Mahon: transparency vital in future

From Nuala Haughey, Advocacy and Research Officer, Transparency International Ireland

As the Mahon report rightly states, corruption thrives in shadows and darkness. The twilight world of political finances – and the toxic nexus between business and political parties – is an obvious area where the disinfectant properties of sunlight are much needed.

The Mahon report echoes the Moriarty report in emphasising that disclosure must be the bedrock of all attempts to control corruption risks associated with money in politics.

Transparency International Ireland believes that detailed disclosure by political parties and candidates of assets, income and expenditures, together with adequate oversight and enforcement, is the starting point of any decent regulatory framework.

Incredibly, political parties are not currently obliged to keep proper books and accounts including donations, let alone to make them available to public scrutiny. While parties produce accounts for their members, they are not subject to scrutiny by an independent body. The Standards in Public Office Commission (SIPO) has repeatedly warned that this makes it impossible to know the annual income of political parties and to have a full picture of how elections are funded.

On last night’s Tonight with Vincent Browne on TV3, Fine Gael’s Charlie Flanagan, vigorously pressed on why his party does not voluntarily publish its annual accounts in full, fell back on the lame excuse that: “It hasn’t been the practice until now.”

This may change soon. The Electoral (Amendment) (Political Funding) Bill 2011 currently before the Oireachtas would oblige parties to publish annual audited accounts. However it leaves it up to SIPO to draw up draft guidelines for the format of these accounts in consultation with political parties, with final approval by the Minister for the Environment. If disclosure is to be meaningful, it is crucial that the format of party accounts is comprehensive and standardised. Is it really appropriate to put SIPO in the position of having to cajole political parties into agreeing a standard format for their accounts? And do we really want a minister – who is a member of a political party after all – to have the final say on the matter?

When it comes to disclosure of political donations, timing is key. Long gaps between the receipt of a donation and its disclosure make it difficult to establish a causal link between a political donation and a favour rendered. The Moriarty report recommended that donations be disclosed in something approaching a real time frame. In Finland, political parties receiving public funding must disclose on a monthly basis monetary or in-kind donations exceeding €1,500. In the UK, political parties must submit reports detailing the names and addresses of donors to the Electoral Commission on a quarterly basis. Currently, parties and candidates in Ireland file annual donation statements to SIPO, (the latest available on its website are for 2010). They also submit to SIPO election expenses statements some three months after polling.

The corruption risks which the current bill does not address are significant, and many of them have been highlighted by SIPO, the Council of Europe, the Moriarty Report and now the Mahon report. In fact, the Mahon report takes issue with the very definition of “donation” in current law, which is any contribution “given for political purposes.” This definition interrogates the intention of the donor, not the actual use made of the money. Mahon recommends, very sensibly, that a donation should be defined as “any contribution given, used or received for political purposes”.

Mahon makes several other solid recommendations to curb corruption risks and ensure better enforcement of party finance rules, including increasing SIPO’s enforcement resources and powers, and introducing new criminal sanctions. Transparency International Ireland is calling for a revitalised SIPO to be equipped with the powers and resources to conduct investigations and impose sanctions in relation to breaches political funding laws, as well as ethics laws.

The key feature of the current bill – that it effectively bans corporate donations – is being presented by government ministers as deep-cleansing panacea, when in reality it is not. If public trust in political parties is to be rekindled, legislators should ensure that reforms are meaningful and that that parties and candidates sign up to the spirit as well as the letter of any new laws.

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5 thoughts on “Mahon: transparency vital in future

  1. Mr. Justice Mahon was able to recommend only behavioural remedies and this post advocates strengthening these remedies. But there has been a continuous stream of legislation over the last 20 years defining and enforcing behavioural remedies – yet Ireland had the biggest economic and financial blow-out of any advanced economy since the last war. There is little point in relying on behavioural remedies when the politicians they are intended to restrain devise and enact the legislative provisions and implicitly control those who enforce them. Are we capable of learning anything in this country?

    The primary requirement is for structural remedies; the behavioural can follow. We need alternative locations of power in local government and in a functioning parliament. They should not be empowered to compete with central government – just be sufficiently empowered and resourced to discharge their responsibilities, to restrain the power exercised by central government and to contest the optical illusions generated.

    We rely far too much on loyal internal opposition within the semi-permanent central regime to ensure the ship of state is steered safely. Ireland benefitted when this loyal opposition within Finance became dominant in the form of TK Whitaker and his group of officials in the late 1950s, but it suffered when sufficiently effective opposition did not surface in 1977 when Martin O’Donoghue persuaded Jack Lynch and George Colley to spend their way out of a recovery. Ireland benefitted again when the official conviction on a change of a course strengthened from the mid-1980s and the incoming government in ‘87 was persuaded. And Ireland really suffered when this internal opposition simply evaporated or went with the flow from the early 2000s.

    It is simply far too risky to rely on public-spirited officials being able to curtail the frequent hare-brained schemes of politicians on a continuous basis. We need alternative locations of power. And what surprises me is that a sufficient number of backbench TDs, with negligible prospects of advancement – and, presumably observing the roles of members of parliaments in other jurisdictions – is not clamouring to acquire more power and resources for the Dail.

    They can’t all be totally thick or too frightened of their parties’ high commands’ – or can they?

  2. As citizens we have been forced by political incompetence in the recent past to accept increasing austerity in the present and the likelihood of State disclosure and collapse in the near future. We are in a dark place and need light at the end of the tunnel
    Citizens need to be more fully protected by the Constitution. Clear obligations of due diligence over affairs of State by Cabinet and public service chiefs should be enshrined in the constitution. Freedom of Information needs to be enshrined in the Constitution. Sorry Nuala your piece is too ”if only” and aspirational and you ignore the power struggle between those who control power and resources and those voters who have no control apart from voting every five years. Wishful thinking such as “parties and candidates signing up to the spirit as well as the letter of any new laws.” Is a pure waste of time. This country has been run for the enrichment of the few while giving token gestures to aspirations like the 1916 Proclamation and the 1937 constitution the spirit of which was ignored by the Golden Circle busy feathering their own nests. Just look at the iniquity of politically controlled judicial appointments. If I was a resident of Northern Ireland and read the conclusions of the Mahon report I would run a mile from this corrupt feckless State.
    Aspirations just don’t cut it in the real world. We as citizens need to get tough on political reform.

  3. Isn’t it safe to assume that what Mahon actually found out is at best about 25% of what actually happened and if it went on int Dublin it went on everywhere else.

    Nor is it only since 1977 that this started – since the midsts of time the Irish culture has been cronyism – the loyalty to the Gelic overlord only remained as long as they could line your pocket, the loyalty to the Norman lord only remained as long as they lined your pocket – our history shows how easy it was for the British to get the Irish to turn on their own.

    So it would seem it’s not just laws or regulations need to change it’s a fundamental change in our culture to authority and responsibility that needs to change.

    Can someone whose political mentality was formed in backward Co Mayo in the 70s and 80s (no offence but let’s be honest that the further you get from Dublin the worse the cronyism gets) really be the one to lead such reform?

  4. @Desmond
    “backward Mayo” That’s a bit of a howler.
    Did you never hear of Ray500 in the 1980s in north county Dublin.
    Dublin bank managers, a Dublin Taoiseach and Dublin councils’ planning corruption is what caused our collapse as a State.
    The bigger the swill-pot (Dublin being the biggest in Ireland) the more the cronyism.

  5. The Mahon recommendations all seem pretty reasonable for what they are: tightening up the laws on bribery and corruption, giving SIPO greater enforcement powers, recommendations on donations and lobbying, even more powers to tribunals etc.. To tackle corruption I suppose one needs to 1) try to have as much of it as possible covered by laws, i.e. try to minimize “legal corruption” 2) try to prevent conflicts of interest arising at all in the first place and, 3) since one can’t feasibly prevent all conflicts of interest, one should also attempt to shine as much light and transparency on such conflicts as possible.

    For 1) to have meaning, a functioning and genuinely independent criminal-justice system is needed. That includes all three levels: investigation, prosecution and judgment. Somehow (in spite of, rather than because of, the judicial appointments system) our courts (the higher ones at least) seem to exhibit a good measure of independence (as the relatively recent by-election decision demonstrated). Maybe that’s because of long tradition, political allegiances perhaps being more cultivated for career reasons than being genuinely heart-felt, the further constraint in the higher courts that the candidates be capable (putting in an ill-equiped party hack could ultimately come to bite a government in the behind down the road in some subtle, complex, and potentially far reaching judgment), and when judges get to the top they’re probably more thinking of their legal legacy and standing than any past party allegiances. Nonethess, the judicial appointments system should be overhauled (justice should be not just done, but seen to be done). And anyway many of these factors don’t apply in the lower courts. Am not familiar enough with the independence of the prosecutory part of our system: the DPP. But Mahon demonstrates again how weak the protections of independence are with regards to our police force. Investigations went nowhere. All promotions from the midranks up are subject to government approval. The government has a tight rein over the force and how it is run and where resources in it are allocated. There hasn’t even been an attempt to put some of this at arms’ length, perhaps with policing boards or authorities or commission as in the UK (let alone constitutional change). A move by a senior Garda to investigate a politician (or even perhaps a mere friend or associate of a politican) has the potential to be career-ending the way the system is set up. The control structures make the Gardaí more resemble a private security force for politicians than an independent force to root out wrong-doing and corruption wherever it occurs. So sharpening up the law on corruption and bribery is all well and good, but will any investigations even get over the very first hurdle in the criminal-justice system? Greater police independence (and for the criminal-justice system in general) is one of the major implications I take from Mahon. Even the Gardaí in their recent AGSI conference were calling for greater independence from politicians.

    Doing away with political donations entirely, and bringing in a greatly increased state funding regime, would be one way of reducing political conflicts of interest. Placing restrictions on donations and reducing donation limits is moving in this direction. However one has to be wary of the law of unintended consequences. IMO it’s essential in any state funding setup that there’s a bias towards smaller parties and candidates further down the food chain. Otherwise there’ll be a huge bias towards the status quo. One can see this kind of effect in sports leagues. The Premiership more equally distributes revenue to clubs than most (though top clubs do get more) yet there’s very little change towards the top. Some sports try to counteract this effect, e.g. there’s the collegiate draft in the American NFL (the teams get to select from promising collegiate players in reverse order). Leagues like the Premiership can be shaken up by figures like Roman Abramovich who come in with bags of money. 100% state funding, unless done properly, could result in a similar situation (though totally excluding any political Abramovichs). Constraining political donations, if not done properly, has the potential to have a similar effect. Are we making it harder and harder for new political parties to be formed? Maybe different rules should apply to parties with zero or very low Dáil representation? I’m wondering if status quo parties actually see some upsides in such donation legislation? The last thing a party like Fianna Fáil would want is a new party to fill any political vacuum and squeeze it out further. There’s little enough space for new parties as it is.

    On 2) Irish politics has been rife with conflicts of interest, from criminal-justice appointments, to our regulatory apparatus, to state-board patronage etc. etc.. RTE is another example. Really how independent can out state-broadcaster be when the government controls the purse strings? And Taoisigh have not been shy in the past to phone up the station to make certain demands. The tentacles of the state reached everywhere, particularly during the last boom. State funding of voluntary groups has compromised much of so-called “civil society”, which has had the effect of suppressing possible sources of dissent. We could at least start by bring in some formal systems to put all these areas at greater arms’ length from politicans (and perhaps eventually incorporating these into the constitution if they work out well). I see no moves whatsoever in this direction so far. In general, despite Francis Fukuyama’s “The End of History” and the supposed triumph of liberal democracy, there are definitely a number of design flaws in the representative democracy as it currently exists. If humans are still around in the centuries ahead then I’m sure it won’t be the last word. Corruption is still at much lower levels than places like China without a free press and democratic accountability. Human nature being what it is corruption will always be with us. But IMO there’s still far too much of it going on even in Western countries. Who watches governments and politicians? In theory it’s the voters and a free press. But particularly in a small country like Ireland, with quite cozy relationships between policians and media, and press ownership mostly in a small number of hands, can a “free” press really be depended upon? We saw that there can even be problems in a much larger country like the UK (e.g. the current press inquiry). And often voters are given quite conflicted choices every 5 years, e.g. do you want to vote for a government that looks to be managing the economy quite well but whose record on corruption/sleaze is pretty poor? It’s for reasons like this I’m still not prepared to write off the possible utility of a second chamber. Separation of powers doesn’t necessarily have to be oppositional in nature (though a dose of conflict in politics isn’t necessarily bad either), e.g. in semi-presidential systems the president often gets control of foreign affairs while the prime-ministers control of the domestic brief. Have sometimes though the usual impotence of a second house in terms of money and pork could be turned into a positive advantage and its oversight/watchdog role greatly strengthened. Why not give a directly elected second house legislative precedence in a number of oversight type areas? E.g. give the second house control of a specified type of tax (and the ability to set its level) to fund the police (and allow it precedence in terms of drawing up legislation to regulate the force and its appointments). Same with public appointments. One could set up up the broad parameters of a public appointments system in the constitution and give precedence to the second chamber to pass legislation for this (though perhaps not to make the actual appointments themselves). Similar set ups might be useful in other areas (FoI, media regulation, political standards, parliamentary inquiries, regulatory bodies, criminal-justice system). The constitution could set out broad parameters but the second house would actually control the legislation. It would set up a situation where politicians are watching politicians (perhaps not the most desireable situation), but at least the voters would have more options. They could still vote in a seemingly economically competent but perhaps slightly dodgy party to financially run the country, but could also vote in moral guardian types in the second house to keep a close eye on what they actually got up to. Can think of some downsides also to trying to neatly separate out oversight powers into a second chamber, but could still be an interesting approach.

    I still think 1) and 2) above should be prioritized. Mahon and other tribunals are better than nothing I suppose, but their mere existence is in a sense a failure. Maladministration and incompetence is the proper domain of tribunals and parliamentary inquiries, not corruption. Ideally we’d have both a strong inquiry/tribunal system and an independent criminal-justice system not afraid to go after politicians. If I was forced to chose either one or the other I’d opt for the criminal-justice system. One of my problems with the recent emphasis on giving parliament inquiry powers is that it may simply be a distraction from the seeming unwillingness of our politicians to countenace a genuinely independent criminal-justice system. Plus I’d wonder how effective some of the measures in increasing transparency for conflicts of interest will be. For lobbying, there’s a whole spectrum from formal lobbying by a professional lobbyist to a game of golf with a “friend” on the golf course. It seems like these boundaries could be difficult to police. Am not saying it’s not worth trying, but the US has quite a few of these types of lobbying laws (plus strong separation of powers too) but that still hasn’t prevented it from becoming not far from being a “corporatocracy” at this stage.

    Finally, Mahon doesn’t paint a pretty picture of local government. As posters above have pointed out local government could be an alternative source of power to counterbalance central government, e.g. in London the London Mayor and London assembly have significant input into the control and funding of the Met (the police force that would investigate Westminster politicians). If we had a “Dublin Met” police force, fully controlled and locally funded by an independently elected Dublin local authority (that could set its own taxes), then one could feel far more confident Dublin politicians would be investigated without fear or favour. But we can’t even get national government right so far, and local government seems simply like an even worse microcosm of Leinster House. I’d be very reluctant to simply give more powers to local government as it currently exists and expect everything to be ok. There were many reasons politicians in the early Free State stripped powers from local authorites (some were controlled by Republican politicians) but perceived corruption was another reason (and I’m not entirely sure that was without some merit). Some serious thought needs to given to how checks and balances can be incorporated into local government before we can trust it with a lot more power (and that’s not something I really like to say).

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