While Christian Porter’s legal defence came from an unknown source, the same holds true for the majority of political donations.
Following the revelation that Christian Porter accepted donations for his legal defence without knowing the source, Malcolm Turnbull has said that the event is an “extraordinary abrogation of responsibility”, adding that he was “staggered that Porter thought he could get away with” accepting $1 million in legal fees paid by unknown donors.
Porter has maintained that he had “no access to information about the conduct and funding of the trust”.
As Turnbull noted, “…it is a shocking affront to transparency.”
Yeah, about that.
The Australian Electoral Commission recently released political donations data for the 2019-20 financial year, allowing the public to see who donated to whom after the last federal election. In February, the Centre for Public Integrity released a report detailing the volume of dark money – income with an unknown source – given to the parties in the past 20 years.
Sensationally, the report suggests that 35% of contributions (or about $1bn), came from an unknown source. As it stands, political donations under $14,300 can keep their mystery, and there’s no limitation (or paper trail) if a single donor makes numerous donations of the same amount.
Per Christopher Knaus of The Guardian, “The analysis also finds five donors have contributed 25% of all money given to the political parties since 1999. Those donors are Clive Palmer’s Mineralogy, which made 40 donations worth $101.1m, including huge contributions in the lead-up to the last election. The next biggest donor was the conservative funding vehicle the Cormack Foundation, which made 39 donations worth $61.4m, mostly to the Liberals, but also to Family First and other conservative parties. Labor funding vehicles ALP Holdings and John Curtin House were the next largest donors, with 145 donations worth $56.8m and 50 donations worth $47.6m respectively. The Shop, Distributive and Allied Employees’ Association was the fifth-biggest donor over the two decades, giving 318 donations worth $31.2m.”
What’s the story?
In 2019, the High Court upheld Queensland laws banning property developers from making donations to political parties. The ban was introduced by the Palaszczuk government after a recommendation by the state’s Crime and Corruption Commission.
The Queensland ban applies to donations made to state and local political campaigns as well as general donations to political parties. A general donation might be used for federal, state or local political purposes or for the costs of running a party.
At the same time, the High Court also struck down a 2018 federal law that said property developers could ignore state laws banning them from making general donations to political parties. (Yes — federal parliament really did pass a law overriding state anti-corruption powers!).
The High Court said federal parliament has no power to regulate political donations that merely “might be” used for federal campaigns. Property developers are also banned from making political donations in New South Wales and the ACT.
Allowing secret donations from dodgy donors
The legislation passed in July 2020 overrides state bans on property developer donations in two ways.
First, the legislation introduces a new provision to replace the 2018 federal law struck down by the High Court. This new provision allows property developers (and others banned from making donations under state laws) to ignore state laws banning them from making a political donation where the donation is “for federal purposes”.
Second, the legislation allows property developers and political parties to ignore state laws requiring that donations be disclosed. In NSW and Queensland, donations of $1,000 or more need to be disclosed. Under the new federal law, only donations of $14,300 or more made by property developers “for federal purposes” need to be disclosed.
The explanation given for the new laws is that state laws shouldn’t apply to federal donations.
At the time, Finance Minister Mathias Cormann said the new laws “better clarify” the interaction between federal and state electoral laws. “The revised provisions ensure that federal law only applies exclusively to donations that are expressly for federal purposes, while fully respecting the application of state laws to amounts used for state purposes,” he said.
Labor’s Don Farrell told the Senate, “it’s not Labor’s intention in any way to weaken any of those provisions already in place in the states, but the Commonwealth Parliament should be able to make laws with respect to Commonwealth elections, and those laws should not be overridden by the states.”
While the law requires parties to keep money donated “for federal purposes” in separate bank accounts, a donation “for federal purposes” frees up money from other, general donations to be used for state purposes.
Tasmanian lower house MP Andrew Wilkie described the law as allowing “brazen money laundering”. Senator Jacqui Lambie said the law was “a doozy” of a way “to hide big donor money from the voters” and “the latest in a long line of betrayals of the public’s trust”.
Luke Beck contributed to this report.