tag:theconversation.com,2011:/global/topics/political-funding-27862/articlespolitical funding – The Conversation2023-06-06T18:45:06Ztag:theconversation.com,2011:article/2071092023-06-06T18:45:06Z2023-06-06T18:45:06ZExtending the term of parliament isn’t a terrible idea – it’s just one NZ has rejected twice already<figure><img src="https://images.theconversation.com/files/530265/original/file-20230606-19-cso4oh.jpg?ixlib=rb-1.1.0&rect=8%2C8%2C5982%2C3979&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>Among a host of other recommendations, the <a href="https://electoralreview.govt.nz/">Independent Electoral Review</a> has proposed a referendum on extending the term of parliament to four years (from the current three). I’ll admit from the outset to being torn over the issue – the policy wonk in me says four, the election junkie says three.</p>
<p>But there’s another problem. Even if it is a sound idea, why hold a referendum when two past referendums have already rejected the proposal? Parliament could make the change alone, but MPs would likely face a backlash from the people wanting a referendum.</p>
<p>Those previous polls in 1967 and 1990 were both defeated by more than two-thirds majorities. Without a strong sense of a public desire for change, it’s hard to see a third result being any different. </p>
<p>In fact, one can almost hear the social media arguments against it already: “We have more important things to think about”, “They just want to keep their noses in the trough for longer”. Given current levels of distrust in politics, getting this across the line feels like a stretch.</p>
<p>But we’re still at the initial review stage. Public consultation is open until July 17, and a final report goes to the government in November, after the election. Public opinion could still shift in the meantime.</p>
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<h2>Time to govern</h2>
<p>There are some good practical reasons for extending the parliamentary term. For starters, by the time a new government is sworn in after an election, it’s often nearly Christmas and the nation shuts down and heads to the beach. </p>
<p>Ideally, a new government should get cracking with making policy and legislation in its first and second years. But in the third, anticipation of the next election changes the priorities and the focus.</p>
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Read more:
<a href="https://theconversation.com/lowering-new-zealands-voting-age-to-16-would-be-good-for-young-people-and-good-for-democracy-145008">Lowering New Zealand's voting age to 16 would be good for young people – and good for democracy</a>
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<p>To get a new law from a first cabinet paper to an act of parliament can take a couple of years – longer if there’s a lot of argument. So we’re not allowing much time for governments to really get things done. </p>
<p>When we account for the downtime before and after elections, they’re left with roughly two years of action out of every three. That slack could be reduced from roughly one-third to one-quarter if we moved to a four-year term.</p>
<p>On the other hand, many New Zealanders like having their say and holding their representatives to account through the ballot box. That’s not an argument for even shorter terms, but it is certainly a persuasive argument for the status quo.</p>
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<img alt="" src="https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530267/original/file-20230606-23-5q54gz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">ACT’s David Seymour: reform ‘doesn’t solve a single urgent problem that New Zealanders face’.</span>
<span class="attribution"><span class="source">Getty Images</span></span>
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<h2>Winners and losers</h2>
<p>So, if not through a referendum, how would we change the length of the parliamentary term? It is possible if parliament were to pass an amendment to the Electoral Act. That requires a 75% majority. </p>
<p>Given Labour’s Jacinda Ardern and National’s Judith Collins <a href="https://www.rnz.co.nz/news/political/427374/political-leaders-favour-four-year-parliamentary-term-but-many-voters-not-so-keen">both supported the idea</a> before the 2020 election, that super-majority may well exist. That’s bolstered by the fact the <a href="https://www.act.org.nz/democracy">ACT Party also supports</a> a four-year term. </p>
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Read more:
<a href="https://theconversation.com/theyre-nice-to-me-im-nice-to-them-new-research-sheds-light-on-what-motivates-political-party-donors-in-new-zealand-185574">'They're nice to me, I'm nice to them': new research sheds light on what motivates political party donors in New Zealand</a>
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<p>And yet ACT leader David Seymour was <a href="https://www.newshub.co.nz/home/politics/2023/06/act-s-david-seymour-slams-electoral-recommendations-as-waste-of-everyone-s-time.html">quick to rubbish</a> the whole electoral review report. Before most people had even had a chance to read it, he’d declared it a “waste of everyone’s time” and “a major left-wing beat-up that doesn’t solve a single urgent problem that New Zealanders face”.</p>
<p>One explanation for such a negative reaction may lie in one of the report’s other recommendations, which is to eliminate the “coat-tailing” rule. This allows a party that wins at least one electorate seat to bring more MPs into the house, proportional to their party vote even if it’s below the 5% threshold. </p>
<p>The rule has undeniably created inequities. But ACT itself has benefited from it, notably in 2008, when it received just 3.65% of the party vote but took five seats on the back of winning the Epsom electorate.</p>
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Read more:
<a href="https://theconversation.com/lobbying-regulations-are-vital-to-any-well-functioning-democracy-its-time-nz-got-some-203404">Lobbying regulations are vital to any well functioning democracy – it's time NZ got some</a>
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<h2>Self-interest and stalemate</h2>
<p>It’s perhaps inevitable that partisan political self-interest will emerge whenever these electoral reform proposals are made. Those who stand directly to win or lose become the loudest voices in the subsequent debate. The issue itself is politicised before the average voter has even taken in the details.</p>
<p>And, let’s remember, extending the parliamentary term is only one of more than 100 draft recommendations, including lowering the party vote threshold from 5% to 3.5%, and lowering the age of eligibility to vote from 18 to 16. The review process can mean difficult technical, legal and constitutional debates and proposals become bogged down in politics as usual.</p>
<p>Much like the <a href="https://elections.nz/assets/2012-report-of-the-Electoral-Commission-on-the-review-of-mmp.pdf">2012 Electoral Commission review</a>, from which no substantive recommendation for change was ever adopted (the present review repeats some of them), the unintended consequence may be another round of talk, but little action. If there’s a change of government after October’s election, this review is unlikely to go anywhere, other than into the archives. That would be a shame. </p>
<p>New Zealand’s electoral and parliamentary systems aren’t perfect, but no such system is. It may be asking a bit much at present, but some consensus about making them work more democratically and effectively would still be a good thing.</p><img src="https://counter.theconversation.com/content/207109/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grant Duncan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A referendum on changing New Zealand’s parliamentary term to four years would be the third such exercise in under 60 years. Why would the outcome be any different this time?Grant Duncan, Associate Professor, School of People, Environment and Planning, Massey UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1555312021-03-16T16:27:50Z2021-03-16T16:27:50ZDonald Trump: social media ban shows corporate responsibility can win out over profit<p>Following the January riot at the US Capitol in Washington, tech giants moved rapidly to “de-platform” Donald Trump, in a move that could well have hurt more than any impeachment could have. Social media was a key tool for the former US president who would use it to unceremoniously <a href="https://www.rte.ie/news/us/2018/0313/947109-donald-trump/">fire personnel</a>, settle scores – even threaten war, as he famously did in 2017 in response to North Korean nuclear weapons tests when he tweeted that the US was “<a href="https://www.nytimes.com/2017/08/11/world/asia/trump-north-korea-locked-and-loaded.html">locked and loaded</a>”.</p>
<p>All the signs are that he wants to maintain his hold over large sections of the Republican Party, but he’ll struggle without the help of Big Tech. And there’s no sign yet that the social media giants are planning to roll back on their bans. Despite what a drawcard the former president undoubtedly is, platforms such as Twitter and Facebook have clearly come to the conclusion that his brand of incendiary rhetoric is simply too dangerous – for the country and for their brands.</p>
<p>Within two days of the Capitol riots, Twitter released a <a href="https://blog.twitter.com/en_us/topics/company/2020/suspension.html">detailed statement</a> to explain its ban: Trump had breached the company’s <a href="https://help.twitter.com/en/rules-and-policies/glorification-of-violence">glorification of violence</a> policy in two specific tweets sent after the riots. One, in which Trump informed his followers that he wouldn’t be attending Joe Biden’s inauguration on January 20, “may also serve as encouragement to those potentially considering violent acts that the Inauguration would be a "safe” target, as he will not be attending", it said.</p>
<p>Other tech giants responded in a similar way by disabling platforms associated with Trump. Facebook suspended Trump’s profile <a href="https://www.axios.com/trump-facebook-capitol-7772583f-1d1a-480a-adbd-36c22710b203.html">indefinitely</a> pending the outcome of a <a href="https://www.axios.com/review-of-trump-ban-marks-major-turning-point-for-facebook-4a18e219-d471-4e77-ae5e-5f55a01ac2a1.html">review</a> by its new oversight board. </p>
<p>The <a href="https://oversightboard.com/news/175638774325447-announcing-the-oversight-board-s-next-cases/">five-member panel</a> has begun its review of Trump’s suspension. This is likely to be the board’s most significant review since it commenced work in October 2020. That’s partly due to Trump’s profile – but mostly because its decision (which will be binding on Facebook) will have implications for how the platform responds to political speech going forward. Its decision will be published <a href="https://oversightboard.com/decision/">here</a>.</p>
<p>Google, which also owns YouTube, suspended Trump’s YouTube channel – initially for seven days “<a href="https://twitter.com/YouTubeInsider/status/1349205689395245056">minimum</a>”, but the suspension was subsequently made “indefinite” due to “<a href="https://www.theguardian.com/us-news/2021/jan/26/youtube-trump-ban-suspension">concerns about the ongoing potential for violence</a>”.</p>
<p>Big Tech is notoriously slow to crack down on incendiary contributors – perhaps because it’s in their financial interest to maintain the status quo. Certainly, the fact that Twitter’s <a href="https://www.rte.ie/news/business/2021/0111/1188989-twitter-shares-slump-after-trump-suspension-decision/">share price slumped</a> after Trump’s removal suggests that he and others like him are valuable assets for these platforms and that it’s in their interests to hang on to these assets, even if that means hosting contributors that fray societal cohesion, threaten democracy and ultimately lead to the type of violence that engulfed the Capitol.</p>
<h2>Don’t blame the shareholders</h2>
<p>Corporations regularly become embroiled in controversial situations, but it’s not just hosting divisive characters on your social media platform that gives rise to controversy. There are plenty of examples of enterprises that make the most of tax loopholes or exploit “<a href="https://www.newyorker.com/magazine/2021/01/18/whats-wrong-with-the-way-we-work">gig workers</a>”. You’ll often hear them blaming the “profit-maximising shareholders” and claiming that they are obliged to take these tough decisions to maximise shareholder wealth. </p>
<p>This is simply not true. In fact, most corporate law frameworks around the world allow management to decide whose interests they’ll prioritise in making decisions. They could prioritise employees’ interests, those of the environment and society at large or they could prioritise shareholders’ interests. The point is that they don’t have to prioritise the latter.</p>
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<img alt="Billboard with the thumbs-up icon at Facebook HQ in Menlo Park, California." src="https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/389842/original/file-20210316-15-bbm89i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">It was thumbs down for Donald Trump after the Capitol riots in January.</span>
<span class="attribution"><span class="source">achinthamb via Shutterstock</span></span>
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<p>This is certainly the case for Big Tech. All of the tech firms referred to above – <a href="https://investor.twitterinc.com/contact/faq/default.aspx">Twitter</a>, <a href="https://s21.q4cdn.com/399680738/files/doc_downloads/governance_documents/FB_CertificateOfIncorporation.pdf">Facebook</a> and <a href="https://abc.xyz/investor/other/certificate-of-incorporation/">Google</a> – are incorporated in the US state of Delaware. The significance of Delaware is that its courts have recognised that management have discretion to pursue interests other than shareholder wealth maximisation.</p>
<p>So, if these tech firms decide to reinstate the accounts of Trump and his acolytes having realised that his removal is hurting their bottom line, don’t believe them if they say, “The shareholders made us do it.” From a corporate law perspective, the power rests with the chief executives.</p>
<p>It’s up to these businesses whether they host Trump and others like him because he attracts the <a href="https://www.rte.ie/news/business/2021/0111/1188989-twitter-shares-slump-after-trump-suspension-decision/">eyeballs</a> and thus the money – just as it’s up to them whether they remove incendiary contributors in the interests of social harmony.</p>
<p>You could reasonably argue “de-platforming” incendiary or divisive voices has a chilling effect on free speech (regardless of what it does for a social media platform’s bottom line). But, perhaps more important is that by taking steps to detoxify the worst content, social media companies are finally recognising their potential impact on democracy – and the responsibility that comes with it.</p><img src="https://counter.theconversation.com/content/155531/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael James Boland receives funding from the Irish Research Council.</span></em></p>When social media platforms banned Donald Trump they acknowledged that sometimes social good is more important than shareholder profits.Michael James Boland, PhD Researcher, IRC Government of Ireland Scholar, University College CorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1387552020-09-21T12:15:12Z2020-09-21T12:15:12ZWhy you’re getting so many political text messages right now<figure><img src="https://images.theconversation.com/files/358862/original/file-20200918-24-kmzfj8.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4167%2C4167&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">You just got another – yes, another – political text message.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/illustration/hand-holding-smartphone-with-alert-message-royalty-free-illustration/1255978050">goodvector/iStock via Getty Images</a></span></figcaption></figure><p>Text messages and emails from political campaigns are pouring into Americans’ phones and inboxes right now. It’s happening to political junkies, to people who gave their phone numbers to campaigns, and even to people who try to keep their contact information off mass mailing lists.</p>
<p>I study political campaigns, including how they use social media and mobile phones to build support. In my book “<a href="https://global.oup.com/academic/product/presidential-campaigning-in-the-internet-age-9780190694043">Presidential Campaigning in the Internet Age</a>,” I document the history of how campaigns have used the web, social media and phones in efforts to attract independents and urge supporters to take action. </p>
<p>As part of my research for the 2020 election, I subscribed to get text messages from Democratic nominee Joe Biden and Republican nominee Donald Trump. I also used my personal email account – the same one I’ve been using since 1995 – to receive email updates and alerts from both campaigns. I try to look like a supporter. I engage with the emails or text messages periodically, by clicking the links, and I even contribute a tiny amount of my own money to both campaigns so that I really look like a supporter. </p>
<p>Compared to prior election campaigns, as I document in my book, this election is not any more or less active on email. It is not unusual for campaigns to send up to a dozen emails a day from different people on the campaign and the party. What is unusual is the volume of text messages. While both Republican and Democratic campaigns sent texts in 2016, the volume of Trump’s texting this election cycle is unprecedented. </p>
<p>I’ve been inundated, particularly with requests to donate money.</p>
<h2>Floods of requests</h2>
<p>During the two conventions, the sheer volume of messages from the campaigns was astounding, but especially from the Trump campaign. For every one message I received from the Democrats, I received three to five messages from the Republicans, and that was true over both conventions.</p>
<p>On Aug. 7, the night Donald Trump received the nomination, I received five text messages, all from different numbers, some claiming to be from other Republicans, like House Minority Leader Kevin McCarthy. I received 16 emails from senders claiming to be Trump, his children, his wife and former South Carolina Gov. Nikki Haley.</p>
<p>Campaigns bombard people with dozens of messages daily because it works. They use email and text messaging because the people who sign up for those communications are, typically, supporters. They already back the campaign and campaigns need money.</p>
<p>In July, Trump raised <a href="https://www.nytimes.com/2020/08/05/us/elections/trump-vs-biden.html">more than US$165 million</a>, a record-breaking sum – no campaign had ever raised that much money in a single month – while Biden brought in $141 million. </p>
<p>Both campaigns have recently made huge advertising purchases, including Trump’s campaign <a href="https://www.nytimes.com/2020/08/15/us/politics/trump-campaign-ads-dnc.html">spending $10 million to run TV ads against Biden</a> during the Democratic National Convention. Biden’s campaign has announced a <a href="https://www.nytimes.com/2020/08/05/us/politics/biden-ads.html">$280 million television ad buy</a> across two months and 15 battleground states.</p>
<p>They’ll need to spend – and raise – even more before Election Day arrives. </p>
<h2>More messages are better – for campaigns</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A graphic showing text notifications." src="https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=574&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=574&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=574&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=721&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=721&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358863/original/file-20200918-24-zcvmei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=721&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Campaigns send lots of texts.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/illustration/texts-doodle-royalty-free-illustration/1219463155">Jake Olimb/DigitalVision Vectors via Getty Images</a></span>
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<p>When I interview campaign operatives, they tell me that email is the single most effective way to raise money. Email is intimate, it lands in your inbox, and you can easily click a link to go to a website to provide your credit card number in exchange for a thank you and a sticker or a hat – and that feeling that you’re helping your candidate win. </p>
<p>While it might be easier to get large checks from small numbers of big donors, campaigns need high numbers of low-level contributors to demonstrate that they have the support of the masses. These texts and emails help get campaigns those small donations. </p>
<p>Texting is even more intimate, as the messages pop up in your notifications the way your friends’ texts do. Their punchy, personalized messages draw you in to click on the hyperlink: “Jenny, we’re sending the final list 8X-Match donors to Pres. Trump in 3 HOURS. Make sure your name is at the top.” Or “Jennifer, it’s Joe, and I have to ask one last time before tonight’s FEC deadline: Will you help me and Kamala reach our goal before midnight? We’re still short.”</p>
<p>Campaign operatives believe that the more messages they send, the greater the odds that you will act. One a day is not enough – though they do vary the timing and style of messages throughout the day. They’re betting that one of those messages will hit you in just the right way, at just the right time, to shift you from inaction to action and open your wallet. </p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>Opting out is difficult – the messages appear in your most personal inboxes, so your instinct is not to ignore them. And they often come from different senders – I get texts from several numbers for each campaign – so it’s hard to block all the messages at once.</p>
<p>In addition, campaigns get more than just your money. Each time you act on one of those texts or emails – even if you just follow the link but don’t give money – the campaign gets insight on what types of messages seem to work with you. They’ll <a href="https://theconversation.com/amid-pandemic-campaigning-turns-to-the-internet-137745">learn from your responses</a>, and send you more messages like the ones that are successful, in the hopes you’ll stay involved.</p><img src="https://counter.theconversation.com/content/138755/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jennifer Stromer-Galley does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Mobile phones across the country are buzzing nonstop with text notifications from both presidential campaigns. A scholar of campaign communications explains why.Jennifer Stromer-Galley, Professor of Information Studies, Syracuse UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1300422020-02-12T16:45:41Z2020-02-12T16:45:41ZWhen presidential campaigns end, what happens to the leftover money?<figure><img src="https://images.theconversation.com/files/315049/original/file-20200212-61917-12vak7b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Andrew Yang ended his campaign after the New Hampshire primary. </span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Andrew-Yang/a88836f153034250814698115fc2a624/14/0">AP Photo/Matt Rourke</a></span></figcaption></figure><p><a href="https://www.nytimes.com/2020/02/11/us/politics/andrew-yang-drops-out.html">Andrew Yang</a> and <a href="https://www.npr.org/2020/02/11/756126032/colorado-sen-michael-bennet-ends-2020-democratic-presidential-campaign">Michael Bennet</a> have ended their campaigns for president.</p>
<p>What happens to the money they have raised, but not yet spent?</p>
<p>The amounts could be substantial. Financial reports submitted to the Federal Election Commission indicate that as of Dec. 31, 2019, candidates who had already dropped out still had plenty in the bank. Former Texas Congressman Beto O'Rourke <a href="https://www.nytimes.com/2019/11/01/us/politics/beto-orourke-drops-out.html">dropped out Nov. 1</a>, but at year’s end still had US$360,000 in the bank. Sen. Kamala Harris, who <a href="https://www.cnbc.com/2019/12/03/kamala-harris-drops-out-of-2020-presidential-race.html">dropped out Dec. 3</a>, reported having <a href="https://www.politico.com/2020-election/president/democratic-primary/candidates/fundraising-and-campaign-finance-tracker/">$1.3 million available</a>. </p>
<p>Other candidates who dropped out in January had large sums on hand not long before they ended their campaigns: <a href="https://abcnews.go.com/Politics/castro-drops-2020-presdiential-race/story?id=66774136">Julian Castro</a> had $950,000 on Dec. 31, and dropped out two days later. Less than two weeks before they exited, <a href="https://www.usatoday.com/story/news/politics/elections/2020/01/10/election-2020-marianne-williamson-drops-out-presidential-race/2011312001/">Marianne Williamson</a> had $330,000 and <a href="https://www.nytimes.com/2020/01/13/us/politics/cory-booker-drops-out.html">Sen. Cory Booker</a> had $4.2 million. </p>
<p>I <a href="https://www.law.columbia.edu/faculty/richard-briffault">teach and write</a> about campaign finance law. There is one clear rule about that money: Candidates <a href="https://www.law.cornell.edu/uscode/text/52/30114">can’t use it for personal expenses</a>, like mortgage payments, groceries, clothing purchases or vacations. But there are a lot of other options, both within politics and outside of it.</p>
<h2>Paying what’s owed</h2>
<p>The first use for money from a candidate who has just quit the campaign is generally to pay the cost of winding things up. Just because someone announces they’re out, their expenses don’t stop right away. They may still owe rent on office space, as well as fees for services like polling and transportation and for staff salaries. </p>
<p>Some campaigns <a href="https://www.politico.com/states/florida/story/2016/03/grayson-desantis-among-us-senate-campaigns-with-most-debt-032665">max out their credit cards</a>, or <a href="https://www.fec.gov/help-candidates-and-committees/handling-loans-debts-and-advances/">take out loans</a> to fill their accounts, and those still need to be repaid. </p>
<p>Candidates whose campaigns have ended but who are still handling outstanding expenses need to keep <a href="https://www.fec.gov/help-candidates-and-committees/terminating-a-committee/">filing campaign finance reports</a> with the FEC. Once those expenses are paid, there may not be much left. </p>
<p>At times, candidates need to keep fundraising after they drop out, just to pay off the bills they ran up while running. Six months after they dropped out of the 2012 presidential nomination race, failed Republican candidates Newt Gingrich and Rick Santorum were <a href="https://www.salon.com/2013/05/02/14_presidential_candidates_who_havent_paid_for_their_campaigns_partner/">still working to pay off their campaign debts</a>. Former presidential candidates Rudy Giuliani, Dennis Kucinich and John Edwards <a href="https://www.salon.com/2013/05/02/14_presidential_candidates_who_havent_paid_for_their_campaigns_partner/">took years to pay off</a> their campaign debts. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/313580/original/file-20200204-41554-12rstv0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cory Booker can use money left over from his presidential campaign to run for reelection to the Senate.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Cory-Booker/f7fd3e0517434f56805370d3f0619fd7/7/0">AP Photo/Patrick Semansky</a></span>
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<h2>Saving for the future</h2>
<p>If there’s anything left over after all the bills are paid, the candidate has a few options. </p>
<p>For some politicians, the most likely use is to help pay for their next campaign. Booker, for instance, is up for reelection to his Senate seat. Once his presidential campaign has paid off any debts it may owe, he can <a href="https://www.fec.gov/help-candidates-and-committees/making-disbursements/transfers/">transfer the remaining money</a> to his senatorial reelection campaign fund.</p>
<p>If he, or any other candidate, wants to run for president again in the future, it’s easy enough to transfer the funds to a committee for the 2024 campaign season. </p>
<p>A former candidate can also use any excess funds to create a so-called “<a href="https://www.bnd.com/living/liv-columns-blogs/answer-man/article19572627.html">leadership PAC</a>,” which is a political committee that can be controlled by the former candidate but is not used to support that person’s campaigns. Instead, it backs a political agenda – including other candidates – the candidate supports. Leadership PACs have been criticized for functioning as “<a href="https://www.washingtonpost.com/outlook/2018/09/25/leadership-pacs-are-campaign-finance-scandal/">slush funds</a>” for politicians to spend on <a href="https://www.rollcall.com/news/congress/new-members-meet-slush-fund">travel and entertainment</a> they can’t buy with regular campaign donations.</p>
<h2>Sharing the wealth</h2>
<p>Instead of using the money for the candidate’s own political purposes, people who drop out can donate their money to other campaigns or candidates. There are <a href="https://www.law.cornell.edu/uscode/text/52/30114">no limits</a> on how much they can give to a national, state or local party committee – such as the Democratic National Committee. </p>
<p>They can also give money to <a href="https://www.law.cornell.edu/uscode/text/52/30114">state and local candidates</a>, depending on state campaign finance laws, or <a href="https://www.fec.gov/help-candidates-and-committees/making-disbursements/making-contributions-other-candidates/">up to $2,000</a> to each of one or more candidates for federal office. </p>
<p>A former candidate can also <a href="https://www.law.cornell.edu/uscode/text/52/30114">donate surplus funds to charity</a>. This seems most likely to occur when a candidate is retiring from public life. For instance, former Sen. Joseph Lieberman transferred funds from his Senate campaign fund and his leadership PAC to a <a href="https://www.rollcall.com/news/lieberman-gives-219k-to-scholarship-fund">college scholarship fund</a> for high school students from his state, Connecticut. He used other leftover campaign money to organize his political and campaign papers to <a href="https://ctmirror.org/2013/08/28/burnishing-his-legacy-lieberman-leave-his-official-papers-library-congress/">donate to the Library of Congress</a>. </p>
<p>A former candidate with excess funds has two more possibilities. She can do nothing at all and just keep the cash in the bank. In 2014, an analysis found ex-candidates, Republicans and Democrats alike, had <a href="https://publicintegrity.org/politics/nearly-100-million-in-campaign-cash-sits-idle/">as much as $100 million</a> in unused campaign funds just waiting for account holders to decide what to do.</p>
<p>If the person really doesn’t want all that cash on hand, the law is vague on what’s next – it can be used “<a href="https://www.law.cornell.edu/uscode/text/52/30114">for any other lawful purpose</a>,” besides personal use. For example, former Democratic Congressman Marty Meehan of Massachusetts <a href="https://publicintegrity.org/politics/nearly-100-million-in-campaign-cash-sits-idle/">helped fund a document archive</a> for his former colleague, Barney Frank.</p>
<p>[ <em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklysmart">You can get our highlights each weekend</a>. ]</p><img src="https://counter.theconversation.com/content/130042/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Briffault does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When political campaigns end, candidates often are left with a fair amount of money. They have a lot of options about how to spend it.Richard Briffault, Joseph P. Chamberlain Professor of Legislation, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1275962019-11-22T10:02:02Z2019-11-22T10:02:02ZNZ deputy PM under fire, but maintains no laws broken in party donations scandal<figure><img src="https://images.theconversation.com/files/303075/original/file-20191122-112990-152f81m.jpg?ixlib=rb-1.1.0&rect=51%2C86%2C5699%2C3311&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Deputy Prime Minister Winston Peters, the leader of the New Zealand First party, maintains that no laws have been broken in his party's funding arrangements.</span> <span class="attribution"><span class="source">AAP/Paul Braven</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>New Zealand’s deputy prime minister, Winston Peters, is under pressure following a <a href="https://www.tvnz.co.nz/one-news/new-zealand/electoral-commission-receives-complaint-over-nz-first-foundation">complaint</a> to the <a href="https://elections.nz/">New Zealand Electoral Commission</a> about his party’s mysterious funding arrangements.</p>
<p>Under electoral law, political parties have to <a href="https://elections.nz/guidance-and-rules/donations-and-loans/rules-for-party-donations-and-loans/">disclose all donations above NZ$15,000</a>. But the New Zealand First party, a coalition partner in the Labour-led government, has a somewhat <a href="https://www.rnz.co.nz/news/in-depth/403141/mysterious-foundation-loaning-new-zealand-first-money">opaque relationship with a trust called the New Zealand First Foundation</a>, which has loaned the party tens of thousands of dollars in the past three years. </p>
<p>Those <a href="https://www.stuff.co.nz/national/politics/117577119/who-are-the-donors-behind-the-nz-first-foundation">giving money to the foundation</a> can remain anonymous because under electoral law, loans are not subject to the same disclosure requirements as donations. </p>
<p>But the foundation’s trustees are the New Zealand First party’s lawyer and an ex-member of parliament, who is now a lobbyist. This raises questions about the legality of the funding.</p>
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Read more:
<a href="https://theconversation.com/new-zealand-politics-how-political-donations-could-be-reformed-to-reduce-potential-influence-105805">New Zealand politics: how political donations could be reformed to reduce potential influence</a>
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<h2>Money, politics and scandal</h2>
<p>The relationship between private wealth and public power bedevils all democracies. In particular, constant tension surrounds the use of such wealth to fund political parties and candidates that contest public office. </p>
<p>This issue often emerges in the form of a scandal, where some practice or behaviour is revealed that challenges current legal or social norms. New Zealand is in the midst of such a moment.</p>
<p>While the <a href="https://www.rnz.co.nz/news/in-depth/403141/mysterious-foundation-loaning-new-zealand-first-money">loans from the foundation are legal</a>, they have the practical effect of preventing the public disclosure of whoever provided the money in the first place. Reporting <a href="https://www.stuff.co.nz/national/politics/117577119/who-are-the-donors-behind-the-nz-first-foundation">based on leaked internal documents</a> reveals that the foundation’s funding sources include “companies and individuals who work in industries that have benefited from a NZ$3 billion <a href="https://www.growregions.govt.nz/about-us/the-provincial-growth-fund/">Provincial Growth Fund</a>” overseen by a New Zealand First minister. </p>
<p>As further reported, the <a href="https://www.stuff.co.nz/national/politics/117509589/nz-first-foundation-dodging-electoral-rules-records-suggest-breaches?rm=m">foundation also appears to have directly paid</a> for some of New Zealand First’s activities without those payments being disclosed as donations to the party. If correct, that practice looks to be at least questionable under existing electoral law. </p>
<p>While the New Zealand Electoral Commission is now examining the matter, its investigatory role is somewhat limited as it cannot require anyone to produce additional documentation. But should the commission conclude that the recent revelations show New Zealand First (or, more specifically, its party secretary) has committed an offence against the <a href="http://www.legislation.govt.nz/act/public/1993/0087/latest/DLM307519.html#DLM1868320">Electoral Act</a>, it has a <a href="http://www.legislation.govt.nz/act/public/1993/0087/latest/DLM307519.html">statutory obligation</a> to refer the matter to police.</p>
<p>Such a referral would, of course, be politically very damaging to the party. Unfortunately, it would not be unprecedented. The country’s <a href="https://www.sfo.govt.nz/">Serious Fraud Office</a> already is <a href="https://www.police.govt.nz/news/release/update-complaint-received-regarding-disclosure-political-donations">examining allegations</a> relating to the opposition National Party’s treatment of some NZ$100,000 in donations. To have two of New Zealand’s political parties under police investigation for possible illegal activity is hardly a ringing endorsement of the country’s political culture.</p>
<h2>Is the law fit for purpose?</h2>
<p>The alternative may not be all that much better. Consider what it means if, after discussing the matter with the party and the foundation, the commission concludes that no laws have been broken. After all, the leader of the New Zealand First party, Winston Peters, <a href="https://www.nzfirst.org.nz/electoral_law_breach_allegations">maintains this to be the case</a>.</p>
<p>It would demonstrate New Zealand’s electoral law simply is not fit for purpose. </p>
<p>It would mean a key part of the government can be intimately connected to a legally opaque foundation that has raised hundreds of thousands of dollars from primary industry leaders, wealthy investors and multi-millionaires; that the foundation can use that money for the benefit of a party and its MPs; and that no one outside of the party and those who gave the money need know what is going on.</p>
<p>Such a state of affairs surely would threaten New Zealand’s <a href="https://www.transparency.org/country/NZL">ranking as the world’s second least corrupt nation</a> in the world. It is important to note there is no indication that any form of quid pro quo actually exists here, but this would make it hard to sustain public trust and confidence in our governing arrangements.</p>
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<strong>
Read more:
<a href="https://theconversation.com/a-full-ban-on-political-donations-would-level-the-playing-field-but-is-it-the-best-approach-81821">A full ban on political donations would level the playing field – but is it the best approach?</a>
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<p>For this reason, the current scandal is already generating calls for change to New Zealand’s electoral laws. Former National Party prime minister, Jim Bolger, <a href="https://www.rnz.co.nz/national/programmes/morningreport/audio/2018723350/ex-prime-minister-jim-bolger-calls-for-end-of-political-donations">advocates an end to private donations</a> to political parties and a system of public funding. Author Max Rashbrooke advocates a combination of low limits on private donations and the use of “<a href="https://www.theguardian.com/world/2019/nov/19/a-weeping-sore-jacinda-ardern-must-clean-up-new-zealands-political-donations-mess">democracy vouchers</a>”, which give every citizen a small amount of money to donate to the political party of their choice.</p>
<p>Those are proposals that New Zealand ought at least to consider seriously. For as long as the country continues to leave the funding of political parties and candidates up to those individuals and groups with wealth to spare, we will see scandals like the current one reoccur.</p><img src="https://counter.theconversation.com/content/127596/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Geddis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The New Zealand First party, a government coalition partner, has received tens of thousands of dollars from a foundation whose trustees include the party’s lawyer and an ex-MP.Andrew Geddis, Professor, University of OtagoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1183102019-10-25T12:32:19Z2019-10-25T12:32:19ZWhat is ‘dark money’? 5 questions answered<figure><img src="https://images.theconversation.com/files/297714/original/file-20191018-56198-ynqprd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">These Iowan supporters of Steve Bullock may hope he'll make good on promises to get 'dark money' out of politics.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Steve-Bullock/e109acce79d54e44808f94098093fdb1/1/0">AP Photo/Charlie Neibergall</a></span></figcaption></figure><p>With the 2020 campaign season upon us, “dark money” is again in the news. </p>
<p>Maine’s Republican Sen. Susan Collins has decried what she contends is a <a href="https://www.pressherald.com/2019/09/06/sen-collins-criticizes-dark-money-in-political-campaigns/">“dark money” campaign</a> against her. Montana’s Gov. Steve Bullock has made opposition to dark money <a href="https://www.npr.org/2019/07/17/742427894/steve-bullock-vows-to-disentangle-dark-money-from-politics">a centerpiece of his Democratic presidential campaign</a>. </p>
<p>But what exactly is “dark money,” and why is it considered a problem? </p>
<p>As a law professor who studies <a href="https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=3090&context=faculty_scholarship">campaign finance</a>, I’d like to answer those questions and explain how improved disclosure laws could shed some light on dark money.</p>
<h2>1. What is ‘dark money’?</h2>
<p>Election campaigns run on money. </p>
<p>Money pays for <a href="https://www.fec.gov/help-candidates-and-committees/making-disbursements/operating-expenditures-candidate/">salaries, travel – and especially advertising</a>. Candidates who are not personally wealthy depend on contributions to cover those costs, or on supportive spending by political parties and other political groups. Since the <a href="http://www.worldcat.org/oclc/892340">Watergate scandal</a> in the 1970s, <a href="https://www.washingtonpost.com/wp-srv/national/longterm/watergate/legacy.htm">federal laws</a> have imposed limits on political contributions and required that candidates disclose to the Federal Election Commission the sources of most donations used in federal campaigns. Most states have similar laws <a href="http://www.ncsl.org/research/elections-and-campaigns/disclosure-and-reporting-requirements.aspx">governing their elections</a>. </p>
<p>In the first several decades after the enactment of disclosure requirements, most federal campaign spending was disclosed. But changing campaign practices, particularly the growing role of outside groups that are neither candidate committees nor political parties, has enabled some large donors to hide more of their giving. Starting in 2010, campaign finance observers at the Sunlight Foundation began to refer to some of these unregulated funds as <a href="https://sunlightfoundation.com/2010/10/18/daily-disclosures-10/">“dark money</a>.” The term was popularized by a best-selling <a href="http://www.worldcat.org/oclc/929917321">2016 book by Jane Mayer</a>.</p>
<p>“Dark money” refers to campaign money whose sources are not disclosed. An expenditure – for example, for a television ad criticizing an opponent – will often be publicly reported to the FEC but not the identities of the people, firms or organizations that pay for it.</p>
<h2>2. Is ‘dark money’ a problem?</h2>
<p>Many scholars think it is. </p>
<p>A lack of disclosure makes it harder for journalists, regulators and opponents to detect violations of campaign finance law, such as illegal contributions from foreign donors or government contractors and contributions over the legal limit. </p>
<p>It also hides <a href="https://www.opensecrets.org/news/2017/10/returned-contributions/">legal contributions from disreputable sources</a> like Harvey Weinstein or Bernie Madoff. </p>
<p>That’s not all. The lack of disclosure also denies voters valuable information. As the U.S. Supreme Court observed in <a href="https://supreme.justia.com/cases/federal/us/424/1/">Buckley v. Valeo</a>, the landmark 1976 decision that upheld federal campaign disclosure laws, identifying a candidate’s financial backers “alert(s) the voter to the interests to which the candidate is most likely to be responsive.” This is particularly significant in primaries when all the candidates are in the same party, and voters can’t rely on party labels to decide whom to vote for.</p>
<p>In the current Democratic presidential race, for example, disclosure allows voters to verify candidates’ claims about donors, revealing that former Vice President Joe Biden has <a href="https://theintercept.com/2019/04/25/joe-biden-presidential-bid-lobbyists-fundraiser/">courted lobbyists</a>, Sen. Elizabeth Warren gets nearly <a href="https://www.opensecrets.org/members-of-congress/summary?cid=N00033492">30% of her money from large individual donors</a>, or that some Silicon Valley donors are supporting South Bend Mayor <a href="https://prospect.org/article/do-pete-buttigiegs-donors-know-him-better-we-do">Pete Buttigieg</a>. Knowing these details helps voters understand what interests a candidate may favor if elected.</p>
<p>To be sure, disclosure has its critics. Last summer’s kerfuffle over <a href="https://thehill.com/homenews/house/456902-house-conservatives-call-for-ethics-probe-into-joaquin-castro-tweet">Rep. Joaquin Castro’s tweeting</a> the names and employers of large donors to President Trump – all of which had been disclosed as required by law – underscores the concern of some people that disclosure is an invasion of donors’ privacy.</p>
<h2>3. How much dark money is out there?</h2>
<p>Due to its very “darkness,” it is hard to know just how much dark money is being spent, but there is reason to believe the number is large and growing. </p>
<p>Remember: Some dark money spending is reported to the Federal Election Commission without disclosing donors and some dark money spending isn’t reported at all. The campaign finance watchdog <a href="https://www.opensecrets.org/news/2016/11/1-4-billion-and-counting-in-spending-by-super-pacs-dark-money-groups/">Center for Responsive Politics found</a> that dark money groups reported spending US$181 million in the 2016 federal elections. Dark money accounted for nearly a fifth of all spending by groups other than candidates and parties in the last decade. </p>
<p>But these figures account only for spending reported to the FEC and likely represent only <a href="https://www.opensecrets.org/news/2019/02/somp3-billion-dollar-dark-money-tip-of-the-iceberg/">“the tip of the iceberg</a>,” according to the center. As long as campaign spending is not subject to disclosure the total amount of dark money is unknowable. </p>
<h2>4. Why is it possible to hide donations?</h2>
<p>Dark money grows out of gaps in our campaign finance law. </p>
<p>Federal election law most clearly addresses reporting and disclosure by candidates, political parties and political committees that exist primarily to support candidates and parties. But other organizations also participate in elections. These include <a href="https://www.issueone.org/wp-content/uploads/2018/09/Dark-Money-Illuminated-Report.pdf">business groups and trade associations</a> like the U.S. Chamber of Commerce, membership organizations like the National Rifle Association or the League of Conservation Voters, labor unions, and ideological groups like Americans for Prosperity or Patriot Majority USA.</p>
<p>These groups do not have to report their donors because they claim to work on issues and not on behalf of specific candidates.</p>
<p>There are some exceptions. If the group spends a significant amount on a campaign ad, it will have to report the spending and any donors who specifically helped buy it. But the law covers only some campaign ads. The Buckley decision held that only ads literally calling for the election or defeat of a clearly identified candidate – what the law calls <a href="https://supreme.justia.com/cases/federal/us/424/1/">“express advocacy”</a> – are campaign ads subject to disclosure. </p>
<p>That means that organizations can sharply attack or warmly praise a candidate in ads but avoid disclosing donors by stopping short of telling people how to vote. These <a href="https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1909&context=faculty_scholarship">“issue ads”</a> are not subject to disclosure.</p>
<p>In 2002, Congress passed the <a href="https://caselaw.findlaw.com/us-supreme-court/540/93.html">McCain-Feingold law</a>, which extended disclosure to include broadcast ads that mention a candidate 30 days before a primary and 60 days before a general election, but similar ads aired earlier in the campaign season are not covered.</p>
<p>Following the money is made more difficult because many nominally non-political organizations fund campaign ads indirectly. They do this by donating to another group which buys the ad. Sometimes, even that second group transfers the money to a third organization before the ad purchase it made.</p>
<p>This <a href="https://www.bloomberg.com/news/articles/2012-10-15/secret-political-cash-moves-through-nonprofit-daisy-chain">“daisy chain”</a> or <a href="https://www.cpr.org/2019/06/20/colorado-dems-have-a-plan-to-shine-a-light-on-dark-money-could-it-work/">“nesting Russian doll”</a> practice is an end run around disclosure. </p>
<p>Even though the organization that actually does the spending must disclose its large donors to the <a href="https://www.fec.gov/data/">Federal Election Commission</a>, these reports simply list a contribution from the next link in the chain – which tells the voters nothing about <a href="https://www.issueone.org/wp-content/uploads/2018/09/Dark-Money-Illuminated-Report.pdf">who actually paid</a>.</p>
<h2>5. What can be done?</h2>
<p>The problem of “dark money,” while serious, can be addressed with legislative fixes.</p>
<p>First, all organizations – including corporations, labor unions and non-profits engaged in election-related spending – could be required to disclose large donors whose funds are used for campaign ads. The Citizens United decision struck down limits on corporate spending, but it also <a href="https://www.fec.gov/updates/fec-statement-on-the-supreme-courts-decision-in/">sustained the law requiring corporations to disclose their spending</a>. </p>
<p>Second, when the disclosed donations are from an organization further down the daisy chain, the disclosure could include the major donors to that organization. Several states, such as <a href="https://www.insidepoliticallaw.com/2019/07/02/new-jersey-colorado-join-growing-list-of-states-regulating-dark-money/">New Jersey and Colorado</a>, have recently passed laws requiring that information. </p>
<p>The U.S. House of Representatives this spring passed <a href="https://www.npr.org/2019/03/07/701248576/democrats-election-reform-bill-takes-aim-at-dark-money">similar legislation</a> addressing large dark money donors and spenders in federal elections, although <a href="https://www.vox.com/2019/3/27/18284171/senate-democrats-anti-corruption-hr1-schumer-mcconnell">Republicans in the Senate</a> seem unlikely to take it up. </p>
<p>To be sure, some constitutional issues remain – particularly the definition of what constitutes an election-related ad. But because disclosure does not limit or bar the use of campaign money and increases voter information, the court has regularly found disclosure to be consistent with the First Amendment. </p>
<p>In other words, unlike many other issues in campaign finance reform, the obstacle to improved disclosure is political, not constitutional. </p>
<p>[ <em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/118310/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Briffault does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A law professor explains political disclosure laws, how donors get around them – and what to do about it.Richard Briffault, Joseph P. Chamberlain Professor of Legislation, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1040932018-11-02T10:53:31Z2018-11-02T10:53:31ZCampaign spending isn’t the problem – where the money comes from is<figure><img src="https://images.theconversation.com/files/243339/original/file-20181031-122180-q6vr40.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lots of money is spent on campaigns. But is that a problem?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/37813696?size=huge_jpg">Shutterstock</a></span></figcaption></figure><p>The tide of campaign money seems to be running high and threatening to swamp our democracy.</p>
<p>For the first time, the cost of congressional elections is <a href="https://www.opensecrets.org/news/2018/10/cost-of-2018-election/">likely to surpass US$5 billion</a>. </p>
<p>Certainly, $5 billion sounds like a lot to spend on a midterm election. But consider the stakes – our $4.4 trillion federal budget, our $20 trillion gross domestic product and a host of national policies, from immigration to health care to trade to the environment, may all be affected by the election’s outcome. </p>
<p>And although $5 billion is a record amount, the five top advertisers in the U.S. – Comcast, Procter & Gamble, AT&T, Amazon and GM – together spent $20 billion on advertising last year – or <a href="http://www.statista.com/statistics/275446/ad-spending-of-leading-advertisers-on-the-us">four times the money spent on campaign communications</a>. </p>
<p>I’m a scholar who studies, among other subjects, <a href="https://www.law.columbia.edu/faculty/richard-briffault">campaign finance regulation</a>. This surge in campaign spending is striking, but I believe the volume of campaign spending is not the main problem with our campaign finance system. </p>
<p>The real challenge for our democracy is where so much of this money comes from.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=493&fit=crop&dpr=1 600w, https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=493&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=493&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=620&fit=crop&dpr=1 754w, https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=620&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/243561/original/file-20181101-83661-wg9uaq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=620&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Demonstrators in Lacey, Washington, in 2016 wanted money out of politics.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Campaign-2016-Why-It-Matters-Money-In-Politics/25f95e39fb1446a299105b879ace623d/11/0">AP/Ted S. Warren</a></span>
</figcaption>
</figure>
<h2>The one-thousandth of 1 percent</h2>
<p>Our federal election campaigns are <a href="https://transition.fec.gov/pages/brochures/citizens.shtml#ie">entirely funded by private money</a>. The minimal public funding program for presidential elections established in 1974 has collapsed; no major candidate took public funds in either of the <a href="https://shorensteincenter.org/can-taxpayer-money-save-presidential-campaigns/">last two presidential elections.</a> A public funding program for congressional races never existed.</p>
<p>And the private dollars that drive the system come from a tiny fraction of our society. </p>
<p>Federal law requires the reporting of the identities of only those <a href="https://www.fec.gov/help-candidates-and-committees/keeping-records/records-receipts/">donors who give at least $200</a>. </p>
<p>Barely one-half of 1 percent of the adult population has given $200 or more in connection with this year’s federal elections. Yet collectively they have accounted for more than 66 percent of campaign funds, or <a href="https://www.opensecrets.org/overview/donordemographics.php">more than $3.4 billion</a>.</p>
<p>More strikingly, a little more than 37,000 people – or about one-thousandth of one percent of the adult population – have so far given $10,000 or more each, aggregating to nearly $1.9 billion, or <a href="https://www.opensecrets.org/overview/donordemographics.php">38 percent of the total</a>. </p>
<p><iframe id="OV40Y" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/OV40Y/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>In discussions about inequality in the United States, there is a lot of talk about the 1 percent, but in campaign finance it is the 0.0001 percent who matter. And it is the less than one-thousandth of 1 percent – the 2,210 people, who so far have collectively <a href="https://www.opensecrets.org/overview/donordemographics.php">given $1.1 billion, or nearly one-quarter of the total</a> – who matter even more. </p>
<p>These numbers reflect only publicly disclosed contributions. With the rise of “<a href="https://www.opensecrets.org/dark-money">dark money groups</a>” that spend to influence election outcomes but – because they claim to be primarily non-electoral – do not have to disclose their donors, the fraction of campaign money provided by <a href="https://www.issueone.org/dark-money/">elite donors is probably even larger</a>.</p>
<p>Nor is the donor class representative of the broader community whose interests are all at stake in an election. </p>
<p>Donors are older, whiter and wealthier than America as a whole. They hail disproportionately from certain places: So far this year, more money has come from the District of Columbia than from 28 states put together. And certain industries – <a href="https://www.opensecrets.org/overview/donodemorgraphics.php">finance, real estate, law, health care, oil and gas</a> – are particularly big givers. </p>
<p>According to media reports – there is no formal tracking of these donors – this year has witnessed a <a href="https://www.nytimes.com/interactive/2018/10/16/us/politics/campaign-finance-small-donors.html">striking increase in the number and importance of small donors</a>. But big donors continue to be <a href="https://www.cnn.com/2018/10/22/politics/wealthy-republican-donors-fuel-cash-edge/index.html">pivotal to the campaign finance system</a>. And the financing
role of a small number of very wealthy individuals inevitably distorts our political process. </p>
<h2>Impact on democracy</h2>
<p>As the saying goes, he who pays the piper calls the tune. With campaign donors and recipients, this is less a matter of classical quid pro quo corruption – the exchange of campaign dollars for votes – than it is the dependence of so many of our elected officials on these megadonations. </p>
<p>Elected officials are often reluctant to take positions that are at odds with the interests of their large donors, and what gets on – or stays off – the legislative agenda can be driven by donor concerns. </p>
<p>This tends to be more significant for issues that get little media attention – who gets a specific tax break or regulatory relief – than for hot-button concerns. But it inevitably <a href="https://www.frbsf.org/economic-research/files/NTJ-business-lower-tax-rates.pdf">shapes who benefits from government action</a>, <a href="https://www.press.umich.edu/2454352/influence_of_campaign_contributions_in_state_legislatures">who is harmed and who is ignored</a>. </p>
<p>As <a href="https://www.oyez.org/cases/2003/02-1674">the Supreme Court explained</a> in sustaining the McCain-Feingold Act’s ban on soft money, “The evidence connects soft money to manipulations of the legislative calendar, leading to Congress’s failure to enact, among other things, generic drug legislation, tort reform and tobacco legislation.” </p>
<p>Federal budget director and former Congressman Mick Mulvaney <a href="https://www.nytimes.com/2018/04/24/us/mulvaney-consumer-financial-protection-bureau.html">put the matter with disarming candor</a>: “We had a hierarchy in my office in Congress. If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.” </p>
<p>The campaign finance system certainly has implications for the health of our democracy. But for those concerned with democratic representation, I believe their focus ought to be on the sources of campaign money – and on finding ways to bring in more small donations and no-strings-attached contributions – than on the spending itself.</p>
<p><em>An updated version of this story can be found <a href="https://theconversation.com/election-2020-sees-record-11-billion-in-campaign-spending-mostly-from-a-handful-of-super-rich-donors-145381">here</a>.</em></p><img src="https://counter.theconversation.com/content/104093/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Briffault does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Congressional midterm election spending will likely hit a record $5 billion. But the spending masks the main problem with US campaign financing: who gives the money and what they may get in return.Richard Briffault, Joseph P. Chamberlain Professor of Legislation, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653432016-09-19T05:50:42Z2016-09-19T05:50:42ZFactCheck Q&A: Is Australia one of the few countries worldwide to accept foreign political donations?<figure><img src="https://images.theconversation.com/files/138030/original/image-20160916-14303-18yx4dp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Senator Bridget McKenzie, speaking on Q&A.</span> <span class="attribution"><span class="source">Q&A</span></span></figcaption></figure><p><strong>The Conversation is fact-checking claims made on Q&A, broadcast Mondays on the ABC at 9:35pm. Thank you to everyone who sent us quotes for checking via <a href="http://www.twitter.com/conversationEDU">Twitter</a> using hashtags #FactCheck and #QandA, on <a href="http://www.facebook.com/conversationEDU">Facebook</a> or by <a href="mailto:checkit@theconversation.edu.au">email</a>.</strong></p>
<hr>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/msWc40SRCZw?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Excerpt from Q&A, September 12, 2016. Watch from 1.40.</span></figcaption>
</figure>
<blockquote>
<p>TONY JONES: Sorry, to be fair, you still haven’t answered the question as to whether you think your party should not take foreign donations.</p>
<p>BRIDGET MCKENZIE: Yeah, I probably don’t. We’re one of the few countries in the world that does. <strong>– National Party Senator for Victoria Bridget McKenzie responds to journalist Tony Jones on the <a href="http://www.abc.net.au/tv/qanda/txt/s4512304.htm">ABC’s Q&A program</a>, September 12, 2016.</strong></p>
</blockquote>
<p>Nationals Senator Bridget McKenzie told Q&A that Australia was one of the few countries in the world that accepted foreign donations. </p>
<p>Is that true?</p>
<h2>Checking the source</h2>
<p>When asked for a source to support her assertion, a spokesperson for Bridget McKenzie referred The Conversation to data collected by the International Institute for Democracy and Electoral Assistance, which <a href="http://www.idea.int/political-finance/question.cfm?id=246">shows that</a> of the 180 countries it listed, 114 ban foreign political donations. </p>
<p><a href="http://www.idea.int/">The International Institute for Democracy and Electoral Assistance</a> (International IDEA) is a Stockholm based intergovernmental body, of which Australia was a founding member. It maintains a political finance database covering political finance laws and regulations in 180 countries.</p>
<h2>Is Australia one of the few countries in the world that allows foreign donations?</h2>
<p>It is true Australia allows foreign donations but it’s a slight exaggeration to say it is among the few countries in the world to do this. </p>
<p>The chart below, created by the <a href="http://www.idea.int/political-finance/question.cfm?field=246">International IDEA database</a>, shows that of the 180 countries they researched, 114 countries ban donations from foreign interests to political parties. 55 do not and data is lacking for 11. </p>
<p>Australia belongs to the one third that do not ban foreign donations.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=452&fit=crop&dpr=1 754w, https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=452&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/138032/original/image-20160916-14280-1dgy79z.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=452&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Which countries ban donations from foreign interests to political parties?</span>
<span class="attribution"><a class="source" href="http://www.idea.int/political-finance/question.cfm?field=246">International Institute for Democracy and Electoral Assistance</a></span>
</figcaption>
</figure>
<p>Oceania, the region that includes Australia, has the <a href="http://www.idea.int/political-finance/question.cfm?field=246&region=9">lowest proportion</a> of countries that ban foreign donations. Only two countries out of 12 in Oceania (Papua New Guinea and Fiji) ban such donations. New Zealand allows foreign donations but limits them to NZ$1,500.</p>
<p>In contrast, <a href="http://www.idea.int/political-finance/question.cfm?field=246&region=9">33 of 37 countries</a> in Asia and <a href="http://www.idea.int/political-finance/question.cfm?field=246&region=50">31 of 44 countries</a> in Europe ban foreign political donations. </p>
<p>Democracies most similar to Australia, such as the <a href="http://www.idea.int/political-finance/country.cfm?id=77">UK</a>, <a href="http://www.idea.int/political-finance/country.cfm?id=231">US</a> and <a href="http://www.idea.int/political-finance/country.cfm?id=37">Canada</a>, all ban foreign donations.</p>
<h2>Other common restrictions on political donations</h2>
<p>The International IDEA data also show that of the 180 countries on which data is collected:</p>
<ul>
<li><a href="http://www.idea.int/political-finance/question.cfm?field=253">87 countries</a> ban donations to political parties from corporations with government contracts or partial government ownership. (Australia does not). </li>
<li><a href="http://www.idea.int/political-finance/question.cfm?field=248">46 countries</a> ban corporate donations to political parties. (Australia does not).</li>
<li><a href="http://www.idea.int/political-finance/question.cfm?id=257">45 countries</a> ban trade union donations to political parties. (Australia does not). </li>
<li><a href="http://www.idea.int/political-finance/question.cfm?id=266">69 countries</a> cap donations to political parties in relation to an election, regardless of the source. (Australia does not).</li>
<li><a href="http://www.idea.int/political-finance/question.cfm?field=284">54 countries</a> place limits on the amount a political party can spend – including Canada, New Zealand and the UK, which also limit election campaign spending by non-party organisations. In Australia, <a href="http://www.dpc.nsw.gov.au/announcements/panel_of_experts_-_political_donations">NSW</a> and the <a href="http://www.elections.act.gov.au/funding_and_disclosure/new_electoral_campaign_finance_laws_in_the_act2">ACT</a> have such spending limits, while in <a href="https://www.legislation.sa.gov.au/LZ/V/A/2013/ELECTORAL%20(FUNDING%20EXPENDITURE%20AND%20DISCLOSURE)%20AMENDMENT%20ACT%202013_51.aspx">South Australia</a> expenditure caps apply to all parties that opt into public funding. </li>
<li><a href="http://www.idea.int/political-finance/question.cfm?id=270">120 countries</a>, including Australia, provide direct public funding for political parties. This can include annual administrative funding, as in European countries, as well as campaign funding. </li>
<li><a href="http://www.idea.int/political-finance/question.cfm?field=279&region=-1">65 countries</a>, including Australia, provide tax benefits for political parties, candidates or donors. </li>
</ul>
<p>The High Court has recently <a href="http://theconversation.com/factcheck-qanda-would-the-constitution-need-to-be-changed-to-ban-political-donations-from-unions-65463">decided two important cases</a> about regulation of political donations in Australia. In Unions NSW the Court struck down legislation imposing a blanket ban on political donations from corporations or unions or others not on the electoral roll. In McCloy, the Court upheld caps on political donations and a ban on donations from property developers.</p>
<h2>Verdict</h2>
<p>Bridget McKenzie was slightly exaggerating to say that Australia is one of the few countries in the world to accept foreign political donations.</p>
<p>Of the countries for which we have evidence, Australia belongs to the one third that do not ban such donations. <strong>– Marian Sawer</strong></p>
<hr>
<h2>Review</h2>
<p>This is a sound FactCheck. I have reviewed it and the author presents a fair and accurate view of the data from International IDEA. </p>
<p>There may be constitutional issues in banning foreign political donations in Australia. The High Court has <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2013/58.html">struck down</a> a scheme in NSW that banned donations from corporations, unions and non-citizens. On the other hand, the High Court <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2015/34.html">upheld</a> a NSW scheme that imposed yearly caps on political donations and banned donations from property developers, due to the history of corruption in NSW. </p>
<p>So any ban on political donations has to be carefully circumscribed to be compatible with our constitutional freedom of political communication. <strong>– Yee-Fui Ng</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/65343/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marian Sawer has received funding from the Australian Research Council for the Democratic Audit of Australia.</span></em></p><p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Nationals Senator Bridget McKenzie said Australia is one of the few countries in the world to accept foreign political donations. Is that true?Marian Sawer, Emeritus Professor, School of Politics and International Relations, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/594532016-06-02T20:24:05Z2016-06-02T20:24:05ZEight ways to clean up money in Australian politics<figure><img src="https://images.theconversation.com/files/124255/original/image-20160527-22083-1jxjtec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An integrated reform blueprint for federal and state politics could comprise eight elements.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/cwilso/2580985266/">Chris Wilson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Political funding in Australia is governed by <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">different rules</a> for state (some of which do not require disclosure) and federal governments. Both levels <a href="https://www.newsouthbooks.com.au/books/money-and-politics_the-democracy-we-cant-afford/">suffer significant weaknesses</a>; foremost is the lack of transparency associated with the place of private money. </p>
<p>When devoted to lobbying, donations can sometimes result in covert influence over the political process. And when made directly to political parties and candidates, they can be shrouded in secrecy. </p>
<p>Neither is public money free from such afflictions; corruption through the misuse of public resources occurs when parliamentary entitlements and government advertising are used for electioneering. </p>
<p>The flow of money into Australian politics also results in various forms of unfairness. The sale of access and influence provides another avenue for the rich to secure greater influence over the political process because of their wealth. And lobbying too can lead to corruption and misconduct. </p>
<p>All these practices are fuelled by the increasing demand for campaign funds, and this is unlikely to change. What then can be done to improve the system of political finance?</p>
<h2>Eight steps</h2>
<p>An integrated reform blueprint for federal and state politics could comprise eight elements.</p>
<ol>
<li><p>Schemes requiring – at the minimum – disclosure twice a year generally, and weekly during the election period, and with a threshold of A$1,000.</p></li>
<li><p>Ministerial and parliamentary codes of conduct in relation to political donations that require meetings between members of parliament or ministers and party contributors to be recorded. And ban such officials attending fundraising events.</p></li>
<li><p>Contribution limits set at a low level (such as A$2,000 per year), with an exemption for membership fees (including <a href="http://www.smh.com.au/federal-politics/political-opinion/union-fees-to-the-alp-are-a-special-case-20100114-ma0h.html">trade union affiliation fees</a>).</p></li>
<li><p>A party and candidate support fund comprising election funding payments with a low threshold and calculated according to a tapered scheme; annual allowances calculated according to the number of votes and party members; and policy development grants for new parties.</p></li>
<li><p>Strict regulation of the amount and use of parliamentary entitlements, including limiting their use to the discharge of parliamentary duties (thus preventing their use for electioneering).</p></li>
<li><p>Effective processes of accountability <a href="https://theconversation.com/election-explainer-what-are-the-rules-governing-political-advertising-57880">in relation to government advertising</a>.</p></li>
<li><p>Election spending limits that apply six months before polling day. In jurisdictions where there aren’t fixed terms, the application of these limits can be timed from the last polling day. Spending limits for federal elections, for example, can apply two years after the last polling day.</p></li>
<li><p>Rigorous regulation of lobbying that extends to all lobbyists (not just commercial ones) and provides for transparency in relation to all their activities, especially meetings with ministers.</p></li>
</ol>
<p>These reforms would not just counter the plutocratic tendencies of Australian politics arising from private funding of parties and candidates. They would also minimise the kleptocratic risks of incumbent governments and MPs (ab)using public resources, such as election funding, parliamentary entitlements, and government advertising for partisan gain. </p>
<p>Specifically, they seek to meet the danger – and reality – of incumbents gaining an unfair electoral advantage through the use of public resources.</p>
<p>Many elements of this blueprint have been adopted – in one form or another – by the states and territories, particularly New South Wales.</p>
<h2>Constitutional constraints</h2>
<p>There are concerns that limits on contributions and spending may be unconstitutional because they breach the freedom of political communication implied under the Constitution. </p>
<p>In 1992, the High Court <a href="http://www.austlii.edu.au/au/cases/cth/HCA/1992/45.html">struck down</a> a federal scheme that banned election advertising and provided for a “free-time” regime. But in 2015, it <a href="http://eresources.hcourt.gov.au/downloadPdf/2015/HCA/34">found</a> the New South Wales caps on political donations to be compatible with the implied freedom.</p>
<p>The High Court had, in 2013, <a href="http://eresources.hcourt.gov.au/downloadPdf/2015/HCA/15">struck down</a> a measure limiting political donations to those on the electoral rolls (that banned donations from non-voters including non-citizens, organisations and corporations) on the basis of its selective scope. </p>
<p>But, its 2015 decision clarified that measures limiting political contributions on a selective basis can be compatible with the freedom implied in the Constitution if properly justified. This decision upheld the NSW ban on political donations from property developers.</p>
<p>The constitutionality of election spending limits were not directly at issue in the 2015 case. But the court also made strong comments that broad-based spending limits would compatible with the implied freedom.</p>
<p>What stands in the way of genuine reform of the federal political funding system is not the availability of effective and practicable measures, but the lack of adequate political will.</p>
<hr>
<p><em>This is the last piece in our series on political donations. <a href="https://theconversation.com/au/topics/political-finance-in-australia">Catch up on other articles</a>.</em></p><img src="https://counter.theconversation.com/content/59453/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joo-Cheong Tham receives funding from the Australian Research Council and has written commissioned reports for the New South Wales Electoral Commission. He is also the Director of the Electoral Regulation Research Network, an initiative sponsored by the New South Wales Electoral Commission, Victorian Electoral Commission and Melbourne Law School.</span></em></p>Political funding in Australia is governed by different rules for state (some of which do not require disclosure) and federal governments. And both levels suffer significant weaknesses.Joo-Cheong Tham, Associate Professor, Melbourne Law School, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/595972016-06-01T20:16:28Z2016-06-01T20:16:28ZAustralia trails way behind other nations in regulating political donations<figure><img src="https://images.theconversation.com/files/124706/original/image-20160601-1943-10gwwm4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The UK has limits on expenditure by political parties and third parties, and doesn’t allow paid advertising in electronic media at all.</span> <span class="attribution"><span class="source">Reuters</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms.</em></p>
<hr>
<p>Australia was once a pioneer in developing mechanisms for electoral integrity. We gave the world the secret ballot, for instance, as well as non-partisan electoral administrators and non-partisan processes for electoral redistribution. But our political finance regulation now falls way behind international standards.</p>
<p>To take just one issue, <a href="http://www.idea.int/political-finance/bans-and-limits-on-private-income.cfm">Australia is not one</a> of the 114 out of 180 countries that ban donations to political parties from foreign interests. Transparency can be impossible to achieve when donations come from other countries.</p>
<p>The federal government introduced public funding for political parties in 1983, to reduce reliance on private donations. But corporate donations have continued to grow – reaching <a href="http://periodicdisclosures.aec.gov.au/">A$202 million in 2013–14</a>. The only federal restriction on private money in politics is the <a href="http://periodicdisclosures.aec.gov.au/">requirement to disclose donations</a> of more than A$13,200. But this information doesn’t become public until well after the relevant electoral event. </p>
<p>Unlike similar democracies, Australia limits neither political donations nor campaign expenditure by political parties at the federal level. But states and territories have <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">different rules</a>.</p>
<h2>Other jurisdictions</h2>
<p>Canada has extensive regulation, banning corporate and union donations, imposing caps on individual donations and limits on candidate, party and third-party expenditure – that is, expenditure by groups other than candidates or political parties during an election campaign. </p>
<p>New Zealand also limits expenditure by parties and third parties. Its electoral commission is responsible for party broadcasting allocation (free time and money for paid advertising).</p>
<p>The United Kingdom has limits on expenditure by political parties and third parties. Paid advertising in electronic media isn’t allowed at all.</p>
<p>In 2008, the <a href="http://www.publications.parliament.uk/pa/ld200708/ldjudgmt/jd080312/animal-2.htm">House of Lords upheld the prohibition</a>. It argued the ban was necessary to maintain a level playing field and prevent “well-endowed interests” from using “the power of the purse to give enhanced prominence to their views”.</p>
<p>In Australia, the cost of television advertising and associated market research has driven political parties to chase ever-greater donations. Both political donations and the negative advertising these buy increase distrust in politicians and political parties.</p>
<h2>Regulating for democracy</h2>
<p>The aim of political finance regulation is twofold: to ensure the integrity of elections and to promote a level playing field for electoral competition. Both aims are equally important. </p>
<p>To safeguard integrity, we need transparency and other measures so that those with vested interests in government contracts or regulation cannot buy access and influence.</p>
<p>The second reason for regulating political donations is to promote political equality, a defining feature of democratic citizenship. </p>
<p>Parties without wealthy backers should not have their message drowned out by those that do. And corporate donors should not be able to buy political access far in excess of what other citizens enjoy. </p>
<p>A third reason for regulating donations is to ensure those elected to be political representatives don’t instead spend their time chasing donations.</p>
<p>But despite repeated calls for political donations reform, progress at the federal level has been stalled since then senator John Faulkner’s <a href="http://australianpolitics.com/downloads/voting/2008/08-12-01_electoral-reform-green-paper.pdf">2008 Electoral Reform Green Paper</a>. </p>
<h2>States, territories and reforms</h2>
<p>There’s been more movement at the state and territory level. New South Wales now has the most comprehensive regulations. These include: donation caps; source restrictions (no donations from property developers, for instance, or gambling, tobacco or liquor industries); and expenditure limits for parties and third parties. </p>
<p>The NSW government even appointed an expert panel to investigate the possibility of a total ban on political donations, and their replacement by full public funding of parties, in 2015.</p>
<p>The Australian Capital Territory has expenditure limits. The ACT also requires continuous disclosure for donations more than A$1,000. </p>
<p>In South Australia, expenditure limits are a condition of public funding. The state also imposes a A$500 cap on “cash for access” events.</p>
<p>But this patchwork of regulation creates many loopholes. NSW Premier Mike Baird has tried to get a national system of political donation law onto the COAG agenda – so far without success. </p>
<p>In the past, many believed any reform of Australia’s political donations regime wouldn’t survive a challenge because the High Court has found that the Constitution implies freedom of political communication. All this changed with the <a href="http://eresources.hcourt.gov.au/showCase/2015/HCA/34">2015 McCloy decision</a>. </p>
<p>In this case, brought by a property developer, the High Court decided that “guaranteeing the ability of a few to make large political donations in order to secure access to those in power” was antithetical to the underlying constitutional principle of political equality. Political freedom needed to be balanced by “equality of opportunity to participate in the exercise of political sovereignty”.</p>
<p>This was a very welcome recognition that political equality is central to representative democracy. And it should give heart to all electoral reformers.</p>
<hr>
<p><em>Catch up on <a href="https://theconversation.com/au/topics/political-finance-in-australia">other articles in the series</a>.</em></p><img src="https://counter.theconversation.com/content/59597/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marian Sawer has received funding from the Australian Research Council for the Democratic Audit of Australia and from the Academy of the Social Sciences in Australia for her current project with Anika Gauja on party regulation.</span></em></p>Unlike similar democracies, Australia neither limits political donations nor campaign expenditure by political parties at the federal level.Marian Sawer, Emeritus Professor, School of Politics and International Relations, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/596012016-05-31T19:49:37Z2016-05-31T19:49:37ZWhat do businesses get in return for their political donations?<figure><img src="https://images.theconversation.com/files/124527/original/image-20160531-7678-16k9yfc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Politicians often argue lobbying is going to happen anyway, so there's little harm in demanding donations from those seeking their time.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms.</em></p>
<hr>
<p>My surfing companion looked glum. He invested in start-up companies and it had been a bad year.</p>
<p>“I lost more than $200 million this year,” he said.</p>
<p>“That was careless,” I said.</p>
<p>“Yes, my boss thinks so too,” he replied. “But I’ve realised my mistake. I selected companies on the strength of their technology, when I should have picked them based on their relationship to government.”</p>
<p>His companies had crashed and burned while companies with inferior products flourished as government incentive schemes underpinned their take-off.</p>
<h2>Paying for access</h2>
<p>Government schemes and regulation are central to the profitability of many sectors of our economy. Economists Paul Frijiters and Gigi Foster <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2571042">have found</a> the majority of Australia’s rich list made fortunes in sectors such as mining, property development and banking, where success is built on favourable government decisions.</p>
<p>Even industries whose fortunes aren’t as obviously determined by political decisions still need to have strong relationships with government. </p>
<p>Governments often don’t understand the nitty-gritty of the industries they regulate; they need the reality check of talking to people on the ground. And when they’re arbitrating between competing stakeholders, their decisions are shaped by who is in their ear.</p>
<p>Politicians often argue lobbying is going to happen anyway, so there’s little harm in demanding donations from those seeking their time. They argue that as long as they’re collecting small amounts of money from a lot of different players, there isn’t really a problem. And they claim this is a better way of funding election campaigns than calling on the public purse.</p>
<p>Those who disagree argue that the logic of “paying for access” is that people who pay more get better access. The risk, they say, is that big business gets a louder voice than small businesses, communities and ordinary people.</p>
<h2>Not so miscellaneous</h2>
<p>More worryingly, it’s unclear whether access is the only issue. Our political donations disclosure regime is so opaque that we don’t really know who is paying how much and what they get in return. </p>
<p>But the lengths players go to hide donations suggests we should be suspicious. The Liberal Party holds its donors closer to its chest than Labor, so consider this graph of Liberal Party receipts over the last decade.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>The gap between the top two lines is the money we know nothing about. Laws dictate that only donations of more than <a href="http://www.aec.gov.au/Parties_and_Representatives/public_funding/threshold.htm">A$13,200</a> have to be disclosed, but as the major parties have seven state and territory branches as well as a federal branch, a large donation of, say, A$100,000 can easily be hidden by breaking it into small chunks and giving a portion to each branch.</p>
<p>Second, we have the gap between the “Other receipts” and the “Donations” line. Little information is released publicly about these payments, but it’s supposed to be money the parties receive that is not from donations. </p>
<p>Close examination reveals companies are making payments in this category that are many <a href="http://periodicdisclosures.aec.gov.au/">multiples</a> higher than their declared donations.</p>
<p>In the last ten years, for instance, ANZ Bank has publicly declared that it gives the same donation to each side of politics – A$50,000 to A$100,000 each year. But, in election years, it increases the donation to the Liberals to A$150,000. </p>
<p>But, the “Other receipts” show the total was up to nine times the size of the ANZ’s declared donations. This money flowed much more strongly to the Liberal Party and peaked (almost doubling) in the years crucial decisions were made about financial sector reforms. </p>
<p>These payments may be entirely legitimate, but based on the publicly released information we can’t really tell.</p>
<p>Even declared donations that appear in the bottom (blue) line in the graph above are not transparent. Many of the biggest listed donors are shell organisations, such as the Free Enterprise Foundation, which take payments from companies and then pass that money onto political parties with no names attached, effectively laundering donations.</p>
<h2>Missing transparency</h2>
<p>This lack of transparency makes it hard to speak with certainty about the impact of money politics on government decisions. But looking at the trend lines, we can see worrying signs that suggest donations are used to coax and punish governments for their decisions.</p>
<p>The Rudd government, for instance, received A$85 million on the eve of its first election victory when business was keen to get in its good books. But donations slumped to just A$22 million in the 2009-10 financial year. A drop-off in non-election years is normal, but this drop was extreme and not echoed for the Coalition. </p>
<p>Interestingly, the dip happened while Labor was still flying high in the polls and before the Rudd/Gillard divisions began; it was while Labor was seeking to implement changes to the WorkChoices industrial relations law, banking sector reform and the mining tax.</p>
<p>It was at the end of this same period that the then treasurer, Wayne Swan, published his notorious essay in The Monthly, <a href="https://www.themonthly.com.au/rising-influence-vested-interests-australia-001-wayne-swan-4670">The 0.01 Per Cent: The Rising Influence of Vested Interests in Australia</a>. He argued corporate elites were pouring their considerable wealth into trying to pervert the political process, and that “the rising power of vested interests is undermining our equality and threatening our democracy”.</p>
<p>It’s clear that having a close relationship with government is an important part of business success in Australia, but the precise role of political donations in that relationship is opaque. </p>
<p>The only thing we know for certain is that, in this election campaign, millions of dollars is changing hands, the relationships created by these donations matter, and we don’t know as much about political donations as we should.</p>
<hr>
<p><em>Catch up on <a href="https://theconversation.com/au/topics/political-finance-in-australia">other articles in the series</a>.</em></p><img src="https://counter.theconversation.com/content/59601/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lindy Edwards does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our political donations disclosure regime is so opaque, we don’t really know who’s paying how much and what they get in return. But the lengths players go to hide donations gives cause for suspicion.Lindy Edwards, Senior Lecturer in Politics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.