Expenditure of the Party Leaders Allowance (2007)

Statements of Expenditure and Public Auditors' Reports, in respect of 2007, furnished to the Standards in Public Office Commission, pursuant to Section 1.10(11)(a) and Section 1.10(11)(d) of the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2001.

Report by the Standards in Public Office Commission to the Minister for Finance in accordance with Section 1(10)(11)(e) of the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2001.

Foreword

I am pleased to furnish this report to the Minister for Finance in accordance with section 1.10(11)(e)(iii) of the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2001 (the Act). The Statements of Expenditure and Public Auditors' Reports referred to in the report were furnished to the Standards in Public Office Commission (the Standards Commission) pursuant to sections 1.10(11)(a) and 1.10(11)(d) of the Act.

Justice Matthew P. Smith
Chairman

Part 1 - Introduction

1.1 This report concerns the Statements of Expenditure of the Party Leaders Allowance for the year 1 January 2007 to 31 December 2007 furnished to the Standards Commission by the parliamentary leaders of the seven political parties qualified to receive the allowance in 2007.

1.2 The Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2001 (the Act) provides for the payment of an annual allowance to the parliamentary leader of a qualifying party in relation to expenses arising from the parliamentary activities, including research, of the party. This allowance is known as the Party Leaders Allowance.

1.3 A qualifying party is defined in the Act as a political party, registered in the Register of Political Parties, which contested the last preceding general election or any subsequent by-elections and which had at least one member elected to Dáil Éireann or elected or nominated to Seanad Éireann. Prior to the general election of 2007, the parliamentary leaders of seven political parties qualified for payment of the allowance. With the loss of its representation in the Houses of the Oireachtas, the Socialist Party did not qualify for payment of the allowance after the general election. The parliamentary leaders of six political parties are now qualified to receive the allowance.

1.4 The allowance is calculated for each parliamentary leader by reference to the number of members of the party elected to Dáil Éireann or elected or nominated to Seanad Éireann. If a qualifying party forms part of the Government, then the combined allowances in respect of its members of the Dáil only is reduced by one-third. Following the formation of a new government in 2007, this reduction now applies to the allowance received by Fianna Fáil, the Green Party and the Progressive Democrats.

1.5 The Standards Commission has a supervisory role in relation to expenditure of the allowance. It must receive and consider statements of expenditure of the allowance and to consult, if necessary, with the parliamentary party leaders on matters contained in their statements. The Standards Commission must furnish a report to the Minister for Finance on the statements received by it and to lay a copy of its report before the Houses of the Oireachtas. It must also facilitate the inspection and copying of the statements furnished to it.

Part 2 - Statements of Expenditure furnished by the Party Leaders

2.1 Background

Section 1.10(11) of the Act provides that parliamentary party leaders must prepare, or cause to be prepared, not more than 120 days after the end of the financial year in which an allowance has been paid, a statement of any expenditure from the allowance. The statement must be audited by a public auditor and must be submitted with the auditor's report to the Standards Commission within this 120 day period. Section 1.10(12)(a) of the Act provides that an allowance shall not be paid unless the statement and auditor's report have been received by the Standards Commission not more than 120 days after the end of the financial year to which the statement and auditor's report relate.

2.2 The Standards Commission wrote to the parliamentary leaders of the seven qualifying parties on 3 March 2008 and enclosed a form (Statement of Expenditure of Party Leaders Allowance form (07/PLA/EFS)) for completion and return to the Standards Commission by 31 March 2008. (This date is not specified in the legislation. However, having regard to the statutory deadline of 29 April 2008, the return date of 31 March was chosen to ensure that parliamentary leaders would have sufficient time to furnish their statements in advance of the statutory deadline.) The letter informed the parliamentary leaders that they must provide details, under the relevant headings on the form, of the specific items to which the expenditure was applied and that the form must be accompanied by an auditor's report.

2.3 The parliamentary leaders to whom the Standards Commission wrote were:

• Mr Bertie Ahern TD, Fianna Fáil
• Mr Enda Kenny TD, Fine Gael
• Mr Eamonn Gilmore TD, Labour Party
• Ms Mary Harney TD, Progressive Democrats
• Mr John Gormley TD, Green Party
• Mr Caoimhghín Ó Caoláin TD, Sinn Féin
• Mr Joe Higgins, Socialist Party.

2.4 In relation to the Labour Party, the Green Party and the Progressive Democrats where there had been a change of parliamentary party leader during 2007, section 1.10(11)(b) and (c) of the Act, provides that where a person who is the parliamentary leader of a qualifying party ceases to be the parliamentary leader of the party he/she shall prepare or cause to be prepared a statement of any expenditure from that allowance. In other words, Deputy Pat Rabbitte, Deputy Trevor Sargent and Mr Michael McDowell were each responsible for furnishing a statement of expenditure in respect of the period in 2007 during which they were parliamentary leaders respectively of the Labour Party, the Green Party and the Progressive Democrats. This provision does not apply, however, if the previous parliamentary party leader and the current parliamentary leader agree in writing that expenditure from the annual allowance paid to the previous leader during 2007 shall be included in the statement of expenditure furnished by the current leader.

2.5 The Standards Commission wrote to Deputies Rabbitte and Sargent and to Mr McDowell on 18 March 2008 advising them of these requirements. A Statement of Expenditure of Party Leaders Allowance form (07/PLA/EFS) was enclosed should they wish to complete one. A single Statement of Expenditure was completed by Deputy Gilmore (incorporating expenditure from the allowance paid to Deputy Rabbitte), by Minister Gormley (incorporating expenditure from the allowance paid to Deputy Sargent) and by Minister Harney (incorporating expenditure from the allowance paid to Mr McDowell). The required letters of agreement from Deputies Rabbitte and Sargent and from Mr McDowell were also provided.

2.6 A Statement of Expenditure/Public Auditor's Report was received by the Standards Commission from five of the parliamentary leaders of the seven qualifying parties within the specified period (i.e., by 29 April 2008). Statements of Expenditure/Public Auditor's Report were not received from the parliamentary leaders of the Progressive Democrats, Minister Mary Harney TD or the Socialist Party, Mr Joe Higgins by 29 April 2008. The Department of Finance was informed of this fact on 2 May 2008. The Progressive Democrats' Statement of Expenditure/Public Auditor's Report was subsequently received on 13 June 2008 and the Department of Finance was made aware of this on the same day. The Socialist Party Statement of Expenditure/Public Auditor's Report was eventually received on 30 June 2008.

2.7 Section 1.10(11)(e) of the Act provides that the Standards Commission must consider each statement and auditor's report furnished to it and, if necessary, consult with the parliamentary leader on any matter contained in the statement. The Standards Commission considered it appropriate to write to Fine Gael, the Green Party and to the Progressive Democrats seeking further information regarding items of expenditure contained on their Statements.

2.8 Parliamentary party leaders are required to state on their Statement of Expenditure of the Party Leaders Allowance if the allowance has been used for electoral purposes. Each of the parliamentary party leaders has stated that the allowance was not used for electoral purposes.

2.9 The Standards Commission must furnish a report to the Minister for Finance on the statements and auditors' reports received indicating:

1. whether the statements and auditors' reports have been submitted within the specified period,
2. whether any expenditure is disclosed which does not comply with subsection 1(10)(5) of the Act,
3. whether the statements are adequate, or
4. whether the statements are inappropriate.

2.10 The Standards Commission, having considered the Statements of Expenditure/Public Auditors' Reports, is now satisfied that:

1. the Statements of Expenditure were not received from the parliamentary leaders of the Progressive Democrats or from the leader of the Socialist Party within the specified period;
2. the Statements of Expenditure do not disclose any expenditure which does not comply with section 1.10(5) of the Act;
3. the Statements of Expenditure are adequate; and
4. the Statements of Expenditure are not inappropriate.

2.11 The Standards Commission is required to lay a copy of its report to the Minister for Finance before each House of the Oireachtas. A copy of the statements and auditors' reports received must be retained by the Standards Commission for three years and be made available for public inspection and copying. The Statements of Expenditure/Public Auditors' Reports furnished to the Standards Commission may be inspected and copied by members of the public at the offices of the Standards Commission, 18 Lower Leeson Street, Dublin 2. The information will also be available, in summary form, on the website of the Standards Commission www.sipo.gov.ie.

2.12 Details of the allowances paid to the parliamentary leaders are shown in Table 1:

Table 1 - Details of funding available to Parliamentary Leaders of Qualified Political Parties under the Party Leaders Allowance during 2007

* Where funding in respect of a particular year is not spent in that year, it must be accounted for in the statement(s) for the year in which it is actually spent.
** The amount included on the PD statement for 2006 as carried forward for 2007 was €277,635. This was subsequently reviewed by the party. See PD statement for 2007.

Table 2 shows the breakdown given by each political party of expenditure of the allowance during 2007.

Table Breakdown:

*The amount accounted for by the Socialist Party is €90 more than funding available to the party in 2007. Given the amount involved the Standards Commission did not request the parliamentary party leader to amend his statement. 

Categories of expenditure

(a) the general administration of the parliamentary activities of a qualifying party,

(b) the provision of technical or specialist advice likely to be required in connection with legislative proposals or potential parliamentary initiatives,

(c) research and training,

(d) policy formulation,

(e) the provision of consultant services, including the engagement of public relations services,

(f) polling or public attitude sampling in connection with parliamentary debates or initiatives,

(g) the purchase of support services for a parliamentary party from the party,

(h) the payment to a parliamentary leader of any salary or honorarium in respect of duties arising from his or her activities as such leader as distinct from those of a member of Dáil Éireann or a holder of a Ministerial office,

(i) the payment to another person of any salary or honorarium in respect of duties arising from the person's activities in a parliamentary party,

(j) the provision for, or recoupment of, transport and personal expenditure incurred by a parliamentary leader, officers or a parliamentary party spokesperson as a result of their parliamentary party function,

(k) entertainment.

Part 3 - Recommendation

3.1 The Standards Commission recommends that the legislation be reviewed in order to grant it a statutory advice function in relation to the use of the allowance. Any such advice given by the Standards Commission should be legally binding.

3.2 Background

The supervisory role of the Standards Commission in relation to expenditure of the allowance is provided for in section 1(10)(11)(e) of the Act and is set out in the introduction to this report.

Unlike the Ethics in Public Office Acts 1995 and 2001 (the Ethics Acts) or the Electoral Act 1997 as amended (the Electoral Acts), the Standards Commission does not have a statutory advice function in relation to the use of the allowance. Whereas guidelines published or advice given by the Standards Commission under the Ethics Acts and the Electoral Acts are legally binding, a view or opinion expressed by the Standards Commission in relation to use of the allowance does not have the same authority.

The Standards Commission regularly receives requests for advice as to whether use of the allowance for a particular purpose is appropriate or not. When such requests are received the Standards Commission will express a view as to whether it considers the use of the allowance for the particular purpose to be appropriate. It is aware, however, that the person seeking the advice is not required to accept or comply with the views expressed by the Standards Commission. In expressing a view as to the appropriate use of the allowance the Standards Commission has regard to whether the proposed expenditure is within the scope of the provisions of section 1(10)(1) and 1(10)(14) of the Act and that the expenditure is not prohibited under section 1(10)(5) of the Act. (Appendix 2 of this report sets out the purposes for which the allowance may and may not be used.)

There is a need, therefore, for either the Standards Commission or the Minister for Finance to be able to publish guidelines or give advice on the appropriate use of the allowance and for such guidelines and advice to be legally binding on the persons to whom they apply. Any such guidelines should be prepared in consultation with the parliamentary leaders of qualified political parties. The Minister may wish to consider introducing such a provision into the Act. In considering such a provision the Minister might have regard to the provisions of section 25 of the Ethics Acts and section 4(6) of the Electoral Acts.

Appendix 1 - Increases in the Party Leaders Allowance during 2007 and current rates of payment

Section 11A of the Ministerial and Parliamentary Offices Act 1938 (as inserted by the Ministerial, Parliamentary and Judicial Offices and Oireachtas Members (Miscellaneous Provisions) Act 2001) provides that the allowance shall increase in line with general Civil Service pay increases. An increase of 2% under Towards 2016 was applied to the allowance from 1 June 2007.

Section 8A of the Ministerial and Parliamentary Offices Act 1938 (as inserted by section 11 of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act 1973) provides that the Government may, by order, increase the allowance. (Increases made by an order of the Government generally reflect increases awarded under Reports of the Review Body on Higher Remuneration in the Public Sector.) During 2007, no such increases to the allowance were made by Ministerial Order.

As of 31 December 2007, therefore, the allowance paid to parliamentary party leaders in respect of members of Dáil Éireann was as follows:

• €68,074 per member for each of the first 10 members elected,
• €54,458 per member for each member elected from 11 to 30 members and
• €27,237 for each member elected over 30 members.

(The original amounts provided for in the Act were €48,547, €38,837 and €19,423, respectively)

As of 31 December 2007 the allowance paid to parliamentary party leaders in respect of members of the Seanad was €44,512 per member elected or nominated for each of the first five members and €22,257 for each member elected or nominated over 5 members. (The original amounts provided for in the Act were €31,743 and €15,872 respectively).

As of 31 December 2007, non-party members of Dáil Éireann received an allowance of €39,169 while non-party members of Seanad Éireann received an allowance of €22,257. (The original amounts provided in the Act were €27,934 and €15,872, respectively). The total amount paid to non-party members of Dáil and Seanad Éireann during 2007 was €429,619. Non-party members of Dáil or Seanad Éireann are not required to furnish to the Standards Commission a Statement of Expenditure in relation to the all owance.

In accordance with section 1.10(6) of the Act, these allowances are not subject to income tax.

Appendix 2 - Purposes for which the Party Leaders Allowance is provided

Section 1.10(1) of the Act provides that the allowance shall be paid to the parliamentary leader of a qualifying party in relation to expenses arising from the parliamentary activities, including research, of the party.

Section 1.10(14) of the Act provides that "expenses arising from the parliamentary activities, including research" include expenditure on the following matters:

(a) the general administration of the parliamentary activities of a qualifying party,

(b) the provision of technical or specialist advice likely to be required in connection with legislative proposals or potential parliamentary initiatives,

(c) research and training,

(d) policy formulation,

(e) the provision of consultant services, including the engagement of public relations services,

(f) polling or public attitude sampling in connection with parliamentary debates or initiatives,

(g) the purchase of support services for a parliamentary party from the party,

(h) the payment to a parliamentary leader of any salary or honorarium in respect of duties arising from his or her activities as such leader as distinct from those of a member of Dáil Éireann or a holder of a Ministerial office,

(i) the payment to another person of any salary or honorarium in respect of duties arising from the person's activities in a parliamentary party,

(j) the provision for, or recoupment of, transport and personal expenditure incurred by a parliamentary leader, officers or a parliamentary party spokesperson as a result of their parliamentary party function,

(k) entertainment.

Section 1.10(13) of the Act provides that the Minister for Finance may, by regulation, extend this list after consulting the parliamentary leaders and after considering any report made by the Standards Commission.

Section 1.10(5) of the Act provides that the allowance shall not be used for, or to recoup, expenses incurred for the purposes of an election or a referendum. During 2006, certain media reports suggested that Exchequer funding received by qualified political parties might be used to finance "pre-election" spending at the 2007 Dáil general election. "Pre-election" spending means expenses incurred on goods, property or services which were used prior to the dissolution of Dáil Éireann. The Standards Commission took the view that the allowance may only be used for expenses arising from the parliamentary activities, including research of the party and could not be used for any form of election or "pre-election" spending at either the Dáil or Seanad general elections. It wrote to each of the seven political parties who were then qualified to receive the allowance informing them of this. The Standards Commission's view was also published on its website.