The Dim-Post

March 2, 2015

What we talk about when we talk about donations and political corruption

Filed under: Uncategorized — danylmc @ 11:15 am
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Matt Nippert and the data journalism team at the Herald are uploading all of the electoral donations and crowdsourcing an analysis of it. All sorts of interesting things are cropping up. Like this:

New Labour MP Stuart Nash was bankrolled to the tune of $4000 a month by political backers for more than a year leading up to last year’s general election.

Mr Nash’s $99,000 in candidate donations meant his warchest ranked only behind Hone Harawira’s $105,000 courtesy of the Kim Dotcom and his Internet Party as being the country’s best-funded candidate.

And this:

Talley’s Group, a family-owned fishing and meat processing company based in Nelson, poured $42,500 into no fewer than nine separate races, mostly favouring National candidates fighting for regional seats.

Three members of the primary production select committee – Chester Borrows, Stuart Smith and Damien O’Connor – each received $5000.

Also, National is engaged in large-scale form of ‘legal laundering’:

An analysis of electoral finance declarations shows more than 80 per cent of donations to National Party candidates were channelled through party headquarters in a loophole described as akin to legal “laundering”.

National’s heavy reliance on funding candidates with donations from the party – shown in a Herald study to account for more than $1m out of $1.2m raised by their candidates for the 2014 general election – was a “striking use of electoral law that appears to be laundering the money”, said Otago University political science lecturer Bryce Edwards.

Electoral law requires candidates to reveal the identity of donors who contribute $1,500 or more, but political parties can keep donors secret even if they give up to $15,000.

Meanwhile Andrew Geddis points out the extremely unusual circumstances around Donghui Liu’s donation to Jamie-Lee Ross.

MPs and other political insiders get really upset if you suggest to them that this is all basically political corruption. Partly this is down to their massive egos. MPs don’t think it’s strange that corporations just give them huge sums of money. Are they not extraordinary individuals? Have they not been chosen by destiny to lead the nation? Related to that is cognitive dissonance. The system around political donations might look totally corrupt, but MPs all know that they personally are not corrupt – how dare anyone suggest that? – so Tallys must just be giving free money to the MPs that happen to sit on the Select Committee that oversees and regulates their industry because they personally believe in those individual MPs.

MPs also very quickly point out that the donations are not transactional. No one ever says ‘I’ll pay you a hundred thousand dollars and you’ll get a law passed for me.’ Which is superficially true but substantively false. Political scientists refer to the political donation system as a gift economy. Donations create a sense of obligation. It is basically like getting invited to a wedding: everyone understands that you have to reciprocate and buy the couple a gift. It doesn’t explicitly say that on the invite because it doesn’t have to.

The solutions are simple: (a) transparency, which means shutting down National’s latest donation laundering scam, and (b) strict policing of conflict of interest. If corporations believe in certain MPs so much they just have to shower them with money then that’s great, but those donations should preclude those MPs from sitting on Select Committees or holding portfolios that impact on their donors. Let’s see how devoted these companies remain if their political clients can’t deliver law changes for them.

52 Comments »

  1. Or, total transparency, so if Fulton Hogan want to rain money on Gerry, we can all see. And make up our own minds regarding transport policy.

    Comment by northshoreguynz — March 2, 2015 @ 11:32 am

  2. Or Higgins on a mayoral candidate. Wait…

    Comment by jmarshall — March 2, 2015 @ 11:40 am

  3. So how is this going to work with the Union monies, no Labour MPs on those committees that deal with their interests
    Don’t see that happening

    Comment by rayinnz — March 2, 2015 @ 11:56 am

  4. “Donations create a sense of obligation. It is basically like getting invited to a wedding: everyone understands that you have to reciprocate and buy the couple a gift. It doesn’t explicitly say that on the invite because it doesn’t have to.”

    It’s not just an appeal to good old politeness, either. In this situation there’s an intonation that if you don’t reciprocate by acting favourable to the benefactor then a donation won’t be forthcoming in three years’ time, or (worse) that donation might go to an opponent.

    Comment by izogi — March 2, 2015 @ 12:02 pm

  5. Re the Unions, it’s different when the left do it.

    Comment by Richard — March 2, 2015 @ 12:17 pm

  6. Nash is interesting, because he is honest and transparent enough for everyone to see where his money is coming from – a hodge-podge of cronys, patrons, political influence seekers, and the proceeds of $1 a ticket local branch chicken raffles. It shows that most substantial political funding comes from those comfortable within the establishment’s Overton window. My guess is National’s centralised money laundering would show a similar pattern, along with some eye wateringly big donations that would be large enough to answer some questions over some odd policy positions of the government.

    The solution is to only fund political parties from capped membership fees topped up by the state based on total party membership with some allowance for poll ratings and votes achieved last election. So, if you have, say, 10,000 members capped at $100PA then you will get $1,000,000 maximum from members, and this base number would be bolstered by, say, a $1.50 state top up per maximum dollar amount- so a theoretical total of $2,500,000. Add to that say 25k for every percentage point you averages in a poll of polls over the previous 12 months and a party on 30% would top out at 3.25 million maximum income. Or, if you only charged $50 PA for membership on average, $2,750,000 – both plus however much you tithe your MPs . Or, if you are ACT and have 501 members, you’ll be stuck with 150K to play with.

    Asking a major political party seeking power to have 10,000 paid up members should not be a hard ask.

    Comment by Sanctuary — March 2, 2015 @ 12:43 pm

  7. $50 is a bribe. $50,000 is a statistic.

    Comment by Ben Wilson — March 2, 2015 @ 12:57 pm

  8. Ah, the old bingo card … “wot about the unions?”. You can see the Tory knees jerking under the computer.

    The unions give money to (usually) Labour MPs because they expect those MPs to act and vote in their members’ interests. That’s what the labour unions are for. (Whether Labour’s MPs have delivered in government is debatable, but that’s what they’re meant to do).

    If a National MP said “I take money from the alcohol / gambling / mining lobby because I’m here to vote the way they want”, that would be fine. Well, not fine, but honest. But they don’t, do they?

    They lie about both the source, and the purpose of the donations. That’s disingenuous at best, corruption at worst.

    Comment by sammy 3.0 — March 2, 2015 @ 1:07 pm

  9. At least with the trade unions, they’re open about their donations.

    Comment by Kumara Republic (@kumararepublic) — March 2, 2015 @ 1:26 pm

  10. so can people drop the whole “teh unions!” red herring now?

    Comment by framu — March 2, 2015 @ 1:54 pm

  11. What I don’t understand about Andrew Geddis’ article is why take the money if it is a poison pill? His argument seems to fail both Occam’s and Hanlon’s Razor.

    Comment by Robert Singers — March 2, 2015 @ 1:55 pm

  12. I see the malnourished penguin is trying to have a go at Stuart Nash. Given how National launder cash into slush funds to ship hot money around the electorates, you’d think he’d be more careful.

    Comment by Sanctuary — March 2, 2015 @ 2:19 pm

  13. @Robert Singers

    Why take Donghui Liu’s donation? Because when the money was given (August 2013) there was no issue about being associated with Donghui Liu.

    Liu’s domestic violence arrest was in December 2013. Williamson resigned on 1 May for interfering in this case. Just the day before (31 April) is when the National Party should have declared Liu’s significant donation to the party.

    Comment by RJL — March 2, 2015 @ 2:31 pm

  14. What I don’t understand about Andrew Geddis’ article is why take the money if it is a poison pill? His argument seems to fail both Occam’s and Hanlon’s Razor.

    For the same reason that National accepted $22,000 from Donghua Liu in 2012 … to quote David Mamet; “Everybody needs money. That’s why it’s called ‘money’.”

    Comment by Andrew Geddis — March 2, 2015 @ 2:47 pm

  15. “(b) strict policing of conflict of interest. If corporations believe in certain MPs so much they just have to shower them with money then that’s great, but those donations should preclude those MPs from sitting on Select Committees or holding portfolios that impact on their donors. Let’s see how devoted these companies remain if their political clients can’t deliver law changes for them.”

    The Ministry of Primary Industries and Ministry of Labour would suffer alternating hibernation periods.

    Comment by unaha-closp — March 2, 2015 @ 3:02 pm

  16. The solutions are simple:

    The solutions are gargantuan-ly complex, as workable regulations can only be written by someone who is:
    A) trustworthy and incorruptible
    B) a politician

    Comment by unaha-closp — March 2, 2015 @ 3:33 pm

  17. Robert Singers #11: because everyone seems to have their price.

    Comment by Kumara Republic (@kumararepublic) — March 2, 2015 @ 3:53 pm

  18. I don’t think that many politicians write regulations.
    That’s what they have staff and the public service for, both of which are tacitly assumed to be trustworthy if not always incorruptible.

    Comment by Gregor W — March 2, 2015 @ 3:56 pm

  19. How hard is it to get someone’s name correct.

    Jami-lee Ross…I mean it is on parliament’s website, National’s website…simple really.

    Comment by whaleoil — March 2, 2015 @ 4:12 pm

  20. For God’s sake, Parliament is a proper noun in this context. Not that difficult is it.

    After all, grammar and correct spelling really are at the heart of the issue here.

    Comment by Gregor W — March 2, 2015 @ 5:04 pm

  21. Perhaps a culture of obligation exists between a politician, her staff and the civil service?

    Comment by unaha-closp — March 2, 2015 @ 5:06 pm

  22. How hard is it to get someone’s name correct.

    It always pays, if you’re going to have a go at someone for getting a name wrong, to get it right yourself. Otherwise you come over as a right prat.

    Jamie-Lee Ross, not Jamie-lee

    Comment by Flashing Light — March 2, 2015 @ 7:38 pm

  23. “so can people drop the whole “teh unions!” red herring now?”

    So it’s not corruption if you’re honest about it?

    Comment by Matthew W — March 2, 2015 @ 8:28 pm

  24. It’s called Transparency International for a reason.

    Nobody on the right really thinks the unions’ open relationship is the same as the secret trusts. But you know, games must be played …

    Comment by sammy 3.0 — March 2, 2015 @ 8:58 pm

  25. I’m pretty sure National is openly “pro business”. So it’s quite similar actually

    Comment by Matthew W — March 2, 2015 @ 9:10 pm

  26. Have you even bothered to read the links in Danyl’s post?

    “Loophole: National Party donors stay secret”

    How do you know they’re from business? How do you know which companies? How do you know anything at all if they are secret?

    Come on, this isn’t hard.

    Comment by sammy 3.0 — March 2, 2015 @ 9:32 pm

  27. It’s the same rules for all the parties.

    Danyl has called for strict conflict of interest policing. Not sure what that means, but let’s assume he wants conflicts to be avoided, then it has to apply to Labour and the unions exactly the same as any other party.

    To pretend Labour doesn’t have the exact same conflicts of interest is sophistry.

    Comment by Matthew W — March 2, 2015 @ 9:59 pm

  28. Matthew – why is a conflict of interest for organised labour to openly support the (supposed) political arm of organised labour? It’s in the name really.

    Comment by Gregor W — March 2, 2015 @ 10:57 pm

  29. @Gregor W: But isn’t National the political arm of organised capital?

    Comment by kalvarnsen — March 2, 2015 @ 11:11 pm

  30. Sure. But they don’t call themselves the Organised Capital Party and, for example, take big open donations from banks then go on to pitch to voters about why it’s important to prioritise the rights of finance creditors over debtors.

    Comment by Gregor W — March 2, 2015 @ 11:28 pm

  31. why is a conflict of interest for organised labour to openly support the (supposed) political arm of organised labour?

    Are these union funds opaque enough to shove a ship load of money through?

    For instance if you wanted to brokerage massive sell off of state assets and radically change the social structure in favour of your rich friends. Or if your business wished to openly exploit Chinese labour rates and ditch all local manufacturing,

    Could a labour (It’s in the name really) party be helpful?

    Abso-effing-lutely.

    Comment by unaha-closp — March 3, 2015 @ 12:29 am

  32. ” We sell our votes for government money “

    Comment by fahdisjro — March 3, 2015 @ 2:18 am

  33. Gregor,

    It is not a conflict of interest for the unions to support Labour. The conflict Danyl sees lies with the MPs.

    Both Labour and National campaign on policy platforms that are somewhat consistent with the views of their donors, but are tailored to win votes. Which is fine.

    If they choose to use their power in government to “pay back” their donors that is wrong. If they act in a way that is consistent with their policy platforms and values and also happens to benefit their donors, that is ok, depending on the specifics. These are issues for all parties including Labour.

    Labour doesn’t campaign by saying “vote for us, we will support the unions with our power”. They talk about the things they will do for all kinds of people.

    More generally the issue is: are politicians representing their constituents or donors. For both major parties, these groups overlap but are not the same.

    Comment by Matthew W — March 3, 2015 @ 6:57 am

  34. Do you want to know who National’s donors are? Yes or no?

    Comment by sammy 3.0 — March 3, 2015 @ 7:29 am

  35. mathew W

    when you can show that the unions are donating money, and labour is utilising a means to keep the individual amounts and sources of the donation secret you can get on the tall pony.

    The issue is “the influence obtained COMBINED WITH the ability to hide your influence” – we know the unions donate to labour, we know how much – and we know what kind of law changes the unions might want

    contrast that with the truth that the national party is hiding the source of almost all of its backing, and while we know generally what big business wants – we have no way of looking at the funding sources and putting those alongside policy developments, and this applies to 80% of where their money comes from! Almost all of it is secret. Such brave champions of industry that need to hide themselves – what does that tell you? That they want to be open and transparent? Are they even NZers? Are they even real live people and not some multi national corp?

    eg: did warners donate big time to the nats during the hobbit debacle? If they did it changes how we view what happened doesnt it

    You can play dumb semantic games all you like – but they remain dumb semantics

    Going on about the unions is a red herring if the topic is “secret donations” – Why? because the unions donations arent secret. Not even slightly secret. They are in fact declared. And its the decleration of the funding that lets you and me figure out the what and why of labour policy at a level somewhat more nuanced than broad slogans.

    Comment by framu — March 3, 2015 @ 9:24 am

  36. @unaha-closp # 31

    Are these union funds opaque enough to shove a ship load of money through?

    To my knowledge, union funding is declared even down to the specific union – someone may have better info on this than me though?

    For instance if you wanted to brokerage massive sell off of state assets….etc.

    I’m not quite sure of what you are saying here, or are you just pointing out that the neo-lib NZLP of 30 years ago didn’t represent their classic constituency and was steeped in the methods of crony capitalism, indicating a degree of implicit corruption?
    If you are making that point then I wholeheartedly agree, but I don’t know what bearing that has on the issue at hand given that the both the National and Labour parties of today have are quite different beasts in terms of leadership personalities, ideology and policy.

    Comment by Gregor W — March 3, 2015 @ 9:45 am

  37. Is this time is different than the last 2 times? The union funding in 80s gave us Rogernomics. The union funding in the 00s gave us a FTA with China. These are policies that appeal more to centrists like me or people even further to my right, than most trade union members.

    Comment by unaha-closp — March 3, 2015 @ 11:18 am

  38. The union funding in 80s gave us Rogernomics. The union funding in the 00s gave us a FTA with China.

    Those are pretty long bows to draw, IMO.
    I’m sure you have a citations and/or analysis at hand somewhere that specifically links union funding with both of these outcomes, though?

    Comment by Gregor W — March 3, 2015 @ 12:18 pm

  39. “The union funding in 80s gave us Rogernomics. The union funding in the 00s gave us a FTA with China.”
    Lol: doesn’t this just tell ya that being more or less pro-business is the RIGHT thing to do? After all, businesses, their employees and customers pay all the taxes that fund the governments work.

    Comment by Clunking Fist — March 3, 2015 @ 1:54 pm

  40. clunking fist

    define pro business – are you talking SMEs or multinationals?
    and you missing the rather obvious point – those are examples of things happening despite the funding – unless you want to claim the unions secretly campaigned to destroy themselves or something

    Comment by framu — March 3, 2015 @ 3:06 pm

  41. “and you missing the rather obvious point – those are examples of things happening despite the funding ” But that’s my point exactly: perhaps govts do things they believe are correct, even if you don’t (believe they are the correct course of action), in spite of donations.

    “define pro business – are you talking SMEs or multinationals?”
    After all, we all know that multi-nationals (boo hiss) rape the world. My definition is ireelevnt: unfortunately, most govts, in effect, use a definition that we would call “crony capitalism”.

    Comment by Clunking Fist — March 3, 2015 @ 3:18 pm

  42. @Andrew Geddis what you’re saying makes more sense with the time line (thanks RJL) over laid on it, I’d forgotten those details. I’d like to posit a different motive. Having J-LR declare the donation and return it personally prevents the NP from losing face with the Chinese community, which would jeopardise more funding than just the $25K. It also allows Mr Liu to save face,and be a potential future donor.

    Comment by Robert Singers — March 3, 2015 @ 3:21 pm

  43. Let’s say that the EPMU gives the Labour Party a MILLION DOLLARS. (This is way more than the EPMU gives.) That works out to about $25 per member – which is exactly the kind of small scale widespread donation culture that we claim to want, and a corrective to the influence of really rich people throwing huge sums of private wealth around.

    Comment by Keir Leslie — March 3, 2015 @ 3:40 pm

  44. 38. Gregor W

    Of course not, but any lack of evidence isn’t going to stop me casting aspersions. After all that is what this thread is about

    My aspersion here is that the NZ organised labour unions look like they are funding the NZLP regardless of policy, thus making the transaction non-transparent. What if the unions are being led by a group of aspiring politicians and driven by pure political reasoning, instead of working for the union members they could be doing all sorts of stuff.

    Comment by unaha-closp — March 3, 2015 @ 3:56 pm

  45. @ unaha-closp

    Why talk about “what if’s” in an attempt to create unwieldy hypothesis when we can look at the facts in front of us.

    Exhibit A: A bunch of money is funnelled by the National Party to candidates in amounts unknown, by donors unknown, for benefits unknown but presumably related to the donor’s impression that benefits can be gained in doing so.
    Exhibit B: A bunch of money is funnelled directly to candidates of both major parties in amounts known, by donors known, for benefits unknown but presumably related to the donor’s impression that benefits can be gained in doing so.
    Exhibit C: A bunch of money is funnelled into the Labour party in amounts known, by Unions, for benefits unknown but can be extrapolated fairly easily by looking at what Unions are created to achieve (i.e. the preservation/enhancements of workers rights) and related to the donor’s impression that benefits can be gained from doing so

    A is pretty suspect.
    B is also pretty suspect because we still don’t know the cause and effect of said donations, but not as bad as A because we can infer something from who is making said donations.
    C is not really like A or B for reasons that are pretty obvious.

    Or hypothetically, the unions could be run by shapeshifting lizards hell-bent on the destruction of the proletariat, blah blah.

    Comment by Gregor W — March 3, 2015 @ 4:54 pm

  46. ” What if the unions are being led by a group of aspiring politicians and driven by pure political reasoning, instead of working for the union members they could be doing all sorts of stuff.”

    What if large companies are being led by a group of aspiring 1%ers and driven by their pure self-interest, instead of working for the owners and other stakeholders they could be doing all sorts of stuff.

    Comment by Stephen J — March 3, 2015 @ 4:56 pm

  47. One other thing: Richard Prebble, surprise surprise, has in the past called for trade unions to be banned from making donations to political parties, supposedly on the grounds that their members have no say in what parties they donate to. To turn the tables for a moment, imagine the wolf-crying, billboards and full-page adverts if corporations were banned from doing the same thing because shareholders didn’t have a say in political donations.

    Comment by Kumara Republic — March 3, 2015 @ 6:46 pm

  48. @Robert Singers,

    I’m not quite sure how telling Mr Liu “your money’s not welcome and we don’t want to be associated with you” enables him to “save face” – certainly his response doesn’t reflect that (he described the move as a “slap in the face”). But I guess anything’s possible.

    Comment by Andrew Geddis — March 3, 2015 @ 6:56 pm

  49. One other thing: Richard Prebble, surprise surprise, has in the past called for trade unions to be banned from making donations to political parties, supposedly on the grounds that their members have no say in what parties they donate to.

    Ironically the only time Richard Prebble ever obtained political power was when the unions gave his party lots of money.

    Comment by unaha-closp — March 4, 2015 @ 12:57 am

  50. @ Gregor W,

    The actions of a political party are of public record, therefore the benefits (or otherwise) of a political party are known.

    In all cases A, B and C we can judge the political party on their actions alone, there is no need to presume or extrapolate.

    In case A donors are sheilded and get to participate in democracy without attracting unwanted attention for their political beliefs.

    In case B the donations are smaller so of lesser general importance and to individuals who cannot generally be blamed for collective political action.

    In case C the donations have coincided with actions which are of historic record and the donors are tarred with a large amount of blame.

    Comment by unaha-closp — March 4, 2015 @ 1:36 am

  51. clunking fist

    would you agree thata policy setting that is good for large multinationals can be highly destructive to SME’s? (and vice versa)

    thats my point sunshine – so drop the ideological stereotypes.

    Its foolish to talk of being “pro business” if you cant see that “business” is a wide and varied thing

    Comment by framu — March 4, 2015 @ 8:19 am

  52. Unaha-closp;

    While your alternatate interpretation is valid from a theoretical point of view, the quickest way to give your POV a perception ‘sanity check’ on A or C would be to ask some friends and colleagues two questions.

    1. Is it ok for unknown donations from unknown parties for unknown amounts to enter our political process, resulting in unknown ends?

    2. Do you find Unions through the funding of the Labour Party morally accountable for the implementation and effects Rogernomics?

    Comment by Gregor W — March 4, 2015 @ 9:00 am


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