B.C. government’s political finance bill makes key changes – but too-high donation limit means wealthy will still have influence, funneling will happen
September 18, 2017 Bradford 0
50-group coalition, and more than 6,000 B.C. voters, call for annual donation and loan limit for individuals (including candidates) of $100 (as in Quebec), stronger enforcement and penalties for violations, and annual per-vote and donation-matching public funding only if parties can prove it’s needed
High donation limit will lead to funneling of donations by businesses and unions – as happened in Quebec and at the federal level – and ongoing unethical influence by wealthy donors (in 2015, federal Liberals received almost 23% of their donations from just over 4% of wealthy donors who gave $1,100 or more)
Same changes should be made to municipal political finance system across B.C.
FOR IMMEDIATE RELEASE:
Monday, September 18, 2017
OTTAWA - Today, as the B.C. NDP prepare to introduce their political finance bill, Democracy Watch and the Money in Politics Coalition (made up of 50 groups with a total of more than 3 million members), joined by more than 6,000 B.C. voters who have signed a petition on Change.org, called on B.C.’s political parties to make the following changes before the legislature breaks for the upcoming provincial election:
ban corporate and union donations, and set an individual donation limit of $100 per year (as in Quebec);
set a limit of what candidates can give to their own campaign of $100 per year;
prohibit loans to parties except from a public fund;
only establish per-vote annual public funding to of at most $1 per vote, and annual donation-matching public funding, if the parties can prove they need it, and;
strengthen enforcement and penalties for violations.
“While it seems like the B.C. government’s political finance bill will include some key changes, the too-high donation limit will encourage funneling of donations from businesses and unions through their executives and employees and their families, as has happened in Quebec and at the federal level,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “The donation limit is much higher than an average B.C. voter can afford, and will allow wealthy people to continue to use money as an unethical way to influence politicians and parties.”
Years of experience and scandals in Quebec before 2013, at the federal level since 2007, and in Toronto since 2009, show clearly that setting a donation limit that allows individuals to donate more than $1,000 each year will allow the unethical influence of big money donations, and cash-for-access fundraising schemes, to continue in B.C.
“As Quebec, federal and Alberta donation scandals show clearly, the only way to stop the unethical, undemocratic influence of money in B.C. politics is to stop big money donations by allowing only individuals to donate only $100 a year,” said Conacher.
Enforcement also needs to be strengthened as Elections B.C. was revealed in the spring to be failing to catch violations that the media has exposed with simple audits, including appointing a special prosecutor to ensure all violators are prosecution in the recent lobbyist-donation scandal.
Democracy Watch is also challenging in court the B.C. Conflict of Interest Commissioner’s ruling that no conflicts of interest were caused by B.C. Premier Christy Clark’s high-priced, exclusive fundraising events.
The many donation scandals across the country show that low donation limits are the only way to stop the influence of big money. Few have been charged in Quebec’s corruption scandal even though an Elections Quebec audit found $12.8 million in likely illegally funneled donations donations from 2006-2011. To stop the corruption, in 2013 Quebec lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate), and required donations to be verified by Elections Quebec before being transferred to parties and candidates. B.C. should make the same democratic changes.
At the federal level, SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011. And former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees. There are likely many more examples of illegally funneling of donations at the federal level, as it seems Elections Canada has not yet done the full audit it promised to do in 2013.
As in Quebec, when Elections Canada has not yet done the full audit it promised to do in 2013 it found dozens of illegal donations. As well, in a 2013 scandal in Alberta, a coalition of construction companies made it clear that Elections Alberta did an audit in 2012
their big money donations were conditional on the Alberta government changing the labour law.
As well, the Liberals have been recently caught in a cash-for-access scandal as Prime Minister Trudeau and several Cabinet ministers have attended about 90 high-priced, exclusive events since January 1, 2016. And, as the Globe and Mail reported on October 25th, one of the events was a fundraising event to be attended by the Finance Minister that a drug company executive helped organize while his company lobbied Finance Canada.
Democracy Watch filed a complaint about the event with the federal Lobbying Commissioner who is investigating, and also a complaint about another event the same drug company executive organized for Justin Trudeau in August 2015, and a complaint about another event top Liberal donors were invited to in September 2016, as well as a complaint about the Trudeau Cabinet selecting their own ethics and lobbying watchdogs. Most recently, Democracy Watch filed a complaint about a big money fundraising event held by a corporate board member for the Liberals in August 2014.
The results of Democracy Watch’s research also show that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised.
In addition, the federal Liberals hold special events for donors who donate $1,500 or more annually (they become members of the exclusive Laurier Club). As the Globe and Mail reported recently, based on Elections Canada figures only 790 people (0.85% of all donors to the Liberals) donated $1,500 or more in 2015, and in 2014 only 522 people (0.68% out of 77,064 total donors) donated $1,200 or more (the amount needed then to attend a Laurier Club event).
Toronto’s experience is another example of how high donation limits allow donors to get around bans of corporate and union donations. Such donations were banned in Toronto elections in 2009, and individual donations limited to $750 annually, but a 2016 analysis by the Toronto Star found that big business and other special interest group executives and their families continue to give large amounts to city councillors.
Loans from financial institutions must also be limited to ensure financial institutions, businesses and unions can’t use loans as a means of unethical influence. Loans should only come from a public fund and be limited to the average total amount donated during the previous two years.
If the parties can prove that they need public funding, annual per-vote funding should be no more than $1 per vote, and the parties should implement a similar annual public funding matching system as Quebec ($2.50 for the first $20,000 raised annually by each party, and $1 for the first $200,000 raised annually). Elections Quebec has analyzed the results of Quebec’s changes and found that the parties are still adequately funded.
“To match Quebec’s world-leading democratic system, B.C. must limit individual donations to about $100 annually and, if the parties can prove they need it, use per-vote and donation-matching public funding to give parties and candidates funding based on their actual level of voter support,” said Conacher. “Similar changes should be made to B.C.’s municipal law, taking into account that there are no parties in most municipalities, to ensure every city and town across the province has the same democratic rules.”
The key changes that must be made in B.C. to democratize its political finance system are as follows (and similar changes should be made province-wide to the municipal political finance system, taking into account that many municipalities do not have political parties):
ban donations by corporations, unions and other organizations (Quebec enacted such a ban in the late 1970s);
limit annual combined total donations of money, property and services by individuals to $100-200 to each party (Quebec’s limit is $100), and establish the same limit on candidates donating to their own campaign, with donations routed through the election watchdog agency (as in Quebec);
prohibit loans to political parties, riding associations and candidates, except from a public fund (with loans limited to the average annual amount of donations received during the previous two years);
limit spending leading up to, and during election campaigns by parties, nomination race and election candidates, third party interest groups, and also candidates in party leadership races;
require disclosure of all donations and gifts of money, property, services and volunteer labour given to any party, riding association, politician, nomination race, election or party leadership candidate, including the identity of the donor’s employer, and board and executive affiliations (and the identity of anyone who assists with any fundraising);
give annual public funding for parties based on each vote received during the last election (no more than $1 per vote, with a portion required to be shared with riding associations);
give annual public funding for parties matching up to the first $500,000 raised (as in Quebec where the first $200,000 raised is matched);
give public funding matching up to $25,000 that each nomination race and election candidate (including an independent candidate) raises (similar to Quebec's matching funding system), and public funding matching up to $100,000 that each party leadership campaign candidate raises, and;
require election, donation and ethics watchdogs to conduct annual random audits to ensure all the rules are being followed by everyone;
Elections B.C., or the Auditor General, must be empowered to review all government advertising and to stop or change any ad that is partisan or misleading;
all penalties for violating donation and spending rules must be increased to minimum $100,000 fine and a multi-year jail term, and loss of any severance payment, and a partial clawback of any pension payments, and;
Elections B.C. must be required to disclose the rulings they make on all complaints they receive as soon as they make the ruling, and to disclose the rulings they make on all investigations they initiate themselves.