williamson ‘resigned’ over his phone call to the police and Judith Collins has come under intense scrutiny.

And that’s the system working as designed. The donation was public so the influence became public. But the system is designed not to work or to work only in very occasional cases. As I showed last week the bulk of the money donated to National (and the other large parties) is anonymous and vastly greater than the public donations. So Key and his party are effectively saying, ‘Yes, the tiny number of our public donations do make our Ministers look a bit corrupt but the staggeringly larger number of anonymous donations paid to a body called ‘The Cabinet Club’ have nothing to do with buying influence with Cabinet Ministers.’

People give money to political parties for different reasons. ACT is mostly funded by a libertarian called Alan Gibbs, and I’m pretty sure he’s funding that party because he believes in it. Phillip Mills just gave Labour and the Greens a lot of cash because he’s worried about climate change, and National insist that the Green Party now cares about climate change purely because they’ve been bought out by Phillip Mills. The union movement funds the Labour Party because its, well, the Labour Party.

I guess there’s someone in New Zealand who identifies with National’s current values of neo-liberal interventionalist laissez faire conservative dirigeste liberalism and gives accordingly. I imagine lots of the money Key attracts through his fundraisers is so that various bores can sit at a table in the same restaurant as him and then subsequently bray to their friends, ‘Yes, I was having dinner with my friend John Key the other night . . .’ And obviously, pretty much every knighthood awarded ‘For services to business’ is awarded on the basis of a gigantic cheque written out to whatever party happened to be in government. So not every donation is transactional. But National’s argument that their tiny number of public donations look like corruption but their enormous number of private donations are not is simply not believable.

Is the only alternative public funding of political parties? I think that’s a false choice and I’d like to try a system with a lot more transparency before we go that way. Like I said the other day, the average New Zealander pays just under $150 a year to charity. Let’s be generous and cap anonymous donations at ten times that amount: $1500 and then see what happens to National’s donor base, who love the values of the National Party so much that they secretly give them over a million dollars a year expecting nothing in return.

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44 Comments »

  1. Danyl: there is no “body” or “organisation” called “the Cabinet Club”. You are among too much of this.

    Comment by Matthew Hooton — May 12, 2014 @ 2:13 pm

  2. For “among” read “making”. Autocorrect fuck up

    Comment by Matthew Hooton — May 12, 2014 @ 2:14 pm

  3. @ Matthew Hooton: Okay, to the “clowder of Cabinet Clubs” if you want to be pedantic.

    Comment by toad (@toad001) — May 12, 2014 @ 2:21 pm

  4. As a National Party voter I reject the way you dismiss the party that represents my political and social values as being ‘neo-liberal interventionalist laissez faire conservative dirigeste liberalism’ (no commas sic), and categorises donors as name droppers. The left is on very thin ice on donations/electoral funding subject. The sun has not gone down on Owen Glenn, the rorting of Parliamentary expenses for the pledge card, the attorney Generals findings of impropriety and Lab/Greens legislaiton to legalise their pilfering and advantage themselves alone. State funding would take government even further away from the people than MMP already has and I can see no argument that suggests entrenching encumbent parties funded by compulsion is in any way compelling.

    Comment by yabby — May 12, 2014 @ 2:38 pm

  5. @yabby: “further away from the people than MMP already has

    Claiming that MMP has pulled government further away from the people seems very contentions, given that in 1993—our final non-MMP election—18.2% of voters (more than 1 person in 6) selected candidates representing values of the Alliance, yet that Party received only 2% of the seats to show for it.

    Comment by izogi — May 12, 2014 @ 3:06 pm

  6. Best use of the word “bray” that I have read this week.

    Comment by rickrowling — May 12, 2014 @ 3:19 pm

  7. Put all private political donations into a pool to be divided out among all the parties using a step down allocation. Say a national donation split 60% to national 20% to labour 10% to greens etc etc. Some formula. (a bit like income tax. Ha!)

    Unions funding National and Liu funding Labour.

    Comment by Simon — May 12, 2014 @ 3:38 pm

  8. @yabby: If you think that National represents your political and social values, does that make you an incoherent, immoral sociopath, or are you merely deluded about which political and social values National represents?

    I’m not sure that claiming you are either evil or stupid is the best opening for an argument.

    Comment by RJL — May 12, 2014 @ 3:49 pm

  9. As a National Party voter I reject the way you dismiss the party that represents my political and social values as being ‘neo-liberal interventionalist laissez faire conservative dirigeste liberalism’ (no commas sic)

    He who condemns the lack of commas better make sure not to wrongly spell “legislation”. Or “incumbent”. And better not mix up the Auditor General with the Attorney General.

    Snark aside, Danyl’s current infatuation is with the Green Party. Why are Labour’s past sins relevant to that organisation?

    Comment by Flashing Light — May 12, 2014 @ 3:51 pm

  10. ” As I showed last week the bulk of the money donated to National (and the other large parties) is anonymous and vastly greater than the public donations”

    Actually, didn’t Andrew point out that your chart showed no such thing?

    Also, it’s spelt “dirigiste”.

    Comment by kalvarnsen — May 12, 2014 @ 5:49 pm

  11. Nah, Yabby, Danyl’s outsourcing again and this time the author is Imperator Fish channelling what he imagines a member of the Spartacist’s Kelburn branch might say.

    Comment by Tinakori — May 12, 2014 @ 5:50 pm

  12. kalvarnsen:

    I don’t think that’s what he pointed out. As far as I can tell, that point concerned small donations that are not anonymous to the National Party (i.e. the Party knows who the donations are from). The Party doesn’t have to declare those donations, so they are anonymous from the point of view of the general public, as well as being of an unknown aggregate amount.

    Comment by Simeon — May 12, 2014 @ 6:20 pm

  13. Actually, didn’t Andrew point out that your chart showed no such thing?

    Not quite. I pointed out that the amounts that show up on the Electoral Commission’s website exclude “known” donations of less than $1500, so his apparent conclusion that parties are getting the vast bulk of their funding in chunks of money between $1500 and $15,000 was off the mark. I think Danyl’s point here simply is that National (in particular) gets lots more money in donations of $1500-$15,000 than over $15,000.

    I think pretty much everyone agrees that a donation of less than $1500 is such small beer no-one will care much about it. The more disputable question is whether anything less than $15,000 is a potential cause for concern.

    Comment by Andrew Geddis — May 12, 2014 @ 6:35 pm

  14. The more disputable question is whether anything less than $15,000 is a potential cause for concern

    If a couple of directors of a business give a party $14999 a year for three years then you’re talking about a very large amount of money relative to New Zealand politics.

    Comment by danylmc — May 12, 2014 @ 6:57 pm

  15. Both Labour and the Greens hold similar fundraisers to the so-called Cabinet Club where money is exchanged in order to meet an MP or leader of the party. Correct me if I am wrong, but what you appear to be saying it is OK for Labour and the Greens to fundraise by this method but it is not OK for National to do so? Could you answer another question for me too please? You seem to have a great knowledge of the workings of Labour so perhaps you can tell me who the donors to Mr Cunliffes’ secret trust fund are. Clearly, Mr Cunliffe has something to hide and does not want the public of New Zealand to know who the donors are. Are they people the public would not approve of?

    Comment by David Lloyd — May 12, 2014 @ 9:42 pm

  16. Flicking the Nats $5k or whatever is going to be neither here nor there to most of these donors. If you have a net wealth of more than a few million dollars you are not doing for some payback. Sure there aren’t really a lot of people out there who are ideologically National (is there such a thing). But they genuinely hate the values of Labour and the greens. That’s what they are passionate about and is why they donate.

    Comment by Swan — May 12, 2014 @ 9:53 pm

  17. “Correct me if I am wrong”

    You’re wrong. Read the post again.

    Comment by lefty — May 12, 2014 @ 9:54 pm

  18. Et tu quoque, Yabby, et tu quoque.

    Comment by DeepRed (@DeepRed6502) — May 13, 2014 @ 12:51 am

  19. “so perhaps you can tell me who the donors to Mr Cunliffes’ secret trust fund are”

    there arent any – they declined to be named so the money was returned – key point here – the donors themselves, not cunliffe decided to stay private. So the issue of whether the trust initially set up was good or bad aside, cunliffe by definition is hiding nothing as it wasnt his choice to reveal or not! – how many times does this need to be pointed out? Seriously, its like NZs birther movement

    and david loyd – the issue with cabinet club is (perception or fact) the selling of access to sitting CABINET MINISTERS not MPs – thats the point. If you attended a “cabinet club” where you got one on one time with sitting cabinet ministers what exactly do you think your buying? MPs work for the party – so can fund raise all they like – cabinet ministers work for the country – so cant raise a dime for the party. (it is possible to wear more than one hat)

    So – when you can point to labour selling access to sitting cabinet ministers we can start making some kind of comparison – the greens have never been in govt – ergo they arent fund raising in the same manner so cant be included

    Comment by framu — May 13, 2014 @ 8:25 am

  20. “there arent any – they declined to be named so the money was returned – key point here – the donors themselves, not cunliffe decided to stay private. So the issue of whether the trust initially set up was good or bad aside, cunliffe by definition is hiding nothing as it wasnt his choice to reveal or not! – how many times does this need to be pointed out? ”

    And presumably everyone also understands that Judith Collins can’t just go ahead and tell everyone who was at a private dinner – it is their choice to make it public.

    Comment by Swan — May 13, 2014 @ 8:45 am

  21. And presumably everyone also understands that Judith Collins can’t just go ahead and tell everyone who was at a private dinner – it is their choice to make it public.

    If the dinner was private, of course. But since MFAT were asked to be involved, then not so much.

    Comment by Gregor W — May 13, 2014 @ 9:20 am

  22. Both Labour and the Greens hold similar fundraisers to the so-called Cabinet Club where money is exchanged in order to meet an MP or leader of the party.

    The Greens had a raffle earlier this year in which several hundred $5 tickets were sold (to members and members of the public). The winner got dinner and a ukelele lesson with Metiria Turei. Cash for access? You decide.

    Comment by George — May 13, 2014 @ 9:42 am

  23. Both Labour and the Greens hold similar fundraisers to the so-called Cabinet Club where money is exchanged in order to meet an MP or leader of the party. Correct me if I am wrong, but what you appear to be saying it is OK for Labour and the Greens to fundraise by this method but it is not OK for National to do so? Could you answer another question for me too please? You seem to have a great knowledge of the workings of Labour so perhaps you can tell me who the donors to Mr Cunliffes’ secret trust fund are. Clearly, Mr Cunliffe has something to hide and does not want the public of New Zealand to know who the donors are. Are they people the public would not approve of?

    You’re wrong. What I’m saying is that I’d like transparency across all fundraising. Phillip Mills gave a ton of money to Labour and the Greens, and now if they privilege him in some way we can (hopefully) find out about it. But he could easily have structured his donation in a way that made it anonymous, and then either of those parties could have benefited him in some way and we’d never know. That’s a huge problem.

    As for the inner workings of Labour, I have no knowledge of them whatsoever. When news of Cunliffe’s secret trust came out I wrote: ‘Cunliffe was a total fucking hypocrite. He deserved to have his face rubbed in shit.’ So, there’s that. I’m probably a Green voter again this year, although I’m not especially a Green supporter.

    Comment by danylmc — May 13, 2014 @ 9:46 am

  24. “Judith Collins can’t just go ahead and tell everyone who was at a private dinner”

    1) has the chinese border official actually requested to stay un-named or is it just the nats refusing to name them?
    2) was the dinner private in the first place – remember it was an official dinner right up untill judith stepped in an declared it wasnt

    so nice try – but not even remotely the same

    regardless – is cunliffe hiding donors who donated to an internal party process? – i think we can all safely say – no, he isnt (well, not any more)

    Comment by framu — May 13, 2014 @ 10:17 am

  25. “has the chinese border official actually requested to stay un-named or is it just the nats refusing to name them?”

    I don’t see the name of the “Chinese Border Official” to be as important as the role in which they were attending the dinner, and the name being splashed all over media is a privacy thing unless it’s overshadowed by obvious relevance.

    But I’ve also been conditioned for New Zealand where I’d expect government departments, with a few suspicious exceptions, to take responsibility and be forthcoming if they’d had employees attending events to interact in an official capacity. I don’t know if the same is to be expected from the Chinese government or its officials, and I suspect it isn’t. There’s also very little incentive for them to stoke a foreign political scandal. So we’re very heavily relying on Judith Collins to be open and honest here, but somehow I’m not convinced that that’s what’s happening. Even if she’s being truthful, it’s a pretty crappy record keeping effort and judgement on her part, and she deserves the reaction she’s getting for it.

    Comment by izogi — May 13, 2014 @ 10:41 am

  26. And presumably everyone also understands that Judith Collins can’t just go ahead and tell everyone who was at a private dinner – it is their choice to make it public.

    I don’t think there’s a law preventing you from saying who you had dinner with…Judith Collins can say what she likes, and invariably does.

    Comment by Ross — May 13, 2014 @ 10:55 am

  27. he could easily have structured his donation in a way that made it anonymous, and then either of those parties could have benefited him in some way and we’d never know. That’s a huge problem.

    How would parties benefit a donor when they don’t know the donor’s identity? That is my understanding of an anonymous donor…

    Comment by Ross — May 13, 2014 @ 10:58 am

  28. the name being splashed all over media is a privacy thing

    I don’t think so. But for argument’s sake, let’s assume you’re right. Since when did Judith Collins worry about the Privacy Act?

    Comment by Ross — May 13, 2014 @ 11:02 am

  29. “so nice try – but not even remotely the same”

    You based that response on questions you don’t know the answer to. So, yeah not really a complete rebuttal is it.

    Comment by Swan — May 13, 2014 @ 11:10 am

  30. swan – well youve got me there – i made an assumption of what your answers would be.

    But you havent refuted my rebuttal soooooo…….

    Comment by framu — May 13, 2014 @ 11:26 am

  31. How would parties benefit a donor when they don’t know the donor’s identity? That is my understanding of an anonymous donor…

    Danyl’s using the term in an unforgivably loose way. This is why lawyers (and only lawyers) should be allowed on the internet. Rather than “anonymous” (which means the party doesn’t know who gave it), he means what I call “faceless” donations – where the party knows who gave the cash, but the public doesn’t.

    So, for instance, if on December 30th Philip Mills and his wife (assuming he’s married, of course!) both gave $15000 each to the Greens, and then on January 1st they did the same thing, the Greens would have got $60,000 knowing full well who had given it … but we’d never find out. And all completely legal.

    Comment by Andrew Geddis — May 13, 2014 @ 11:37 am

  32. When news of Cunliffe’s secret trust came out I wrote: ‘Cunliffe was a total fucking hypocrite. He deserved to have his face rubbed in shit.’

    Typical lefty bias. Why only Cunliffe’s face? What about the rest of him? If it had been John Key … (etc, etc, etc).

    Comment by Andrew Geddis — May 13, 2014 @ 11:39 am

  33. Swan, cherry pick all you like but it’s not the name of the Chinese official that’s the main problem, it’s the way Collins has continuously lied that keeps this story going. And being seen to help her husband’s firm on a taxpayer-funded trip she undertook as Minister of Justice, not Minister of Exports and Milk Promotions.

    Comment by MeToo — May 13, 2014 @ 11:44 am

  34. @Ross: “I don’t think so. But for argument’s sake, let’s assume you’re right. Since when did Judith Collins worry about the Privacy Act?”

    Agreed. That’s my own view of privacy instead of Judith Collins’ examples, and as @MeToo has just said I don’t see the name of the official as being a very important thing. The problem is that Judth Collins almost certainly hasn’t been honest about what the dinner was for to begin with, and she’s actively tried to mis-lead. The only reason she’s still in a Ministerial job is that it’s politically impractical for the PM to treat her the same way as he’d treat some other ministers.

    Comment by izogi — May 13, 2014 @ 11:51 am

  35. if on December 30th Philip Mills and his wife (assuming he’s married, of course!) both gave $15000 each to the Greens, and then on January 1st they did the same thing, the Greens would have got $60,000 knowing full well who had given it … but we’d never find out. And all completely legal.

    But wouldn’t the Greens be legally required to disclose the donation, seeing as they know the identity of the donor and their donation?

    Comment by Ross — May 13, 2014 @ 12:23 pm

  36. No. Parties only need to disclose any donations of more than $15000 from an individual in a calendar year. So, if Philip Mills and his wife (two separate people) each individually give $15000 on the last day of 2013, then neither need to be disclosed as donors that year. If they then give $15000 on the first day of 2014, they don’t have to be disclosed that year either (so long as they don’t give any more).

    Hence Danyl’s point about Philip Mills, if he wanted to, being able to find ways to get $60,000 to the Greens without having any legal requirement to disclose his identity to the public.

    Of course, the Greens always could be trend-setters and voluntarily disclose the identity of donors who give less than $15,000 … if they wanted to grab the true moral high ground!

    Comment by Andrew Geddis — May 13, 2014 @ 12:39 pm

  37. I take your point Andrew. I’m not sure there’s an easy fix, though Danyl has mentioned $1500 as a cut off figure for anonymous donations. Of course this focuses only on the revenue received by political parties. More interesting I think is to focus on the spending and maybe changing the rules around that. (In sporting terms, a good analogy is the NRL and EPL. In one competition, spending on players is almost limitless and only a handful of clubs have a realistic chance of winning the championship. In the other competition, there’s a spending cap applied to each club. The upshot is that the competition is more even.)

    Comment by Ross — May 13, 2014 @ 1:13 pm

  38. @Ross,

    There already is a $1500 cap on truly anonymous donations. If a party gets a donation of more than this (i.e. a bank cheque in the mail for $10,000), then it must give the amount more than $1500 (i.e. $8,500) to the Electoral Commission. What Danyl is suggesting is that the identity of all people giving donations of more than $1500 should be made public (as the party already must by law know who these people are).

    As for spending, we already have rules limiting this in terms of advertising before an election. Whether these should be broadened to include other stuff (opinion polling, travel, hiring consultants, etc) is a valid question.

    Comment by Andrew Geddis — May 13, 2014 @ 1:20 pm

  39. As for spending, we already have rules limiting this in terms of advertising before an election

    That’s true, but there’s quite a big difference between what the main and minor parties spend. National spent more than $2.32 million at the last election while Labour spent $1.79 million. The Greens spent about a third of National’s spend.

    Comment by Ross — May 13, 2014 @ 2:26 pm

  40. “That’s true, but there’s quite a big difference between what the main and minor parties spend.”

    Unless you consider the Conservative Party: $1.878 million, more than Labour.

    But yes, I get what you mean. :)

    Comment by izogi — May 13, 2014 @ 2:35 pm

  41. ” I’m probably a Green voter again this year, although I’m not especially a Green supporter.”

    Oh dear.

    Comment by kalvarnsen — May 13, 2014 @ 4:17 pm

  42. Did Danyl get the office you wanted? Use your cup in his tea break? Something else?

    Comment by Psycho Milt — May 14, 2014 @ 9:04 am

  43. “…Did Danyl get the office you wanted? Use your cup in his tea break? Something else..?”

    I’m going with continually leaving his dirty lunch dishes in the communal kitchenette sink.

    Comment by Sanctuary — May 14, 2014 @ 10:26 am


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