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The Northern Myth

Jul 16, 2017

Has the Mansfield Inquiry into NT political donations been crippled from the start?

Foundation 51 has been the subject of intense media attention, and of formal enquiries by both the Australian and the NT electoral commissions and, despite years of digging by the media, NT Labor and others, no smoking gun has been, or is likely to be found. Foundation 51 was deregistered in May 2015.

The appointment this past weekend by Michael Gunner’s Northern Territory Labor Government of retired Federal Court Justice John Mansfield to conduct an inquiry into political donations in the NT was long overdue and welcome. As Gunner noted yesterday, the Mansfield Inquiry will be an important step towards restoring public trust in the institutions of government in the NT. Finding a commissioner for this gig was always going to be tough, but I can think of no better person than Justice Mansfield for the task—he has long familiarity with the Territory and its people and institutions without being beholden to any.

But the Gunner government has bungled the conduct of the Mansfield Inquiry even before it has begun, not least by an unexplained delay in the appointment of the commissioner but also in—apparently—failing to lay the essential groundwork for the effective and efficient conduct of the inquiry. Add to that Terms of Reference that need drastic revision and it does not make for a good start.

Gunner didn’t identify—he didn’t have to—the cause of much of the lack of Territorian’s trust in their government—the four years of chaotic rule of the NT by the Country Liberal Party from 2012 to 2016 under now Independent MLA Terry Mills and his successor as Chief Minister, Adam Giles are still fresh in our minds. For those in need of a refresher, check The Northern Myth’s archives here—or grab a copy of Crocs in the Cabinet, the best account of that most turbulent time in the NT’s brief political history as chronicled by NT News writers Christopher Walsh and Ben Smee.

Proposals for a local inquiry into political donations—and its ugly cousin election funding—have been around for a while. In mid-August 2014, in a move that caught the CLP napping—literally—Independent MLA Gerry ‘Ich bin ein chook Bauer‘ Wood presented a motion for a broad-ranging inquiry into political donations aimed directly at the conduct of the CLP and its “mental and monetary creature,” Foundation 51.

More on Foundation 51 shortly but, as I wrote here the next day:

In the normal course of events the CLP Government would have squashed that motion like a bug on the windscreen of a Toyota ute. But … it appears that the CLP was caught asleep at the wheel and the motion passed on the voices … Leader of Government in the Assembly, John Elferink, opposed the motion but didn’t have the numbers present in the Assembly to defeat the resolution. According to reports, the Government only had five members—or less—in the House at the time the motion was bought on.

It took a couple of months but the CLP eventually overruled that motion by a rescinding vote where it managed to round up the numbers to kill the Humpty Doo chook-farmer’s motion.

Political donations and election funding were a constantly-scratched itch for the remainder of the CLP’s troubled term. Following Labor’s inevitable election win in late August 2016, the new Gunner government introduced a motion to establish “Options for Political Reform” and tabled Labor’s election policy paper “Restoring Integrity to Government,” a grab-bag of tepid proposals that argued—among other things—for a local ICAC and reforms to political funding and electoral processes.

As tabled by Gunner on 30 November 2016, the Terms of Reference for the Mansfield Inquiry call for that process to be finalised within 12 months. The first six references, while relatively uncontroversial, are poorly drafted and imprecise and look more like a working draft than a final document designed to inform and direct any particular lines of any serious enquiry. For mine it is inappropriate to ask Justice Mansfield to make conclusive recommendations about matters like a cap on political spending (references (1) and (4)); full or partial public funding (references (2) and (3)); and whether there have been any breaches of the NT Electoral Act in relation to political party and candidates donations (reference (7)) during the previous ten years—without directing him to broader aspects of the electoral law.

Surely it would have been better to provide a more general focus, such as directing the Mansfield Inquiry to an examination of “Part 10 – Financial Disclosures” of the NT’s Electoral Act?

Notwithstanding those limitations—and it is unclear whether the Terms of Reference will be amended or revised—Justice Mansfield should be able to construct clear lines of enquiry from at least the first seven references, which are largely directed to legislative and policy issues.

However other, more serious administrative and procedural issues remain to be clarified.

As yet no discussion paper has been produced or is available. That is an essential document that will—or should—provide key focal points for the attention of Justice Mansfield and his support staff and of any members of the public, political parties or others—think property developers or other classes of donors—that might be affected by or interested in the inquiry.

Similarly, right now it is unclear just how the Mansfield Inquiry will operate. Will it conduct private and/or public hearings or will it be conducted “on the papers” by submissions only? Will the Mansfield Inquiry be able to compel the evidence of witnesses or the production of documents—both matters provided for by the Inquiries Act under which the inquiry has been established? Will Justice Mansfield be provided with sufficient staff—think counsel assisting, research and administrative staff etc—to enable him conduct the inquiry in the manner he thinks appropriate and that the people of the NT deserve?

It is also of concern that, as The Northern Myth understands, the Mansfield Inquiry will be funded out of current allocations, i.e. it will have no separate or dedicated budget allocation.

A further issue arises in relation to the timing and length of the inquiry. As noted above, the Terms of Reference require that Justice Mansfield “inquire into and report on” the terms “by no later than 12 months from today,” i.e. by 30 November 2017. No explanation has been provided as to why it has taken eight months to appoint Justice Mansfield to the inquiry and it would surely be unrealistic to expect him to engage his legal and administrative staff, set up an office, website and the other accoutrements required for the effective conduct of his inquiry and then be expected to commence and complete his report between now and November 2017.

Apparently the NT government will “look favourably” upon any request for an extension of time.

Perhaps the most serious issues for the conduct of the Mansfield Inquiry will emerge from reference (8). It is worth setting that reference out in full.

8. Any legislative or regulatory amendments that should be made to ensure that limits on political donations and disclosure requirements cannot be avoided through the use of third parties, associated entities or other means. To this end the inquiry will investigate:

(i) the structure of Foundation 51 and the scope of its activities;

(ii) the relationship between Foundation 51 and the Northern Territory Government and its agencies, and any related conflicts of interest;

(iii) the relationship between Foundation 51 and the Country Liberal Party, and any related conflicts of interest;

(iv) the extent of direct and indirect financial and in-kind support provided by Foundation 51 to the Country Liberal Party, members of parliament and candidates for parliamentary elections;

(v) the extent of breaches of the Northern Territory Electoral Act and any other Territory legislation by Foundation 51; and

(vi) the activities of Harold Nelson Holdings and its compliance with the Northern Territory Electoral Act.

Notwithstanding that the reference specifically refers to “any legislative or regulatory amendments” that might be required, reference (8) is clearly political—in stark distinction to references (1) through (7), which are mainly legislative or policy-related. The repeated focus on Foundation 51 is particularly disturbing, unhelpful and just plain silly.

As I wrote here in May 2014—just as the furore over Foundation 51 was breaking:

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. Lantry left Mills’ employment in May 2010 and ended his directorship of Foundation 51 in July that year following a furious falling out with the party. 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.

In August 2014—at the time that Gerry the chook farmer surprised everyone by catching the CLP asleep at the parliamentary wheel—I observed that there were two distinct views as to what services Foundation 51 provided the CLP. For the CLP, Foundation 51 was just:

… a private company providing essential electoral and business research to like-minded supporters of the CLP but has no official connection with the party. Others see the relationship between the CLP and Foundation 51 very differently. For the NT Labor Party opposition, Foundation 51 is little more than a secretive slush fund that channels millions of dollars from anonymous, big-end-of-town donors to their favourite political party.

As usual, and with the benefit of hindsight—and NT Electoral Commission returns—it appears that the truth lies lost somewhere in the middle of a particularly toxic political fog. Foundation 51 has been the subject of intense media attention and of formal enquiries by both the Australian and the NT electoral commissions.  Notwithstanding that there at least seemed a reasonable likelihood that Foundation 51 could be guilty of breaches of the NT’s electoral funding laws, no further action was taken by either body or the NT Director of Public Prosecutions. And in any event, those breaches that might have been found would have been vigorously contested, relatively minor and administrative in nature, with the likely sanctions on prosecution being modest fines.

Despite years of digging by the media, Labor and others, no smoking gun has been, or is likely to be found. Foundation 51 was deregistered in May 2015. The Northern Myth understands that all necessary disclosures to both the NT and Federal electoral commissions have been filed, albeit many of those returns having been filed late.

The Mansfield Inquiry can, as Gunner said on Saturday last, deliver “a credible path forward to reform political donations in the future” and help restore trust in the institutions of government in the Territory. But if Justice Mansfield is not given the resources needed to undertake his inquiry in the manner he sees fit and is not provided with appropriate references to guide his work then the prospects of any credible reform and the restoration of trust in the NT’s governance will be severely diminished.

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In 2016 I was awarded an NT History Grant to examone the history of electoral funding and political donations in the NT. You can read more about that work at The Northern Myth post, “Follow the money, bruss!” A short history of electoral funding in the NT” here.

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