Australia: Explained: The Liberal Party's Parakeelia rod

The manner in which Parakeelia has buried its beak in the national feed tray is, once the legal chicanery is stripped away, as brutally simple as laundering drug money through a casino, writes Michael Bradley.

Parakeelia. Sounds like an exotic and colourful member of the parrot species, but it's a bird of prey.

Its activities have not yet achieved the attention they deserve because, when one says "politicians' entitlements" and "political funding disclosure" in the same sentence, the national eyes glaze over.

Well, sit up and take a bit of notice, because the manner in which Parakeelia has buried its beak in the national feed tray is, once the legal chicanery is stripped away, as brutally simple as laundering drug money through a casino. Our taxes are funding the Liberal Party, in large sums and without our informed consent.

Parakeelia is a company owned, in some unclear way, by the Liberal Party. It provides software services to the party's federal members of Parliament - voter-monitoring software that compiles information about constituents. That information appears to be largely compiled by MPs' electorate staff - that is, Liberal Party operatives. No doubt it's highly valuable data. Reportedly each Liberal MP in Federal Parliament pays Parakeelia $2,500 each year for access to it.

The MPs get that money from us. The source is the Parliamentary Entitlements Act, one of numerous instruments which supplement MPs' salaries. Specifically, Item 7, Part 1, Schedule 1 of the Act, as amended by Schedule 1 of the Regulations (yep) gives each MP an allowance for their electorate office:

...together with equipment, facilities, office requisites and stationery necessary to operate the office, as approved by the Minister, for purposes related to Parliamentary, electorate or official business, but not commercial business.

And not party business. "Office requisities" include software. The allowance was increased last year from $1,650 to $2,575.50.

With me so far? MPs are entitled to this money to pay for software necessary to run their electorate offices. The Liberals all choose to spend it on Parakeelia's software and associated support services (training, helpdesk). Assuming the software's use meets the definition of "Parliamentary, electorate or official business", so far so good. We'll come back to that.

We don't know a lot about Parakeelia's finances, but we do know what it does with quite a lot of its money. It gives it to the Liberal Party. According to Australian Electoral Commission returns, Parakeelia has given more than $1.4 million to the Liberal Party since 2008-2009, including $1.1 million in the past three years.

AEC returns tell us who gave a political party more than $12,100 in any year. Each receipt is listed either as a "Donation" or "Other". All the Parakeelia payments are shown as "Other". The only other information we have on this comes from a statement by a Liberal Party spokeswoman that:

Payments from Parakeelia to the Liberal Party are not donations. These operations are entirely lawful.

And this from Julie Bishop:

The payments are for services provided through the party [and] it's entirely legitimate.

If Parakeelia's money isn't a donation or a loan, then it seems the $1.4 million can only be payment for services rendered by the Liberal Party to Parakeelia. What could the Party be doing for Parakeelia which is so expensive?

Perhaps this is in the same realm as the kinds of "services" the Australian Workers Union offers, such as the advertising and training services it supposedly provided to Thiess John Holland in return for $300,000, under a deal struck in 2005 while Bill Shorten was running the AWU.

This brings us back to the legitimacy question. According to disgruntled, disendorsed Liberal MP Dennis Jensen, what Parakeelia really does is collect information provided by the staff of Liberal MPs from all their contacts with constituents. He says this information has legitimate uses, but "it's used for data mining for the Liberal Party, for issues relating to trying to get votes, for fundraising and other reasons."

He says Liberal MPs were instructed to cold-call constituents to survey them and enter that data into Parakeelia's database.

Two obvious issues arise here.

First, the Liberal Party's insistence that Parakeelia is paying it money for services, not making donations, supports the proposition that the leg-work involved in building and maintaining Parakeelia's databank is being largely provided by Liberal Party operatives, for which Parakeelia is paying a commercial rate.

Secondly, it's difficult to see how any of this fits the statutory definition of "parliamentary, electorate or official business", which is the only lawful basis on which MPs can claim the 82,500 entitlement. The very fact that Parakeelia operates a centralised database, which the whole Liberal Party uses, is inconsistent with the suggestion that each MP is spending their software allowance on Parliamentary or electorate business. Clearly, it's actually party business.

The whole entitlements system is based on a supposedly clear distinction between the legitimate work of MPs - serving their electorates, engaging with constituents, doing work on Parliamentary committees and performing their portfolios if they have any - and the business of trying to get re-elected and promote their party to voters. The latter is a perfectly appropriate and necessary feature of parliamentary democracy; it's just that the public is not supposed to pay for it. Party business is supposed to be funded by the party, using money raised from people who want to support the party. The public purse provides generous election funding, but that's all.

I don't think it's very hard to conclude that the money that Liberal MPs are drawing for their software entitlement and paying to Parakeelia is not legitimately available for that purpose. That is, they're all rorting their entitlement.

I also don't think it's hard to see through the Parakeelia/Liberal Party scam, which works like this: $2,500 per Liberal MP is routed to Parakeelia. Parakeelia's work appears to be largely carried out by the Liberal Party via its MPs' staff, and "sold" to Parakeelia at a high price. Parakeelia thus pays large sums to the Liberal Party, which gets the double benefit of the cash and the work product of its own staff. The person paying for it is, by means of this round-robin, the Australian taxpayer.

Is this legal, as the Liberals claim? If the $2,500 entitlement is being legitimately claimed (which I very much doubt, as I explained), then yes it is probably legal. It is, however, deeply immoral. It points to how hopelessly inadequate the current system of parliamentary entitlements and financial disclosure by political parties is; how easy it is for parties to drive a big fat money truck through the holes in that system; how much contempt they have for us; and, again, how badly we need a federal anti-corruption body.

(For the record: the Labor Party's MPs also spend their entitlement on similar software, raising the same issue of legitimacy; however, their software provider is an independent third party. They're still having a lend of us, just to a lower degree of grubbiness.)

That stench you detect is coming from the carcass of the long dead concept of integrity that public service supposedly comprehends; the carrion birds are feasting at will.

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