Disclosing the political dollars: US and Australia

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Disclosing the political dollars: US and Australia

Posted 13/02/2012 by Brenton Holmes

On 1 February 2012, the Australian Electoral Commission released the 2010-11 annual financial disclosure returns from political parties, associated entities, donors and third parties who incur political expenditure. The combined receipts totalled almost $231 million. Not all of this came from donations. The annual returns from donors totalled around $25 million—but only donations above the threshold of $11 500 have to be declared.

Clearly, modern party politics involves substantial sums of money. And as the recent Joint Standing Committee on Electoral Matters (JSCEM) report into the funding of political parties and election campaigns stated, transparency and accountability ‘must remain central goals’ of Australia’s political financing arrangements, and disclosure ‘should continue to be a central pillar ...to provide electors with sufficient information on which to base selection of their political representatives’.

Australian observers of American politics are likely to be staggered by the amounts of money being spent by third parties on the US presidential primaries. The huge influx of funds has come about by virtue of the Supreme Court decision Citizens United v FEC (2010) that removed virtually all prohibitions on political expenditure by corporate groups and other supposedly politically independent organisations. The Court determined that these prohibitions constituted a “ban on free speech” in violation of the First Amendment of the US Constitution.

In an attempt to reverse the effects of the Citizens United decision a group of Democratic Congressmen has recently introduced the DISCLOSE Bill 2012. Its provisions include:
  • All corporations, unions, other outside groups, and Super PACs (a Political Action Committee is a political committee that is neither a party committee nor an authorized committee of a candidate) will have to report, to the Federal Election Commission (FEC), within 24 hours of making a $10,000 campaign expenditure or financial transfer to other groups which can then be used for campaign-related activity.
  • All leaders of corporations, unions, other outside groups, and Super PACs that make campaign-related ads, will have to stand by their ads and say that he/she “approves this message”. In addition, this bill will require the top financial contributors to be disclosed in the Television and Radio advertisements.
  • Corporations, unions, and other outside groups will have to disclose their campaign-related expenditures to their shareholders and members in their periodic and annual financial reports. This would also require these groups to make their political spending available to the public, through a hyper-link to the FEC, on their websites.
  • All Federally registered lobbyists will have to disclose their political expenditures in their Lobbying Disclosure reports in conjunction with the report of their lobbying activities.
Australia has a proud record when it comes to the regulation of political financing, but JSCEM has reminded us that the rules ‘are in need of review and revitalising’. The JSCEM has called for, among other things:

  • increasing the level and frequency of disclosure, by reducing the disclosure threshold from the current $11 900 (indexed to CPI) to $1 000 
  • special reporting of single donations over $100 000, which must be disclosed to the AEC within 14 business days 
  • political parties and associated entities to classify their receipts as ‘donations’ or ‘other receipts’ to enhance transparency of the type of money being received 
  • political parties to aggregate donations of any value, not just values that exceed the disclosure threshold 
  • possible caps on third party campaign expenditure.
On 20 October 2010, the Gillard Government introduced the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2010 to increase the transparency of political donations disclosure; introduce more frequent and timely reporting of political donations and expenditure; and reform the public funding of elections. The Australian Greens and independent MPs Wilkie, Windsor and Oakeshott supported the bill during its passage through the House on 17 November 2010. The bill awaits consideration by the Senate.
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