‘The Root of All Evil is Deeply Rooted’, as one law review title put it. Illustration: Toby Morris
‘The Root of All Evil is Deeply Rooted’, as one law review title put it. Illustration: Toby Morris

MembersMarch 2, 2020

Money talks: Why the donations crisis goes to the heart of trust in our politics

‘The Root of All Evil is Deeply Rooted’, as one law review title put it. Illustration: Toby Morris
‘The Root of All Evil is Deeply Rooted’, as one law review title put it. Illustration: Toby Morris

Today The Spinoff launches a week-long series on politics and funding. With a host of donations under scrutiny, we’ll ask: how did we end up in this predicament, and how might we fix it? Launching the series, Otago University law professor and electoral law expert Andrew Geddis explains why the subject is of such fundamental importance to our democracy.

This series is made possible thanks to Spinoff Members. Join Members to support more of this work.

As soon as human societies began to accord exchange value to cattle, cowrie shells or shiny pieces of metal, money and politics became linked.

After all, both represent forms of power. Everybody needs money – that’s why they call it “money”. (A line that admittedly sounds much better when Danny DeVito says it than it does written on the page.) And politics is, at its core, all about the distribution and deployment of social influence and authority.

The repeated use of one form of power to obtain and buttress the other is then seen across time and place. Political spending in the Roman Republic became so rampant that it arguably ended that system of rule. The potlach ceremonies among First Nations peoples in what is now northwestern Canada and the US used ritualised gift giving to “display and legitimate class, rank, privilege, kinship, and marriage”. President Suharto, the dictator of Indonesia from 1967 to 1998, is estimated to have accumulated some US$15-35 billion over his time in power.

But the link between the two becomes particularly problematic in the age of liberal democracy, where freely elected representatives are then expected to act in the interests of those they govern.

Money’s ubiquity means it is required for virtually any sort of election-related activity. Sure, there may be the odd candidate able to win a local council seat without spending anything on advertising, but even they will incur costs for petrol and the like.

Scale up to nationwide elections, where, in New Zealand’s case, you need to communicate a political party’s message to some three million voters in a way that will convince them of its merits, and an adequate supply of money becomes critical. It’s noteworthy, for example, that all of the last three “big splash” attempts to enter our national political scene share something in common.

Kim Dotcom’s “Internet Party”. Colin Craig’s “Conservative Party”. Gareth Morgan’s “The Opportunities Party”. All basically dependent on the deep pockets of their leader/benefactor.

Of course, each of these examples also proves that while having money may be a necessary ingredient for political success, it is far from a sufficient one. Even spending millions of dollars cannot compensate for a fundamentally flawed product.

Kim Dotcom at the ‘Moment of Truth’ Rally. Photo: Getty Images

Equally, a strong political kaupapa may overcome a relative lack of funds, as the Māori Party’s comparative success on the smell of an oily rag showed at the 2008 election. So, any simple claim such as “more money buys more political success” is clearly false.

Which is not to say that an opposite claim – “money is irrelevant to political success” – is clearly true. Any candidate or party who tries to argue this is the case should be asked a very simple question: why do you accept donations from supporters, and are you perpetuating a fraud on them when you do so?

Because it’s a pretty safe bet that any candidate or party given the choice of either facing an opponent possessing twice as much money or one with a smaller amount of money will plump for the latter option. After all, if money might make a difference in the contest you’re involved in, then you would be a mug to go into it at a significant disadvantage.

That fact creates problems in itself. It generates something of an arms race situation for candidates and parties, where having “enough” money depends upon how much your competitors have.

New Zealand does try to limit this effect by placing caps on how much parties or candidates can incur in “election expenses”. Those caps, however, only apply to relatively narrow range of election activities; in essence, election time advertising. Activities like opinion polling, running focus groups, candidate travel, hiring campaign advisors, hiring campaign offices and the like are not covered.

Nor does the cap on spending include any advertising carried out before the three-month pre-election period. Recall why Simon Bridges was so happy to hear from Jami-Lee Ross about the now infamous $100,000 donation:

Um, look, I just think we want it for, uh, the advertisements and the like, you know? We want it for the things that we’re gonna need to do over the next year or so, sort of outside of the – not outside of the party but um, uh, you know, like I say we want to do some more attack ads – say we want to do another regional fuel one, say we want to do an industrial relations one. We just want to keep doing those things, right?

So, the amounts that candidates and parties incur for “election expenses” each campaign represents but a fraction of the total that they actually spend on seeking election.

Simon Bridges and Jami-Lee Ross (Photos by Hagen Hopkins/Getty Images)

Getting in enough money to fund those campaigns to a level that is competitive with (or even better, greater than) your opponents then becomes crucial. If you can’t self-fund (see Kim Dotcom, Colin Craig, Gareth Morgan), you have to go out to supporters and solicit donations from them.

Which creates a potential problem for a representative democracy like New Zealand. Remember that elected representatives are expected to act in the interests of those they govern. That’s the basic deal we make when we vote – you have our consent to exercise power over us, provided you then use it in the right way.

Now, determining what those interests are and how power should be used to serve them can sometimes be, to quote Darryl Kerrigan, “a bit iffy”. The whole reason politics exists is because different people will have different views on what they are and how they best can be met. There’s a good reason why we have an ACT Party and a Green Party and a Māori Party (and a whole host of other parties) all advocating their different policies.

But one thing that definitely has to be off the table in a properly functioning system of representative democracy is any idea that elected representatives will make decisions based purely on who is paying their bills. Making such explicit transactions – “because you did this good thing for me, I’ll use my political power for you” – is considered to be a serious crime (as Philip Field discovered in 2009).

Even absent such direct quid-pro-quo deals, reliance on private funding of our national politics still poses a problem. Because, whisper it, the money that parties seek to fund their activities is not evenly distributed in our society. You only have to look over the list of disclosed donors to National or Labour (or undisclosed donors to the NZ First Foundation) to see that disparity in action. There’s not many amongst us that could even contemplate making a $15,000 (let alone $150,000) donation to the political party of our choice.

Yet remember that our governing compact – representatives have our consent to exercise power over us, provided they then use it in the right way – is premised on an assumption that we all should have an equal say in who gets to govern. We’ve long since rejected John Stuart Mill’s proposal that some people deserve to cast more votes because they have better ideas about how to run our society.

Why, then, do we allow for unlimited private funding of those who are competing for public power? Isn’t that a form of potential political influence that is just as important, or maybe even more important, than actually casting a vote? Put it this way, if I were to say to a candidate or party, “I’ll either give you $100,000 or my vote on election day,” which option do you think would get chosen?

Sure, we may say such “big” donations then have to be disclosed (albeit that such rules are looking a little bit shaky just at the moment), but that doesn’t really address the basic inequity of the situation. There’s a very small group in our society whose wealth alone gives them greater capacity to take part in deciding who will govern us all.

What, though, is the alternative? Because we can’t hope to take all money out of politics; trying to starve such activities of resources is an invitation for even greater rule bending and outright illegal practices.

Furthermore, we really shouldn’t try to do so. Having different parties and candidates (and other groups as well) all out advocating for their best views of society and its future is A Good Thing for us all. Prevent that from happening and, well, you destroy the entire basis of democracy.

Coming up with a satisfactory solution for all these sorts of issues is not easy. A 1989 law review article (whose title I really wish I’d thought of) defines the problem nicely: “On Campaign Finance Reform: The Root of All Evil is Deeply Rooted”. But these are issues that we really do have to think about.

For at the base of it all lies the fundamental question of whether we can have trust in the process that determines how we all will have to live together. Once that trust is lost, then we no longer have a basis for making such decisions. And without that, well, we really don’t have anything to go on at all.

Mad Chapman, Editor
The Spinoff has covered the news that matters in 2021, most recently the delta outbreak. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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