Clayton Cosgrove is in trouble for this. What do you think - should he be?

The nineteenth century US Senator and Republican Party manager, Mark Hanna, purportedly once claimed "There are two things that are important in politics. The first is money and I can't remember the second."

It's one of those clever-sounding quotes that get hauled out whenever some sort of political financing scandal breaks. Never mind that it may not be entirely true - or, at least, not entirely true in the New Zealand context. You could, for instance, let Ewen Macdonald raise as much money as he possibly can and then let him spend it on running for Parliament, safe in the knowledge that it will never make him a viable candidate for office (once he is released from jail and thus becomes eligible to stand, that is).

But while Hanna's statement may overegg things somewhat, it still contains an important insight. You simply can't run a political campaign of any sort without some money to pay for it. And unless you are independently wealthy - step forward, Colin Craig - you've got to get that money from somewhere. Which means that if you are a humble electorate candidate seeking to get elected, you have to hit up your supporters in the electorate and beyond for the cash to fund all the leaflets, hoardings and other forms of advertising that you'll use to try and remind the voters of your many, many good qualities.

This reliance on private sources to raise the money needed to pay for the path to Parliament then poses a pretty obvious potential problem. MPs possess a certain degree of public power that is not held by anyone else. They can grease the wheels of officialdom. They can put a word in the right ears. They can even make (or unmake) laws. All of which can have value for individuals or groups (be they companies, unions or otherwise) that have an interest in something that only government can give to them.

So, how can we know whether some person who is giving a candidate the money he or she needs to mount a successful campaign for office is doing so out of a true belief in the qualities that candidate possesses and the policies he or she espouses, as opposed to seeking to buy influence in the governmental realm? The short answer is, we can't. Only the donor knows why they are giving, and even they may not be entirely sure; or, at least, may have several motives for their generosity. After all, it is only human to believe that the person who may be best able to help you personally also is the person who is best suited to take part in running the country generally.

Therefore, because those pesky civil libertarians refuse to allow the SIS to apply electrodes to the sensitive spots of potential donors in an effort to uncover their true motivations, there are three layers of protection against the relationship between a donor and a potential MP decaying into outright corruption.

First, we have the criminal law (as Philip Field found out to his cost, albeit outside of the campaign financing arena). Under the Crimes Act 1961, s 103(1):

Every member of Parliament is liable to imprisonment for a term not exceeding 7 years who corruptly accepts or obtains, or agrees or offers to accept or attempts to obtain, any bribe for himself or any other person in respect of any act done or omitted, or to be done or omitted, by him in his capacity as a member of Parliament.

A "bribe" could include a campaign contribution, where this is specifically tied to some action (or omission) done in a candidate's capacity as a member of Parliament. And as the Supreme Court noted in its judgment on Philip Field's appeal, any connection between a "bribe" and some action (or omission) by an MP need not have been arranged before the MP's action (or omission). If the person paying the "bribe" does so out of gratitude to the MP for an action (or omission) already undertaken and the MP knows that this is the reason why the payment is being made, then it is an offence if the MP goes ahead and accepts it anyway.

So, then, direct, overt arrangements that tie a campaign donation to an MP's action (or ommission) are illegal and punishable by quite hefty spells in prison (as Philip Field found out). But, of course, these sorts of deals can be tricky to prove in the absence of one or the other parties spilling the beans on the deal (as, again, happened in Philip Field's case). To try and deter even the possibility of corrupt relationships between a donor and a potential MP, then, there is Justice Brandeis' old adage that "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."

New Zealand's attempt to disinfect the campaign fundraising process takes the form of the disclosure requirements in the Electoral Act 1993, s 209. Every electorate candidate must file a return with the Electoral Commission within 70 working days of the election setting out the identity of all donors who gave a donation of more than $1500 for use in that candidate's campaign for election (with an associated ban on receiving "anonymous" donations of more than $1500). Which then gives an insight into those individuals (or groups, be they companies, unions or otherwise) that are significant financial backers of each candidate - including those who are successful in winning election to Parliament.  

Note one problem with this regime, though. Disclosure of donations only happens well after an election is over; the candidate returns from last November's election weren't due to Electoral Commission until 26 March this year. And note another - while disclosure to the Electoral Commission tells us who gave a candidate how much (as well as when they gave it), it doesn't tell us why they gave it or why a candidate accepted it. Even if a funding relationship is out in the open, the nature of that relationship may remain a legitimate cause of concern.

Which, in the end, brings us to a candidate's internal sense of political morality. That is to say, we rely to a large extent on candidates knowing that receiving donations from some private sources is not only wrong in itself, but if revealed to the public will be politically damaging to them personally and their party generally. And we expect candidates to show the appropriate wisdom to avoid not only overtly wrongful relationships (such as where a potential donor expressly offers to make a donation in exchange for the candidate's help), but also those which appear to be wrongful (such as where a reasonable observer may conclude that there is some connection between a donation and the candidate's past or future help). Because it is only by our prospective MPs avoiding the latter that we can be fully sure that they are not participating in the former.

How, then, does New Zealand's three-part response to the potential problem of political corruption by way of campaign funding apply to Clayton Cosgrove's current predicament? (I'm going to assume if you've made it this far into the post, you know what I'm talking about. If you don't, you can read all about it here.)

First of all, no-one is accusing Cosgrove of accepting a bribe from Independent Fisheries - at least, they are not doing so out loud. Both Cosgrove and the company adamently deny there was any connection between his introduction of a members bill that would financially help the company (as well as a number of other constituents) and its later decision to donate money to his campaign. Not only is this most probably true in fact, the dual denial means that there is no way of proving it to be false. And no-one is going to be silly enough to invite a defamation action by accusing Cosgrove and the company of overt corruption - at least, not unless they are judgment proof (i.e. a bankrupt blogger who I shall not name), or enjoy the privilege of parliamentary proceedings. 

Second, Cosgrove quite rightly declared the $17,500 in donations to the Electoral Commission - from which we all then were able to find out about the relationship a couple of months ago. True, this action tells against any corrupt relationship existing in fact; you'd have to be a pretty silly (or incredibly brazen) person to openly tell the world that you've accepted a chunk of money which was paid to you in exchange for trying to get a change in the law. But the point of declaring donations is to let us make those sorts of judgments about what may or may not have been the motives on each side - if we were to say that simply declaring a donation automatically means that, ipso facto, there cannot be a corrupt intent behind it, then that would have a rather perverting effect on the disclosure regime!

Which brings us once again to the third level of protection. What does the decision to accept a considerable donation from a long-term friend whom you have, in your official capacity as an MP, taken steps to help in a quite significant fashion say about Cosgrove's internal sense of political morality? By this I mean, what does it say about his ability to scrutinise not only his own motives for taking the money, but also understand how taking that money would look to others? And here I mean not those political enemies who would like to see him taken down, but rather the "average voter" who is assessing the behaviour of her or his political masters? Is it a "good look" to them for an MP to be in this sort of relationship, even if all involve protest the purist of motives?

This, it seems to me, is the level on which Cosgrove's actions must be judged. No, the donations weren't illegal. Yes, they were fully decared as the law requires. But were Cosgrove's actions as an MP (and then a prospective MP) right, both in the sense of up to the moral standards we expect of our political leader and displaying the sort of political wisdom that is necessary in such leaders? Because, in the end, our system of government depends upon those involved in it complying with these standards just as much as their abiding by the law - which is why John Key's brushing off John Banks' attempt to conceal Kim Dotcom's donation from public disclosure with the claim that "there's quite a wide definition of ethics" was so disgraceful.

One last point. I note that Cosgrove is alleging that this story has been "shopped around" by Gerry Brownlee in an effort to distract from a court case being brought by Independent Fisheries against his use of CERA powers to rezone their land. That may well be true. And that case also may well reveal what some of us said from the outset - giving Brownlee or any other Minister extensive powers to override existing property rights and legal processes in order to "help Canterbury" carries considerable risks of their misuse.

However, the motives for drawing attention to Cosgrove's relationship with Independent Fisheries do not touch on its basic rightness or wrongness. Or, to put it another way, the problem isn't so much that people are noticing the donation to Cosgrove, but rather that the donation was given and accepted in the first place.

Comments (35)

by stuart munro on July 08, 2012
stuart munro

I imagine the first step in determining the appropriateness of Cosgrove's relationship would be inviting him to explain how his intervention serves the public interest or the greater good. If he's on the level this should not be difficult, if he's compromised his explanation will probably have a few holes in it.

These kinds of donation though, are basically improper. A company, as a non-human entity is not entitled to political representation. It therefore seems odd that one can obtain at the very least beneficial consideration by donating. I imagine that Kypros could easily donate personally, the difference probably being tax paid on the income that became the donation.

by Scott Chris on July 08, 2012
Scott Chris

Clayton Cosgrove is in trouble for this. What do you think - should he be?

No, it's a systemic failure. Better to outlaw all political donations with the exception of granting a, say, $25 voucher to every voter which s/he can then donate to the candidate/party of her/his choice. Gets rid of union and business influence for starters.

Harvard Law Professor Lawrence Lessig explains:

by Andrew Geddis on July 08, 2012
Andrew Geddis

Stuart,

The whole issue of land zoning around Christchurch and the airport in particular looks to be a messy and complex one (see this article backgrounding the court challenge to Brownlee's decision, which covers some of the issues). So I have no doubt that Cosgrove's members bill can be defended on good substantive grounds, and that he was trying to be a good constituency MP in introducing it. That said, whether a members bill was the appropriate way to deal with this issue is a further point of debate.

But, of course, that fact doesn't mean there is no basis for suspicion about the relationship. As I noted in my post, a situation where a grateful constituent gives a donation to an MP running for reelection because they have been helped by that MP (and the MP knows this is why the donation has been given) is just as corrupt as where the two make a quid pro quo agreement before the action is taken. So even if the original action can be justified on independent substantive policy grounds, the subsequent receipt of a donation is raises problems of perception (at the very least).

As for banning company donations ... maybe. I guess that also means no union donations? And does that mean we need state funding of parties/candidates?

by Scott Chris on July 08, 2012
Scott Chris

I imagine the first step in determining the appropriateness of Cosgrove's relationship would be inviting him to explain how his intervention serves the public interest or the greater good.

If I were he, I would argue that inflationary pressure associated with real estate is partly driven by land scarcity created by over-regulation of urban development. Freeing up land to develop therefore helps alleviate this pressure somewhat which serves both the public interest and the greater good. (not to mention the developer's)

by barry on July 08, 2012
barry

So, did any of the MPs voting on drinking age get donations from alcohol producers? 

What about the racing "industry"?  Pokie trusts?  Sky city?

 

Basically any political donation runs the risk of being associated with some legislation and bringing accusations of corruption.

 

So do we ban all donations and go to state funding?

by Iain Butler on July 08, 2012
Iain Butler

Or, to carry on Barry's point, did the EMA fund National's campaign in exchange for favourable employment law, and did unions fund Labour for the exact same reason?

It seems to me that in some small way, EVERY political donation is an attempt to influence policy, (they're not charities after all) so every politician fuded by them is equally tainted. Unless you fund whole parties the way you allocate party-political broadcasting time, it will ever be thus.

by Andrew Geddis on July 08, 2012
Andrew Geddis

Except, Iain, the $17,500 Independent Fisheries gave was 70% of the $25,000 maximum that Cosgrove could spend on election expenses. So the equivalent would be the EMA giving the National Party a donation of about $1.7 million in the year after the National Party introduced legislation that would drastically lower the labour costs of that organisation's members. So even given the fact that private interests fund those parties that work in the donor's interest, isn't this particular donation still a little questionable? Or, if not, then what are we saying ... anyone can give as much to any candidate as they want and we won't ask any questions at all (because we know everyone is just out to buy influence anyway)? In which case, why bother with disclosure of donations at all - seeing as we don't judge the wisdom/propriety of accepting any given donation, as we know everyone is just out to buy influence anyway?

Point being - if we're going to say that this donation was "just politics" and nothing to be particularly concerned about, then I don't see how we can ever be concerned about any sort of donation ... up to (and possibly even including) ones where there is crystal clear evidence that a donor and candidate explicitly agreed to swap money for policy. Are we really that jaded about our politicians? And if so, isn't that a bad thing?

by stuart munro on July 08, 2012
stuart munro

What a lawyer thinks of as being defensible, and what the public will punish an MP for sometimes overlap - the Banks donations for one. Ultimately a real democracy will want to diminish the roles of parties, and one way of doing this is to defund them. Washington predicted the need for this in his remarks on factionalism. Donations like Cosgrove's help form things like logrolling alliances, which subvert the representative function and thereby reduce the effectiveness of government.

by Tom Gould on July 09, 2012
Tom Gould

Andrew, reading your reported comments on Stuff in the Watkins piece you seem to be suggesting that an MP cannot use the members bill provisions if there is anyone known to the MP or who has ever donated to the MP's campaign or party who may in some way benefit from the bill's passage. This is just plain silly. In fact it's daft.

by Andrew Geddis on July 09, 2012
Andrew Geddis

Tom,

Which should be a caution to you that what appears in a Newspaper often is but a snippit of a longer conversation with a journalist, so don't assume it tells the whole story. 

My point was about the use of a members bill to accomplish Cosgrove's (and Independent Fisheries) desired end wasn't connected to the subsequent fact of a donation - on that issue I simply think Cosgrove should have said "thanks, but no thanks ... it wouldn't look right for me to take this (or, at least, take this much)." Rather, I was commenting on his Bill's actual effect on the land zoning decisions in the area and how this would have trumped the existing processes of local decisionmaking/judicial appeals/etc. Or, to put it another way, his proposal raised the same concerns as National's use of legislative power to abolish ECAN because it wasn't producing the decisions that National thought ought to be made. Yes - Parliament can make these law changes ... but just because it can doesn't mean it should whether or not there are donations involved.

by Tom Gould on July 09, 2012
Tom Gould

Andrew, your theory fails because you claim a connection between the donation and the legislation. There was none. Both Cosgrove and the donor have said so, in public and on the record. Your legal mind should have perpared you to avoid falling into such traps. The "desired end" was that of the 100 or so Christchurch folks who wanted to develop their land. Cosgrove, as the local MP, correctly agreed to advocate their cause through the members bill. That's what he is paid to do. In fact, the bill would have served the interests of the land owners, the airport which would have been indemified over noise complaints, and the earthquake victims who need sections to rebuild their homes. A real good look, I would have thought. Especially with there being no connection between the giving and receiving of the donation and the promulgation of the bill, and with both the donation and the bill being made fully public, and even better look. As for "trumping" local decsion making, the only decision maker was Gerry Brownlee, the uber tsar of Canterbury.  

by Andrew Geddis on July 09, 2012
Andrew Geddis

Tom,

Don't make allegations you can't substantiate. Show me where I've "claim[ed] a connection between the donation and the legislation." All I've ever said is that this is a situation where an observer could infer such a connection, and that wise candidates ought not to put themselves in a position where such inferences can be drawn (for the sake of their own individual reputation, their party's political fortunes and in order to protect NZ's standing at the top of Transparency International's listings for clean electoral and governmental processes). 

As for whether the Bill really would have been a win-win-win solution to a problem ... maybe. But the current court action against Brownlee's "solution" to the problem suggests that such happy endings are not easily achieved ... .

by Pete Sime on July 09, 2012
Pete Sime

There was a great episode of This American Life a few months ago examining money in US politics. Quite aside from the perceived corruption angle, politicians in the US spend so much time on fundraising that it prevents them from being fully effective as lawmakers.

by Tom Gould on July 09, 2012
Tom Gould

Andrew, at last we seem to be getting somewhere. You say not to make "allegations you can't substantiate." Precisely. Could not agree more. Cosgrove has never had such an allegation made against him. Yet all manner of folks, media mainly but you included, as good as make that very allegation and proceed to give it life as if it had been made. An observer could only infer such a connection had the allegation been made. But it was not. So your premise that either the fact or the perception of the fact are equal is a nonsense. They are not. And you should know that. So what you are really saying is that "wise candidates" should not do anything in case non-one makes an allegation against them? Weird.

by Andrew Geddis on July 09, 2012
Andrew Geddis

Tom,

You are completely comfortable with a candidate accepting $17,500 (or 70% of the money he or she is allowed to spend on advertising his or her election) from a single donor, after having introduced legislation that would provide significant financial benefit to that donor (amongst others). That is your standard of political morality. It is not mine. Hence, there seems no further point engaging in discussion.

by Kyle Matthews on July 09, 2012
Kyle Matthews

"As I noted in my post, a situation where a grateful constituent gives a donation to an MP running for reelection because they have been helped by that MP (and the MP knows this is why the donation has been given) is just as corrupt as where the two make a quid pro quo agreement before the action is taken."

 

The post-action donation would seem to be a much harder case to make. Pre-action there is a "I'm giving you this money so you will do this". Fairly standard commercial relationship, and corrupt.

If the action has already happened then there would have to be some pretty solid evidence that the payment was expected in the future. I guess it could be trying to make it less obvious, but you're reducing your chances of getting paid if you do the work, and then hope they'll pay you a couple of years later.

It's not like the MP can send the company an overdue bill after all.

by Ross on July 09, 2012
Ross

Andrew

How many National Party donors benefited from legislation passed by the National coalition during the last term of government? Shouldn't we be looking seriously at this issue?

 

by Andrew Geddis on July 09, 2012
Andrew Geddis

Kyle,

Philip Field's conviction was for precisely the actions you outline ... he helped the various folk with their immigration matters, they then (out of gratitude for his official actions) offered their services to him, he accepted those services (knowing that they were being offered as a payment for his official actions). It was never shown there was any expectation before Field acted that they would subsequently pay him off with free/cheap labour. But it was still corruption, and it put him in jail for a couple of years.

Now, Cosgrove and Independent Fisheries swear black and blue that there is no such relationship between the introduction of the members bill and the later gift of a donation. And I guess we have to believe them, there being no evidence to gainsay their statements. But, ought Cosgrove have put us in a position where we are being asked to believe that? After all, Field asked us to believe him, too ... so again, in situaitons like this, how do you tell the clean politicians from the dirty? 

by Andrew Geddis on July 09, 2012
Andrew Geddis

Ross,

I don't know. Do you? If you want to point to examples, I'm fine with that. 

But seeing as we are looking for comparisons ... if Serco (the company that runs the private remand prison that National legislated to permit to operate) were to give the National Party a donation of $2 million (that is, 70% of the amount that a party is permitted to spend on election expenses) before the 2014 election, would that be a problem?

by Ross on July 09, 2012
Ross

I would note that the Clayton Cosgrove Supporters Club donated more than $25K to Cosgrove. He didn't require any other donations to max out his advertising budget.

Andrew, you've referred to the "later gift of a donation". I understand there were 2 donations, the last in June 2011.

by Ross on July 09, 2012
Ross

Andrew,

I'm not sure about your Serco example. For a start, $17,500 is chicken feed compared with $2 million. Second, I would like to think Serco were awarded the contract by legitimate means after a thorough and fair process was undertaken. In regards to Cosgrove, the legislation he was proposing would've needed the support of most MPs. It never happened. In other words, Independent Fisheries didn't benefit from the proposal. Anyone would think that they did benefit.

by Andrew Geddis on July 09, 2012
Andrew Geddis

@Ross: I would note that the Clayton Cosgrove Supporters Club donated more than $25K to Cosgrove. He didn't require any other donations to max out his advertising budget.

Sure - but $25,000 is only what candidates can spend on advertising. There are lots of other expenses that fall outside those limits that candidates also have to meet (staff costs, hire of campaign HQs, etc). So I'm sure the IF money remained very useful to a candidate who was in a very competitive race to retain his electorate seat. I simply put it alongside the limit on election expenses to give some idea of how significant $17,500 is in terms of individual candidate campaigns.

Andrew, you've referred to the "later gift of a donation". I understand there were 2 donations, the last in June 2011."

Yes - one of $2500 in 2009 (a few months) after the members bill was introduced, another of $15000 in 2011 (after it had been withdrawn, but Cosgrove later called on the Government to adopt and pass it).

For a start, $17,500 is chicken feed compared with $2 million.

Well, in absolute terms, yes. But in the context of how much candidates are allowed to spend? How many other individual donations were made to other candidates of a similar or larger amount (and note the Supporters Club donation is different - it is made up of a number of smaller donations, each less than $1500)? What level of donation to a national political party would you say is the equivalent of $17,500 to an individual candidate?

Second, I would like to think Serco were awarded the contract by legitimate means after a thorough and fair process was undertaken.

A thorough and fair process that could only happen because of National's law change. Does that matter in judging the appropriateness of a (hypothetical) later donation?

In other words, Independent Fisheries didn't benefit from the proposal. Anyone would think that they did benefit.

But there was the potential for benefit, wasn't there? And might a donor not feel gratitude to an MP who (even if unsuccessfully) tries to bring about a beneficial outcome for them? After all, the Thai tilers at the heart of the Philip Field case never actually got their residency ... .

by Keir on July 09, 2012
Keir

So, wait, hang on. Cosgrove should have not advanced the Bill? Should have advanced the Bill, and then when a mate said ``Clayton, you're doing a bang up job as an MP, here's a lot of money 'cause I reckon you're the best guy for the Waimak'' said ``I see that over the past three years I have done things which were beneficial to you, I can't take your money, it would be corrupt''?

I mean, I would hope that most electorate MPs seem themselves as having done things which were beneficial to their constituents . (It is their job, after all.) Should they all refuse donations from anyone they might have helped?

After all, the thing that was truly astounding about Banks was the deceit, not the donation.

by Andrew Geddis on July 09, 2012
Andrew Geddis

Keir,

Yes - I think Cosgrove should have said "because of my actions that could have been of such a significant benefit for you (as well as bunch of others), it would be wrong for me to now take this large amount of money from you because of the perceptions that it would create." This does not seem to me to be an overly onerous standard to ask our MPs to abide by - or, if we really think it is too onerous, then I think our democracy is in real trouble.

Now, of course there is a continuum of benefit and donation, which demands that MPs display a sense of proportion and judgment. For example, if an MP writes a letter to Housing NZ on behalf of a constituent, and that constituent's cousin then thinks "what a top bloke/shiela" and gives $100 to their reelection campaign, then I think there is no problem. But $17,500 after proposing legislation that would help the donor? That, to me, falls clearly on the side of unacceptable. In between are grey areas ... which is hardly unusual in this vale of tears in which we dwell.

I note that a number of commentators seem to think that unless we have some sort of bright line rule here, one that lets us clearly and unaguably know what is "right" and "wrong" in terms of accepting donations, then we can't criticise candidates for accepting any money from anyone. I disagree - we are dealing with standards of behaviour, which get applied across a range of potentially different situations. And, again, I say Cosgrove fell short of the standards we should expect of our elected representatives - just as Banks fell short of those standards by (quite legally) seeking to funnel Dotcom's donation to his campaign in a way that no-one could see.

by Keir on July 09, 2012
Keir

But there's no suggestion that either Cosgrove or IF thought that the donation influenced Cosgrove's position, or was a reward for taking that position. And I don't think there's any reason at all to suspect anything untoward. There's just the possibility of the appearance of impropriety.

While, yeah, in terms of being above suspicion Cosgrove would ideally have turned down the money, in the real world, constituency MPs are always going to get donations from people they know and who they have ongoing relationships with. What is important is honest and open management of those relationships.

Banks, after all, attempted to avoid open and honest management of his relationship with donors. That was his sin.

by Joe Wylie on July 10, 2012
Joe Wylie

Whatever standards Cosgrove may or may not have fallen short of, there's something very strange about his candid declaration of friendship for a political Darth Vader such as Independent Fisheries' Mike Dormer. This is the man who vigorously exploited the union-busting provisions of Ruth Richardson's 1992 Employment Contracts Act to an even greater degree than Talleys Fisheries. Two years later, faced with then Fisheries Minister Doug Kidd's push to "New Zealandise" his industry and introduce minimal work conditions, he indignantly defended his company's "right" to pay as little as $4.50 per day to foreign joint venture fishing crews. 

 

by Andrew Geddis on July 10, 2012
Andrew Geddis

@Keir: "There's just the possibility of the appearance of impropriety."

No. There is the appearance of impropriety. Which the parties both deny exist in fact. Which is just what a candidate and donor who actually were involved in impropriety would do as well. Which is why avoiding even the appearance of such impropriety is important - because how do you know which is the simply apparent impropriety and which is the real one (aside from saying that MPs from the parties you like are only apparent, while MPs from the parties you don't like are real).

And I don't think we need to have an "ideal world" for candidates to avoid conflicts of this glaring a nature. Or, if we DO need an ideal world to do so, then why do we require candidates to disclose any donations at all? After all, if our response to seeing a donation of this type is just to shrug and go "meh", then exactly what sort of donation would cause us to actually care? And why, then, is it bad for Banks to (legally) avoid telling the world about a donation from Dotcom, when our response to seeing that donation would have just been "meh"? We're upset that he didn't tell us about something we don't care about?

by Darel Hall on July 10, 2012
Darel Hall

One focus here is the size of the IF contribution to Cosgrove’s campaign including the proportion of the allowable campaign spend the contribution is, ie $17,500 of the $25,000 allowable – 70%. 

Andrew, you seem to be saying that if it was much smaller then it becomes more ethical, the $100 example.

Some other ways of looking at the $17,500, which may edge it towards the ethical end zone include:

  • What proportion of the total election spend is the contribution, ie of all expenses in, say, the year prior to the election?
  • What proportion of the total money raised is the $17,500?  If it is 70% of the money raised Clayton looks worse than it was, say, 35%.
  • Has Clayton had any issues covering expenses without the $17,500 contribution, ie is the money useful but not critical?
  • Is there $17,500 still left in Clayton’s accounts, ie could his campaign been run without the IF contribution?
  • Does it make it ethically better if IF split the donation and paid the $17,500 over three calendar years; if so, why?
  • How much do the non-IF stakeholders gain from the bill; how much have they contributed and to whom; and what proportion of expenses does that constitute?

Also interesting but not relevant o assessing Clayton is the question of how much do the stakeholders opposed to the bill gain and how much and to whom did they contribute?

The other bit I’m interested in is what is the correct course of action for an MP, say of a party that is less likely to have benefactors with deep pockets because of the party principles and likely policy settings, who absolutely believes they are acting honourably?  There has to be a way of taking some money in an ethically reasonable way. 

Perhaps making sure no contribution in any one year is above, say, 20% of total expenses approximates a proportion that means it is unlikely to appear to be swayed by a contribution.  Or is it a higher or lesser proportion?  But then that is still a good wedge of cash.  Oh, and I’d want continuous disclosure of contributions of over, say, $1,000.  Perhaps that’s my answer there.

Of course the money could just be routed through the central party.

Andrew, apart from just saying No, how would you get to an ethically satisfying position in Clayton’s position?

by Ross on July 10, 2012
Ross

"But there was the potential for benefit, wasn't there?"

Well, if we're talking about potential, what of the potential benefits from asset sales that may accrue to some of National's donors? What of the actual benefits that may accrue to donors? There are potential benefits from just about every piece of legislation. And you're ignoring a key issue - many people would have benefitted from the Cosgrove proposal. To focus on one beneficiary is somewhat disingenuous.

 

 

by Ross on July 10, 2012
Ross

"Yes - I think Cosgrove should have said 'because of my actions that could have been of such a significant benefit for you (as well as bunch of others), it would be wrong for me to now take this large amount of money from you because of the perceptions that it would create.'"

Hmmm well that relies on Cosgrove knowing that any action he has taken, or intends to take, may or will benefit a donor. What happens if that assumption is false? What if an MP did something which benefitted a recent donor, say, 10 years earlier. Should the MP say to the donor: "Have I done anything or said anything that was of direct or indirect benefit to you? If so, I would rather decline the donation". How many MPs ask that question? I'd say none.

 

by stuart munro on July 10, 2012
stuart munro

@ Joe,that would be US $2 a day -the industry standard on soviet and post soviet vessels for decades. Every party and fisheries minister colluded. And people wonder why the industry is no longer technologically and economically level pegging with agriculture. The resource is greater, it should be beating agriculture handily.

by Keir on July 10, 2012
Keir

<i>And why, then, is it bad for Banks to (legally) avoid telling the world about a donation from Dotcom, when our response to seeing that donation would have just been "meh"? We're upset that he didn't tell us about something we don't care about? </i>

Pretty much --- the cover up is worse than the crime. If Banks had just said, yeah, I got $1000 from Dotcom, everyone would have said meh. Therefore it must be the act of covering up the donation that is repugnant there. Which is pretty much what you'd expect.

Here, Cosgrove hasn't covered up the donation. If you think he acted improperly, i.e you think he was influenced by the money, then what he did was wrong. If you don't think he was influenced by the money, then what he did was possibly unwise and politically ill-considered, --- and I would have advised against accepting that money, I think, but I'm not sure --- but it wasn't wrong.

The reason that Banks was wrong to cover it up was that he prevented us reaching the `meh' judgement ourselves.

by Andrew Geddis on July 10, 2012
Andrew Geddis

@Darel: I don't see why any of those metrics/benchmarks helps any more than the one I've used ... we as a society say that $25,000 is as much as people should be able to spend on advertising their candidacy in order to limit the influence that wealth may have on the local election contest (crudely put, to stop someone "buying" a seat in Parliament). Independent Fisheries' donation made up fully 70% of that limit. That says something about how significant it is in the context of the election system as a whole.

As for how to "ethically" take money from donors ... well, anything more than $1500 will be revealed to the public post-election. So a wise (and politically moral) candidate should carefully consider before accepting a donation of more than that amount whether a combination of the size of the proposed donation and the source it comes from will raise any significant concerns in outside observers (i.e. the voting public) about the motivation underlying the gift and/or any feelings of obligation it may create in the recipient. Even asking that question ought to resolve many problems. For the trickier/borderline cases, I guess rules of thumb might help (i.e. don't take more than $5000 from anyone, etc). But I'm certainly not saying that even a proper standards-based approach will stop all disagreements in this area ... not all people will agree on how such standards ought to be applied to every case ... just that it should have stopped Cosgrove accepting the cash in this case. I do agree with you on continuous disclosure, though - that would be a good thing that also might help focus a candidate's mind on the consequences of a donation decision (i.e. if they have to justify a donation during the heat of a campaign, rather than some 7 months after it's over, they might think harder about what they are doing when they take cash).

As for "of course the money could just be routed through the central party" - no, not legally. A donation given to another person (be it inside the party or outside) with the express intent it be given to the candidate's campaign is a "transmitted" donation, and the original donor's identity still must be disclosed by law.

 

@Ross: We may be quickly approaching an end to what we can usefully say to one another on this matter. However, if you have some story to share about how particular donors to National are benefitting from the asset sales policy, then do so and I'll make the requisite tut-tutting noises. As it is, I've focused on Independent Fishery's possible benefit from Cosgrove's proposed legislation because they gave Cosgrove $17,500 afterwards. This seems to me to differentiate them from the other landowners who may also have benefitted (however many of them there may have been).

Look - as I have just said, there always will be grey areas where applying ethical standards to the receipt of political donations is not straightforwards. But I'd really like you to answer the question I put in my last comment: "if our response to seeing a donation of this type is just to shrug and go "meh", then exactly what sort of donation would cause us to actually care?" Seriously - what do you think is beyond the pale in regards (properly declared) donations to candidates?

by Ross on July 12, 2012
Ross

What I think is beyond the pale is when Ministers or MPs act in a duplicitous or corrupt way to help themselves and/or others. When John Key - whilst in Opposition - asked questions about Tranz Rail, the perception (and likely reality) was that he was seeking to benefit personally from the information being supplied. Key held thousands of shares in Tranz Rail and lied about the number of shares he held. Why lie about such a trivial (in his view) matter? That seems to me to be a clear case of conduct that is beyond the pale. Was Cosgrove seeking to benefit here? No evidence that he was. Indeed, there was no law change and any law change would have needed Parliament's support. Was he acting in a duplicitous or corrupt manner? Again, no evidence that he was.

by Darel Hall on July 12, 2012
Darel Hall

Given your starting point, I am interested in what shifts donations towards the ethical endzone. 

My search for other metrics goes to the crudely put question “What does it take to but a seat in Parliament?”  The advertising limits during the official campaign period are important but not the whole story.  The proportion of the total amount required to get elected is important if there is a materially difference between the total amount required and the advertising limit.   I think there is a material difference but that the difference doesn’t get to your draft rule of thumb, which, given your $5,000 comment, is 20% of the total required to get elected.  

I think continuous disclosure is part of the answer as it requires immediate justification, particularly when it counts, leading up to an election.

I didn’t develop the point about possibly routing money through the central party.  What I meant was that if we believe politicians are overly loose in their moral appreciation of donation receipt, then they might search for other ways to receive donations which generate a benefit to them.

If an MP brings large donations to the central party it is not unreasonable to think that might also bring valuable influence.   

Interesting issue.

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