Schadenfreude

David Cunliffe’s many mistakes over the use of a trust to hide donations to help  his leadership campaign have provided his opponents with the opportunity to accuse him of all sorts of things, including hypocrisy.

Probably none relishes this more keenly than John Banks who can be forgiven for more than a wee bit of schadenfreude:

ACT MP John Banks labelled Mr Cunliffe and former leader David Shearer, who initially failed to declare an overseas bank account, as hypocrites.

“These are the same people who paraded in the house as paragons of virtue and railed against me day after day, week after week and month after month. They should look at themselves – these people are hypocrites.” . . .

Duncan Garner also employs the h word:

. . . David Cunliffe is a former high-flying business consultant – his wife is a top lawyer – they know how these things work. His friends are business people. His wife knew about it and kept all this secret. How on earth did she think they were going to get away with this approach? Their collective judgement on this is woeful.

Where was he when Labour rallied against National’s use of trusts to fund its many elections campaigns? It’s why Labour changed the law and brought in the Electoral Finance Law. Was he not in the Parliament at the time? No, he was there. Did he speak up against National’s use of secret trusts? Oh yes he did.

Labour politicians of all shapes and sizes criticised National for months for receiving secret money. Cunliffe was in there, boots-‘n’-all. Trevor Mallard went further and claimed there was a ‘secret American bag-man.’ It was never proved.

I’ll never forget Labour climbing into National over electoral finances. Now Cunliffe looks like a complete hypocrite despite the apology. National has every right to pile into him on this. Just like Labour piled into National over secret trusts and campaign donations.

I’m starting to wonder just who Cunliffe is. What does he stand for? Is he anti-business or pro-business? Does he care about the poor? Or hang out with the rich? My big question really is this: Who is the real David Cunliffe?

Is he a fake?

That’s an f word no politician can afford to have directed at them, especially when more than half his caucus will also be feeling more than a wee bit of  schadenfreude.

Trusts, trust and transparency

Labour leader David Cunliffe is in the news for the wrong reasons again:

Labour leader David Cunliffe used an “agent arrangement” to take donations to his leadership campaign last November and is refusing to say whether he has disclosed individual donors in the MPs’ register of financial interests or whether they were disclosed as being from a trust.

It will be one or the other, why won’t he say which?

The returns for the Register of Pecuniary Interests were due last Friday, and Mr Cunliffe said his return met both the rules of the register, which requires disclosure of donations of more than $500, and those of the Labour Party, which said all donations would be confidential.

He refused to say how he had met both rules, or whether he had declared donations as being from a trust rather than the original donors.

But he confirmed his campaign was run through an “agent arrangement” rather than taking donations directly. He sought a legal opinion before filing his return and defended the use of trusts.

“In the event donations are made to a trust, the trustee will have information about donations which a candidate or campaign team won’t have. So [if] there is a trust involved, it will be the donations of the trust to the campaign that are declared, as per the rules. If there is a trust, trustees owe obligations of confidentiality.” . . .

How do we reconcile that statement with this:

In 2005, Labour changed electoral finance rules to stop National filtering large anonymous donations through trusts. Grants made through a trust must now be disclosed separately if larger than the disclosable limit of $15,000 to a party or $1500 for an individual candidate.

Mr Cunliffe said there was “nothing at all” to embarrass him in his return.

“It does appear there is a difference between the rules of the party and the rules of the Pecuniary Interests Register. MPs are bound to satisfy both. I’m confident that to the best of my knowledge I have done so, and the results will be in public view to the extent required by the Pecuniary Interests Register.” . . .

It will take someone with a better understanding of the law than I have to explain how two apparently contradictory requirements can be reconciled.

But regardless of that, Keeping Stock points out:

During the debates on the Electoral Finance Bill (since repealed and replaced) speaker after speaker from Labour, the Greens and NZ First railed against the National Party for legally declaring donations through a trust or trusts.

What he did could well be within the rules but isn’t it more than a wee bit hypocritical to rail against trusts to vehemently then use one himself?

The point of the rules was to give transparency which is necessary so we can have trust.

It looks like Cunliffe used a trust but there’s a problem with transparency which makes it all look a bit tricky and therefore it’s difficult to have trust.

So much for consensus

Justice Minister Judith Collins has made it clear she wants to get consensus on any change to MMP as a result of recommendations from the electoral Commission.

The shameful ramming through of the Electoral Finance Act and its short life are a reminder of why any changes to electoral law should have more than a simple majority.

Labour obviously doesn’t care about that.

David Shearer said the party is going to introduce a Member’s Bill on MMP:

“Labour’s bill will deal with the most important recommendations made by the Commission. It will abolish the one electorate seat threshold for the allocation of list seats and lower the party vote threshold from 5% to 4%. It will also require the Electoral Commission to conduct a review after three general elections.

“This should not be a party-political issue. I will be writing to the Prime Minister offering to work with the Government to see these changes put in place.

It’s more than a little rich to talk about it not being a party-political issue when he’s writing off the government’s attempt to find common ground before it’s been given a chance.

So much for consensus.

No consensus, no change

Justice Minister Judith Collins is consulting all parties about the Electoral Commission’s final report on MMP and she wants to get as much of a consensus as possible.

I think it’s important that we have electoral reform of this sort of magnitude that has  . .. not just a straight majority in parliament but a very substantial majority in parliament. . . .

I well remember what happened when the Electoral Finance Act was rammed through . . . and I know that that caused a lot of angst in parliament and in the public. . .

She is right about both the importance of consensus and the angst caused by the EFA. The then Labour-led government didn’t have much support in or out of parliament but rammed it through anyway.

Electoral law is too important to be treated that way. It should be enduring and it is more likely to be so if it has broad support in parliament.

Wellington constitutional lawyer and former Vote for Change campaigner, Jordan Williams  says the government should reject the recommendations and stick with the status quo.

Unless the government can get strong support for changes that is good advice.

If there is no broad consensus there should be no change.

Sabotage or stupidity?

Memo to Andrew Little:

When you’re the president of a party which is trying to drag itself out of the poll doldrums it’s not a good idea to attack the media.

He criticised the country’s three main daily papers for editorials supporting the Social Development Minister, Paula Bennett, after she revealed the details of two beneficiaries’ incomes. The women had made headlines for criticising government policy.

Mr Little called the editors who published the pieces “a disgrace” and said they had no place in an organisation such as the Commonwealth Press Union. He says the affair demonstrated how fragile freedom of speech is and what Labour is up against in trying to get balanced media commentary.

Telling only the part of the story which supports your point (forgetting, or ignoring that these beneficiaries went to the media first) reminds us of recent instances when your leader has fed only part of the story which supported his point and looked silly when the full facts came out.

Pointing out the fragility of freedom of speech reminds us yours was the party which passed the Electoral Finance Act.

That’s either an act of sabotage or it’s stupid. Neither of those is a good look for a party president.

Free elections key to Democratic Club membership

Travelling in Europe always reminds me how fortunate New Zealand was to have been settled by the British who came from a democracy and established another in their colony.

Europe is far older than us but many countries here are much newer to democracy than we are.

It’s only 34 years since Franco died and it was a couple of years later that democracy was established in Spain under a constitutional monarchy.

Further east democracies are much younger and some countries have yet to attain it.

Former British ambassador to Moscow, Tony Brenton, sees a role for established democracies  in fostering democracy in countries where it is incipient or endangered. He also sees a role for a Democratic Club and comes up with a simple requirement for membership:

A country must be willing to allow independent international observers to attend and report on its elections.

. . .  Even countries with such impeccable democratic qualifications as the UK might have to modify electoral law to allow observers full access to the balloting process. And the sourcing of observers would itself have to be watched. There are tainted sources, but also excellent ones such as the OSCE (Organisation for Security and Co-operation in Europe). The core concept, however, could not be starker. If you hold an election judged by international experts to be free and fair, you are a democracy. And if not, not.

It would have been interesting to see if a country with impeccable democratic qualifications such as New Zealand would have passed this test with last year’s election under the Electoral Finance Act.

We can be thankful it has gone but it would be a good guide to keep in mind this criteria when designing the legislation which will replace it.

Imagine the shame if we didn’t qualify! That and the desire to be part of an exclusive, albeit essentially toothless, club is one of the things which Brenton thinks might help foster democracy.

That is a worthy aim. The international community has a real interest in the spread of democracy to those places yet to gain it because ii is not only better for the people in the individual countries, it helps make the world a more stable place.

If a Democratic Club helps encourage democracy then it’s definitely worth promoting.

How much would it take to buy an MP?

The $999 limit for donations from individuals and $9,999 from organisations before they have to be disclosed has always struck me as ludicrous.

MPs may not be held in high regard by many people, but does anyone seriously believe one or more could be bought for that little?

 Stephen Franks reveals  that MPs definitely thought it was far too low:

During that debate (behind closed doors) the United Future MP Murray Smith, persuaded us to have a frank discussion about what amount of money we thought would actually be likely to influence a party’s manifesto. We eventually reached a consensus that it was around $50k.

I may be naive but I don’t think an MP or party could be bought for that amount either, but at least it’s a sum which would allow most of those who, for good reasons, might wish to donate to a political party to do so anonymously if they chose to.

Those good reasons include:

* Modesty – I know a lot of people who donate anonymously to all sorts of organisations because they don’t want any publicity.

* Wanting to keep the donation a secret from a partner, family or friends. Not everyone feels free to disclose their political views, especially if they’re in an unequal relationship where they’re the less powerful person.

* Wanting to keep the donation secret from an employer. Some employees may feel their employers don’t share their political views and may be concerned that a public donation might put them at a disadvantage.

*Wanting to keep the donation secret from employees. Some employers may not wish their staff to know their political allegances.

* Wanting to keep the donation secret from associates or clients because the donor might feel it could harm their business.

* Wanting to keep donations secret from other parties. Some people give to more than one party and might not want them all to know that.

Many of those who want full disclosure of donations argue it’s to stop big business and wealthy individuals buying influence. But if the amount is set too low it catches a whole lot of “little” people who want to help a party whose policies they support but don’t want others to know they’re doing it.

Apropos of this, Labour secretary Mike Smith says big donations are drying up.

Would that have anything to do with the Electoral Finance Act, the unpopularity of his party’s policies and the recession?

One down another to go

The Electoral Finance Act has gone so the government can turn it’s attention to addressing another threat to freedom of expression – the Guilt by Association law Section 92A.

 

See more at:  goNZofreakpower, MacDoctor, Hand Mirror,  Not PC, WhaleOil,  Kiwiblog,  Juha Saarinen and Russell Brown.

Break out the champers

The affront to democracy that was the Electoral Finance Act was repealed this evening.

It was consigned to the dust bin by 112 votes to 9 when only the Greens continued to blindly support the misguided and badly drafted peice of legislation to the bitter end.

What do you do when the evidence proves you wrong?

Mike Moore writes that the ability to change one’s mind is a virtue.

The great economist, Lord Keynes, was once challenged at a media event – they had the “gotcha” press even back then.

How, he was asked, could he justify his statement when just a few years ago he had said the opposite ? “When the evidence proves I’m wrong, I change my mind.

What do you do ?” he replied sweetly.

The rest of the colum would be instructional reading for the Greens because of its economic message and because they’re the only party in parliament that won’t accept the evidence about how bad the Electoral Finance Act was and will be voting against its repeal.

Until their blind support for the EFA I had thought the Greens were principled. Their attachment to that dog’s breakfast changed my mind and their refusal to support its repeal confirms I was right to do so.

Inquiring Mind  points out the Green’s disdain for democracy, Monkeywithtypewriter reminds us of exactly who was to blame for the Act and lists its faults; and Keeping Stock  celebrates the Act’s demise.

Getting it right from the start

Labour got the Electoral Finance Act wrong from the start by trampling all over the convention that such measures should have multi-party support.

National is getting the first steps right  in the process which will provide a democratic and enduring replacement by involving all parties in consultation and providing opportunities for public submissions.

Inventory 2   notes John Key is keeping a promise made in his contribution to the third reading debate in December 2007.

(He also notes he started his blog Keeping Stock  in response to the bill and I’m pleased that while the EFA is going his blogging will continue).

Posts on Kiwiblog contributed some of the most intelligent opposition to the EFA. I agree with comments on this post  which give due thanks to David Farrar and Whaleoil  for the part they played in opposing the Act.

It was an attack on democracy and among its many faults was the way it made it stifled expression not just during the election campaign but for almost all of election year because of the confusion over what was and was not covered by it.

Logo saga continues

The response to my email to the Electoral Commission asking why the logo on Rodney Hide’s jacket breached the EFA (see posts here and here) when the logo on Metiria Turei’s bathing suit didn’t said it was the logo not the slogan that was the problem.

I responded asking if there had been a decision made on logos and the response to that said there had been no published decision.

I replied asking if there had been an unpublished decision and if so when it would be published.

The response to that was: 

We only make published decisions

I’ve replied explaining: I’d had an email in May saying all logos which had been referred to the Commission would be considered when they considered the logo on balloons; I recalled reading that the matter had been referred to Crown Law for an opinion but I’ve seen nothing since; and asking when the decision on logos will be made.

I don’t think this is an unreasonable request, but perhaps I’m missing something.

If his jacket breached the EFA why didn’t her bathing suit?

Rodney Hide has been referred to the police for breaching the Electoral Finance Act by wearing his yellow jacket with the Act logo but without an authorisation.

If his jacket breached the EFA then why didn’t Metiria Turei’s bathing suit?:

 

I wrote a letter to the editor after seeing this in the ODT saying she was breaching the act by wearing a wetsuit emblazoned with the Green logo without authorisation. She wrote a letter back saying she wasn’t so I emailed the Electoral Commission to ask which of us was correct.

The initial reply said:

You suggest that a party logo by itself constitutes an election advertisement.

 An party advertisement is

‘any form of words or graphics or both that can reasonably be regarded as encouraging or persuading voters to do either or both of the following:

(a)      to vote for the party (whether or not the name of the party is stated):

(b)      not to vote for another party (whether or not the name of the party is stated)’

 It is not clear to me that a party logo, by itself, meets this definition.

When I saw a news item saying the commission was considering whether a balloon with a Labour Party logo constituted an advertisement I emailed back suggesting that if a logo on a balloon was going to count then a logo on a wetsuit must too, especially when the story beside the photo included this quote:

“ Mrs Turie said …. She chose not to compete in a wetsuit, preferring a swimsuit emblazoned with the Green Logo. “It’s always good to get your message out there.” ….  She said competing not only helped her promote the Green message throughout the country…”

I received a reply to that email on May 1 saying that when the balloon logo was considered the commission would consider all other logos which had been referred to them but have heard nothing further.

In light of the new development I will email again.

 

EFA bites again

Just in case anyone thinks the Electoral Finance Act was good legislation, yesterday’s NBR reminds us it wasn’t.

ACC’s plans to consult on fully-funding ACC by 2014 or 2019 were put on hold because they could have breached the Act.

Never too late

It’s supposed to never be too late to say sorry, and there’s nothing wrong with changing your mind when presented with new evidence which shows your previous stance was wrong.

So I’m not going to criticise Phil Goff because he’s admitted Labour got the Electoral Finance Act wrong.

But I’d be very interested in what he knows now that the party didn’t know a year ago when so many people and groups provided so much evidence that it was  a dogs breakfast and an attack on democracy.

And like Keeping Stock, I wonder if his new deputy and former Minister for Common Sense agrees with him.

That aside, I am confident National will show more common sense, graciousness and understanding of the importance of cross-party support for constitutional matters when drawing up the replacement than Labour did in ramming through the original.

MMP emasculates

The Electoral Finance Act has rightly received much of the blame for a dull campaign but Muriel Newman also points the finger at MMP:

The MMP system itself is also responsible for emasculating the campaign. Parties have turned a blind eye to the radical policies being promoted by some, lest they offend those who may become bedfellows after the election. As a result, policies are not being exposed to public scrutiny and the radical agendas of some parties are largely unknown to voters.

MMP also threatens good government and the democratic process by allowing minor parties to exert influence far beyond their electoral support. This is particularly true of the Maori party which only attracts the support of mainly activist Maori (about 2 percent of the population) yet is likely to win around 5 percent of the seats in Parliament through the racially based Maori seats.

. . . Former Labour Prime Minister Mike Moore puts it this way: “No major party dare question the Maori party because they know they will have to do a deal, best save that until later. But what some Maori party leaders have said should be reason for some tough media questions. For example, when a leader says they want equal representation in a government because it’s not about numbers, it’s a partnership, what does that mean?  Sorry, democracy is about numbers.

One of the strengths of the adversarial nature of parliament is the scrutiny opposing parties subject each other to. However attacks are sometimes blunted under MMP because MPs know their party might need the support of other parties and therefore they pull their punches.

At best this means policies and actions don’t get the rigorous examination they ought to have. At worst it could allow corruption to go unchecked and we had an indication of how that might happen in Labour’s refusal to accept the Privileges Committee censure motion of Winston Peters.

NZ 7th in world for press freedom

New Zealand has moved up from 15th to 7th place in an international ranking of media freedom  by Reporters without Borders.

It’s hard to say exactly what that means because while being better than the absolutely awful doesn’t make you good, nor does being worse than the absolutely perfect make you bad.

However, by and large the media is pretty free in New Zealand which is something to be grateful for, and also something we should guard jealously.

Parliament’s move to stop TV filming anyone who was not speaking is hardly worth mentioning in the same breath as imprisonment of journalists who fall foul of the powers that be, but it’s still a restriction of media freedom.

The Electoral Finance Act largely left reporting and comment in the media alone, but Newstalk ZB may have breached the Act because of something said on a talkback. Again this is minor in comparison with restrictions in some other countries, but that doesn’t mean we aren’t justified in being concerned about it.

So while we can take some pride in our ranking, we should see it as an achieved or perhaps even a merit but there’s still work to be done if we want to get an excellent.

Update: Poneke reckons the ranking makes us a bastion of free press.

Don’t audit election returns – NZICA

Stephen Franks says the New Zealand Institute of Chartered Accountants is warning its members against auditing election returns of expenses required under the Electoral Finance Act.

. . . a member must consider how appropriate it is, applying the Fundamental Principles in the Code of Ethics, to accept an appointment to “audit” subject matter information that is inherently unauditable. . .

We believe that auditors will have little choice but to state that they have been unable to form the required opinion (ie disclaim any opinion) for the following reasons:

§         There is currently significant uncertainty surrounding what constitutes an election advertisement. 

§         The risk surrounding completeness.  It is difficult to envisage any situation where the auditor would be able to perform audit procedures to give assurance that all expenses have been recorded in the returns – how to establish how many advertisements exist and then how to conclude that all expenses associated with each advertisement are included (particularly where some materials or space has been provided at no charge).

§         Difficulties in establishing the commercial value of materials or advertising space provided free of charge.

§         Difficulties in the apportionment of election expenses of election activity between individual candidates and the party as a whole.

§         It is possible that public funds may have been used for electioneering (as the Auditor-General determined to have happened after the 2005 general election).  No auditor reporting under the Electoral Financing Act will be able to obtain assurance that public funds have not been used in advertisements intended to persuade a voter to favour a candidate or party in an election unless they audit the Parliamentary Services.

 

We note that a disclaimer will most likely be the appropriate form of opinion even in situations where the party or third party involved has implemented strict controls and done everything possible to ensure that the return is as accurate as possible.

 

Clearly this is an unfortunate situation and could have negative connotations.  Those reading the report may misinterpret the opinion (or lack of an opinion).  This is of particular concern given the highly politically sensitive nature of the information contained in the returns and the possibility of high media attention.  The Institute has formally raised this with the Electoral Commission and are attempting to meet with the Chief Executive to discuss this further with her.”

Stephen rightly says:

It is a disgrace to New Zealand democracy, that our audit standards body is saying that an election law is so defective that a prudent auditor should refuse to get into the position where they might have to give an opinion on how it is applied.

What a hurdle the law is to challengers to the political establishment wanting to make sure they do not render themselves liable to huge fines or imprisonment. Even if they could afford professional advice, the professionals are saying many of the questions are inherently unknowable. Establishment insiders of course have party structures and systems to form a consensus on what risks are being run.

Every party and every candidate must find some poor sod to give that sign-off opinion if they are to participate in our democracy. Belatedly the accountants are saying – find someone silly, but not us.

What’s going to happen if/when candidates can’t find anyone to sign off their accounts?

19 more sleeps . . .

. . . until the election and thanks to the Electoral Finance Act we still don’t know it logos are election advertisement.

EFA scares radio from interviews

Kapiti Coast Access radio is too scared to run election candidate interviews because it fears falling foul of the Electoral Finance Act.

Access Radio recorded seven of 12 interviews with Kapiti and Mana election candidates last week but decided not to air them.

The station was concerned the interviews could be seen as election advertisements, rather than current affairs, and attract public complaints.

The Kapiti Coast station’s manager, Graeme Joyes, said the Electoral Commission could not guarantee that running the interviews was safe and the community station was too small to risk testing the laws in court.

“That’s not a street I actually want to walk down. We’re the minnows of the radio world and we can’t afford a court case.”

The electoral rules were too vague on what was classed an election programme and what was current affairs.

“It’s a very, very tenuous boundary. It needs a really good cleanup so we have a clear understanding what we can or can’t do.”

. . . Commission spokesman Peter Northcote said it could not give advice to broadcasters and the decision rested with the station.

“We appreciate it may be difficult for the broadcasters [but] it’s their call how they manage their risk around that.

“It’s important not to think this is one of these Electoral Finance Act issues – it’s not. The Broadcasting Act’s got a definition of what an election programme is. That hasn’t changed.”

That may not have changed but I don’t recall any media exhibiting this level of fear before the EFA was imposed on us.