AEC not punishing political donors that break the rules, damning audit finds
Australia’s electoral watchdog is not doing enough to punish political donors that break the rules, failing to ensure they are providing accurate and complete financial information, and is still missing key records from 75 donors, a damning audit has found.
The auditor general on Thursday released a damning audit of the Australian Electoral Commission’s administration of the political donation system.
The audit urged the AEC to take a tougher approach to donors who break the rules and do more to check they are submitting accurate information.
Among other things, the audit found that:
The AEC is failing to obtain key recordsfrom some donors. In four years, the AEC has not obtained 75 annual returns – a key record detailing a donors’ contribution in any given financial year.
Huge volumes of records are being submitted late, in some cases by more than a month. Almost one-quarter of annual returns and 17% of election returns were submitted late and 44 donors were late by an average of more than 30 days.
The AEC is doing little to check that the information it does receive is accurate and complete. It looks only for empty fields in forms and obvious errors, but does not compare what a donor has reported to other data from internal or external sources.
The AEC is failing to meet its own target for compliance reviews, which are used to audit a donor’s claims. It failed to conduct 58 of the 168 reviews it had planned in the five years examined in the audit.
No compliance reviews have been conducted on entities who claimed to have made no donations in any particular period.
Donation records from third parties – groups such as the Australian Christian Lobby, the Minderoo Foundation, unions, and Greenpeace – are not ana
lysed at all.
The AEC also failed to analyse donation records submitted during elections by candidates, Senate groups or election donors, instead relying on records handed in by political parties.
The watchdog is not properly using its enforcement powers when it does identify noncompliance.
The audit also found the AEC had failed to take any concrete steps to improve following a 2012 review, which found it needed to be more proactive in its approach to compliance.
Seven recommendations were made to improve the AEC’s handling of the political donations system, including improving its collection of donation records, strengthening its analysis of the accuracy of the data it does obtain, and adopting a more targeted approach to its compliance activities.
The AEC has only agreed in-full to two of the recommendations.
One recommendation – to use a more graduated system of punishments for noncompliance by donors, including the use of criminal prosecutions – was rejected outright, because the AEC said it already takes such an approach.
The other recommendations were accepted with qualifications.
A spokesman for the AEC said the commission disagreed with the auditor in multiple areas.
“The AEC welcomes scrutiny of its work and appreciates the role of the ANAO [Australian National Audit Office],” a spokesman said. “But, in regard to the conclusions the ANAO draws in its report, the AEC disagrees with it on a number of fronts.”
The AEC said the audit runs counter to data showing it obtained 98.9% of annual returns and 99.6% of election returns during the four-year period examined. It said the majority of noncompliance it detects is caused by administrative problems, rather than nefarious intent.
“The AEC view is that the ANAO has misunderstood the intent of the legislation,” the AEC said in its formal response to the audit. “Over the period the AEC has been administering the requirements of the Electoral Act, the AEC has not detected systemic issues, wilful or large-scale noncompliance with the legislation.
“And nor have others that scrutinise this scheme through our transparent sharing of the data.”
The AEC said it relied on consultation and education, rather than heavy-handed enforcement, to achieve its goals. Such an approach was in line with the intent of parliament, the AEC said.
“The proposition the AEC should be more heavy-handed in its approach to enforcement is rejected, as prosecutorial action for amendments and other administrative mistakes would be disproportionate.”