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The Northern Myth

Apr 29, 2016

Never mind the quality, feel the disclosure. The CLP's Foundation 51, the AEC and electoral funding law reform

Senator Wong may be a patient and thorough interrogator but she cannot match the forensic inquisitorial skills of Labor's bad cop-bad cop team of John Faulkner and Robert Ray, now both unfortunately retired from the Senate.

Foundation-51-edit

The unsurprising no-show by Senator Arthur Sinodinos deprived yesterday’s hearings of the Senate’s Finance and Public Administration References Committee of much of the drama expected from the committee’s too-short-by-half Legislative oversight of associated entities of political parties inquiry. Sinodinos–and others–regarded the snap inquiry as a political stunt but well, they would say that.

I’ll leave it to others to pick over the bones of the broader aspects of the hearings–the only witnesses left standing were the Australian Electoral Commissioner Tom Rogers and his Chief Legal Officer Paul Pirani–but of real interest to me and many in the NT was the continuing stoush between Rogers and Labor Senator Penny Wong over the ‘related entity’ status of a so-called political slush-fund closely related to the Northern Territory’s governing Country Liberal Party and known as Foundation 51.

Wong and Rogers had gone toe-to-toe over the AEC’s dealings with Foundation 51 in Senate Estimates hearings in early February that ended in a nil-all draw, Wong beggaring belief that the AEC hadn’t acted against what she saw as a clear violation of the electoral funding guidelines, if not the law. Rogers gave as good as he got, holding firm on the line–repeated almost ad infinitum–that when disclosure had been achieved the prime purpose of the Electoral Act had been met.

As I wrote of Foundation 51 in May 2014:

Foundation 51 is a $2 company established in February 2009 by Graeme Lewis, the eminence grise of the CLP, along with chief of staff to then Opposition Leader Terry Mills, James Lantry.

Lewis remained as Foundation 51’s sole director until mid-February 2013 when local transport executive Peter Hopton was appointed as a director. On 2 January 2014, Peter Maley, recently appointed as a local Magistrate and briefly a CLP MLA in the mid 2000s, was appointed to the board of Foundation 51 as a non-shareholding director.

Maley resigned as a director of Foundation 51 in May 2014 and as an NT Stipendiary Magistrate in August of that year. Foundation 51 was de-registered in May 2015.

Of interest is the apparently differential treatment of Foundation 51 by the AEC and the NT Electoral Commission.

As Wong told the Estimates hearings in February:

The NTEC advised that an investigation had established possible breaches of electoral law. The breaches were referred to the Northern Territory Police for further consideration. There was subsequently a decision made [by the NT DPP] that it was not in the public interest to proceed.

Senator Wong noted at the time that the DPP’s decision was made “Notwithstanding a prima facie case and a reasonable prospect of conviction.” Rogers responded that the purpose of the Act was disclosure, a purpose that in Foundation 51’s case had been satisfied and thus required no further enquiry, absent further new information, by the AEC.

Roll forward to yesterday’s hearings.

Senator Wong went over much of the same ground as in February’s Estimates–and to similar effect–in testy exchanges with Rogers, and occasionally Pirani. Senator Wong may be a patient and thorough interrogator but she cannot match the forensic inquisitorial skills of Labor’s bad cop-bad cop team of John Faulkner and Robert Ray, now both unfortunately retired from the Senate. I can only imagine how much fun they might have had with the Commissioner’s mantra that disclosure equals compliance.

The differential treatment of Foundation 51 by the NTEC and the AEC is highlighted in this exchange yesterday between Senator Wong and Commissioner Rogers.

Mr Rogers: I am coming back to the evidence I gave when you asked me this question to start with. We looked at Foundation 51. They put returns in. We conducted a compliance review. They were responsive to requests we made, so we have decided not to pursue this matter. And let me go further, given the interest in this, I note that the Northern Territory Electoral Commission took a different course of action.

Senator WONG: Correct. It is amazing how the state and territory commissions seem to be much more proactive than you, Mr Rogers.

Mr Rogers: Well, it might be amazing, Senator, that their legislation is better than ours. That could also be—

Senator WONG: They are not deciding to leave things aside.

Mr Rogers: I am not leaving things—

We’ll call that a draw.

But yesterday wasn’t a complete waste of the Senate’s time. Of particular interest were two–from a scant total of four–of the submissions received by the inquiry.

Dr Joo-Cheong Tham, an Associate Professor at the Melbourne Law School and leader of the very interesting research program entitled “The Problems of Campaign Finance Regulation“, made a brief submission that included a number of recommendations aimed at beefing up the AEC’s investigative and compliance powers.

Tham’s recommendations include the introduction of a rigorous governance regime for political parties and their associated entities.

Recommendation Six

• The Act should be amended to require that political parties and their associated entities establish proper governance arrangements, drawing upon the relevant recommendations of the Heydon Royal Commission report and that of the New South Wales Panel of Experts on Political Donations.

• These amendments should require that political parties provide to the AEC a list of their associated entities together with a statement as to how the governance arrangements of these entities interact with those of the party; and

• Such information should be publicly disclosed by the AEC.

The other submission of interest is the NT Labor Party’s 6 pager, that attaches 37 pages of documents, emails and media reports relevant to the conduct of the CLP’s ‘slush fund’ Foundation 51 and the regulatory efforts of both the AEC and the NTEC.

The NT goes to a general election in August this year.

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You can read my earlier pieces on Foundation 51 at the links below.

August 2014: NT Parliament calls for Foundation 51 inquiry. CLP spits dummy.

May 2014: With the top end of town in the Top End – the CLP’s Foundation 51

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