Political parties, like other public bodies, need to have their accounts fully audited

The ongoing standoff between the Minister for the Environment and the Standards in Public Office Commission (SIPO) is yet another signal of just how much this government has backtracked on its supposed commitment to open government.

At the heart of this issue is what level of party accounts should be made available for auditing and public scrutiny. The Minister (and in fairness, it seems all the other parties with him – I stand ready to be corrected on this ☺) is of the view that the legislation (the Electoral (Political Funding) Act, 2012) requires that the parties need to only audit their national accounts. SIPO disagrees. As a letter this week from the outgoing SIPO Chair (published on their website here) makes clear their legal advice, on the contrary, is that the auditing should also extend to the sub-national units (i.e. the party branches) of the parties’ organizations.

There are a number of reasons to support the position of the SIPO chair. Here are three main ones:

  1. As his letter observes, the three main parties have sub-national units that between them are raising €500,000-1 million in additional funding annually. Why should these funds not be included in the audit of party finance? And what about monies in other sub-national units that we’re not aware of?
  2. This is in line with best international practice and is something that, among others, The Council of Europe’s GRECO body (Group of State’s Against Corruption) has been asking for since 2009 (see here). Indeed, the Mahon tribunal specifically referred to this as an issue that needs to be resolved if we’re to avoid the real and present danger of donors to political parties flouting the rules on the maximum amounts they can donate in a given year by spreading their payments among a number of branches.
  3. A good illustration of the yawning gap in our knowledge of what the parties are raising privately is in the data published by SIPO on how much the parties declared they spent in the 2011 general election and how much their purportedly raised in private donations that year. Between them the parties declared they spent more than €9 million on their campaigns, yet it seems that all they could raise was a mere €30,000. Given that parties are forbidden by law from using any state funds to support election expenses, we’re left with a figure of more than €8,970,000 unaccounted for.

Of course, requiring the parties to provide audited accounts below the national level would add some additional administrative burden. In a Morning Ireland interview today on this issue, Leo Varadkar referred to the problems of University student branches being required to have their meagre accounts audited. This is disingenuous. As he well knows, the requirement for auditing accounts would fall on the national party organization, not the individual branches. The latter would be required to send in the details to national HQ. Presumably any self-respecting party would want its branches to be keeping good records of receipts and expenditures. In any event, for any party branch whose accounts truly are meagre the amount of work required to account for this should be pretty minimal.

One final thing to note is that Irish political parties are actually public bodies. They are in receipt of very generous state funding (in the form of exchequer funding and the party leaders’ allowance) which in 2012 totalled just under €13million. The fact that they receive this funding is perfectly appropriate: modern day democracies should provide funding support for political parties, and most do. Since parties have all this public largesse, then surely there is nothing to stop them diverting a small portion of it towards establishing a proper system of internal auditing of their accounts.

And, more to the point, given the current pressure being applied to charities and public health bodies to provide full and transparent account of their finances, it’s a bit rich for political parties (similarly funded generously from the public purse) to be rejecting such scrutiny of their own operations.