10/03/09 - Report to the Minister for the Environment on Third Parties and the Referendum on the Treaty of Lisbon

Chapter 5 - Difficulties encountered by the Standards Commission

Many of the difficulties encountered by the Standards Commission in supervising these provisions of the Act have already been set out in a review of the Act which the Standards Commission carried out at the invitation of the then Minister for the Environment, Heritage and Local Government, Mr Martin Cullen TD and which was published in December 2003. The Standards Commission also referred to some of these difficulties in subsequent annual reports.

This review document was circulated to each member of the Houses of the Oireachtas at the time and is available on the website of the Standards Commission. Among the issues referred to in the document are the following:

• The broad definition of political purposes which unintentionally captures the activities of individuals or groups which would not normally be regarded as "political".
• Individuals or groups which may be politically active but who have not accepted donations are outside the third party provisions of the legislation.
• The difficulty for the Standards Commission in determining whether a contribution has been given for political purposes.
• The requirement on some individuals or groups to register both as a "third party" and as a person intending to incur election expenses is overly bureaucratic.
• The presumption in the legislation that all third parties continue in existence.
• The absence of an offence for failing to open and maintain a political donations account.

The Standards Commission does not intend to revisit all of these issues in this report. It would, however, like to restate the difficulties it has encountered in determining whether a contribution has been given for political purposes and to set out some further issues it has had to consider when supervising the provisions of the Act relating to third parties.

a) Determining whether a contribution has been given for political purposes

The current legislative determinant as to whether an individual or group is a third party is receipt of a contribution in excess of €126.97 which has been given for political purposes. The Standards Commission is aware that a number of groups have funded "political" campaigns from their own resources, from their membership fees or from other general contributions. Such contributions, if not given for political purposes, are not donations and do not require an individual or group to register as a third party.

In most cases, and unless an individual or group conducts a campaign for which it specifically requests donations, it is not possible to determine whether a contribution has been given for political purposes.

b) The offence under section 25(1)(e) of the Act for failing to register (in accordance with section 23C of the Act)

Failure to register as a third party when required to do so is an offence under section 25(1)(e) of the Act. The difficulty in determining whether a contribution has been given for political purposes could present a difficulty in prosecuting this offence. There has been a number of occasions where the Standards Commission was satisfied that the activities of a group were captured by the definition of political purposes. It would also have been aware that the group was soliciting contributions on a regular and general basis. Some of these groups, however, did not register as third parties. The Standards Commission assumes that this was on the basis that they had not accepted a contribution which had been given for political purposes. Under such circumstances, and in the absence of any evidence that a contribution had been specifically given for political purposes, the Standards Commission has not referred such matters to the Director of Public Prosecutions. The Standards Commission was aware from previous experience that the DPP can refuse to prosecute because of ambiguity in the relevant statute. The Standards Commission is of the view that there is sufficient ambiguity in the third party provisions of the Act to inhibit the prosecution of an offence under section 25(1)(e) of the Act.

c) Membership fees

In the case of the Alliance for Insurance Reform, the Standards Commission was required to consider whether membership fees paid to this group engaged in a "political" campaign constituted donations under the Act. (The Standards Commission had previously received legal advice to the effect that membership fees paid to a political party are not contributions given for political purposes.)

On the basis of the information provided by the Alliance, the Standards Commission was satisfied that the group had a bona fide membership fee structure in place. It advised the group that ordinary membership fees paid by its members in accordance with its agreed membership fee structure were not donations. Additional contributions from members, however, including benefits in kind, which were in excess of the normal membership fee, would be regarded as donations as would any additional subscriptions sought or given by members for the purposes of financing a particular "political" campaign. The Standards Commission also advised the group that contributions, including benefits in kind, received from non-members to fund a "political" campaign would be regarded as donations for the purposes of the Act.

Based on this precedent and legal advice obtained in relation to membership fees paid to political parties, the general approach of the Standards Commission is that bona fide membership fees paid to a group by its members are not contributions given for political purposes and are not, therefore, donations. If, however, it is evident that a group has put a membership structure in place in order to disguise the receipt of contributions given for political purposes, the Standards Commission may regard such contributions as donations and may decide that the relevant provisions of the legislation should apply to the acceptance of such contributions.

d) Groups which may rely on overseas contributions to fund their activities

The Act provides that a third party may not accept foreign donations. An issue which the Standards Commission was required to consider was whether Stop Salmon Drift Nets Now, which had registered late as a third party, should return overseas contributions received by it prior to registration.

The issue arose when the Standards Commission contacted the group concerned in 2005 regarding a "political" campaign which it was engaged in. Having been provided with a copy of the Standards Commission's explanatory note on third parties, the group informed the Standards Commission that it had received contributions in 2004 and 2005 which would have required it to register as a third party. The group also informed the Standards Commission that some of these contributions constituted "foreign donations". All contributions, both foreign and domestic, had been lodged to a single bank account from which the group's expenses had been met.

The Standards Commission asked the group to explain why it had not complied with the Act by:

1. failing to register as a third party;
2. failing to open and maintain a political donations account and furnish the required statutory documentation in relation to this account; and
3. accepting "foreign donations" and failing to take the appropriate action in relation to these donations.

The failures at 1) to 3) above each constituted an offence under the Act.

The group informed the Standards Commission that it had been unaware of the requirements of the Act in relation to third parties and hence its failure to register and to comply with the other provisions of the Act relating to third parties. The group undertook to register immediately as a third party and to open and maintain a political donations account. It also offered to complete Certificates and submit bank statements in respect of 2004 and 2005 in relation to the bank account it had operated. It could not, however, state that all monies from this account were used for political purposes as it had financed all of its activities (both political and non-political) from the one account.

In relation to the acceptance of "foreign donations" the group informed the Standards Commission that it had already spent some of these monies. The group also informed the Standards Commission that it had recently established a particular fund. Activities financed from this fund were not captured by the definition of political purposes. It proposed transferring an amount equivalent to the amount of overseas contributions it had received to the fund. It also undertook to ensure that all future overseas contributions would be lodged to this account.

The Standards Commission accepted that the group had not been aware of the requirements of the Act relating to third parties. It was satisfied that the group now intended to comply fully with the requirements of the legislation with regard to registering as a third party and opening a political donations account. The Standards Commission decided not to take any further action in terms of a referral of these matters to the DPP.

The Standards Commission also considered the matter of overseas contributions received by the group. It received confirmation from the group that the total amount of overseas contributions received had been transferred into the particular fund. It also accepted that activities financed from the fund were unlikely to be captured by the definition of political purposes. It also had regard to a message posted on the group's website which advised future overseas contributors that their contributions would be allocated to this particular fund. The Standards Commission took the view, therefore, that by transferring the amount of overseas contributions received to the fund, the group could be deemed not to have used the overseas contributions for political purposes.

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