Australia: NSW Liberal Party denied public funding because of donation disclosure breaches

Last Updated: 8 May 2016
Article by Ian Robertson and Sarah Butler
Most Read Contributor in Australia, September 2016

On 23 March 2016 the NSW Electoral Commission (Electoral Commission) released a statement that it had decided that the Liberal Party of Australia (NSW Division) (NSW Liberal Party) was ineligible for its current claim for public funding of approximately $4.4 million from the Election Campaign Fund for the 2015 State Election and from the Administration Fund for the fourth quarter of 2015, on the basis that it had failed to disclose the identity of all major political donors in its 2011 declaration to the Electoral Commission.

In relation to the decision, the Chair of the Electoral Commission, the Hon Keith Mason AC QC, stated that:

Integrity and public confidence in the electoral system are vital.  The election funding and disclosure scheme promotes campaign finance transparency ... Parties seeking public funding must play by the rules.

A brief background: what happened and what are the rules?

The NSW Liberal Party established The Free Enterprise Foundation (Foundation) in 1981.  The Electoral Commission states in its Summary of Facts relevant to its decision that "the Foundation commenced to be used well before 2010 as a means of offering anonymity to favourably disposed donors wishing to support the [NSW] Liberal Party".

The Election Funding, Expenditure and Disclosures Act 1981 (NSW) (EFED Act) requires parties, members, groups, candidates and third-party campaigners such as trade unions and lobby groups to disclose the receipt of reportable political donations to the Electoral Commission in accordance with section 92 of the EFED Act.  A declaration of disclosure must cover a specific disclosure period, being each 12 month period ending on 30 June.  Relevantly, a person who makes a political donation during a relevant disclosure period that exceeds $1,000 is a major political donor and such a donation constitutes a reportable political donation under section 88(2) of the EFED Act. 

On 26 September 2011 the NSW Liberal Party lodged its declaration in relation to reportable political donations received for the period of 1 July 2010 to 30 June 2011.  This declaration included donations received from the Foundation on 16 August 2010 ($94,000), 22 December 2010 ($171,000), 23 December 2010 ($358,000 and $64,000) and 24 December 2010 ($100,000).  

In 2014 the Independent Commission Against Corruption (ICAC) commenced "Operation Spicer" for the purpose of investigating allegations that certain members of Parliament and others corruptly solicited, received and concealed payments from various sources in return for certain members of Parliament and others favouring the interests of those responsible for the payments.  Oral and documentary evidence provided in the Operation Spicer inquiry and published on the ICAC website disclosed that the sources of the Foundation's donations were a series of individual donors.  In its Summary of Facts, the Electoral Commission states that most of these individual donors were considered major political donors who required disclosure under the EFED Act.

On 11 February 2016, the Electoral Commission contacted the NSW Liberal Party to inform it that the Electoral Commission had considered the evidence published by the ICAC and that, following its own inquiries, it considered that the donors and their corresponding donations should have been individually disclosed to the Electoral Commission.  The Electoral Commission asked the NSW Liberal Party for submissions on this issue and for an amended declaration that disclosed the relevant details of the major political donors in question. 

There was a series of correspondence between the NSW Liberal Party and the Electoral Commission during early 2016 in which, in summary, the NSW Liberal Party contended that a disclosure in the requisite form had been lodged and that its adequacy in terms of detail was irrelevant to the decision of the Electoral Commission as to whether to withhold its public funding under the EFED Act. 

The Electoral Commission's decision

The Electoral Commission concluded that there were "significant breaches of the election funding laws" and that until the NSW Liberal Party's disclosure was rectified, the Electoral Commission was required to withhold payments for claims by the NSW Liberal Party from the Electoral Campaigns Fund and the Administration Fund, in accordance with sections 70(1) and 97L(1) of the EFED Act.   In summary, those sections provide that a party or elected member is not eligible for any public funding payment or administrative and policy development funding payment where there has been a failure to lodge a "requisite declaration" under Part 6 of the EFED Act. 

Reasons for the Electoral Commission's decision

In reaching its above decision the Electoral Commission concluded that:

  • The Foundation was not a validly-constituted charitable trust because the purposes of the money which it controlled were not exclusively charitable in the eyes of the law.  When the Foundation paid money to the NSW Liberal Party in 2010 as disclosed to the Electoral Commission, the Foundation was merely acting as an agent for the original donors.
  • Accordingly, instead of disclosing the Foundation as the donor, the NSW Liberal Party should have disclosed the individual donors in its declaration if the sums involved made them "major political donors" under the EFED Act. 
  • In any event, section 85(1)(d) of the EFED Act was engaged.  This section provides that a gift made to or for the benefit of an entity (which was, according to the NSW Liberal Party, the Foundation) which was used or intended to be used by the entity to enable the entity to make directly or indirectly a political donation is itself a political donation.  The Electoral Commission concluded that section 85(1)(d) applied for two reasons. First, because the gift was actually used by the Foundation to make a donation.  Secondly, because the gift was intended to be used by the Foundation to make a political donation.

The Electoral Commission's statement and relevant information, including correspondence with the NSW Liberal Party in the lead-up to the Electoral Commission's decision, is located here.  The Electoral Commission has stated that the purpose for it releasing this information on the Electoral Commission's website "is to assist with increasing public awareness about the work of the Commission, to understand how and why this decision was made and demonstrate to the public that NSW's electoral laws are enforced". 

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ian Robertson
Sarah Butler
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.