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Estimates: Finance and Public Administration Legislation Committee: Finance Portfolio: Australian Electoral Commission

Estimates & Committees
Lee Rhiannon 2 Jun 2017

Thursday 25 May

Senator RHIANNON: Mr Rogers, in response to a question put by Senator Hanson, you volunteered that Labor had submitted an amended return. Then, in response to a question by Senator Watt asking if One Nation had submitted an amended return, you would not comment. Why was there a difference in your response?

Mr Rogers : I think I made fairly clear that, as I mentioned earlier, because there is an active investigation into the matters involving One Nation, I am loath to comment further about that matter.

Senator RHIANNON: That involves that return?

Mr Rogers : I have said what I have said. As a result of the issuing of those notices, I am loath to comment further on that matter.

Senator RHIANNON: On another matter, does the AEC review, as part of compliance reviews, party websites for how parties solicit donations?

Mr Rogers : I think I have to take that on notice. Let me make a general statement. We undertake a range of activities when we undertake a compliance review using the powers available to us under the Electoral Act. Whether we, to rephrase what you said, conduct a review of party websites to see how they solicit donations—my gut feel would probably be no, but I will take that on notice and confirm. If there is a specific instance you would like to raise with us, I am happy to look at it.

Senator RHIANNON: I will go through some of the details and then come to it. If a party's website were soliciting donations for the party but there were also a separate stream for donations to a party figure—that is, an individual using their own name, so they are not identified with any party position or link to that party—would that be of interest to the AEC?

Mr Rogers : It would be really helpful if you were to give us a specific instance to look at rather than asking me to try to answer questions in the broad about bits of the act and how they might apply. The act is so complex and there are so many different provisions that it is very difficult for me to provide those sorts of answers to you. But, if you have a particular instance you would like me to look at, I am happy to examine that.

Senator RHIANNON: I have a screenshot from the One Nation website that shows the two streams where you can donate to One Nation and you can donate separately to Pauline Hanson; and the way you do that is listed there. Can I table that?

CHAIR: I will take a look but, in principle, certainly.

Mr Pirani : Without having a look at the screenshot, I am not aware of any provision in the Electoral Act that would prohibit a person who is an endorsed candidate or a member of the political party obtaining or seeking donations in their own name, as opposed to that of the party. The act has provisions in relation to the disclosure of donations that are received by the party in their annual returns and also by candidates.

Mr Rogers : If the donation is over the disclosure threshold, there would be some sort of obligation that is triggered as a result. I have not seen the issue that you raise.

Senator RHIANNON: I had some questions about disclosure and so I might ask them while we are waiting. If someone sends a cheque to party headquarters and the amount is above the disclosure threshold and the cheque is addressed to the party figure—that is the individual—would the donor or the party be obligated to disclose the donation?

Mr Pirani : That would depend upon the particular facts. In relation to the intention of the donor, the donor will have an obligation. I mentioned earlier section 304(5) of the act which deals with the intention and how the money is going to be used. If the money is given to a person and not for the purposes of the conduct of an election, then there is no disclosure obligation in relation to that individual. If the money is used and intended to be used for the purposes of the conduct of an election, then the donor will have a reporting obligation and the recipient candidate will have a disclosure obligation. If the money goes into the account of the political party, then under section 314AB the party will have a disclosure obligation in relation to that as well. It really does depend upon the particular facts and circumstances that apply to both the making of the donation and the receipt of the donation and how that money is to be used.

Senator RHIANNON: My question was: would the donor or party be obligated to disclose a donation? I think you have answered the question but I am trying to understand: if we are in an election period do we assume the donation is for the election?

Mr Pirani : I cannot assume that.

Senator RHIANNON: So let's flesh this out. Pauline Hanson—because it is set out on the website—can get donations sent just to her with nothing said about the political party. Even if it is in an election period and the she does not say that it is for the election, then that is her money, is it?

Mr Pirani : The issue becomes the intention of the donor. That is what section 304(5) deals with. So if it is used by the person for their own personal purposes, then there is no disclosure obligation. That is what section 304(5) makes clear.

Senator McALLISTER: Mr Pirani, can I interrupt to ask about the interaction between those two tests, because it strikes me that you describe two different tests—one which is the state of mind and the intention of the donor; and the second is the use to which the donation is put. Are both relevant to the disclosure obligations? Or do they create different disclosure obligations for the donor and the recipient?

Mr Pirani : Thank you, Senator, you have raised the very issue as to why in many cases it is impossible for us to match a donation with a receipt by a political party. The intention is part of the test in the act as to whether there is a disclosure obligation placed on the donor, but then the actual use of that money is also a matter that needs to be considered. If it is not used in an election, then there is no disclosure obligation.

I can give you the classic example for this: when a person attends a fundraising function of a political party, quite often the person who has bought a table and spent over the threshold will put in a donor declaration. But when you have a look at the receipt by the political party, they will say it is an 'other'—that is, it is not a donation because they believed the person received value for money and therefore there was adequate consideration. This is one of the idiosyncrasies that we have in Part XX of the Electoral Act.

Senator McALLISTER : Senator Rhiannon, do you mind if I ask one further follow-up question? Focusing specifically on the obligations that arise for the recipient, practically what tools have the AEC used, or perhaps have the court used, in discriminating between moneys that are utilised for personal purposes and moneys that are utilised for electoral purposes when donations are received by a candidate?

Mr Pirani : There is a definition of electoral expenditure in section 308 of the Electoral Act, which is the disclosure of electoral expenditure, and this is what creates the obligation in relation to the recipient. When you have the party that receives the money, in section 314(AB)—

Senator McALLISTER : I am more interested in when the candidate receives it directly, in the example that Senator Rhiannon and I are discussing.

Mr Pirani : That gets back to section 304(5). As I said, there can be, and there often is, this disjunct between the intention of the donor and the intention for and the use of the money by the recipient.

Mr Rogers : I am now looking at what you have provided here. I have not seen the website—I am just looking at a copy of it. I do not know how it is laid out, and I have just seen it. Mr Pirani might jump in and comment if I am going down the wrong path, but, if I look at the definition of electoral expenditure in relation to candidates, under section 308 of the act it talks about a range of issues. If I look at the heading of this page, it says, 'Donate to One Nation,' and it says, 'Where your donation money is spent', which is a fairly clear indicator of intent. Part of that is about expenses for election campaigns, so I would have thought that that would have been broadly within the remit.

Senator RHIANNON : Although, if you look at the size of the headings—and it is a screenshot—'Donate to One Nation,' is at the top, and 'One Nation donations' and 'Pauline Hanson donations' as headings are all of equal size. So people might think, 'Are these personal donations?' I can see why you said that, because that is one reading of it—

Mr Rogers : I have just seen it. I have just made a statement, without drawing too many conclusions.

Senator RHIANNON : I will go back a point that came up before, Mr Pirani. I think you said that it depends on the intention of the donor. I thought that you used that term. You do not work in political parties, but I think you probably have a fair idea that you get to a period when there are cheques coming in, and life is busy, and it is election, election, election. But there may be cheques coming in that could well be addressed to Pauline Hanson—and this is how you make the cheque payment; there is the address that you send it to. How do you determine what the intent of the donor is? I thought that you might have determined it because it is an election period, but you have said that is not the case.

Mr Rogers : No.

Senator RHIANNON : Therefore, people could be receiving donations in the election period, after the writs have been called, that are going to Pauline Hanson donations, made out to Pauline Hanson, that she could well view as personal donations because they have come to her. It is not clear what the donor has actually done. We may never know what the donor actually wanted. Have we got a big grey area here?

Mr Rogers : It is difficult for me to comment on the specifics without actually seeing the website and spending some time unpicking this matter. Mr Pirani, I am not sure you agree with that, but we would really need to see the context in which that is placed before we could make some sort of decision on that. But I think what Mr Pirani has pointed out more generally is a gap that exists between how we track donations, in any case, to parties and to associated entities and third parties.

Senator McALLISTER : Can I ask you a specific follow-up. Has Pauline Hanson, the candidate, declared any personal donations?

Mr Rogers : I am actually not sure. The candidate returns would be on our website. I would have to go and have a look at the website.

Mr Pirani : I do not have that in front of me.

Mr Rogers : If you go and have a look on the AEC website, under the funding and disclosure requirements, and you go into the actual returns that are there and you click on candidates, you will see what the return is that was lodged with us. Most candidates with registered political parties put in zero returns because the money all goes to the political party, so they do not normally regard the funds as going into their own account. They go into the account of the party. But I would have to have a look at the return on our website.

Senator McALLISTER: I am looking at your website. The very specific question I am asking is not a general one about One Nation as a political party or other One Nation candidates. I am interested in whether Pauline Hanson has herself made declarations of personal donations. There is a clear request—an ask, as people call it in politics—for people to provide financial support to Pauline Hanson as an individual, and I am just wondering what assurances the Australian people might have that these contributions are being adequately declared.

Mr Rogers : Given there are so many candidates and parties, I know you will understand that I do not have that information about each of those parties and candidates before me this evening, so I am not sure what has been declared or not declared, but there are very clear obligations on candidates, parties and other players in the political process to declare expenses and receipts under the Electoral Act. Where candidates do not do that, we do take action. Where candidates do not declare information—in fact, since the 2016 election, I think we have referred three candidates to the CDPP. Yes. Since the 2016 federal election, for example, we have referred three cases to the CDPP for donors who have not lodged a return as required by the act, so all players have particular obligations. My presumption would be that either that has been submitted or, if it has not, that we are working on it or whatever the issue is with that particular matter. But we do follow up on the individual requirements for the various players within the political process.

Senator RHIANNON: From what Mr Pirani said, haven't we identified that individuals could be receiving money and, if it is not identified to be for the election, it does not have to be declared, even though it might be a week before the election? That was my understanding from what you said, Mr Pirani.

Mr Pirani : That is clearly possible, but, again, looking at this document and given the heading is 'donate to One Nation' with the same address PO box down for cheque payments for both of them, I would suggest to you that it would be extremely unlikely that moneys that are directed to Ms Hanson in her own right as separate from the political party would not be included in the overall return. But that would be a matter that we would look at when we were doing a compliance review of the accounts of the political party.

Senator RHIANNON: Does what you have just said mean that all moneys that come in—even if the donor has not said it is for the election—as donations going to Pauline Hanson are for the election, because it is under that heading?

Mr Pirani : Again, when you look at section 314AB, which is the annual returns to registered political parties, it is the total amount received by or on behalf of the party during the financial year, so the issue will become: are those moneys that have gone to Ms Hanson separate from those of the party? Are they by or on behalf of the party that they have been received by? Therefore, there would be a disclosure obligation on the party.

Senator RHIANNON: Would you conclude from looking at that that it is by or on behalf of the party from the way that is set out?

Mr Pirani : Again, we would have to have a look at the actual account.

Senator RHIANNON: Does the requirement to disclose rest upon which bank account the donation is deposited to? Is that relevant here?

Mr Pirani : No, the disclosure obligation rests on the party. The classic example is the larger political parties have their own federal election committees that are normally arranged in accordance with the divisions in the House of Representatives—the various seats—and normally those moneys go through to either the state office or the national office, and a single return is provided to the AEC. We would be expecting that there would be an amalgamation of the amounts received in a single return that would be lodged with the AEC, and that is the usual practice.

Senator McKENZIE: We now have 14 singular entities within the parliament, whether it is single MPs who are independents, single members in the lower house or, indeed, the plethora of senators. How are you dealing with that difference now, given that the usual practice is with large parties with big state or federal offices?

Mr Pirani : The majority of those Independents have created political parties that are registered with the AEC. I think there is only one that is not, and I think that is Ms McGowan, the member for Indi, but certainly the Xenophon party is registered with us, the Katter party is registered with us, the Jacqui Lambie party is registered with us et cetera.

Senator McKENZIE: Just on notice, do they submit at a state or federal level, or under their own names?

Mr Pirani : They are a parliamentary party, and normally they put in a party return. They appoint a party agent, which is part of the registration process with the AEC. They are required to appoint that party agent at the time that they nominate their candidates, and it is the party agent who will lodge the return on behalf of the party.

Senator RHIANNON: Mr Rogers or Mr Pirani, does the AEC have the power to demand bank statements or otherwise investigate which bank account donations are deposited to?

Mr Rogers : Just before Mr Pirani perhaps takes the detail of that, I think we went through earlier on that the AEC has a broad range of powers, and some of those are indeed demand powers, but it depends on the circumstances in which we choose to exercise those. A normal compliance review is commenced under section—

Mr Pirani : Section 316(2A). We use that coercive power at the commencement of every compliance review.

Senator RHIANNON: In terms of what we have been talking about here, and your then auditing, would this be something that you would do to determine where the money goes to, just following the money trail?

Mr Pirani : Potentially it would be something that we would look at, if we had some reason to believe that all the money that was coming in was not going in and being disclosed to us. But, again, it is section 314AB, whether it is received by or on behalf of the party. But that is an issue that we would look at during the compliance audit.

Senator RHIANNON: Would it be of interest to the AEC if a party's website were soliciting donations for a party figure and that same party figure were making loans or donations to the party?

Mr Rogers : And you are referring to the same website?

Senator RHIANNON: Well, what I have given you there is the only screenshot I have got, but there is certainly talk about there being loans made. That is why I have not used names at this stage, but it is certainly relevant to what is going on here. I am just trying to understand how it works for you in terms of your investigations, because it seems, when loans come into it, and donations can go to the individual—and we have heard from Mr Pirani that they could be actually for the individual if the donor does not indicate that they are for the election. I think this is a relevant question.

Mr Rogers : I think, as Mr Pirani indicated, each circumstance here is going to vary, and each compliance review is going to be different, depending on the circumstances. Sometimes it is going to be incredibly obvious and actually quite simple, to work out what is occurring with that particular party or entity. Other times it is more complex, and we will use a range of different measures to find out. Mr Pirani, you might add further to that.

Mr Pirani : There is an amended disclosure return for the 2015-16 financial year on our website that does disclose a loan that was made by Senator Hanson to the party.

Senator RHIANNON: Right. So we have got the amended return; would the AEC investigate that further in the light of this issue?

Mr Pirani : I do not believe we have—

Senator RHIANNON: Or would you see that they are not related?

Mr Pirani : Well, it is difficult on just the website and this to form a conclusion that they are related, but again I note that we have done a compliance review. We have taken on notice questions from Senator Watt as to whether that review has been completed, and I think we will leave it there. The answer to Senator Watt's question may well go to addressing your issue.

Senator RHIANNON: My next question was—and maybe you will again say you cannot answer it; it sounds like it is a yes, but I will just check—would the AEC investigate a suspicion that donations to an individual identified with a party were then being passed on to the party, either as donations or loans?

Mr Rogers : It would depend on the individual circumstance to which you are referring rather than the generic question. If you are referring to a matter to do with One Nation, which I think you are, I would probably back up what Mr Pirani said and what I said earlier: that there are a range of matters that are active at the moment and I am very loath to comment further in that regard.

Senator RHIANNON: As you can see, it was not just about One Nation. I have been trying to understand the process, and I did not use One Nation in the question. With regard to this issue of loans, can you give some response in terms of how you handle that? Is it something that you regularly investigate or is it not something that sets off alarm bells for you?

Mr Pirani : Loans appear quite often in the returns. There was a large loan, I recall, in relation to the Family First Party that was disclosed in an amended return. That loan was forgiven. I understand that was part of an issue that a liquidator is presently looking at. It depends on the circumstances as to whether it is something that may somehow indicate a failure to disclose. Again, the AEC is not responsible for the internal governance of political parties. We are responsible for ensuring that there has been disclosure in accordance with those requirements of the act. Let's just be clear: if there are issues about the internal governance of a political party, that is not our remit. Our remit is to ensure that there has been disclosure in accordance with the requirements of part XX of the act.

Senator RHIANNON: I think that answers the question I was querying about donations coming to an individual and also that that individual might be giving loans. But, in terms of how you view it, you are not assuming. Therefore there is no need for you to investigate if there is a link there. To you, they are internal matters.

Mr Pirani : Again, we would look at these sorts of things in a compliance review, but the mere fact of the loan does not raise an alarm bell in my mind.

Senator RHIANNON: Okay. Thank you very much.

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