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

Chapter 8 - How the legislation might be improved

General Approach

In June 2006 the Standards Commission wrote to the then Minister for the Environment, Heritage and Local Government, Mr Dick Roche TD to ascertain whether there were any proposals to amend the Act in the near future, and in particular the provisions of the Act relating to third parties. The Standards Commission was informed by the Minister that he was of the view that any substantial amendments to the Act should not be on "a piecemeal basis" and should be dealt with "in a comprehensive way and the work progressed in consultation with the various interests involved and on a consensus basis".

The Standards Commission agrees with such an approach. It considers that there should be a consultation process or regulatory impact analysis on the regulation of the funding of "political" campaigns which are organised by third parties. That process should also take account of the Charities Bill 2007 and the possibility that charities who may have an advocacy role could be subject to both the Charities legislation and to the Electoral Acts.

The consultation process should establish whether all "political" campaigns should be covered by the relevant provisions of the Act or only those campaigns relating to elections or referendums. In considering this issue the Standards Commission has had regard to the fact that all of the main political parties qualify for State funding under the Act. While such funding may not be used to offset expenses incurred at an election or a referendum it may be used to promote a party's policies or views on a particular matter. The Standards Commission considers that it may not be reasonable to restrict under the Act the ability of a third party to fund a campaign, which might be opposing a policy of a particular political party, in circumstances where that party may legitimately be using state funding provided under the same Act to promote its policy. In that regard it is inclined to take the view that only campaigns relating to elections or referendums should be regulated.

Improvements required

In summary, the Standards Commission believes that the legislation might be improved in four particular areas:

1. Criteria for registration as a third party

If the activities of third parties are to be regulated effectively, then registration should be based on intention to incur expenditure in a particular election or referendum campaign rather than on the motivation of actual or potential donors.

2. Registration for a particular campaign

The legislation should allow for registration for a particular campaign or on an on-going basis.

3. Transparency in funding and expenditure on campaigns

Third parties and political parties should be required to disclose details of expenditure on referendum campaigns. Similarly, information should be made available on the sources of funding available to both third parties and political parties.

4. Sanctions for non-cooperation with the Standards Commission

The sanctions provided for under the legislation should be reviewed. In particular, failure to cooperate with enquiries made by the Standards Commission under section 4(4) of the Act should constitute an offence.

Some further details on each of these suggestions is given below:

1. Criteria for registration as a third Party

As stated in Chapter 5, a difficulty in supervising the current provisions of the Act is determining whether a contribution has been given for political purposes. For instance, an individual/group which applies funds from its own resources, membership fees or general contributions to finance a campaign at an election or referendum is not required to register as a third party. The Standards Commission considers that, regardless of how such a campaign is financed, similar rules should apply to any individual or group which is engaged in a campaign which seeks to influence the outcome of an election or a referendum. The requirement to register as a third party should arise, therefore, where expenses are incurred to finance such a campaign. If expenditure in excess of €5,000 is incurred on an election or referendum campaign an individual or group would be required to register with the Standards Commission and to account for the expenditure incurred. (At a referendum, a political party which intended to incur in excess of €5,000 would also be required to register.) The individual/group/political party would be required to show how a campaign is being funded. If donations were received to fund the campaign, the individual/group would be required to adhere to the disclosure and acceptance limits applying to political parties (if the campaign was related to a referendum) or to candidates (if the campaign was in the context of a Dáil, European or local election).

2. Registration for a particular campaign

The current provisions assume that individuals/groups which register as third parties remain in existence as third parties. In practice, the vast majority of third parties which register, do so for a particular campaign. In some cases third parties are existing groups which become involved in a "political" campaign. Others are groups which are established for a specific campaign. In most cases their "political" activity does not extend beyond the particular campaign for which they register.

The Standards Commission considers that individuals/groups should be allowed to register for either a particular campaign (i.e., a referendum or an election) or to register as a third party which intends to be politically active on an ongoing basis. Where a third party registers in relation to a particular campaign, the legislative requirements would only apply in relation to that particular campaign. The requirement to maintain a political donations account would end when the individual/group has furnished the relevant statutory documentation to the Standards Commission. Where a third party registers as being politically active on an ongoing basis, it would be required to maintain a political donations account and submit an annual return to the Standards Commission.

3. Transparency in the funding of campaigns

During the 2008 referendum, concerns were expressed about the lack of transparency in the financing of the referendum campaign by Libertas. There were calls for Libertas to provide details of how it had funded its campaign. The Standards Commission considers that it might be unreasonable to expect third parties to show how an election or referendum campaign has been funded, if political parties and candidates at elections are not subject to the same scrutiny. While political parties and candidates must disclose details of donations above the relevant statutory disclosure thresholds, other details as to how campaigns were funded (e.g., own resources, loans, donations received which were below the disclosure threshold etc.) are not provided.

In its annual report for 2007, the Standards Commission stated that it is not known how political parties finance their election campaigns. It repeated its view that there is a strong case to be made for a new approach to the general funding of political parties and for increased transparency in such funding. It referred to the Committee of Ministers of the Council of Europe's approved set of common rules against corruption in the funding of political parties and electoral campaigns. It suggested that those recommendations should be implemented, i.e., that political parties keep proper books and accounts; that these accounts should specify all donations received by a political party; that details of donations over a certain value should be disclosed; and that party accounts should be presented at least annually to an independent authority.

4. Sanctions for non-cooperation with the Standards Commission

The Electoral Acts provide for a wide and varied range of offences. However, no offence is committed where a person fails to cooperate with or hinders enquiries made by the Standards Commission under section 4(4). On occasions, third parties have failed to cooperate with the Standards Commission. Such failure should constitute an offence.

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