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The Problem is influence
Money for Nothing? Lobbyist Frank Dunlop told the Planning Tribunal in Ireland that his phone would “walk off the desk” with calls from candidates seeking money as soon as a general election was called. There are analogies with Australia. For years the heavy reliance of both major Australian political parties on developer donations has been known. One developer (Jeff McCloy) memorably told the New South Wales (NSW) Independent Commission against Corruption he felt like a “walking ATM”. Both givers and recipients have insisted that nothing is expected and nothing is given in return for these donations, and it has been impossible to disprove this “money for nothing” proposition. Instead it has been suggested that donations are simply a way of “participating in the political process”. The Courts: donations as communication The notion that donations are simply a way of “participating in the political process” reflects US Supreme Court jurisprudence, which has elevated donations to the status of “speech” and forbidden US legislatures to act to prevent anything short of “quid pro quo” corruption. The Australian High Court followed the US Supreme Court part of the way along this path, characterising donations as a form of “political communication”. An attempt to confine donations to voters (as is the case in Canada) was successfully challenged in the Australian High Court by Unions NSW, on the basis that this was an unreasonable imposition on an “implied freedom of political communication” . A recent challenge by McCloy to the constitutional validity of the pre-existing NSW ban on donations from property developers (in place since 2009), and caps on the amount of donations (in place since 2010), was however unsuccessful in both respects. The High Court rejected the US Supreme Court’s reasoning that governments may only limit political communication to prevent quid quo pro corruption. It confirmed that the prevention of both corruption and undue influence are valid reasons for legislatures to restrict political donations, and that in the final analysis, the Australian constitution must be interpreted to serve the interests of democracy. This should come as a great relief to Australian citizens. Proving quid pro quo Anti-corruption agencies with strong investigative powers (including the power to undertake covert operations) have uncovered what many suspected was the truth, both in Ireland and Australia. There is now firm empirical evidence in both countries of cases in which donations from the property development sector have in fact had “strings attached”. Something was expected of public officials in return, whether explicitly stated or not, and that something was some form of rezoning or development approval, or an action that cleared the way for these approvals. The reality of donor influence has been admitted in the public statements of some donors and some recipients in Australia, most recently in the submissions for the plaintiffs in the McCloy case in the High Court. This evidence is backed up by research in the field of psychology. A donation, like any gift, tends to activate the very human urge to reciprocate. The resulting cognitive bias may be genuinely unconscious, but it is real, and potent. The Planning Tribunal In Ireland the Tribunal of Inquiry into Certain Planning Matters and Payments (the “Planning Tribunal”) ran from 1997 to 2008 in Ireland, and made its final report in March 2012. It found 14 separate rezonings that had been influenced by corrupt, improper or inappropriate payments in the form (or guise) of political donations. The Tribunal made adverse findings against public officials from George Redmond, Dublin’s Assistant City and County Manager, right up to a Taoiseach, Bertie Ahern. The approach taken by the Tribunal is encapsulated in a passage from its final report. The Tribunal found that the developer Owen O’Callaghan had provided his lobbyist Frank Dunlop with large amounts of cash (IR£80,000 in 1991 and IR£73,500 in 1992) and that most of this money was paid to councillors to ensure their support for the rezoning of land at ‘Quarryvale’: “The Tribunal considered that such payments were always corrupt from the perspective of Mr Dunlop and Mr O’Callaghan, and were often (although not always), corrupt from the perspective of the recipients”. Having considered an enormous amount of evidence, the Planning Tribunal developed a set of principles relating to payments to local councillors, covering both givers and recipients. These principles are summarised below. Donors In the eyes of the Planning Tribunal it was “probably corrupt” for a developer/landowner to pay money to an elected councillor, where: (a) the developer/landowner was, or was likely to be, or to become, the subject of a decision by the County Council in which the councillor was an elected public representative; (b) the councillor would be entitled to exercise the right to vote, or to otherwise act, in relation to such a decision. Depending on the circumstances, however, the payment might alternatively be classed as “improper” or “inappropriate”. The Tribunal’s concept of improper or inappropriate payments corresponds with the concept of “undue influence”. Donors often argued that payments could not be corrupt because they did not change the recipient’s actions, but this claim was either rejected or made no difference to the Tribunal’s overall view of them: “The Tribunal did not consider it necessary that the recipient was actually influenced by the payment or even aware of the payer’s intention to influence him or her for the payment to be corrupt on the part of the payer”. Recipients The principles applied by the Planning Tribunal in the case of the recipients of donations were: a) It is corrupt to solicit or accept money from a developer/landowner, specifically in return for exercising his/her vote (or for undertaking any other act open to him/her to take in his/her role as a councillor); b) It is corrupt for a councillor to exercise his/her vote in the expectation of a payment of money; c) It is inappropriate, improper or corrupt to solicit or accept money from a developer/landowner, where it is known, believed, expected or suspected that land in which they have an interest
