18 July 2013

You got cash? They’ve got a party. #nlpoli

The party that brought the province its first and only election finance law in 1991 is currently in the midst of a campaign to select its own leader, but the race has absolutely no rules of any kind on campaign financing.
The Liberal Party’s constitution and 2013 leadership rules are absolutely silent on campaign finances except for setting the $20,000 entrance fee every candidate had to offer up to enter the race.

Candidates are free to spend as much as they want in any way they want without any rules requiring disclosure to anyone. 

And any potential donor – individual or corporation – from anywhere on the planet can give as much as they want to the person who will lead the party after the election and who could well wind up running the province in 2015.

The lack of any rules on financial accountability and disclosure in the Liberal leadership contest leaves the it wide open to all types of excess.  The campaign can easily become a contest not of principle but of cash, as one campaign tries to outspend the other in a fight to rack up as many votes as possible. 

Given that the candidates could become premier or influential figures in a future cabinet,  they are also attractive targets for unscrupulous individuals and corporations eager to buy influence over how the provincial government spends billions of dollars in oil and mineral revenue in the coming decades. He who pays the piper calls the tune, as the saying goes.  But it is more than just as saying.  People give money to political parties for a reason.  That and the size of the prize in public funds these days make it all the more important to have rules about campaign finance, let alone clear and stringent ones. 

Until 1991,  provincial laws didn’t cover party finances at all. Things were scarcely different in the 1980s from the way they were in the 1920s when Richard Squires was said to have run the government finances out of one pocket in his pants and the party and his personal finances out of the other. 

The finance sections of the Elections Act, 1991 were an effort to change that.  For all the improvements in accountability the new Elections Act brought, section 270 specifically exempted party leadership and district nomination contest from its financial reporting sections.

While that may have been acceptable a couple of decades ago, standards and public expectations have changed a lot in the meantime. Federal election finance rules now include party leadership campaigns, for example, in order to extend public disclosure of what the piper-payer is doing as widely as possible.  The federal Liberal Party imposed its own specific rules on finance in its 2013 campaign largely to avoid creating the sort of debt problems that have plagued candidates from recent failed leadership bids.   Both are good examples of why the Liberal Party should have imposed some election finance rules of its own.

Different Party.  Different Rules.

The Liberals could have taken a leaf from the province’s Conservative Party constitution.  Although,  the Conservatives haven’t had a contested leadership since the 1990s, and their last leadership contest violated their own constitution, the party does have extensive finance rules for leadership campaigns, at least on paper.

For example, the Conservative Party constitution caps candidate spending at $200,000. Each candidate must name an official agent who must report monthly to the party’s financial compliance officer on campaign spending. The first report is due 10 days after the candidate files his or her nomination papers. Subsequent reports are due no later than the 10th of each month for the previous calendar month’s expenses.

Over in the orange world, things are nowhere near as detailed but they are still slightly ahead of the Liberals.  The New Democratic Party constitution requires the party to table audited financial statements at its annual meeting. The constitution makes no mention of leadership campaign finance rules.

Broken Promises

Of course, none of that would matter if the Conservatives had delivered on their promise in 2003 to make long overdue changes to the provincial election finance laws.  In February 2003, then Conservative leader Danny Williams, former leader Ed Byrne and member of the House of Assembly Harvey Hodder announced a package of reforms designed to improve openness and transparency in government and the House.

The Conservatives said one of the reasons for enhanced disclosure rules was to fight potential undue influence by monied interests in a leadership fight where the winner would become Premier. Once in power, though, the Conservatives ignored their pre-election commitments.  In 2010, they avoided even their own internal finance rules by rigging up the leadership with a backroom deal.  No contest.  No rules.

And in hindsight, the Conservative posturing on campaign finance reform is almost laughable. As Newfoundlanders and Labradorians learned in 2009,  the Conservatives financed some of their party activities in the run-up to the 2003 general election out of money obtained illegally by former leader Ed Byrne. The province’s chief electoral officer – himself a former president of the Conservative Party – refused to investigate the apparent violations of the existing election finances laws.

Yet for all that and while no laws are worth a damn if they aren’t enforced, the Conservative 2003 promises were good ones. They were based on sound principles like transparency and accountability that the candidates in the Liberal leadership contest have already endorsed.

The 2003 proposals would have brought the 1991 laws up-to-date and ensured appropriate public accountability for all parties.  Here’s what they proposed:
  • “We will legislate maximum donations to candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”
  • “We will set out in legislation that the cash contribution to the party from an individual or corporation shall not exceed $10,000.”
  • “We will also legislate maximum expenditures by candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”
  • “Furthermore, we will require the full public disclosure of all donations to, and expenditures by, candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”
  • “With respect to Party leadership races, we will require that donations must be disclosed when they occur, and all expenditures must be independently audited and fully disclosed within three months after the election of a new leader.”
  • “We will also enact provisions governing the ownership of unused contributions donated to candidates in leadership races. These legislative provisions will ensure that all unused donations are returned to the donors”.
Like at least half of their ethics and accountability pledges from that announcement, though, the Conservatives just didn’t deliver.  And on the promises they did deliver – like lobbyist legislation – the laws proved so loose that Conservative Party friends could lobby to their hearts’ content without ever having to comply with the spirit or letter of the law.

That’s too bad.

The Conservatives had some good ideas. It’s just too bad that their promises on accountability,  openness,  and whistleblower legislation were more honoured in the breach than the observance.  Dropping in the polls and obviously enjoying the cash that flows freely to any incumbent party, they are unlikely to introduce campaign finance reforms that would cut them off from their money supply.

While it is too late to look to the Conservatives for ethical reforms, it isn’t too late for the province.  One of the parties might just do something even if it will have to wait until after the next election.

In the meantime, though, it also isn’t too late for the Liberals to put in place the sort of campaign finance rules on their own leadership contest that embody the principles of openness and accountability everyone talks about but no one  - so far - has done anything about.