Money in Politics

The 2019 Corruption Perceptions Index: Money in Politics

This year Transparency International (TI) focused on money in politics when introducing the 2019 Corruption Perceptions Index. The global anti-corruption organisation, analysed the relationship between politics, money and corruption, including the impact of campaign finance regulations and how money influences political power and elections.

Keeping big money out of politics is essential to ensure political decision-making serves the public interest and curbs opportunities for corrupt deals. TI's research highlights the relationship between politics, money and corruption. Unregulated flows of big money in politics also make public policy vulnerable to undue influence.

• "When policy-makers listen only to wealthy or politically connected individuals and groups, they often do so at the expense of the citizens they serve."
• Within the Asia-Pacific region "Even in democracies, such as Australia and India, unfair and opaque political financing and undue influence in decision-making and lobbying by powerful corporate interest groups, result in stagnation or decline in control of corruption."
• Countries in which elections and political party financing are open to undue influence from vested interests are less able to combat corruption, analysis of the results finds.
• The outsized roles that some companies play in their national economies gives them political support that too often triumphs over real accountability.

“Frustration with government corruption and lack of trust in institutions speaks to a need for greater political integrity,” said Delia Ferreira Rubio, Chair of TI. “Governments must urgently address the corrupting role of big money in political party financing and the undue influence it exerts on our political systems.”

New Zealand and political integrity

Transparency of political party funding is essential to provide clarity about who is influencing decision making.

The lack of transparency in political party and campaign funding is putting New Zealand’s reputation for strong integrity at serious risk. It erodes trust in our elected representatives, degrades our financial well-being, and impacts on our society and how it works together.

Transparency International New Zealand (TINZ)'s recent report Building accountability: Summary of the National Integrity System Assessment 2018 Update found evidence of serious accumulating threats to the integrity of political party funding. It notes that recently there has been little progress towards more transparency in Parliament and its administration (a key recommendation in 2013) and that the problem of political party funding has grown more acute rather than being addressed.

"Make no mistake about it: despite New Zealand’s reputation for low corruption and high quality civil service, the country is surprisingly vulnerable to capture by monied interests", conclude guest authors Maria Armoudian and Timothy Kuhner,  refer to Is New Zealand becoming a plutocracy? (November 2019 Transparency Times).

They note generally:

"Research has shown that the great majority of funds available to campaigns, parties, and interest groups are provided by a tiny sliver of the population. Approximately 0.5% of the adult population controls the market for campaign funds. About 0.0001% of the adult population controls superPAC (Political Action Committee) spending. The great majority of lobbying activity favours big business interests."

"This oligarchy denigrates and corrupts democracy by its insidious influence, degrading core values — such as political equality, citizen participation and trust, government representation, responsiveness and integrity. The resulting laws and policies — as political scientists Martin Gilens and Benjamin Page have shown — serve the rich, often to the detriment of the rest of the country, creating a downward spiral toward plutocracy and climate crisis."

"Researchers who wish to document the fundraising base and economic backers of the major parties, can’t even get a foothold because of the incredibly weak disclosure rules. Under such conditions, it’s all too predictable that this country’s reputation as one of the least corrupt in the world is poised to decline. More important than our reputation for high quality civil service and integrity, we risk losing the actual reality of good government."

Political financing is a national and local issue in New Zealand

Our recent general election cycle highlighted that the issue of political financing is a local issue as well as a national issue.

Local body political candidates appear to think that the public is only interested in local body services and rates that directly impact on their households and communities. Only due to media coverage did candidates become aware that there was public interest in their sources of campaign funding.

The Auckland Transport case is a recent example of the negative way corruption can impact local communities. This case was prosecuted by the Serious Fraud Office. https://www.reportitnow.co.nz/blog/serious-fraud-office-billions-in-public-funds-likely-lost-to-fraud/

Strong integrity systems that inspect, detect, prevent and protect against corruption are essential if our local communities are to thrive. Strong local government integrity systems lead to better public services and attract population growth that results in lower rates per household.

Transparency International's recommendations

To reduce corruption and restore trust in politics, TI recommends that governments:

• Reinforce checks and balances and promote separation of powers
• Tackle preferential treatment to ensure budgets and public services aren’t driven by personal connections or biassed towards special interests
• Control political financing to prevent excessive money and influence in politics
• Manage conflicts of interest and address “revolving doors”
• Regulate lobbying activities by promoting open and meaningful access to decision-making
• Strengthen electoral integrity and prevent and sanction misinformation campaigns
• Empower citizens and protect activists, whistleblowers and journalists.

TINZ's recommendations

In its report Building accountability: Summary of the National Integrity System Assessment 2018 Update TINZ recommends that  priority be given to:

1. Strengthening the transparency, integrity and accountability systems of Parliament. Particular attention to be paid to: extending the coverage of the Official Information Act; introducing a code of conduct for members of Parliament; requiring publication of all members’ appointment diaries; and providing greater transparency around lobbying of members of Parliament and ministers.
2. Achieving greater transparency in the appointment process for statutory boards.
3. Reviewing public funding of political parties, including: (i) allocation of broadcasting time to political parties and the restrictions on parties purchasing their own broadcast election advertising; and (ii) requiring greater transparency of the finances of political parties, including donations.

True democratic governance for New Zealand

Maria Armoudian and Timothy Kuhner offer options to improve New Zealand's democratic governance.

"New Zealand has a number of options to correct its course.  Whether New Zealand takes a cue from more successful models or blazes a trail of its own, true democratic governance requires a few features:

1. At the most fundamental level, New Zealanders need access to greater transparency. With much more rigorous reporting requirements and publicly available political funding information, voters would have vital information they need to make decisions. Reports with detailed campaign contributions from $100 upwards and lobbying information, can be placed real-time, when received, into a user-friendly searchable website at the Electoral Commission
2. An outright ban on foreign contributions to candidates and parties prevents improper influence from interest groups outside our borders, or skewing our policies to favour another country
3. Hard limits on contributions to candidates and parties or other politically active groups, help to level the playing field as do outright bans on contributions from organisations such as corporations
4. Ethical requirements for lobbying including prohibitions on gifts and limitations on revolving doors help prevent access inequalities and more fair representation within our own borders."