Electoral (Amendment) Bill, 1998: Second and Subsequent Stages.

: I move: "That the Bill be now read a Second Time."

This is a short Bill to amend certain sections of the Electoral Act, 1997, relating to the disclosure of donations for political purposes and the regulation of expenditure at elections. The need for the Bill arises from the experience gained in operating the 1997 Act to date, particularly the legal interpretation applied by the Public Offices Commission to Parts IV and V of the Act. It is no surprise that difficulties have arisen, as we sail in uncharted waters in so far as the disclosure and expenditure requirements of the 1997 Act are concerned. Although there was provision for furnishing election expenditure statements up to 1963, the requirements then and the present public scrutiny of all things political are not comparable. I, for one, do not remember the pre-1963 regime and so far as I know there is only one Member of the House who was a Member when that arrangement relating to the publication of election expenses operated.

The Government has no problem with the principles of Part IV of the Electoral Act, 1997, which deal with the disclosure of political donations. I made the same point on Committee Stage of the Bill before the House last year. This Bill seeks to make the 1997 Act more workable following the initial experience of the reporting arrangements for disclosure of donations and the furnishing of statements of election expenses. Following consultation between the party Whips, I understand the amendments are acceptable to all the parties with the exception of the Green Party. Even though the Bill has 18 sections, the substantive changes are contained in six sections. Most of the other sections contain consequential drafting amendments.

The amendments to the Electoral Act, 1997, broadly provide for the following: the modification of the definitions of the expressions "donation" and "election expenses" as used in Parts IV, V and VI of the Act; clarification that a donation received by an elected representative or a candidate of a political party at an election, which is passed on by that person to the political party, will be regarded as a donation to the party, provided a written acknowledgement is received by the elected representative or candidate from the party; a requirement that a person who makes donations to several members of the same party in the same year must furnish a donation statement to the Public Offices Commission if, when aggregated, the donations for the year exceed the disclosure requirement of £4,000 for a political party — this will replace the existing requirement on political parties to disclose such multiple donations; a clarification of the position in relation to election expenses incurred by a political party or a candidate at a Dáil general election and by-election and at a Presidential or a European election; the removal of the ceiling on the limit of a candidate's election expenses which his or her party may incur at an election.

Section 3 will amend section 3 of the 1997 Act, consequent on an amendment in section 6 of the Bill. Section 3 of the 1997 Act makes provision for the variation of monetary amounts in that Act by order of the Minister. The amendment includes a reference to the new subsection (1A) in section 24 in the list of sections which have monetary amounts which can be varied by ministerial order, in accordance with changes in the consumer price index. The monetary amount referred to in section 24(1A) is £4,000, which will be the limit for disclosure by a donor of multiple donations in any year to different members of a political party.

I will move a further amendment to section 21 of the 1997 Act on Committee Stage concerning the number of votes necessary to be obtained at a Dáil by-election to qualify for reimbursement of a candidate's expenses. The number of votes to be obtained to qualify for reimbursement of election expenses will be the same proportion as at a general election.

Section 5 includes the first substantive amendments in the Bill. It provides for amendments to the definition of "donation" as used in section 22 of Part IV of the 1997 Act. The first amendment in paragraph (a) of section 5 provides that benefits derived by a candidate from a service rendered at an election by an individual in the employment of a political party will not be regarded as a donation to the candidate, provided the individual is not in receipt of any extra reward or benefit in kind for the service. This is in keeping with the general thrust of the 1997 Act that benefits derived by individual candidates, elected representatives or political parties from services or facilities which are publicly funded are not deemed to be a donation or an election expense. If such a provision is not included it would be nearly impossible to apportion the cost of an individual employed at party headquarters among many candidates of the party at an election. It would involve keeping detailed time sheets. In my view, the administrative work involved in keeping such detailed records would be out of proportion to the benefits obtained by the individual candidate.

The amendment in paragraph (c) provides that expenditure by a political party on behalf of its candidates at an election will not be regarded as a donation to the candidates, except in the case of a monetary contribution to a candidate which will be regarded as a donation. This amendment clarifies a point raised by the Public Offices Commission. It will avoid the need for double disclosure as such expenditure by a national election agent of a political party on behalf of each of the party's candidates is required to be included in that agent's election expenditure statement. It also forms part of the candidate's election expenditure limit. The exclusion of this matter from the definition of a "donation" will not inhibit disclosure of the expenditure involved.

The section also includes in paragraph (d) an amendment to the 1997 Act which provides that a donation received by a Member of either House of the Oireachtas, a representative in the European Parliament or a candidate at a Dáil, Seanad or European election will be regarded as a donation to the person involved unless it is passed on by him or her to the person's political party and a written acknowledgment of the donation is received by the person from the party. In that case, the donation will be regarded as a donation to the party and it will have to be disclosed by the party if it exceeds £4,000. Disclosure by the elected representative or candidate is not required in these circumstances. This amendment will clear up a legal doubt raised by the Public Offices Commission which would require double disclosure even though an individual was merely a channel between the donor and the intended beneficiary, the party.

Paragraph (b) of section 6 will amend section 24 of the 1997 Act to require a donor who makes donations to several members of the same party in the same year to furnish a donation statement to the Public Offices Commission, if the donations for the year, when aggregated, exceed £4,000. The disclosure requirement applies to the donations whether the individual donations exceed the disclosure threshold for the individual to whom they were made and fall to be disclosed separately by the individual. A political party will not be required to disclose such donations covered by the new subsection.

The main purpose of this amendment is to make it unnecessary for political parties, not only the larger parties but also the smaller parties, to introduce elaborate bureaucratic procedures to trace all donations, even very small donations, to every member of the party in order to ascertain if the aggregate of donations from any one source exceeds £4,000 in any year. I referred to this problem when the 1997 Act was being discussed on Committee Stage last year. The large bureaucratic exercise required would far outweigh the benefit sought from the present legal requirement. The amendment will put the onus on an individual who makes multiple donations to the same or different members of a political party in a year, which exceed £4,000 in aggregate, to make a donation statement to the Public Offices Commission. A Member of the Oireachtas, an MEP or unsuccessful candidate at elections to these institutions will still be required to submit a donation statement for any single donation exceeding £500 or multiple donations from the same source exceeding £500 at an election, or in a year, whichever period applies. The donation statement by a donor of multiple donations exceeding £4,000 in a year to the members of the same political party will have to include the name of the political party and the individual donees to whom the donations were made.

I will be moving two amendments to section 6 on Committee Stage. The main amendment will clarify that if one or more of the multiple donations is made directly to the party as well as to individual members of the party, then such donations will be included in the total of the donations for disclosure purposes. The other amendment is a consequential drafting amendment.

Section 6 restates, with an amendment, section 24(1)(b) of the 1997 Act. It provides an extra month for political parties to furnish donation statements for the period from 15 May to 31 December 1997. The latest date for furnishing such statements will be 30 April next. The deadline for submitting donation statements by political parties will revert to 31 March in future years. The extension of time is being provided to allow political parties to take on board the changes included in the Bill.

Section 7 provides for the insertion of a new section in the 1997 Act to prohibit an elected representative, a candidate of a political party at an election or any other member of a political party from accepting a donation from a donor if he or she knows or has reason to believe that the donor in question will be required to make a donation statement and does not intend to comply with the requirement. If, notwithstanding the prohibition on the acceptance of such a donation, an elected representative, a candidate of a party at an election or any other member or agent of a party receives a donation, he or she will be required to notify the Public Offices Commission and surrender the donation or its value to the commission. The commission will be required to cause a copy of such a notification to be laid before each House of the Oireachtas and to dispose of the donation or its value in such manner as directed by the Minister for Finance. This prohibition on accepting a donation where the donor is considering not submitting a donation statement is a corollary to the change proposed in section 6. The section demonstrates that the amendment proposed in section 6 is not made lightly and it is not intended to convey a softening of the Government's attitude to the principle of disclosure of donations for political purposes.

Section 25 of the 1997 Act provides for offences and penalties for non-compliance with the various requirements in Part IV of the 1997 Act. Section 8 of the Bill provides for an amendment to insert new subsections (1)(a) and (1)(b) in section 25 to designate as an offence non-compliance with the disclosure requirement of section 24(1)(a) and with the prohibition on the acceptance of a donation and other requirements of section 24(a) inserted by section 7 of the Bill. The penalties are the same as the existing penalties in the 1997 Act.

Section 10 of the Bill will clarify that the expression "election expenses" means all expenditure for electoral purposes incurred on the provision of property, goods or services for use during the period of the election. In the case of a Dáil general election, this period commences on the date of the dissolution of the Dáil and ends on polling day. In the case of a Dáil by-election, the period extends from the date of the issue of the writ to polling day and, in the case of a European election, it commences on the date of the polling day order and ends on polling day.

The amendments to section 31 clarify that all election expenses incurred before the commencement of the relevant period for an election on the provision of property, goods or services for use during the election period will be regarded as election expenses and will have to be accounted for by the relevant election agent. The reason for these amendments is to assist candidates in an election and the Public Offices Commission in implementing the Act.

There has been much discussion on whether an elected representative's normal constituency work is to be regarded as an election expense. This work was never intended to be regarded as an election expense. I am glad the Public Offices Commission accepted this in the guidelines issued for the recent by-elections.

There are four amendments to section 32. The amendments in paragraphs (a) and (c) are consequential drafting amendments. The amendment in paragraph (b) removes the ceiling of 50 per cent of the election expenses of a candidate which may be incurred by the candidate's political party with the candidate's agreement. This will leave it open to the political party and a candidate to agree in writing a division of the candidate's expenditure limit as may be appropriate to the circumstances. I do not accept an arbitrary upper limit should be set for this purpose. A rigid limit is not appropriate when one does not know what exactly the expenditure will be. The removal of the 50 per cent limit will facilitate the candidate and the political party to come to whatever arrangement satisfies both. No change is being made in the expenditure limits.

The provisions which provide that expenditure by a political party under sections 32 and 33 of the 1997 Act is deemed to be expenditure by the candidate will be replaced by two new provisions which specify that expenditure by a political party under section 32 in a constituency, other than expenditure by the national agent of the party, will be deemed to be expenditure by the candidate and must be accounted for by the election agent of the candidate. In other words, if the expenditure by a political party in a constituency is not incurred by the national agent or under his authority, it is the responsibility of the candidate and his or her election agent.

The amendment in paragraph (d) inserts a new subsection (4) which clarifies that expenditure by a party in a constituency, including expenditure by the national agent, will be deemed to be expenditure by a candidate for the purposes of the reimbursement of the election expenses of the candidate. This will change the present position that the expenditure of a party in constituencies other than the candidate's constituency could be used by a candidate to claim recoupment of election expenditure. The new arrangement clarifies that only expenditure in the constituency can be included in the candidate's claim.

The amendments in section 12 of the Bill are identical to the amendments in section 11 except that they relate to European Parliament elections rather than Dáil elections.

Section 18 is a transitional provision which provides that a donation statement or a Presidential election donation statement already furnished to the Public Offices Commission or a statement of election expenses to the Public Offices Commission relating to an election held before the coming into operation of the Bill will be deemed to be valid if the statement in question complies with the provisions of the 1997 Act as they now stand or the provisions as amended by the Bill. I will move amendments on Committee Stage to ensure donation statements for the period between 1 January this year and the date the Bill is enacted are also covered as well as donation statements to be made by unsuccessful candidates in the recent by-elections.

The amendments proposed in the Bill to the 1997 Act will make the Act more workable for those covered by its provisions and the Public Offices Commission. I express the appreciation of the Government Chief Whip to the other Whips who discussed over many meetings the conclusions being put before the House. I commend the Bill to the House.

Mr. Hayes

This matter has been under discussion with colleagues on all sides of the House because certain key provisions of the Electoral Act, 1997, introduced by the rainbow coalition Government, have proved inoperable. My party welcomes the Bill on which there is a degree of consensus and which deals with these administrative difficulties. The principles underlying the Electoral Act will continue to stand. It is right, after a period of reflection, that it is being revisited and amended accordingly. The principles enshrined in the Act are identical to those enshrined in most other modern European countries.

We have to ensure limits are placed on expenditure and the State funds political parties. This is essential if we are to create a modern, open democracy where decisions are taken purely in the common good. If this can be achieved, much of the cynicism which surrounds politics here, as witnessed in the plethora of tribunals which have been established, will be eliminated with the result that more people will become involved in the political system. I see this Bill as part of a process to reinvigorate politics and to change the perception and image of political parties within the wider community. It is right that we should implement it. Members of the House have a duty to help political parties, small and big, as well as Independents at this time as this cynicism is affecting the turnout at elections and the participation of individuals in the political process. This should never be discouraged.

It is good that limits are being placed on expenditure as much money is wasted in general and Presidential elections. Over a three or four week campaign huge costs are incurred. As we are all aware, there are politicians on all sides of the House who have incurred huge financial losses. We have to move away from such a system once and for all. An upfront approach is adopted in the Electoral Act. The Minister has proposed broadening the scope of donations so that those made to elected representatives and passed on to the party will be regarded as donations to the party once a written acknowledgment is received by the elected representative that the sum of money has been forwarded to the party. It is fair that there be a distinction between moneys and support given to the party and individual donations to candidates. This brings the legislation up to date and is worthwhile.

The Bill amends the previous legislation by excluding services rendered by staff of elected representatives for the purposes of a donation. It was ludicrous that the work done by staff during a three or four week campaign could be considered part of a donation. On seeing the implementation of the legislation in the general election and particularly in the by-elections it was realised that this provision could not work. I commend this amendment contained in the Bill.

There is now an onus on a donor who gives more than £4,000 to the party to make a declaration to the Public Offices Commission. Since enactment of the legislation many parties have wasted huge amounts of time going to constituency executive meetings trying to collect the relevant information. It is correct that the onus should be on the donor as the function of a political party and its headquarters staff is to work in researching and advocating the message of the party.

The Minister seems to be making a distinction between the amount spent by a party nationally and in each constituency. I welcome this as many constituencies have no hand, act or part in what is spent by the party in a national campaign. The distinction between the national campaign and the campaign in each of the 42 Dáil constituencies is sensible.

Members were frustrated to learn that, according to the definition of the Public Offices Commission, money spent since 1 January on various activities in our constituencies was to be regarded as election expenses. People were baffled by this and I do not think officials or the last Government, on inserting this provision, had any understanding that this would be the result. Colleagues on all sides of the House welcome the provision in the amending legislation. It is absurd that money spent printing a document about relevant public issues concerning one's work in the Dáil or on a local authority and one's approach to them and subsequently distributing it among constituents can be considered part of election expenditure. I welcome the fact that the Minister has faced up to this problem in the Bill.

A politician incurs considerable expense in distributing information among constituents, sponsorship, advertising on a regular basis in order to inform constituents of clinics and one's views on issues and in organising a number of meetings. If we want a participative democracy we must ensure we listen to people on a more regular basis. One of the ways of doing this is by organising public meetings, which cost a considerable amount of money. This should not be part of one's election expenditure and I welcome the manner in which the Bill addresses this issue. It is correct, however, that items such as literature, posters and the other paraphernalia which accompanies modern elections be considered part of election expenditure in the three or four week period before elections. I welcome the fact that this is explicit in the legislation.

Under the Constitution people have a fundamental right to free speech. However, a ginger group in a constituency which is either for or against a particular candidate could be established. The candidate might have no control over its campaign or the money it raises. Such a group could argue for or against a candidate but be outside the candidate's control. People have a right under the Constitution to express and campaign for their views and raise money to promote them. However, politicians do not seem to have a right under the legislation to respond, as responding to all such views would result in all election funding being used. Other colleagues have raised this problem with me.

The Minister, Members and parties have an onerous and important task in reacting to these changes. Hundreds of volunteers from all parties will have to interpret and implement the Electoral Act and this amending Bill. A huge task lies ahead for the Minister, his Department and political parties in explaining the implications of the legislation. There is much confusion in the party system. We should be up front and open with people. The Department and the parties have a responsibility to explain the changes to the officers of all political parties. We owe them such an explanation and it is the right approach to take. If we pursue the route of openness and transparency we should make no apologies for explaining to people the implications of the legislation. I ask the Minister to consider the possibility of his Department or the Public Offices Commission producing some form of simple, understandable and readable manual on the issue of donations and expenses for the 42 constituencies.

I would like the Minister to give us his views on local authority spending. Such expenditure does not come within the remit of this Bill or the previous legislation. Is it his intention to limit expenditure in local elections? What are his views on local authority candidates receiving donations? It is possible that local elections will, at some time in the future, take place on the same day as general elections. How will the legislation operate in such a situation? It is probable that next year the European elections will take place on the same day as the local elections. None of the candidates in the European elections will be seeking local authority positions—

There is no guarantee that will be the case.

Mr. Hayes

There is no guarantee. More realistically, what would happen if general and local elections were held on the same day? How could the provisions of the Act and the Bill be policed? Perhaps the Minister will respond to this issue.

We welcome the provisions and compliment the Minister on the degree of consensus which has been reached on this matter.

This debate is simply the latest chapter in an ongoing saga which began in 1993 during discussions between Fianna Fáil and the Labour Party on the formation of a Government and a proposed programme. There were a number of pieces of legislation which we sought to enact during our term of office and to which Fianna Fáil agreed. One proposal concerned what became the Ethics in Public Office Act and another what became the Freedom of Information Act.

The third element in that trilogy was the Electoral Act. These Acts had an integrated purpose which was to deal with the erosion of public confidence in the way business was done in the political system. The concern that a golden circle appeared to have access to some elected representatives was undermining the political system itself and public confidence in it.

Although I was involved in the original discussions on the Act at the end of 1992 and the beginning of 1993, I had expected the particular set of measures involved to be enacted much earlier than they actually were. All three pieces of legislation eventually made their way on to the Statute Book, although the journey there was a long and arduous one.

In preparation for today's debate, I reread some of the Committee Stage debates on the Electoral Act. There are many volumes of debates on the Act as it was extremely important, quite complex and innovative legislation. I have to say, with more than a wry smile, that I am gratified the two Government parties have come round to believing that the measure enacted by the previous Oireachtas should remain largely unaltered. The amendments encapsulated in the Bill before the House today simply seek to tweak some of the provisions of that Act and do not, as Deputy Hayes pointed out, seek to alter in any way the core principles involved.

When I introduced the amended Bill subsequent to the McKenna judgment, the then spokesman for the Progressive Democrats, Michael McDowell, informed the committee that the Bill was so bad it was unamendable and that his party would fight it tooth and nail, word by word and line by line. Perhaps it is Michael McDowell's absence from the party which has changed the Progressive Democrats perception. I welcome its conversion to the core principles which we sought to enshrine in last year's Electoral Act. The then Fianna Fáil spokesman on the environment, the current Minister, promised to largely gut the Act and repeal many of its sections. He did that repeatedly throughout the debate when he felt certain sections were too onerous or inadequate. I also welcome the Minister's conversion to the principles involved.

It was my attitude from the very beginning that this was innovative legislation, that it would cause practical difficulties from which we would learn and that the Bill was not written in stone. I believed then, as I still do, that the core principles involved were right and that the framework was largely right. I was aware that there would be practical difficulties and that the Act would have to be revisited at a later stage. That is what we are doing today. I welcome the Government parties' conversion to the principles which I and the previous Government sought to enshrine in law.

By and large, I do not have any difficulty in supporting the amendments before us. In terms of the Act's core principles, it is extremely important to the Labour Party that these remain untouched and unaffected. The core principles of the original Act were threefold. The first concerned the establishment of thresholds on election expenditure in order that people could not buy elections. The Minister for the Environment and Local Government and I debated this issue on Committee Stage of the Bill last year and the Minister was then of the view that politics in Ireland was above being bought and that it was contemptible to think anyone could be affected by monetary donations. Perhaps the outcome of recent tribunals has removed our collective virginal innocence in that regard. There is no proof to date that any particular actions resulted from election donations but substantial donations were certainly made which were not made public. We have now moved into an era where the disclosure of substantial donations is required by the public and where anything less than complete disclosure would not be tolerated. I believe that any attempt to water down that core principle would have been resisted. Putting a threshold on election expenditure is a valid thing to do. The practicalities of that were always going to pose difficulties and I have no difficulty in supporting the suggested amendments which clarify the position.

The disclosure of donations is another important element of the Bill which remains unaffected. The thresholds for disclosure stand at £4,000 for political parties and £500 for individuals. I believe those thresholds are about right even though I know the Minister argued for a higher threshold of £10,000 for political parties at one point. I am glad he is not seeking to revisit those issues now as I think the disclosure thresholds are acceptable as they are. If the Minister does not recall the £10,000 comment, I can give him the reference. During a select committee meeting on 26 March 1997, he stated that the disclosure provision would not shut off donations and that in common with other parties Fianna Fáil was seeking funding in the run-up to the election. He also stated that people were willing to make contributions and though most would accept the £4,000 limit, they would prefer a £10,000 one.

That was a statement of fact.

I understood it to be the Minister's view also. However, it does not matter as he has not sought to change the disclosure limits. I was involved in discussing the limits with the former Minister for the Environment, Deputy Smith, and there was some difficulty in arriving at the £4,000 limit. I believe that an individual donation of £500 would be regarded by most people as a considerable sum. I welcome the fact that the limits are now accepted and that we are simply considering mechanisms to make the practical reporting of such donations more effective.

The final core principle of the Act related to the funding of political parties and the reimbursement of expenditure to candidates. I know the Minister fundamentally objected to that last year, although I do not know whether he lost the battle on it at Cabinet level. In any event, the issue is not being revisited in the legislation before us. I welcome that as I consider it important that everyone should have an opportunity to contest an election and that some portion of election expenses should be met by the State in order to ensure independence from political donations and big business.

There were a number of other elements in the original Act but I have outlined the three core principles. One of the other elements concerned the establishment of the Dáil Constituency Commission on a statutory basis. The Minister also had a number of proposals in regard to that, one of which concerned the removal of the Secretary General of the Department of the Environment and Local Government from it. I am very glad I resisted that and that it and matters such as interim reporting are not being revisited in the current legislation.

I wish to deal with some of the particulars of the amendments which the Minister is seeking to make to the Electoral Act, 1997. I welcome the modification of the definitions of the expressions "donation" and "election expenses" used in Parts IV, V and VI of the 1997 Act. I welcome the tighter definitions. We were all of the view that donations could not be so broad a catchment as to include the work of party officials. It would be difficult, if not impossible, to apportion the salary of a general secretary of any of our parties, who works full-time in a general election campaign, to any one or all the campaigns and I do not believe that was intended. It was my view, and I argued on Committee Stage of the Act, that a commonsense view would be taken by the Public Offices Commission to these matters. Some of its decisions strayed beyond commonsense and this was one of them. I have no difficulty with the tighter definitions on donations and expenses proposed by the Minister.

Regarding clarification that a donation received by an elected representative when passed on is regarded as a donation to the party, there was some ambiguity in the Act about what constituted a donation to a party if it was conducted through an elected representative. It seemed clear that a donation to a party representative that is handed on and comes within the £4,000 threshold is a party contribution, but there is ambiguity about that and I welcome the clarity the amendment brings to it. If someone hands a Deputy £3,000 for the party and it is handed on to the party and receipted appropriately that is a party contribution, but if the Deputy pockets it or uses it for his or her election expenses it is a personal donation under the meaning of the Act. This does not represent a change but a clarification of what was originally intended.

I welcome the Minister's sensible approach to aggregating donations. Determining when the £4,000 threshold is breached would require every donation, even every 5p, to be accounted for and aggregated for a year to make sure that no one gave a member more than £4,000. Reversing the onus and acknowledging it is not possible to ask every member of a party to account for every donation of any amount, whether 20p or £5, to some central body so that there can be a running tally of all donations in head office in case anyone reaches the magic figure of £4,000 during the year is welcome because that would be an impossible and silly task. It is much better to place the responsibility on the donor and to provide that if he or she contributes more than £4,000 to a political party there must be a disclosure. The Minister has gone a little far in the linked amendment because it does not make sense to require the receiver of a donation—

I remind the Deputy that we are dealing with Second Stage and detailed discussions on the various sections should be reserved for Committee Stage.

I am grateful for the Ceann Comhairle's advice on this matter, but since the entire Bill is a Committee Stage amendment of an existing Act it is difficult to talk about it in general terms. However, I will speak in those terms about the effect of that suggestion even though the Minister's speech dealt with the Bill section by section. I know the argument the Minister would make if I put forward a proposal requiring the recipient of a donation to second guess if a donor would make a donation statement and if he or she did not make one that the recipient would not take money and that it would be an offence to take the money if the donor did not to make a statement. That is a little too righteous in its intent.

I have no problem deleting it. I went by what I got.

That proposal was not put to me at any stage. A legal requirement on a recipient to second guess the intent of a donor is extremely difficult and to create an offence if a recipient is wrong in his or her second guessing strikes me as an onerous burden to place on him or her and it would not have much effect in reality. I make that point in terms of the amendments to the Act.

I am conscious of our experience of the implications of anything we put into the Electoral Act. We should be as clear and as straight as we can in our drafting. Anything that requires us to determine the intention of somebody, and if we determine it to be X there will be one course of action or Y there will be another course of action, is subject to difficulties.

I wish to comment on the removal of the ceiling on the limit of a candidate's expenditure which his or her party may incur. That was included in the first instance because the total envelope of expenditure allowed was the aggregate of the allowable expense of each candidate for a particular party, which sounds very convoluted. The reason for that was the Supreme Court decided that every candidate must be treated in like fashion so that an Independent and a political party candidate cannot have different thresholds of expenditure. For that reason the expenditure incurred by a national party in a general election had to be taken from the allowable spend of its individual candidates, and that was fine. If a party ran 100 candidates in 42 constituencies, it would tell them their allowable spend in a constituency was £20,000 and that it would take £5,000 of that and allow the candidate to spend £15,000 in the constituency so that it could build a national fund for the party of allowable expense from the individual candidates.

It was put to me at the time that in order to boost the spend of the party it could put forward candidates for the sake of building up the expense in areas where it had no hope of electing a candidate. It would be invidious of me to mention a constituency where the Labour Party might not get a candidate elected. There are probably no such constituencies now, but if there were some it would be possible for the Labour Party to nominate two or three candidates, run a very low budget and low key election campaign and keep the election expenditure to build a purse of expenditure so that it could target it at winnable constituencies. To deal with that we decided a candidate must spend at least 50 per cent of the expenditure in his or her constituency. I do not see the logic of changing that. The Minister might revisit that on Committee Stage and explain why that argument to ensure that as far as possible we do not encourage people to put forward candidates for the sole purpose of building a national expenditure for the party does not hold sway today as it did last year. In deference to the Ceann Comhairle, I will save the other specific comments I want to make on amendments for Committee Stage.

I join Deputy Hayes in saying that I appreciate the dialogue the Government engaged in on this Bill. I clearly stated the Labour Party's position from the outset and the core principles of the Bill which we tortuously manoeuvred through the Oireachtas with great opposition from some of the parties then in Opposition and threats of war from one of them which is now in Government, the Progressive Democrats. We managed to get a progressive measure enacted. It was not perfect but these amendments will improve it. The Minister genuinely engaged in dialogue with the Opposition parties and the amendments before the House are the result of the consensus and common purpose of all parties.

The Electoral Act and the Electoral (Amendment) Bill impose onerous responsibilities, which did not exist in the past, on candidates, political parties and the political system. That is difficult but it is the right thing to do. Some people still do not believe that, but I am convinced of it. Since the Minister did not attempt to repeal the core principles of the Bill, he too must believe it is right.

However, it is only a few weeks since the director of elections for Fianna Fáil in the Limerick East constituency, Deputy O'Dea, described the Electoral Act as the worst legislation ever enacted by the Oireachtas. One can only assume he supports neither the measure enacted last year nor the measure before the House today. In view of the Minister's stance, it can also be assumed that Deputy O'Dea's position is not indicative of the views of the Fianna Fáil Party.

I welcome the Bill. It is likely that the Electoral Act will have to be amended again after further experience of its implementation. However, over a period of time, we will build a body of law that will be good for the democratic political system and, ultimately, will ensure less cynicism about politics and politicians. That in itself is an extremely important issue. I am proud to have been charged with responsibility for piloting the original important legislation through the Oireachtas.

This Bill fine tunes certain aspects of the Electoral Act which were difficult to implement. Difficulties arose with regard to the interpretation of some of the requirements of the Electoral Act and amending legislation was required.

Some of the interpretations, through no fault of the Electoral Commission but because of how the legislation was drafted, tended to the absurd. The idea that expenditure by officers of a political party in the course of carrying out their normal functions would be regarded as declarable expenditure for the purposes of an election appeared to stretch the remit of the Act's provisions.

Like Deputy Hayes and Deputy Howlin, I appreciate the degree of consultation which took place prior to the introduction of this Bill, which I support. It will render the Electoral Act more workable and will ensure that its provisions will endure into the future.

I also welcome the fact that the Government, particularly its largest constituent party, appears to be committed to the implementation of the Electoral Act. The introduction of the Electoral Bill was strongly resisted by the two Government parties and, following the general election, there were strong mutterings that the new Government might repeal the Act or not implement it. I am glad there appears to be a commitment on the part of all sides of the House to its implementation.

The Electoral Act is significant in the context of electoral law and in the functioning of our democracy. There are two essential principles in the Act. The first is the imposition of a cap, for the first time, on election expenditure. Arguments might be made about the level of the cap, how it operates in practice and how it can be distributed between expenditure by individual candidates and by their parties but at least there is a limit on what a candidate or political party can spend in the course of an election. To some extent, the cap goes some way towards levelling the playing pitch at elections. The second principle is the requirement to disclose political donations. Donations of over £500 in the case of individuals and of over £4,000 in the case of political parties must be declared and disclosed.

The combination of the Electoral Act and the Ethics in Public Office Act, which was also enacted by the last Government, has significantly influenced the change that has occurred in public life and in how it is controlled and made accountable. We should remind the public repeatedly that the Electoral Act is now the law. For a long time Ireland had a political culture in which it appeared to be acceptable that political parties or individual candidates could be financed privately and without accountability by sources which were unknown to their electorate and to the public. That is no longer the case. The law now provides that the funding of political parties and of individual candidates is a matter of public interest and disclosure, and there are rules and regulations to circumscribe that. I welcome that development, as does the public. I am also glad that since the Bill before the House does not roll back the core principles of the Electoral Act, it commands support across the House.

It is worth reflecting on the fact that matters which are currently, and were in the recent past, subject to tribunals of inquiry would not in all probability have required such tribunals if the Ethics in Public Office Act and the Electoral Act had been law at the relevant times. The issue of contributions to political parties was, for example, examined by the beef tribunal. Surprisingly, the report of that tribunal appeared to accept some of the evidence given to that tribunal at face value. The McCracken and Moriarty tribunals deal with payments to elected representatives. The Flood tribunal is dealing with the relationship between planning and property matters and politics. It was established following the revelation of a payment to a politician during an election. None of these tribunals would have been necessary if the Electoral Act and the Ethics in Public Office Act had been in force at the time. We now have an entirely new regime for accountability of political life to the general public and for the disclosure of information in that regard.

The continual discussion, reportage and commentary on what is known colloquially as payments to politicians has had a very corrosive effect on confidence in public life. Notwithstanding that matters have been and are being investigated by the various tribunals and that new legislation is in place requiring disclosure, caps on expenditure and so on, there continues to be discussion of payments to politicians as if it were a current practice. We need to remind ourselves and the public generally that what have become known as payments to politicians were practices that occurred in the past which could not have occurred if the legislation now in place were there at the time; if it were in place they would have had to be disclosed and would be in the public domain in any event. There would be no requirement on anybody to go to the High Court to profess their right to privacy if there had been legislation which required the disclosure of payments and the placing of a cap on expenditure at election time. Such legislation is now in place and that is welcome.

This is electoral law which is confined to changing the way payments are made and the cap on expenditure is operational. One can get around the cap on expenditure. While the position is considerably improved from that when there was no cap on expenditure, there is still considerable potential for unevenness in the way in which elections are conducted and expenditure is made on elections. Deputy Howlin gave examples of how the legislation might be got around. There is another way, for example where a large political party might, in a five seat constituency where normally two or three candidates are selected, select four candidates, thereby entitling it to expenditure of £80,000 in that campaign. That would be considerable outweighing of the cap that might be placed on the unfortunate single candidate from a much smaller political party who might in any event end up spending only half the amount that is entitled to be spent under the legislation.

Is the Deputy suggesting that Fianna Fáil puts up candidates for fun? That is more likely to be done by Democratic Left.

It is most unlikely it would happen in a civilised constituency such as Dún Laoghaire, not least because of the well-known views of the Minister for Foreign Affairs on the selection of additional candidates. We must be conscious of this matter. While the Bill addresses difficulties that arose in the implementation of the legislation — because this is an entirely new regime in our electoral system it was not unexpected that there should be teething difficulties with its implementation — as the years go by it may be necessary to revisit other aspects of the legislation. If, for example, loopholes arise or ways are found to circumvent the intent and the fairness of the legislation, that may have to be considered again.

Since we are dealing with electoral legislation, consideration should be given by the Government and legislation should be introduced to modernise our electoral system in other aspects. For example, the question of when voting takes place must be considered and legislation introduced on it. The holding of elections on Thursday, or if the Government thinks it will be to its advantage, on Wednesday, must be changed. The practice of weekend voting which has been tried successfully in other countries should be introduced here.

There is no golden rule that an election should be conducted in a single day. Given the flexibility required of many people in the workplace and the requirement to be away from home and mobile, arrangements will have to be made in our electoral system to allow for that. We should consider the question of where people vote. We have adopted a traditional approach to polling stations. In other countries different approaches are being tried. With the use of new technologies in particular it should be possible to adopt a more flexible approach to where people cast their votes so that opportunities are increased for people to participate in elections, the decline in which is a cause of considerable concern.

Given the Ceann Comhairle's admonition to Deputy Howlin, I will not go into the detail of the Bill. I look forward to commenting on specific sections on Committee Stage.

It is important at the outset of this debate to ask a simple and pertinent question: why are we rushing through this legislation? Deputy Howlin said that we made mistakes in the past, that we need to get it right this time and that perhaps we will revisit this legislation at a future date. The Chief Whip never ceases to remind us that this is not a legislation factory, yet today the legislative conveyor belt is at full tilt on this issue and I would ask the reason. Substantial changes are being made, despite what Deputy Hayes and Deputy Howlin claim. The spin doctors have been at work on this issue. It has appeared in the papers and the media have swallowed hook, line and sinker that the Public Offices Commission recommended those changes. If one picks up the phone and rings that commission to see if it recommended the changes one will find it did not. It was asked for its advice on how the legislation could become more operable and it offered that advice, but it did not recommend the changes. It has been stated that there is consensus on this issue, but having attended Whips' meetings I wrote a letter to the Chief Whip outlining my position that I do not agree with some of the changes proposed.

The real reason this legislation is going through is that the establishment parties got a fright after the general election. They discovered they had created a monster, that the Public Offices Commission assiduously and enthusiastically applied the law. It interpreted the spirit of the legislation and stuck by the letter of the law.

It did not apply to the general election.

I attended the Whips' meeting and I am aware of the background to this. People discovered — Deputy Hayes referred to this — that the bell was rung from the beginning and that between elections the money would add up and be counted as election spending. This came as a shock to many Deputies and it is one of the reasons so many of them got up on their high horses. The Public Offices Commission did not over-interpret the legislation. Rather it was zealous and carried out its duties in the correct manner. However, this sent a shudder up the spine of many in the establishment parties. It wanted parties to account for all donations. This is something of a headache but it is also potentially embarrassing. I commend the Labour Party for introducing the legislation. I have highest respect for Eithne Fitzgerald—

Mr. Hayes

Deputy Howlin introduced it.

Deputy Howlin referred to the trilogy of legislation. He carried out his duty remarkably well and I do not want to take away from him, but the notion of transparency was introduced in the wake of the beef tribunal. Deputy Howlin referred to the McKenna judgment. The aim of the legislation was to enhance democracy by improving transparency and levelling the playing field. It succeeded in doing this. By placing a cap on spending, small parties could compete with the bigger guns.

We must avoid the Americanisation of our political system. We have seen that money can buy votes. As Ed Rollins, a political consultant in the United States says, one can fool all of the people all of the time if one's advertising budget is big enough. That is the way American politics operates, and it is the way Irish politics can operate. There is too much of the spin doctor in our politics. We see too much of the gloss and not enough substance. There is also too much sound bite. I do not want our politics to go in that direction. On 5 February I asked the Taoiseach on the Order of Business if the Government intended to remove the more unpalatable aspects of the Electoral Act. He said this was not the case and that there was all-party agreement on the changes recommended. However, there was no such agreement.

On the specific problems I have with the legislation, I draw attention to section 5 which will fundamentally change the definition of "donation". Under this provision the fleets of cars which ferry people from hospitals, mental institutions, etc. to polling stations on election day will no longer be described as a donation. This practice should be regarded as a donation. Expenditure by a party on behalf of its candidates will no longer be regarded as a donation. This is a very significant change, particularly when taken in conjunction with the other provision in section 5 which states that a donation to an individual will be considered a donation to the party if the individual gives it to the party and gets a receipt. The Minister should think through the consequences of this provision. A candidate who receives £3,000 from a local developer will hand the money to the party but will ask it to print some leaflets for him. Is this possible under the legislation? If the party prints the leaflets the donation does not have to be declared by the individual. A donation of £3,000 could be potentially very embarrassing.

Will the Minister say if this is possible? If it is possible to do this, we are, in effect, legitimising political money laundering. When we do something in great haste we open up avenues people can use to get around things they should not be able to get around. The Minister must look again at this provision, particularly as regards developers. Reference was made to tribunals, for example, the Flood tribunal. People are extremely cynical about donations given to politicians. In my constituency developers give money to politicians, and the example I gave is a way of getting around this provision.

Section 6 effectively does away with section 24 of the 1997 Act. Under the existing legislation a party must account for the money given to different candidates. This causes problems for parties, particularly the larger ones, but it is a good provision. If an individual is given £500 he does not have to declare it but if the amount exceeds an aggregate of £4,000 the party must declare it. Under the Bill it will be a matter for the donor to declare the money. This section is inoperable and section 24 of the 1997 Act should be retained.

Section 10, which deals with when an election begins, has caused most problems for bigger parties. When we issue leaflets in our constituencies between elections we are effectively electioneering. We are effectively saying to the electorate that we did all these things and they should vote for us at the next election. Regardless of whether we like it, it is election spending. The Bill states that the election begins on the day it is declared, while the caps on spending will remain at £20,000 and £17,000. Consideration must given to putting a cap on spending between elections. People are already working out how they will get around this. Parties will start campaigning between elections and issuing literature which may not contain the word "election" but which will help people to get elected.

Mr. Hayes

That is a fundamental right under the Constitution.

Yes, but in a democracy there must be a level playing field. Those who have most money can operate more effectively.

A private citizen is able to issue leaflets and campaign against a person.

Deputy Hayes's point about ginger groups is a good one and should be looked at. My point is that people can spend as much as they want between elections, thereby giving some people a considerable advantage.

The unseemly haste with which the Bill is being debated will only serve to increase cynicism. We must make fundamental changes to the electoral law. Deputy Gilmore referred to other changes. Given my history of election recounts, the introduction of electronic voting would be timely. My party objects to certain sections of the Bill because of the changes proposed and if our amendments are not accepted, we will not support it.

I wish to protest that the Bill is being forced through with unseemly haste. I note the points made by various Government speakers and those of the larger Opposition parties about extensive discussions in the Whip's office. However, the Whip's office is not Dáil Éireann which is the elected assembly of the people and that is where the details of the Bill should be teased out because they are complex. It is unreasonable to circulate a Bill on a Friday and have it disposed of on the following Tuesday when one considers the pressure of work on Members.

The disclosure of donations received by political parties and candidates was made essential by the anger and concern that existed in society because big business and wealthy elements in society effectively could bankroll political parties and undoubtedly gain favours as a result, all of which was done with the utmost secrecy. It militates totally against even the most basic concept of democracy that those elected should be responsible to the people who elected them and not to secret cartels of big business or super wealthy individuals who because of sizeable political donations were then able to get policies that were favourable to them enacted by the Government of the day made up of parties to which they subscribed financially as a result.

A major scandal of the past five or six years was the tax amnesty introduced by the Fianna Fáil/Labour Government which gave between £500 million and £1 billion to the wealthiest tax dodgers in the land. Their names are secret and neither is it known whether any of them made substantial donations to the political parties which voted in the amnesty. That is unacceptable and even now the Government insists on not declaring whether any party received donations from tax amnesty beneficiaries. That must change and the new Act goes some way towards that as it introduces transparency in the form of the declaration of sums over £500 for individuals and over £4,000 for a political party.

The Bill is a serious watering down of some of the Act in regard to this matter. The question of a donation not being considered a donation to an individual if passed on to the political party paves the way for widespread abuse in regard to candidates being able essentially to cover up the extent of donations received and from whom. If a candidate receives a donation of £3,500 and passes it on to the party, what does the "party" mean? If it is passed on, for example, to the constituency executive or the party head office, is that considered to be the "party" under the Bill? We could have a situation where £3,500 is passed on and then given back in expenses by the party for the benefit of the election of an individual and it does not have to be declared.

That type of practice is specifically excluded in the Bill.

I will seek clarification on that issue on Committee Stage.

The Minister might as well have excluded the section putting the onus on the donor where he or she aggregates donations of £4,000 or over. There is no mechanism to check whether such an aggregate comes to be reached by a single donor and to have a safeguard whereby if the candidate knows the donor is giving money to other people which amounts to £4,000 or over, there is a temptation to turn a blind eye. It is unenforceable and should not be agreed.

The Act states the Minister may make regulations governing local elections but the only limit that applies for disclosure by a councillor or local authority member is the £4,000 one. Will the Minister clarify this? Does section 5 mean a return to the situation where developers and builders can make fleets of trucks and their employees available to certain developer friendly political parties represented in the House? There have been instances where pick-up trucks and vans owned by developers and builders travelled around various constituencies assiduously working for individual candidates of right wing parties.

I wish to refer to the timeframe for incurring election expenses which will qualify as expenses and the limit on expenditure. Running the expenses from the time of the movement of writs or the calling of a general election makes a mockery of setting expenditure limits, especially on major parties. I agree the timescale which could be five years if it was between elections is unreasonable but I propose three months which is lenient. However, the Minister's proposal is a carte blanche, particularly for the Government parties, to shift expenditure ahead of the date on which they know an election will be called or a writ moved so that what is spent does not come within the election limit. It is open to abuse. Will the Minister reconsider that?

I thank all the Deputies who contributed to the debate. Most parties, with the exception of the Green Party, support the Bill. I want to deal with some of the interesting points made by various speakers.

Deputy Hayes raised a point in relation to the disclosure of donations at local elections. He referred to the fact that regulations had not been made concerning election expenses for local elections or the disclosure of the donations by local authority members or candidates in local elections. The Deputy is right but provision is made in the Electoral Act, 1997, enabling the Minister to make regulations in relation to these matters. The regulations will require the prior approval of both Houses of the Oireachtas. My intention is that the arrangements generally will correspond to those relating to Dáil elections contained in the Electoral Act, 1997, and this amendment to it.

It should be noted that under the 1997 Act, for the purposes of disclosures of donations by a political party, a donation made to any candidate in a Dáil, Seanad, European or local election, or any officer, member or agent of the party, will be deemed to have been made to the party and will, therefore, be subject to the disclosure requirement in so far as the party is concerned. If a local authority member receives money, he or she is regarded as a member of the party or as the party and would have the same disclosure requirements. I will consider the whole area of donations and disclosure prior to the local elections. Everybody will be aware of the provisions well in advance of those elections so that there will not be any misunderstanding in that regard.

Deputy Howlin will remember our long discussion on Committee Stage about trying to clarify some of the points that arose. Despite what Deputy Howlin says now, I pointed out at that time the areas of the Bill that would not be workable. I have no doubt, as Deputies Howlin, Gilmore and Hayes acknowledged, that we will revisit this matter at some stage because of interpretations that may be taken by the Public Offices Commission. That is not a criticism of the Public Offices Commission. It must interpret the law as it stands regardless of what we say in this House. This is uncharted territory and I have no doubt other areas will need to be examined at a later stage.

In relation to that point and the point Deputy Hayes made about the local elections, we will try to have some clear guidelines drawn up, perhaps in booklet form, not just for ourselves but for local authority members so that there will not be any ambiguity about the matter. Obviously that is a matter for the Public Offices Commission but I will clearly signal the wishes of the House that this matter be dealt with well in advance of the local elections.

In regard to Deputy Hayes's point about ginger groups — this was also referred to by Deputy Gormley — and the spending of money at elections by third parties, the system for the limitation of election expenses relates essentially to expenditure incurred by or on behalf of the candidates. It is possible that persons not directly involved in the election may seek to involve themselves or influence the outcome and, for this purpose, they incur expenditure. Such persons might also decide to incur expenditure with a view to promoting or perhaps opposing a particular outcome.

I agree with the Deputy that it would be unconstitutional, inappropriate and probably contrary to the freedom of expression to prohibit advertising by third parties but in the interests of openness — we anticipated this on Committee Stage — and to enable people form their own judgment there is a requirement on any person who decides to do that to register with the Public Offices Commission if they intend to try to influence the outcome of an election. The public can, therefore, make up its own mind about that group. In the original Bill there was a ban on anybody taking out an advertisement or attempting to influence the outcome of an election. That cannot be done unless they are registered with the Public Offices Commission.

Deputy Howlin raised a number of general points but one in particular related to the amendment under section 7. I fully accept what the Deputy said but my information is that in regard to the previous amendment — the two are linked — concern was expressed by some people that this would be used as a device to get donations of £15,000, £20,000, £25,000 or more in that the party, an individual or a number of people in the party might ask someone for, say, £3,900 for the party and another amount for someone else. This was the best we could do to implement the wishes of Members. Even if it is difficult to operate, it is better to include that amendment so that there will be some provision by which that practice could be outlawed rather than totally removed. This is one of the areas we will revisit in the future.

I am concerned that somebody might be in danger unknown to themselves.

I accept that point. I am not sure what party proposed this kind of safeguard but it was insisted on and it was the best we could do in drafting an amendment to ensure people would not knowingly try to circumvent the law as it stands.

I acknowledge that many Deputies made the same points but I want to single out one for a reason. Operating the expenditure limits from 1 January 1998, as the Public Offices Commission clearly intended, would cause horrendous difficulties.

I have no doubt that if that were to remain we would have a constitutional action and the Bill, or at least this section of it, would be struck down. It is all very well to say that people who have money can promote themselves between elections by sending out leaflets, flyers, etc. We are approaching a stage where all in this House are equal, with the exception of those who have outside interests, so it is not a reasonable argument to say that some people have an advantage if they spend money between elections to promote their clinics.

On Committee Stage I cited the Conservative Party Manual which warned that difficulties could arise, that advertising a clinic could be regarded as Government expenditure. If that line were taken, it would be unworkable, and that is accepted by the Public Offices Commission. There would also be a glaring inequality in that Members of this House who wanted to inform their electorate would have spent all their money and would be at a disadvantage beside other people from outside, from within their own parties or from other parties who would have a brand new limit. Clearly it would not be workable.

The compromise here makes it clear that expenditure incurred before setting an election date that is used for the campaign is covered, as is all expenditure from the date the writ is moved, so there cannot be a question of huge expenditure on an election campaign three or four months before an election putting somebody at a disadvantage. Deputy Higgins said that the current situation may favour the Government. A three months ban on expenditure would favour the Government even more if it knew when an election would be held. The provision here is fair to everybody because everybody has the same starting point. Let us suppose I decided to produce a full colour leaflet in my constituency stating what a wonderful job we had done over the previous 12 months — clearly election material — and an election was called the following day, I would have no election expenditure at that time.

Why not introduce a cap on money spent between elections?

It is something we could look at, but Members of this or the other House are entitled to inform their constituents of what they are doing and how they are serving their interests.

The change regarding the passing on of donations to the party is a reasonable one. Such a donation then becomes the responsibility of the party. We have all had the experience of being offered donations which we did not want to take because of the suspicion of an ulterior motive.

I thank Members for putting forward their views on this Bill. It is an improvement on current legislation, but we will probably have to revisit it to review its workability in the future.

As it is now 6.45 p.m. I am required to put the following question in accordance with an Order of the Dáil of this day: "That the Bill is hereby read a Second Time, the amendments set down by the Minister for the Environment and Local Government are hereby made to the Bill, in respect of each of the sections not disposed of the section or, as appropriate, the section as amended, is hereby agreed to in Committee, the Title is hereby agreed to in Committee, and the Bill is accordingly reported to the House, Fourth Stage is hereby completed and the Bill is hereby passed".

Question put and declared carried.
Sitting suspended at 6.45 p.m. and resumed at 7 p.m.