2007 Donation Statements

Donation Statements furnished by Political Parties for 2007

Report by the Standards in Public Office Commission to the Chairman of Dáil Éireann pursuant to section 4(1) of the Electoral Act 1997

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Foreword

I am pleased to furnish this report to the Ceann Comhairle in accordance with section 4(1) of the Electoral Act 1997 (the Act). The report relates to annual Donation Statements/Statutory Declarations, in respect of 2007, furnished to the Standards in Public Office Commission (the Standards Commission) by political parties pursuant to section 24 of the Act.

Justice Matthew P. Smith
Chairman

Part 1 - Introduction

This report concerns Donation Statements and Statutory Declarations, in respect of 2007, furnished to the Standards Commission by political parties pursuant to section 24(1)(a) of the Electoral Act 1997, as amended (referred to hereafter as "the Act").

Currently there are 14 political parties which are registered to contest Dáil or European elections and who are required to furnish a Donation Statement to the Standards Commission. Section 4(1) of the Act requires the Standards Commission to consider every statement and notification furnished to it in relation to political donations and where it considers it appropriate to do so, to furnish a report in writing to the Chairman of Dáil Éireann (Ceann Comhairle) on any matter arising.

Table 1 below provides summary details of the donations disclosed by political parties in 2007.

As can be seen the total amount of donations disclosed by political parties for 2007, a year in which Dáil and Seanad general elections were held, was €266,485. Closer analysis of the donations disclosed shows that of this figure, donations totalling €222,793 were donations to political parties from their elected representatives. Donations which were disclosed by Sinn Féin (€187,223) and the Green Party (€29,750) were all from their elected representatives. Fianna Fáil and the Labour Party each disclosed three donations totalling €19,044 and €18,648 respectively. Fine Gael and the Progressive Democrats furnished "nil" Donation Statements. Of the remaining eight smaller political parties, only the Socialist Party disclosed a donation. Details of donations disclosed by political parties are contained in Appendix 1 to this report.

The Standards Commission's report on the disclosure of donations by political parties for 2006 showed that donations totalling €140,753.35 were disclosed by political parties (of which €123,653 were donations from elected representatives of the parties). In its report the Standards Commission suggested a review of the transparency of the funding of political parties. Table 2 below gives details of the total donations disclosed by the six main political parties and their elected representatives for 2007. It also shows the total donations disclosed by unsuccessful candidates of these parties at the Dáil general election and compares the total amount of donations disclosed against election expenditure which was disclosed by the parties and their candidates at the Dáil general election.

Table 2 Comparison of donations disclosed by the six main political parties, their elected representatives and unsuccessful Dáil candidates against expenditure incurred by the party and its candidates at the Dáil general election.

* This figure in this column excludes donations which were returned by representatives (for being in excess of the maximum prescribed limit) and donations which were already disclosed by representatives who had been unsuccessful candidates at the Dáil general election.

** The figure is this column relates only to expenditure on goods, property or services which were used during the election period only (i.e. from 29 April 2007 to 24 May 2007). It does not include expenditure on goods, property or services which were used prior to 29 April 2007.

It is evident from the above figures that in terms of transparency there is a large gap between the amount of disclosable donations and reported expenditure. In view of the fact that the reported expenditure relates to the 3 week election period only and does not include pre-election spending, the gap between donations disclosed and election expenditure is even wider. The difference is not explained by the fact that political parties receive public funds as this funding may not be used for electoral purposes. It is not transparent, therefore, how the parties have financed their election campaigns.

The mix of public and private of funding of political parties which is provided for in this jurisdiction is accompanied by rules and reporting mechanisms to ensure that public money is allocated on an equitable basis and is utilised for the purposes intended and that donations and election spending are regulated. This approach is generally in keeping with Recommendation (Rec (2003)4) of the Committee of Ministers of the Council of Europe.

The Standards Commission is satisfied that the public financing of political parties is sufficiently transparent. (Details of funding received by political parties under the Act and under the Party Leaders Allowance legislation and its expenditure is provided to the Standards Commission and is in the public domain). The Standards Commission has concerns, however, in relation to the transparency of the private funding of political parties. It is obvious that political parties are soliciting donations which are below the disclosure threshold. The Standards Commission does not consider that there is anything wrong with this. However, if the purpose of the Act is to demonstrate transparency in how political parties are funded and in particular how political parties and their candidates fund election campaigns, then this part of the legislation is not achieving that purpose. In that regard, therefore, the Standards Commission reiterates its recommendation that a new approach to the general funding of political parties is required which, in keeping with Recommendation (Rec (2003)4) of the Committee of Ministers of the Council of Europe, would require political parties to furnish accounts to an independent authority. Such accounts would specify all donations received by the party and disclose details of donations over a certain value. These accounts would subsequently be published. The Standards Commission recommends that any review of the provisions of the Act which may be undertaken as part of the proposal in the Programme for Government to establish an Electoral Commission should consider this suggestion.

Part 2 - Disclosure of donations by the appropriate officers of political parties

A political party is defined in the Act as a party that is registered in the Register of Political Parties to contest a Dáil or European Parliament election. Section 71 of the Act provides that each such political party must appoint an appropriate officer for the purposes of furnishing the party's Donation Statement and carrying out certain duties provided for in the Act. Where no appropriate officer stands appointed at any given time, the leader of the party is deemed to be the appropriate officer.

During 2007, a new political party, People Before Profit Alliance, registered with the Registrar of Political Parties as a political party for the purposes of contesting Dáil and Local elections. The Standards Commission wrote to the party on 12 July 2007 advising it of the requirements of section 71 of the Act and requesting it to provide details of its appropriate officer. A reminder letter issued on 13 February 2008 informing the party that in the absence of the appointment of an appropriate officer, its leader would be deemed to be its appropriate officer, and as such would be responsible for furnishing the party's annual Donation Statement. No reply was received from the party. The Standards Commission wrote to the Office of the Registrar of Political Parties concerning the difficulties it had experienced in obtaining a reply from this particular party. A reply was subsequently received from the People Before Profit Alliance on 29 May 2008.

Section 24(1)(b) of the Act provides that the appropriate officer of a political party must furnish a Donation Statement to the Standards Commission not later than 31 March every year. The Donation Statement must show, in relation to the preceding calendar year, whether or not, during that year, the party received any donations exceeding €5,078.95 in value. Section 22(2)(d) of the Act provides that the values of donations received from the same person in the same year must be aggregated and, if the total value exceeds €5,078.95, the donations must be disclosed. Where a donation in excess of €5,078.95 has been received, the actual value and nature (i.e. cheque, cash or property/goods) of the donation must be stated together with the name, address and a description of the donor (i.e. whether the donor is an individual, company etc..) In accordance with section 24(3) of the Act, the Donation Statement must be accompanied by a Statutory Declaration to the effect that the Donation Statement is correct in every material respect and that all reasonable action has been taken by the appropriate officer in order to be satisfied as to its accuracy.

In accordance with Section 22(2)(a) of the Act, a donation to a political party means any contribution given for political purposes by any person. A person means an individual, a body corporate or an unincorporated body of persons.

A donation can include:

1. a donation of money;
2. a donation of property or goods;
3. the free use of property or goods;
4. a free supply of services;
5. the difference between the commercial price and the (lower) price charged for property, goods or services; (this can include a loan provided to a political party by a financial institution at terms and conditions which are more favourable than that provided by the financial institution to other individuals. It can also includes loans provided by persons other than financial institutions. Details of the Standards Commission's position with regard to the issuing and repayment of loans are set out in part 4 of its guidelines for political parties which were published in December 2006.)

A donation can also include the net value of a contribution to a fund-raising event organised by a political party. The costs of holding a fund-raising event are deducted from the proceeds of the event for the purposes of calculating the net value of each person's contribution to the event. A political party is not required to disclose the total value of the proceeds of a fund-raising event.

Where a political party (including a branch of a political party) organises a fund-raising event on behalf of a TD, Senator, MEP or candidate at an election and the proceeds of the event are passed to him/her, the party is regarded as an intermediary accepting donations on the person's behalf. The contributions to the event are deemed to have been made to the TD, Senator, MEP or candidate concerned and he/she is responsible for disclosing the donations if required to. If, however, the funds are retained by the party, the contributions to the event are deemed to have been made to the party.

Section 22(2)(c) of the Act provides that where a donation is made to a TD, Senator or MEP and is passed on to a political party and a written acknowledgement of the donation is received from the party, the donation will be deemed to have been made to the party. Section 22(2)(c)(i) of the Act provides that where a donation is made to a candidate of the party at a local election or to a member of the party who is a member of a local authority the donation is deemed to be a donation to the party. This provision was introduced by the 1998 Electoral (Amendment) Act. It has not been amended, however, to take account of the fact that candidates at local elections and members of local authorities have their own disclosure requirements under the Local Elections (Disclosure of Donations and Expenditure) Act 1999 as amended. In its guidelines for political parties the Standards Commission states that it will only regard a donation made to a candidate at a local election or a member of a local authority as having been made to a political party if the candidate or member concerned has passed the donation to the party and has received a written acknowledgement from the party that it has accepted the donation. Political parties are not, therefore, required to account for donations which have been received by candidates at local elections or members of local authorities and which have not been passed on to the party.

Part 3 - Political Donations Account

Section 23B(1) of the Act provides that if a political party receives a monetary donation in excess of €126.97, it must open and maintain an account in a financial institution in the State and must lodge that donation and any further monetary donations, of whatever value, to that account. This requirement came into effect on 1 January 2002.

In accordance with section 23B(3), a Donation Statement/Statutory Declaration furnished to the Standards Commission by the appropriate officer of a political party, which was required to open a political donations account, must be accompanied by a statement provided by the financial institution in which the account was opened. The statement from the financial institution must specify all transactions that have taken place in relation to the account during the year to which the Donation Statement/Statutory Declaration relates.

The Donation Statement/Statutory Declaration must also be accompanied by a Certificate of Monetary Donations on which the appropriate officer confirms that all monetary donations received during the year were lodged to the account and that all amounts debited from the account were used for political purposes. The Certificate is accompanied by a separate Statutory Declaration.

Part 4 - Receipt of Donation Statements and Certificates of Monetary Donations

In accordance with section 24(1)(b) of the Act, the Standards Commission produced a Donation Statement/Statutory Declaration form (07/PP/DS) for use in respect of the 2007 calendar year. This form was sent to the appropriate officer of each of the fourteen registered political parties on 29 February 2008, for return by the statutory deadline of 31 March 2008.

The Standards Commission also produced a Certificate of Monetary Donations/Statutory Declaration form (07/PP/CMD) for use in respect of the 2007 calendar year. This form was also sent to the appropriate officers on 29 February for return by 31 March 2008. In recognition of the fact that the political donations accounts of some of the smaller political parties may not have been active during 2007, a political party whose political donations account was not active during 2007 was required only to state this on the Certificate of Monetary Donations/Statutory Declaration form and was not required to complete the Statutory Declaration or to forward a copy of a bank statement in respect of 2007.

Table 3 below shows the dates on which each political party furnished its statutory documentation to the Standards Commission.

Appropriate officers of political parties which had not furnished any statutory documentation by 31 March were sent written reminders on 7th and 23rd April and on 6 May 2008. Each reminder referred to the offence under section 25(1)(c) of the Act for failure to furnish a Donation Statement and where required to, a Certificate of Monetary Donations and bank statement by the statutory deadline. The final reminder informed the parties concerned that if the relevant return was not received within 7 days the Standards Commission would consider referring the matter to the Gardaí. Files in relation to the appropriate officers of The Workers' Party, The Communist Party and the Socialist Workers Party were in the process of being prepared when the Donation Statements and Certificates of Monetary Donations were received.

Part 5 - Prohibited Donations

Section 23(1) of the Act provides that a political party must not accept, either directly or indirectly, an anonymous donation valued in excess of €126.97. If such a donation is received, it is required to be notified and remitted to the Standards Commission not later than 14 days after its receipt.

Section 23A(2) of the Act provides that a political party must not accept a foreign donation. A foreign donation is a donation from:

1. an individual (other than an Irish citizen) who resides outside the island of Ireland, or
2. a body corporate or unincorporated body of persons which does not keep an office in the island of Ireland from which one of more of its principal activities is directed.

The Standards Commission was not notified by any of the political parties of the receipt of an anonymous or foreign donation.

Section 23A(1) of the Act provides that the maximum value of donations which a political party may accept from same donor in the same year is €6,348.69. Where a donor makes more than one donation to the same party, in the same year, the values of the donations must be aggregated and the donations treated as a single donation. When submitting a Certificate of Monetary Donations for the Dublin North East Comhairle Dáil Cheantair Accounting Unit, "the responsible person" (see Part 5 below) informed the Standards Commission that the accounting unit had received two donations of €6,500. In each case evidence was provided that the amount in excess of the maximum prescribed limit of €6,348.69 (€151.31 in each case) had been returned to the donors.

The appropriate officer of Fianna Fáil, Mr. Seán Dorgan was not aware of these donations when completing his Donation Statement. It was necessary to return his Donation Statement in order that it could be amended. Part 6 of the Standards Commission's guidelines for political parties recommends that all donations exceeding €100 in value which are received by a branch or subsidiary organisation of a political party should be recorded and notified to the party's appropriate officer for the purposes of observing the maximum prescribed acceptance limit. Mr. Dorgan was asked to ensure that responsible persons and treasurers of local organisations of the party are fully aware of their obligations in this regard.

Section 23A(5) provides that where a donation in excess of the maximum prescribed limit, is received by a political party, the party must notify the Standards Commission within 14 days and remit the donation, or in the case of a monetary donation, that part which is over the limit, to the Standards Commission. As an alternative to notifying and remitting the donation to the Standards Commission, a political party may, within 14 days, return the donation, or in the case of a monetary donation, that part which is over the limit, to the donor and keep a written record of that return for the purpose of it being furnished to the Standards Commission, if required. It is an offence under section 25(1)(b) of the Act to fail to comply with this requirement. It is the practice of the Standards Commission not to seek a prosecution of this offence if the person has otherwise complied with the requirements of the Act, i.e. by returning or remitting the excess donation. It was evident in this case that the Dublin North East Comhairle Dáil Cheantair Accounting Unit had not returned the excess donations within 14 days of their receipt. The Standards Commission decided, however, not to refer the matter to the Gardaí.

Part 6 - Accounting Units

Section 23B(2) of the Act requires the appropriate officer of each political party to notify the Standards Commission of the name and address of each of its "accounting units" and the "responsible person" of each accounting unit. An accounting unit means a branch or other subsidiary organisation of the party, which, in any particular year, receives a donation, the value of which exceeds €126.97. The "responsible person" is the treasurer or any other person responsible for dealing with donations to the unit.

An accounting unit, on receipt of a monetary donation in excess of €126.97, must also open and maintain a political donations account in a financial institution in the State and must lodge the donation and any further monetary donations received, of whatever value, to the account. The responsible person of the accounting unit must, by 31 March each year, furnish a statement from the financial institution in which the account is held together with the Certificate of Monetary Donations, to the Standards Commission, stating that all monetary donations received during the preceding year were lodged to the account and that all amounts debited from the account were used for political purposes. The Certificate of Monetary Donations is accompanied by a Statutory Declaration. It is an offence for the responsible person of an accounting unit to fail to comply with this requirement.

The Standards Commission wrote to the appropriate officers of each political party on 19 February 2008 requesting details of the party's accounting units. The letter provided details of each accounting unit of the party which had made a return to the Standards Commission in respect of 2006. The appropriate officer was asked to inform the Standards Commission of any change of an accounting unit and/or their responsible person (including change of contact details) and to provide details of any accounting units and their responsible persons which were not on the list.

On 29 February 2008, the Standards Commission wrote to the responsible person of each accounting unit enclosing a Certificate of Monetary Donations/Statutory Declaration form. In recognition of the fact that the political donations accounts of some accounting units may not have been active during 2007 a separate form (Form 2) was also enclosed. Where a political donations account was not active during 2007, the responsible person of the accounting unit was required to complete Form 2 only and was not required to complete the Statutory Declaration or to forward a copy of a bank statement in respect of 2007.

Table 4 below gives details of the number of accounting units of each party contacted by the Standards Commission in 2008. The Standards Commission is still pursuing those accounting units which have not provided a return.

The Standards Commission continues to experience difficulties in supervising this part of the legislation. It has referred to these difficulties in its annual report for 2006. The Standards Commission is aware that a contributory factor is that in some cases branches of political parties are slow to inform party headquarters of the receipt of a donation. The Standards Commission considers that this part of the legislation could be improved if the responsible person of a branch of a political party was required to notify the Standards Commission where a donation in excess of €126.97 is received. An offence might be introduced in the Act for failing to comply with this requirement. This would remove an onerous and possibly unfair responsibility on appropriate officers to notify the Standards Commission of branches of the party which have received donations in excess of €126.97.

Part 7 - Publication of Statutory Documentation

In accordance with section 24(7)(a) of the Act, the Standards Commission has today, laid the Donation Statements/Statutory Declarations furnished by political parties before each House of the Oireachtas.

In accordance with section 73 of the Act, the Standards Commission has made the Donation Statements/Statutory Declarations available for public inspection and copying at its offices on 18 Lower Leeson Street, Dublin 2. The information is also available in summary form, on its website at www.sipo.gov.ie

In accordance with section 23(B)(8) of the Act, details of Certificates of Monetary Donations and bank statements furnished to the Standards Commission by political parties and their accounting units will not be laid before the Houses of the Oireachtas or put on public display.

Table 1 - Donations disclosed by Sinn Féin

Table 1(a) - Donations disclosed by Sinn Féin (continued)

Table 2 - Donations disclosed by the Green Party

Table 3 - Donations Disclosed by Fianna Fáil

Table 3 - Donations Disclosed by Fianna Fáil

Table 4 - Donations disclosed by the Labour Party

Table 5 - Donations disclosed by the Socialist Party