By Iain McMenamin

The study of corruption and political finance in Ireland has tended to be qualitative.  This has made it difficult to determine whether problems related to a relatively small number of individuals of the system as a whole.  My article, “Business Financing of Politics in Ireland: Theory, Evidence and Reform” in the current issue of Irish Political Studies uses disclosed data to study the potential for corruption. The graph below shows some striking patterns.  Donations in general were given to both government and opposition.  By contrast, there was a clear bias towards TDs from governing parties in donations from businesses and an even stronger bias towards governing parties from the property sector.  It is highly unlikely that such donations involved a direct exchange of money for policy benefits.  However, it is very possible that such donations could underpin reciprocal exchanges, whereby TDs or their parties, might feel obliged to give extra attention to the needs of a donor business, perhaps at a time long after the donation itself.  Reciprocity is an important motivation for business donations in other jurisdictions as I show in my recently published book, If Money Talks, What Does It Say?  Corruption and Business Financing of Political Parties (Oxford 2013).

Recent legislation has made it very onerous for businesses to donate even tiny amounts to politics.  However, many business contributions to politics come disguised as individual donations or as commercial transactions.  The recent legislation also requires the parties to furnish audited accounts.  The Standards in Public Office Commission, after a period of consultation and with the consent of the Minister for Public Expenditure and Reform, is supposed to provide guidelines on these accounts.  In many European jurisdictions, such annual accounts provide information, on the scale, rather than the sources, of party finance.  Two really obvious ways of avoiding political donation laws are pseudo-commercial payments and pseudo-loans. In Australia, all payments to political parties over a threshold have to be disclosed, whether they are donations or not.  Even though the parties somewhat implausibly classify a small minority of payments as donations, citizens can make up their own minds by inspecting the register of payments.  In the UK, all loans and their interest rates must now be disclosed.  Previously, British parties got away with pretending big donations were loans and therefore not subject to specific disclosure.  If the guidelines require details of individual payments and loans, not just aggregates, it will go some way towards reducing the likelihood of political finance scandals in the future.