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A Weekly Report from the Keyboard of Murray McCully- MP for East Coast Bays

The Auditor-General Strikes

New Zealanders have always opposed the notion of state funding of political parties. The very mention of the prospect has always been enough to prompt howls of taxpayer anguish. So, desperately short of cash to get and stay elected, the Labour Party has never been prepared to go there. Instead, they had a much better, much cleverer plan.

Since at least 1999, the Clark Labour Party has been practicing state funding of political parties - but with a difference: they didn’t actually bother telling anyone. As a result, nor did they bother actually changing the rules. All the public (and their political opponents) were able to see were occasional excursions into the realms of extraordinary dodginess. $20 million campaigns to promote “Working for Families” and taxpayer-funded bus shelter billboards proclaiming “You’re Better Off with Labour.”

One by one, these outrages against the taxpayers’ purse have found their way to the Auditor-General. And while the worst and most blatant excesses have been curbed, many have escaped the A-G’s scalpel - either because the damage had already been done, or because, as with the 1999 and 2002 taxpayer funded pledge cards, no one ever imagined they could have the sheer gall to actually mount such rorts.

Faced with the A-G’s report this week, Clark and Labour have been pleading their previous misdemeanours as some form of established convention. As if a substantial accumulation of previous form should confer some measure of immunity. In fact, the Auditor-General’s mounting anxiety has been apparent as far back as mid 2004. But Clark and Co believed they could stare him down. And this week they discovered they were wrong.

The Warning Signs

Back in August 2004, citing a pattern of regular complaints over use of public money for political promotional activity, the A-G wrote to the leaders of all political parties. He was, he said, intent on a general tidy up. And he invited party leaders to forward their views.

In the ensuing weeks, he met with each of the party leaders, (or their representatives), providing a briefing document for discussion. That document could hardly have been clearer:

”It is a generally held principle that taxpayers do not pay for political parties’ publicity, except to support a party’s parliamentary activities or the conduct of Ministerial business. This is broadly consistent with the accepted position in New Zealand that the State does not fund political parties.”

On 28 April 2005 the A-G had finished his initial work. He wrote (as has been chronicled more than once previously in this publication) to the Labour and National leaders. The A-G wanted “to offer the two major parliamentary parties (Labour and National) a briefing on the draft report and to discuss what I see as the way forward.”

The draft report was also clear as to the A-G’s view about taxpayer funded publicity:

“The basic expectations of the Cabinet Manual 2001 and the Members Handbook Guidelines are clear about conducting advertising campaigns close to a general election and not using parliamentary advertising for electioneering or related purposes.”

The A-G believed that if the Prime Minister and the Leader of the Opposition were prepared to show some leadership on the issue, a solution would be at hand. Dr Brash, of course, readily agreed to meet the A-G. But Helen Clark, no doubt embarrassed with knowledge of plans to again fund the pledge card from taxpayers’ cash, clearly in breach of the A-G’s expectations, refused to meet him.

Yes. The Prime Minister actually refused to meet the nation’s Controller and Auditor-General. This week, those chickens came home to roost.

The Law is the Law

Correctly reading the Clark/Labour line of attack, the AG’s report is emphatic:

“Some MPs and parliamentary parties have said that I have acted unfairly by ‘changing the rules’ after the event. I have not changed any rules. They are not my rules. I am simply interpreting and applying the existing law.”

The Rent-a-Ruling Strategy

The Parliamentary Service and its Minister, Speaker Margaret Wilson, have had the draft A-G’s report for several weeks. The A-G’s position has been clear (as is evident from the above) at least back to 2004. No attempt has been made to challenge or seek clarification of his views. But faced with the prospect of the final report being released, Wilson decided on a strategy of muddying the water by hiring Wellington law firm Chapman Tripp to write a dissenting view.

The Chapman Tripp opinion, drafted by Jack Hodder and colleagues, is an unconvincing piece of work - mounting no credible challenge to the Crown Law view. Poorly written, and even more poorly argued, it simply rehearses the argument run by Labour in recent weeks, that parliamentary business is whatever parliamentarians decide it is. Anything short of asking, on behalf of a political party, for money, or for a vote, is, by this reasoning permissible.

A centre-piece of the Crown Law opinion is an examination of the case law as it defines “election expenses” under the Electoral Act, as distinct from parliamentary expenditure as provided for in the Parliamentary handbook. The Crown Law opinion relies on the High Court decisions in Re Wairarapa Petition, and more recently Peters v Clarkson. Communication that was “intended to persuade the voter generally or in particular to favour the candidate” was an election expense, the High Court found in the Wairarapa case.

In the Peters v Clarkson case the Court relied on the same principle to find that material in a Bay of Plenty Times supplement about Mr Clarkson was an election expense, despite the fact that it did not expressly solicit votes:

”While accepting that the substantial majority of the advertising material contained in the feature related to Mr Clarkson’s successes as a commercial property developer in the area, it must have been readily apparent to Mr Clarkson that the feature would be extremely helpful to his election campaign and would be likely to persuade at least some voters to support him.”

It is noteworthy, of course, that this finding of the Court was reached following submissions to this effect by Mr Peters - the same Mr Peters who now claims the Auditor-General has failed to establish the state a law which is buttressed, in part, by the Peters v Clarkson case.

The Chapman Tripp opinion doesn’t merely fail to cast doubt on the logic of the Wairarapa and Tauranga cases. Astonishingly, it fails to even mention them.

That Wilson was prepared to run the rent-a-ruling strategy, having failed to earlier contest or seek clarification of the A-G’s views, was discreditable. That Hodder and co should lend their names to such an enterprise was foolish and unworthy.

Losing the Money and the Bag

The conduct of Clark, Cullen, Wilson and Co on the pledge card saga has been the classic lose/lose scenario. Having attempted to bluff the media and the public as well as the A-G over many months, they have finally had to concede that they should pay the money back. But they have done so with such bad grace, such lack of remorse or contrition that they will elicit little public sympathy. To pay back the $800,000 and receive no public credit for it is quite a feat. Yet, after 12 months of Parliamentary ducking and weaving, that is what Clark and her colleagues have managed to do.


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