Annual Report 2006

Donations

Donations disclosed by TDs, Senators and MEPs in respect of 2006

A person who was a TD, Senator or MEP during 2006 was required under section 24(1)(a) of the Electoral Act 1997 to submit a Donation Statement to the Standards Commission by 31 January 2007. Donations received during 2006 which exceeded a value of €634.87 were required to be disclosed. Donations from the same person in the same year must be aggregated for the purposes of observing the disclosure threshold and the maximum acceptance limit.

A total of 233 Donation Statements were received in respect of 2006. This comprises 166 Donation Statements from TDs, 60 from Senators and 7 from MEPs (the remaining 6 MEPs are also TDs or Senators and a single Donation Statement is required in respect of their dual mandates). Donations totalling €131,923.67 (of which €5,060.52 were returned to the donors because the donations concerned were in excess of the maximum prescribed limit) were disclosed in respect of 2006. Donations disclosed included money, property, goods and services. The amount disclosed represents a decrease of €15,603.67 on the figure of €147,526 for 2005.

A number of Donation Statements disclosed contributions to fund-raising events. It is important to note that a TD, Senator, MEP or a candidate at an election is only required to disclose the net value of a contribution to a fund-raising event. The costs of holding a fund-raising event are deducted from the proceeds of the event for the purposes of calculating the net value of each person's contribution to the event. TDs, Senators, MEPs or candidates at elections are not required to disclose the total value of the proceeds of a fund-raising event.

TDs, Senators and MEPs are also required to open a political donations account if a monetary donation of €126.97 has been received. All subsequent monetary donations must be lodged to the account and all monies from the account must be used for political purposes. The requirement, therefore, to maintain a political donations account is ongoing. If there were transactions on the political donations account of a TD, Senator or MEP during 2006, he/she was required to furnish with his/her Donation Statement, a statement from the bank in which the account is held. The statement must show all of the transactions on the account during 2006. The TD, Senator or MEP was also required to furnish a Certificate of Monetary Donations on which he/she certifies that all monetary donations were lodged to the account and that all monies from the account were used for political purposes. A TD, Senator or MEP whose political donations account was not active during 2006 was required only to state this on the Certificate of Monetary Donations and was not required to complete the Statutory Declaration or to forward a copy of a bank statement. 68 TDs, 14 Senators and 2 MEPs submitted bank statements to the Standards Commission in respect of 2006. 98 TDs, 46 Senators and 5 MEPs were not required to submit a bank statement.

The legislation provides that there are certain types of donations which TDs, Senators and MEPs cannot accept. These include anonymous donations exceeding €126.97 and "foreign donations". A "foreign donation" is a donation from an individual (other than an Irish citizen) who does not reside in the island of Ireland or a donation from a body corporate or unincorporated body of persons which does not keep an office on the island of Ireland from which one or more of its principal activities is directed. The Standards Commission did not receive a notification from a TD, Senator or MEP of receipt of a prohibited, anonymous or foreign donation.

Section 23A(1) of the Electoral Act 1997, as amended, provides that a TD, Senator or MEP may not accept a donation from the same donor in the same calendar year which exceeds €2,539.48 in value. Where a donation in excess of this amount has been received, the excess donation must, within 14 days of its receipt, be returned to the donor or remitted to the Standards Commission. It was evident from Donation Statements furnished by Deputies Conor Lenihan (FF) and Finian McGrath (Ind) that a donation in excess of the maximum prescribed limit had been received by them during 2006. The Standards Commission wrote to both Deputies asking them to confirm that the excess donation had been returned and requesting them to provide evidence of its return. Both Deputies confirmed that the excess donation had been returned and provided evidence of this. While it is an offence to fail to return the excess donation within 14 days of its receipt, the Standards Commission did not take any further action as both Deputies had otherwise complied with the requirements of the legislation.

Details of the donations disclosed in respect of 2006 are available in a report to the Ceann Comhairle which was published on 4 April 2007. The report is also available on the Standards Commission website.

Donations made by multiple donors in 2006

Section 24(1A) of the Electoral Act 1997, as amended, provides that a person who makes donations in a calendar year, the aggregate value of which exceeds €5,078.95 to -

(i) two or more persons, who, when the donations were made, were members of the same political party, or

(ii) one or more persons and to the political party of which such person or persons were members when the donations were made to them,

must furnish a Donation Statement to the Standards Commission by 31 January of the following year, showing the aggregate value of the donations made, the political party concerned and the name, description and address of each recipient. The donor is required to furnish the statement irrespective of whether the donations are also required to be disclosed by the recipient. In 2006 the Standards Commission published a notice in the national newspapers regarding the requirements of section 24(1A) of the Act and made a detailed explanatory note available on its website. No Donation Statements were received from donors in respect of 2006.

Donations disclosed by political parties in respect of 2006

Each of the 13 political parties registered to contest a Dáil or European election was required to furnish a Donation Statement to the Standards Commission by 31 March 2007. The total value of donations disclosed by parties during 2006 was €146,502.80. Donations received during 2006 which exceeded an aggregate value of €5,078.95 were required to be disclosed. The maximum value of donations which a political party can accept from the same person in the same calendar year is €6,348.69. Donations received from the same donor in the same calendar year must be aggregated for the purposes of observing the disclosure and maximum acceptance limits.

Loans to political parties

During 2006 the Standards Commission received a number of enquiries concerning loans to political parties. These enquiries had been prompted by revelations that certain political parties in the UK had received significant loans in the run-up to the 2005 general election. The Standards Commission considered it appropriate to write to political parties setting out the position under which loans provided to political parties, either by financial institutions or by individuals or bodies which are not financial institutions, might be regarded as donations under the Electoral Acts.

A donation is defined in the Electoral Acts as a contribution for political purposes and includes a contribution of money and the free or below cost provision of goods, property or services. Where a loan is provided to a political party by a financial institution and the normal rules attaching to such loans apply, the loan is not regarded as a donation to the party. However, where a loan is provided to a political party by a financial institution in circumstances where either the interest charged is less than the lowest rate available from the financial institution or the loan is not repaid in accordance with the terms and conditions under which the loan was issued or is only partially repaid, the benefit to the party may be regarded as a donation and may, therefore, be subject to the disclosure and maximum limits applying to the acceptance of donations.

Where an individual or body, who or which is not a financial institution, gives a loan to a political party, it must be evident that the loan offered is a bona fide loan. In that regard the following conditions would apply:

• as with a loan from a financial institution, the terms and conditions applying to the loan and its repayment must be stated clearly in writing;
• interest is chargeable on the loan at a rate (whether fixed or variable) which reflects the interest charged by financial institutions on loans of a similar amount and duration. Where the interest charged is less than the lowest rate available from a financial institution, the benefit accruing from the difference in rates is regarded as a donation to the party.
• the Standards Commission may require sight of the terms and conditions, including the interest charge, applying to the loan and may require confirmation that the loan has been repaid in accordance with these terms and conditions;
• if the loan is not repaid in accordance with the terms and conditions, or is only partly repaid, the benefit of such non-repayment may be regarded as a donation to the party and could be subject to the disclosure and maximum acceptance limits applying.

The Standards Commission also requested the appropriate officer of each political party to:

i) confirm that any loans provided to the party by a financial institution since the commencement date of the Electoral Acts (15 May 1997) had been subject to the terms and conditions which are normally imposed by the financial institution and that the provision of such loans did not constitute a donation to the party;

ii) provide details of any loans provided to the party since the commencement date of the Electoral Acts by individuals or bodies which were not financial institutions.

In relation to loans from financial institutions, all of the political parties confirmed either that they did not receive any such loans or that any such loans received by them were subject to the normal terms and conditions applied by the financial institution and did not constitute a political donation. All of the political parties stated that they did not receive a loan from an individual or body, who or which is not a financial institution

Revised guidelines for Political Parties

In December 2006, the Standards Commission published new Guidelines for Political Parties on Donations and Prohibited Donations. These guidelines replaced previous guidelines from the Standards Commission which had been published in December 2002. The guidelines published in December 2006 reflect legislative developments and advice given by the Standards Commission since publication of the previous set of guidelines. The most significant changes contained in the amended guidelines are as follows:

• political parties are not required to account for donations which are received by members of local authorities or candidates at local elections which are not passed on to the party. This seeks to address an anomaly in the legislation whereby, under the legislation, a donation made to a member of a local authority or a candidate at a local election is deemed to be a donation to the party, notwithstanding the fact that such persons have a statutory requirement to disclose donations under the Local Elections (Disclosure of Donations and Expenditure) Act 1999, as amended;
• donations made to political parties in Northern Ireland or to entities of political parties in the US or elsewhere, which are given and applied for the purposes of funding a party's political/electoral activities outside this State, are not donations for the purposes of the Act. These donations are not required to be disclosed and are not subject to the prohibitions attaching to certain types of donations under the Act;
• membership fees/affiliation fees paid by trade unions to political parties are not regarded as donations. Other contributions made by trade unions (e.g. to fund election campaigns) are regarded as donations.

The guidelines also set out the position with regard to loans to political parties (see above). In addition, the guidelines outline the procedures which the Standards Commission recommends should be put in place by political parties to aggregate donations for disclosure purposes and for the purposes of remaining within the prescribed maximum limit. The recommendation in that regard is that all donations exceeding €100 in value must be notified to the party's appropriate officer. The guidelines also provide advice as to how contributions to fund-raising events which are organised by, or on behalf of, a political party should be treated.

Guidelines issued by the Standards Commission are legally binding. Political parties must, therefore, comply with the guidelines issued by the Standards Commission.

Contributions or grants from Third Level Colleges/Universities

In 2003, the Standards Commission was asked to consider whether funding provided by third level colleges/institutions to branches or societies of political parties in those third level colleges/institutions constituted a donation as defined under the Act. The Standards Commission, having received legal advice on the matter, formed the opinion that the purpose of a branch of a political party in a third level institution is ultimately to promote, directly or indirectly, the interests or policies of the party. A contribution given by the institution to a branch or society of a political party is, therefore, used for political purposes and is captured by the definition of a donation as set out in section 22 of the Electoral Act 1997, as amended. A number of branches of political parties located in third level institutions were subsequently notified to the Standards Commission as "accounting units".

During 2006 it was brought to the attention of the Standards Commission that in some cases the contributions received by branches of political parties from third level institutions may be significant and may have exceeded the disclosure threshold (€5,078.95) or maximum acceptance limit (€6,348.69) applying to political parties. The Standards Commission wrote to the appropriate officers of each of the thirteen registered political parties asking them to confirm:

i) that any grants or contributions received by a branch or society of the party from a third-level institution since the commencement date of the Electoral Acts (15 May 1997) did not exceed €5,078.95 in any calendar year; and

ii) that any grants or contributions received by a branch or society of the party from a third-level institution since the introduction of a maximum limit for the acceptance of donations (1 January 2002), did not exceed €6,348.69 in any calendar year.

Twelve of the thirteen political parties confirmed that no donations in excess of the disclosure threshold or maximum acceptance limit had been received by any of their third-level societies/branches. Fianna Fáil advised the Standards Commission that two of its third-level societies (NUI Galway College Society and University College Cork Student Society) had received donations in excess of the disclosure threshold and that one of these societies (University College Cork) had received a donation in excess of the maximum acceptance limit. The Standards Commission is currently corresponding with Fianna Fáil regarding its failure to disclose the above donations and the acceptance by University College Cork Student Society of a donation which was in excess of the maximum prescribed limit.

As part of its enquiries the Standards Commission also wrote to 14 third-level institutions which had a branch/society of a political party which had been notified to it as an "accounting unit". Twelve of the third-level institutions confirmed that they had not provided funding in excess of €5,078.95 to any branch or society of a political party since the introduction of the legislation relating to accounting units in 2001. University College Cork (UCC) stated that it had not made contributions in excess of the maximum acceptance limit. As this information did not correspond with the information provided by the Fianna Fail party, the Standards Commission asked UCC to re-check its records. At the time of writing, a reply is awaited. One third-level institution - NUI Galway - did not furnish a reply to the Standards Commission. The matter is still being pursued.

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