It beggars belief that the “tough on crime” campaigner Victorian Opposition Leader Matthew Guy dined on lobster and Grange with the alleged Godfather of the Melbourne Mafia, Tony Madaferri. Worse, we now we hear that the (now former) Victorian Liberal Party’s fundraiser, Barrie Macmillan, suggested “splitting” donations from the crime boss in order to hide them from the Australian Electoral Commission (AEC). The story has prompted our editor-in-chief, Sandi Keane, to question how much of a sham is our so-called “democracy”. 

According to a report in The Sydney Morning Herald by Adam Gartrell on 2 February 2017, 66 per cent of donations to the Liberal Party at the 2016 Australian federal election has been found to be untraceable. Whilst 49 per cent of Labor Party income in 2015-16 also requires investigation, at least Labor has a policy of disclosing all donations over $1,000. A look at Labor and its donations policy will follow in a future article as we explore in collaboration with MiVote the murky world of political donations, including advocacy for crowdfunding, real time donations, capping donations, transparency measures, and a look at countries which have done away (to a large extent) with political donations.

So how does the Liberal Party rake in $45 million in “dark money” without revealing the source?

The game-changer was the Howard Government’s weakening of disclosure laws in 2006. By increasing the disclosure threshold from $1,500 to $13,000 (now $13,200), those seeking to buy political patronage could stay beneath the AEC’s watchful radar by splitting donations between the eight branches of the Liberal Party.

So as Victorian Liberal’s key fundraiser Barrie Macmillan has helpfully pointed out this week, splitting donations from the Madafferi family into smaller payments would avoid the scrutiny of the Australian Electoral Commission. They could donate $13,200 (totalling $105,600) to the eight branches of the Liberal Party set out below without fear of committing political suicide by being seen to be taking money from the Mafia — and make a mockery of the Opposition Leader’s campaign to “get tough on crime”.

Liberal Party of Australia

Liberal National Party of Queensland

Liberal Party —WA Division

Liberal Party of Australia – ACT Division

Liberal Party of Australia – Tasmania Division

Liberal Party of Australia —SA Division

Liberal Party of Australia —Victorian Division

Liberal Party of Australia — NSW Division

In the run up to the 2007 election with Rudd riding on a wave of support for his proposed Emissions Trading Scheme, Clive Hamilton claimed almost $13 million was secretly donated to the Liberal Party by the fossil fuel lobby. See Scorcher: The Dirty Politics of Climate Change.

The other way to hide donations is though “associated entities”. The Liberal Party’s major donor was the Cormack Foundation which channeled a whopping $2.9 million into the party coffers. The Cormack Foundation (like the Free Enterprise Foundation and the Greenfields Foundation) are slush funds set up by the Liberal Party for the express purpose of providing anonymity for donors.

This corrupt practice was ably exposed by the Independent Commission against Corruption (ICAC) in New South Wales when it found that banned donations from developers continued to buy favour by being disguised as “anonymous” by the Free Enterprise Foundation. The New South Wales Electoral Commission found that the Liberal Party had breached the Election Funding, Expenditure and Disclosures Act 1981, by concealing the developer’s identity — developers being, of course, persona non grata.

The problem with “Associated Entities” is that they are generally subject to less scrutiny than the parties themselves. Their annual returns do not list all of the sources of their monies. Following the money trail is difficult as AEC does not provide a single list of donations. You can go onto the AEC site and look up the “entity” in question to see who donated. Even then, if they gave less than $13,200, there is no requirement to list the donor. Of more concern is that there no mention of the affiliated party. For example the Liberal Party’s Cormack Foundation donated $25,000 each to the Liberal Democrats and Family First last year. Looking at the voting patterns of former Senator Day and Senator Leyonhjelm, Day supported the Coalition 90 per cent of the time and Leyonhjelm more than 70 per cent. Doesn’t the Australian voter have the right to know that the Liberal Party is greasing the wheels of a select few to bolster its support in a hostile Senate?

Currently, the regulation of political donations is weak at the federal level. It is time to institute enduring change. Labour has called for the disclosure threshold to be reduced to $1000 at a federal level and its own policy is to disclose all donations over $1,000.

But does Labor now want to go much further? Its former chief fund-raiser Senator Sam Dastyari has a knack for snaffling the spotlight. On last week’s Australian Story, he resuscitated his former public hero self to champion major reform calling for a total ban on political donations:

“It needs to come to an end and the time for that is now … and we need to limit, to ban and restrict donations insofar as it is constitutionally possible.”

The Australian Labor Party and the Greens have tried unsuccessfully for years to reform political donations.

Yet another parliamentary committee investigating the political donations regime will report later this year.

Until such time as there is a national ICAC and an appetite to clean up the corrupt practice of political donations being tied to favourable decisions, we know who really governs Australia — those with enough money to ensure political patronage.

The public have been calling for transparency and accountability from our politicians for years but apart from tinkering at the edges, no substantive reforms have resulted. Here’s the most common list rolled out again and again by the public and commentariat alike. Earth to Canberra: “Is this really so difficult?”

  • Real time disclosure of donations;
  • Disclosure threshold reduced from $13,200 to $1,000; 
  • Foreign donations banned;
  • Election campaign spending capped;
  • Associated Entities to detail their political party affiliation;
  • Compulsory union members’ fees donations to Labor end;
  • A federal anti-corruption commission to oversee donations.

I’m sure you can add a lot more to the list so feel free to use the comment thread below. We’ll Tweet them out for you!

You can follow Sandi Keane on Twitter @Jarrapin.