Special report on corruption risks associated with donations and lobbying

Summary

The report's own summary: Foreword, pages 6 to 7

In the body's own words

1. Conclusion

   A high-level review of lobbying regulation in other jurisdictions makes it clear that the regulation of lobbying in Victoria is inadequate.

   SPECIAL_REPORT_-_corruption_risks_associated_with_donations_and_lobbying_-_October_2022_168GDYz5, page 51

2. Conclusion

   The existing regulatory regime does not serve to fully protect the public interest and to restrain, or at least constrain, the disproportionate, excessive and privileged practices of lobbyists.

   SPECIAL_REPORT_-_corruption_risks_associated_with_donations_and_lobbying_-_October_2022_168GDYz5, page 51

Findings, opinions and statements

Allegations are not findings. A commission's finding or opinion of corrupt conduct or misconduct is not a finding that a person is guilty of a criminal offence, and the commissions say so in their reports.

No findings are reproduced in this record. This does not establish that the report contains none.

Recommendations 4

1. Recommendation 1

   IBAC recommends that the government review the existing regulatory regime for political donations to improve transparency and accountability at both the state and local levels of government through legislative reforms that: (a) promote consistent donation regulations at the local and state levels of government so that: i) the specified donation declaration threshold is only indexed once at the beginning of each state and local election cycle ii) donors and candidates at the local government level are required to declare donations over $500 to a central authority, namely the Victorian Electoral Commission iii) the $4000 general cap applies to donations made by a donor at the local government level (b) deter donors from attempting to split donations, and detect schemes designed to circumvent the general cap at the state and local level, using measures that include, but are not limited to, requiring that: i) donor entities declare: • the entity’s Australian Business Number (ABN) • the entity’s registered address • the names and addresses of executive committee members • whether any donations have been made by other associated or related entities ii) individual donors declare if the funds or resources being donated have been provided to the donor by a third-party for the purpose of making a donation (with reference to the Queensland provisions) (c) ensure that campaign donations and expenditure are reported in a manner that provides sufficient information to monitor compliance with donation caps at the state and local level, including, but not limited to, requiring that: i) all candidates register details of their dedicated campaign bank accounts with the Victorian Electoral Commission, and/or submit relevant statements for those accounts to the Victorian Electoral Commission as part of their annual returns (with reference to the Queensland provisions) ii) all candidates submit a statement of campaign expenditure after an election, to be accompanied by an audit certificate, consistent with the expenditure declaration requirements for parties (d) deter donors and candidates from attempting to use third-party campaigners to circumvent the declaration requirements and donation cap at the state and local level, using measures that include, but are not limited to: i) requiring the registration of third-party campaigners ii) requiring publication of the register of third-party campaigners iii) limiting the number of third-party campaigners to whom a person can donate to three, to mitigate the risk of the general donation cap being circumvented (with reference to the NSW approach) (e) provide a disclosure scheme that more closely resembles ‘real-time’ reporting for state and local donors and candidates (with reference to the Queensland approach) IBAC recommends that the government review the existing regulatory regime for political donations to improve transparency and accountability at both the state and local levels of government through legislative reforms that: (f) ensure appropriate measures are in place to facilitate effective monitoring at the state and local level, including, but not limited to, requiring that: i) local government candidates make a declaration within an appropriate period: • after nomination in relation to donations received prior to nomination • after an election if no donations are received by a candidate ii) donors to local government candidates make a declaration that indicates: • the industry they work in if the donor is an individual, or the type of business the corporation carries on if the donor is a company • any interest they have in a local government matter that is greater than that of other persons in the local government area, as well as the nature of their interest (with reference to the Queensland approach) (g) deter donors and candidates from attempting to use ‘fundraising’ events to circumvent the declaration requirements and donation cap at the state and local level, using measures that include, but are not limited to: i) capping the amount that can be charged to enter a relevant event ii) expressly stating that the entry fee to attend a fundraising event constitutes a political donation (with reference to the NSW approach) iii) requiring that registered parties: • publish information about the fundraising event in real time, including details of: - the candidates and/or party for whom funds are being raised - ministers, members of parliament or their staff who are promoted as attending the event - funds raised as a result of the event • submit an audited return to the Victorian Electoral Commission for each event that includes details of: - expenses incurred in relation to the event - items donated to raise funds though raffles and the like, their market value and who donated those items - tickets purchased, including details of each individual who purchased a ticket and how many tickets were purchased - funds raised as a result of the event iv) requiring that all payments and expenses relating to a fundraising event be transacted through a dedicated campaign account that has been registered with the Victorian Electoral Commission.

   Special report on corruption risks associated with donations and lobbying (tabled PDF), page 8

2. Recommendation 2

   IBAC recommends that the Department of Premier and Cabinet, together with the Department for Jobs, Precincts and Regions, examine and make recommendations that identify: (a) a best practice model for campaign expenditure at the state and local levels of government, including: i) expenditure declaration requirements that provide sufficient transparency and accountability ii) expenditure caps that can be applied in a way that helps to address the corruption risks that result from: • pressure to raise funds • avoidance of donation caps and disclosure thresholds by providing in-kind support that is not declared. (b) a best practice model for monitoring and enforcement of donations at the state and local levels of government, including: i) the structural arrangements, namely which agency or agencies would be responsible for investigating breaches and the resources required ii) the mechanisms required to monitor compliance effectively, such as more detailed audit reporting and/or requirements to produce documents or information iii) options for public reporting of breaches to deter improper conduct, and educate donors and candidates iv) whether a broader range of penalties (including fines) would increase the effectiveness of penalties as a deterrent and facilitate timely enforcement (c) a best practice model to deter donors and candidates from attempting to make in-kind contributions to circumvent the declaration requirements and donation caps at the state and local levels of government, after: i) reviewing donation returns that involve in-kind contributions from the 2020 local government elections and 2022 Victorian state election to assess compliance with existing requirements ii) assessing how training can be improved to ensure awareness of obligations iii) assessing the adequacy of existing penalties and how they apply to in-kind contributions that are not declared (d) steps that can be taken to ensure donations from political parties and associated entities registered in other jurisdictions that are received by political parties registered in Victoria comply with the Electoral Act 2002.

   Special report on corruption risks associated with donations and lobbying (tabled PDF), page 10

3. Recommendation 3

   IBAC recommends that the government introduce legislation to regulate lobbying at both the state and local levels of government in a manner that: (a) increases the transparency and accountability of lobbying activities in a way that includes, but is not limited to, the issues set out below (b) defines the following in legislation: i) ‘lobbying activity’ in a way that captures any contact with government representatives (with reference to the Scottish approach) that is made in relation to: • government or parliamentary functions, and • decision-making at the local government level ii) ‘lobbyist’ in a way that focuses on the activity being undertaken, not persons in the business of lobbying iii) ‘government representative’ in a way that encompasses all public officers who may be subject to lobbying activity, including members of parliament, electorate officers, councillors and council officers (c) ensures members of parliament who initiate meetings with a minister or their adviser: i) disclose to the responsible minister’s office: • whether the member of parliament has a private interest in the matter about which representations are being made (noting that a private interest in this context should be defined to include donations or other benefits provided by a person or entity who asked the member of parliament to make representations to the minister) • the nature of that interest (if the member of parliament has a private interest) • the names of any persons or entities who have made representations to the member of parliament requesting that they lobby the minister or their adviser (regardless of whether the member of parliament has a private interest in the matter) ii) maintain records of those disclosures in a form that is auditable, and can be made available to appropriate entities, including the lobbying regulator (d) requires that lobbyists document their contacts with government representatives, and that this information is published via an easily accessible and searchable register that includes, but is not limited to: i) the name and role of the government representative who has been lobbied ii) the subject of the lobbying and its purpose iii) the intended outcome of the lobbying communication (e) mandates the publication of extracts or summaries of ministerial diaries and ministerial staff diaries on a monthly basis, capturing any form of meeting or event (such as attendance at fundraisers), including, but not limited to details of: i) the date of the meeting or event ii) who attended iii) what interests they represented iv) the issues that were discussed at the meeting or event IBAC recommends that the government introduce legislation to regulate lobbying at both the state and local levels of government in a manner that: (f) ensures that interactions between a lobbyist and a minister or their staff are transparent, including, but not limited to measures that require: i) the creation and maintenance of records in relation to requests to meet, any associated approvals, and formal meetings between a minister or their staff and any person lobbying the minister or their staff (with reference to the approaches taken in Queensland, Scotland and Ireland) ii) the inclusion in ministerial diaries and ministerial staff diaries of details of contacts with people undertaking lobbying activity to support the monitoring and compliance activities of the lobbying regulator (with reference to the NSW and Queensland approaches) iii) the publication of a uniform Ministerial Staff Code of Conduct required under legislation, which obliges ministerial staff to comply with lobbying regulations iv) training for ministerial advisers to raise awareness of risks associated with lobbyists (g) ensures that interactions between lobbyists and electorate officers are transparent, including, but not limited to measures that require: i) electorate officers to maintain records (outlining prescribed details) of contact with those undertaking lobbying activity, noting that those records must be auditable to support the monitoring and compliance activities of the lobbying regulator ii) the Electorate Officers Code of Conduct to specify that electorate officers must comply with lobbying regulations iii) training for electorate officers to raise awareness of risks associated with lobbyists (h) prohibits success fees being given or promised to lobbyists in return for a certain outcome of any lobbying activity (i) ensures that a lobbyist cannot lobby an elected official whose election they have supported directly or indirectly, for example, through donations or in-kind support to a campaign.

   Special report on corruption risks associated with donations and lobbying (tabled PDF), page 11

4. Recommendation 4

   IBAC recommends that the Department of Premier and Cabinet examine and make recommendations in relation to the Victorian lobbying and enforcement framework to: (a) identify a preferred model for establishment of a new lobbying regulator, including: i) sanctions that will serve as an effective deterrent ii) enforcement functions and powers necessary to support regulatory activities iii) resources that will be required to ensure the lobbying regulator is able to monitor and enforce lobbying activity effectively (b) identify an appropriate instrument for the lobbyists’ code of conduct, and whether that code should be expanded to outline obligations on government representatives who are subject to lobbying activity (c) ensure the cooling-off period for those seeking to undertake lobbying activities is appropriate and consider whether the application of that requirement should be extended to all members of parliament.

   Special report on corruption risks associated with donations and lobbying (tabled PDF), page 13

Published responses

Responses to this report have not been checked.

Notes on this record

• Tabled: Legislative Assembly 2022-12-20; Legislative Council 2022-12-20.
• Authority: Independent Broad-based Anti-corruption Commission Act 2011.

Coverage

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