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Estimates: Finance and Public Administration Legislation Committee (AEC Donations and Disclosures)

Estimates & Committees
Lee Rhiannon 20 Oct 2015

Lee questions AEC officials about the stunning inadequacy of our federal disclosure laws around associated entities, highlighting the issues around political donations and associated entities, and the restrictive statute of limitations. It comes to light that there is a 3 year statuatory period, and a "delayed public awareness" in which the AEC is forbidden by law from publishing all donations and findings until the 1st February following a financial year. The AEC representatives include Mr Rogers and Mr Pirani, as well as Department of Finance representative Ms Hatton, and Business Enabling Services representative Mr McGregor. 

Senator RHIANNON: If you became aware that cash payments were made by stakeholders to a candidate or MP without receipts being issued, would you investigate and seek more information? How would you respond?

Mr Rogers: Sorry, Senator. If I became aware-

Senator RHIANNON: If you became aware that cash payments were made by stakeholders to candidates or MPs without a receipt being issued, how would you respond? Do you investigate and seek more information or wait until somebody officially reports it?

Mr Rogers: Each case is entirely different, but the act is fairly clear about what the requirements are. If a piece of information came across my desk-actually, that is probably a poor way of phrasing it. If that piece of information came to the notice of the AEC, we would take whatever action we needed to take at that point in time.

Senator RHIANNON: If someone claimed publicly that such a transaction was attempted, would an investigation be launched? Specifically, is the AEC considering investigating and seeking more information on Peter Garrett's claims that were aired on the ABC's 7.30 Report on 6 October?

Mr Rogers: If I understand, those claims were in 2004, which is well outside the statute we discussed previously.

Senator RHIANNON: That was the three-year statutory period?

Mr Rogers: Yes.

Senator RHIANNON: Sorry, I had stepped out at that point. Just to clarify: if a donor or a recipient has not reported a donation given or received, and it was three years ago, it is just ancient history and you cannot look at it. Is that the case?

Mr Rogers: For a start, if we are talking about the specific case you are referring to, it is well outside of that three-year period. Secondly, I am not sure that those facts are uncontested either-that is a separate issue. I have no evidence in front of me at the moment, other than the media report that has been put before me-again, I am looking to Mr Pirani to confirm that-but, in any case, as I understand it, it would put it well outside section 315(11) if those matters were alleged to have occurred in 2004. I think Mr Garrett then recanted that evidence, in any case, from what I understand. So, at this stage, I have no evidence in front of me about that.

CHAIR: Mr Rogers, just for my benefit-sorry, Senator Rhiannon. If someone attempts to give you money, a donation or a cheque and you return it, you are not obliged to disclose it.

Mr Rogers: And you return it?

CHAIR: You return it to them and say, 'No. I don't want your money.'

Mr Rogers: That is why I am saying I think it is contested, in any case, as to what occurred. If someone walked up to you, Senator, and gave you a bag of dough and you pushed it back and said, 'No, thanks', you have no obligation with us to disclose.

CHAIR: That is what I would have thought, and yet neither of the parties alleged to have been involved in this have said that any donation was gratefully received.

Mr Rogers: That is why I say that I have none of that in front of me. Even if I did, it is 2004, which is well outside the scope of any other action that could be taken if there was something there. As I understand it, it is not uncontested, was since recanted and is not before me.

CHAIR: I understand it is also the subject of legal action at the moment, which gives us some cause for concern.

Senator RHIANNON: Thank you, Chair. Mr Rogers, could you take on notice to provide information on the number of investigations into claims of breaches of the Commonwealth Electoral Act that the AEC has investigated in the last financial year?

Mr Rogers: Certainly. Are you referring to all areas of the AEC's operations?

Senator RHIANNON: Yes. I do not know what categories you divide it up into, but it would be useful if you could present that.

Mr Rogers: Certainly.

Mr Pirani: Are you including things like breach of electoral advertising laws in relation to failing to have authorisations or can we limit this to the funding and disclosure?

Senator RHIANNON: It was about funding. Does the inconsistency between the federal and state political donation laws, in terms of prohibited donors, impinge on the AECs ability to maintain transparency with regard to political funding?

Mr Rogers: As I think I said before-I am not sure whether you were in the room-that it is one of the few things that I am loathed to express a view on because the design of the funding and disclosure system is
essentially a political process and a matter for parliament. I will administer whatever legislation is put before me or is passed by parliament. I administer the funding and disclosure legislation that is currently in the act and I have no view outside of that. I know there has been a lot of media reporting about that matter, but for me I administer the act that I have in front of me and that is what I will continue to do.

Senator RHIANNON: I certainly was not asking if you thought the word was 'impinge.' So in carrying out your job, as you have just described, is it limited because of this inconsistency? Does it impinge in any way?

Mr Rogers: I would probably have to give you the same answer which is I administer the act that I have in front of me. I do not have a view on that matter that you have just raised. I know that the funding and disclosure regime is different in some of the states and in other states it is more aligned with the Commonwealth, but we focus on the Commonwealth Electoral Act and that is where we start and stop.

Senator RHIANNON: So there is a grey area between federal and state laws. Is it providing loopholes for donors that are difficult for the AEC to pick up?

Mr Rogers: You are really asking me for an opinion there. I think I will rely on my earlier answer with that which is I am administering the act-the Commonwealth Electoral Act-and that is where our focus is. I have no opinion on those state acts.

Senator RHIANNON: With regard to the three year cut-off, how long has that been in the legislation?

Mr Rogers: Mr Pirani might have the answer to that.

Mr Pirani: I am looking at the index at the back to see when it was amended. It looks as though it has been there since the original funding and disclosure was inserted in 1983. I will take that on notice if I am mistaken,but looking at the end notes in the Electoral Act, it appears it was inserted in 1983.

Senator RHIANNON: If you could take it on notice. I did not realise it had been there from the beginning. When a donation is made to an associated entity does the donor have to specify that entity in its disclosure or just the party to which the associated entity is linked?

Mr Pirani: The test in section 305 is, if they are giving it to an associated entity, the associated entity, normally the donor, would indicate which political party the money is going for the benefit of. Remember this is particular important in relation to dealing with unions which are associated entities. Money can be given to unions for a whole range of purposes that do not necessarily have anything to do with electoral law and electoral expenditure, but if the person intends for the donation to benefit a political party then that is what has to be reported by the donor.

Senator RHIANNON: So the donor gives money to an associated entity. They do not have to say they are giving it to an associated entity; they could just say, 'I'm giving it to party X'?

Mr Pirani: They are giving it and they intend it for the purposes of benefit of a political party. That is what is in the act-

Senator RHIANNON: And no mention is required of the associated entity?

Mr Pirani: No.

Senator RHIANNON: When Clubs New South Wales made a donation to the Menzies 200 Club and they listed the Victorian Liberal Party as a recipient it sounds like that is correct then-that that is how that is accepted under the law?

Mr Pirani: That is correct.

Senator RHIANNON: Surely that makes it hard to follow the paper trail?

Mr Pirani: As we have discussed before, it is-

Senator RHIANNON: That is just the law.

Mr Pirani: That is what the law is and that is one of the problems that we face.

Senator RHIANNON: So you see it as a problem?

Mr Pirani: It is one of the issues that we face. Certainly, we are on record having made these comments

Senator RHIANNON: In terms of the obligations for associated entities, they are required to submit returns, are they, even if no single donation is above the reporting disclosure threshold?

Mr Pirani: The reporting obligation for an associated entity is in section 314AEA:
(a) the total amount received by, or on behalf of, the entity during the financial year ...
(b) the total amount paid by, or on behalf of, the entity during the financial year; and
(c) if the entity is an associated entity at the end of the financial year-the total outstanding amount ... of all debts ...
That is 314AEA and that is what they are required to report. They are separately required to report amounts that are over the threshold that are used for political purposes.

Senator RHIANNON: Right, so to all intents and purposes above the threshold is where we pick it up?

Mr Pirani: That is correct-if there is a particular donation that is going to be used for a political purpose.

Senator RHIANNON: Are you aware of the Bradfield Forum? I am trying to understand whether it is an associated entity of the New South Wales Liberal Party.

Mr Pirani: I would have to take that on notice.

Mr Rogers: If you have some details, Senator, and you can provide them to us we can certainly look at that and provide you with some information.

Senator RHIANNON: This is a specific question that gives an example. I am partly giving it as an example to understand how the process works.

CHAIR: It is not an allegation, I hope.

Senator RHIANNON: Numerous donors have disclosed donations to the Bradfield Forum. The Victorian branch of the Liberal Party has disclosed receiving a donation from the forum. Shouldn't they have submitted returns for these donations?

Mr Rogers: I will answer that for Mr Pirani. I do not have that information in front of me. You are asking us to make a contemporaneous judgement without any of that information in front of us, which is difficult. But if you have information that we can have a look at I will then provide you with an answer.

Senator RHIANNON: I imagine that you need the amounts to determine, because of the threshold issue. Would that be correct-when I put it in?

Mr Rogers: Any information that you have we would gratefully take. Then I will provide a response to you from there, rather than providing a contemporaneous judgement here that may later prove to be incorrect.

Senator RHIANNON: I realise that the three-year limit is up but this example of the Bradfield Forum was picked up on in earlier questions in estimates. Back in 2006 Senator Campbell, in response to questions on notice from Senator Milne about the Bradfield Forum and a fundraising event they had in parliament, stated: 

"The function was run in accordance with the Commonwealth Electoral Act 1918 and all donations will be disclosed accordingly."

They were not disclosed-

Senator Ryan: Senator Rhiannon, I respectfully suggest that I was not in parliament in 2006. I look across the table and see that maybe Senator Bernardi and Senator Polley were here then. The commissioner definitely was not the commissioner in 2006.

Senator RHIANNON: I am trying to understand the process, 

Senator Ryan: I really am.

Senator Ryan: I just want to put that on the record. The commissioner said that with detailed questions-he is happy for you to provide all the facts and he will provide the answers as appropriate.

Senator RHIANNON: Well, let us take the Bradfield Forum out of it. I really am trying to understand the process. Maybe the three-year cut-off just explains it all. Here we have a response from a minister to a question, stating, 'All donations will be disclosed accordingly', and it does not happen. Is that, again, all over because the three years are up?

Senator Ryan: With all due respect, Senator Rhiannon, without being aware of the facts I am going to put on the record that the event donations may not have triggered disclosure requirements. The words you attribute to Senator Campbell are 'disclosed accordingly'. That may not necessarily mean that a disclosure is required. I have to admit that I am going back in my mind to remember what the Act had-

CHAIR: Is that George Campbell, or-

Senator Ryan: I think the answer was from Senator Ian Campbell.

CHAIR: He is the one who was saving the orange-bellied parrot-is that right?

Senator Ryan: In Victoria-from windmills.

CHAIR: I cannot believe that you are picking on another environmentalist.

Senator Ryan: All I am saying, Senator Rhiannon, is that the words you attribute do not necessarily mean a form would have had to be filed.

Senator RHIANNON: I think the threshold had not been raised by that stage. I really am trying to understand the process-these associated entities are so complicated and there are so few opportunities to find out-but I will move on. The PricewaterhouseCoopers commissioned review of the AEC's compliance functions noted on page 17 that the AEC's investigative function by way of compliance reviews is limited by time limits, resources and the ability of staff. So I-

Mr Rogers: What year was that?

Senator RHIANNON: Good question. I do not have the year.

CHAIR: Just while you are contemplating the year, Senator Rhiannon-

Senator Smith interjecting-

CHAIR: Thank you, Senator Smith. That is not helpful. I notice the Minister for Finance has walked in. I am just seeking the general consensus. I know that Senator Gallagher has a few more questions, Senator Smith has a couple more questions and Senator Rhiannon obviously has a couple more questions. Would it be fair to suggest to the Minister for Finance that maybe at three o'clock we might be able to get to the Finance portfolio-in 15 minutes? A bit more? Okay. Let's say about five to 10 minutes past three.

Senator Cormann interjecting-

CHAIR: From the back stalls, a very good suggestion. I will accept that interjection. We will have a break at the conclusion of this, and then we will-

Senator Cormann: I'll be back!

Senator GALLAGHER: He was dying to say that!

CHAIR: It is between Sergeant Schultz and Arnold Schwarzenegger!

Senator RHIANNON: I will put that one on notice. Just to move on, the AEC's current educative function requires-these are quotes from your material-'targeted education' and 'public awareness programs'. Is the current model, in which we have seen some instances where information on political donations is only published 15 months after the election, consistent with your educative objective and function?

Mr Rogers: I think they are two separate issues, Senator, that you are talking about there. I might just get Mr Pirani to answer, but we publish in line with the legislation.

Mr Pirani: That is right. The act is quite clear. We are not allowed to publish the information until 1 February after the end of the financial year, so it depends when an election is held as to which financial year that is in and when the report will be made. But we are forbidden by legislation from putting it up on our website until 1 February in the following year. So matters that occur, for example, in the 2014-15 financial year will be required to come to us in October this year, and we will not be able to put them up on our website until February next year. That is what the legislation requires.

Senator RHIANNON: The legislation. So delayed public awareness, is it?

Mr Pirani: That is what the legislation requires us to publish.

Senator RHIANNON: Thank you. How frequently does the AEC refer matters to the Commonwealth DPP for investigation?

Mr Pirani: I can answer that: we never refer matters to DPP for investigation. We refer matters to AFP very rarely in the funding and disclosure space. Normally we do the briefs of evidence for DPP, and then they come back to us if they have any problems with the brief of evidence.

Ms Halton: And the DPP do not investigate. They only decide whether or not they are going to bring a prosecution.

Senator RHIANNON: And references to the AFP?

Mr Rogers: That is also a difficult question, because there are so many areas of the AEC's operation.

Senator RHIANNON: But in terms of electoral funding, political donations and disclosure issues?

Mr Pirani: For the last financial year, the answer is zero to AFP. As I said, because of our powers under section 316, we conduct the investigation, we do the compliance review and we prepare the brief to DPP.

Senator RHIANNON: If it is zero for the last financial year, how many is it over the last five years?

Mr Pirani: I would have to take that on notice, but I would suspect the answer will be nil again, because we have an MOU with the AFP, and most of the matters in the funding and disclosure area are dealt with by us, by our investigators.

Senator RHIANNON: Does the fact that it is zero reflect that nothing problematic was found?

Mr Rogers: No. I think what Mr Pirani is trying to say-I might get him to just go a little further with his evidence-is that we actually have an MOU with the AFP and we provide briefs of evidence directly to the DPP.

Mr Pirani: That is correct. There are a number of matters that we refer to DPP with briefs of evidence after each reporting period.

Senator RHIANNON: Can you provide data on how many briefs you have prepared for the DPP.

Mr Pirani: Certainly on notice I will give you an indication of the numbers that we have referred to DPP, yes.

Senator RHIANNON: Thank you.

Senator GALLAGHER: I have a couple of other areas of questions. One is around the Joint Standing Committee on Electoral Matters and the reports that have been provided, including two interim reports and a final report. I acknowledge that some of this rests with the parliament, but has the Electoral Commission put in place any preparations based on the bipartisan and unanimous recommendations in the report?

Mr Rogers: Senator, as you know, it really is a matter for government to respond to that report and then for legislation to be passed. That is not to do with me but to do with government and the parliament.

Ms Halton: A teleprinter!

Senator GALLAGHER: and I would imagine an efficiency would be to start the wind-back of facsimile machines.

Ms McGregor: Yes.

Senator GALLAGHER: It could cause some commotion, though. You never know. But could you take that on notice?

Ms McGregor: Yes. I will find out why and how many.

Ms Halton: As long as we are not doing carrier pigeons as well!

Senator GALLAGHER: And also whether or not there are any forms that are required to be faxed in.

Ms Halton: It is a fair question because, if we have things that are connecting with old technology, we ought to do something about it. We will have a look.

CHAIR: Most of it is now that the faxes come in electronically-

Ms Halton: Yes, exactly.

CHAIR: and you scan and respond in kind.

Ms Halton: And you have a multifunction device which prints things out.

CHAIR: Anyway, it is a good question.

Ms Halton: Yes, it is a good question. I used to have one at home, but I got rid of it 12 months ago. I have not used it.

Senator GALLAGHER: It is not my only good question for the day, but-

CHAIR: It is a good end to the day, I think.

Senator GALLAGHER: They are my questions.

CHAIR: Fantastic. Let's finish on a high note!

Senator RHIANNON: My questions are about accessing information on the use of Comcars. The public website about Comcar trips gives limited information, with no information about the pick-up and arrival locations, and I am aware that the information is available, because we get it in the documents you supply us to check our own Comcar use. Also, in some freedom of information requests I have noticed it is on the Right to Know website, Can the information regarding departure and arrival locations and times for Comcar trips for ministers and shadow ministers be made publicly available?

Ms McGregor: The main reason we would not be making that information publicly available is for privacy.

Senator RHIANNON: But, considering it is made available in FOI requests, does that reason not fall down?

Ms McGregor: No. We would consult with the person involved in the FOI request as well. We would seek their permission before making that information available.

Senator RHIANNON: Is it not possible to do the location, like: airport to Bondi, airport to Adelaide city?

Mr Heaver: The current reporting process provides town and cost. It does not provide suburb to suburb. As Ms McGregor said, the privacy issues around providing detailed suburb to suburb and times could cause some security and privacy issues that we would have concerns with.

Senator RHIANNON: I will ask the question in a different way. Some of this information with those details is released in FOI requests. Are you saying you have only released that information on FOI after getting permission from the person to do that?

Ms McGregor: That is correct, Senator.

Senator RHIANNON: Why is it a security threat when it is Bondi to the airport? How?

Mr Heaver: By creating a regular pattern of movements and travel by clients, by senators and members. People having access to that sort of data might be able to regularly pattern out our clients' movements.

Ms Halton: Senator, just to be clear, when we have done consultation with people in respect of those FOIs those concerns have been raised with us on a number of occasions by members and senators.

Senator RHIANNON: To check again, you have checked all those FOI requests with the person-

Ms Halton: Absolutely.

Senator RHIANNON: and they have agreed to that.

Ms Halton: Yes. When we have released them it has been agreed. We have had a number of members and senators object to that level of detail being made public, precisely because of the notion of patterns and locations. They believe it is a security issue.

Senator RHIANNON: If people agreed to it, could that be made public on a regular basis?

Ms Halton: I think we would probably take advice from security agencies as well, Senator. I think it would depend on the position the person holds in the government. There would be many considerations that we would need to consider before releasing that information on a regular basis.

Senator RHIANNON: It just seems to be inconsistent with the FOI requests, because they are popping up now and then.

Ms Halton: But each one is consulted about with the relevant member or senator.

Senator RHIANNON: Thank you, Chair.

CHAIR: Are there any further questions on outcome 3? There being none, may I thank the officials for their attendance today. I thank Hansard, the secretary and fellow senators. We will now adjourn and we will resume at 9 am on Friday morning for cross-portfolio Indigenous matters.

Committee adjourned at 22:23


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