What The AEC Knew About Abbott's Slush Fund

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This is the third in a series of extracts from Margo Kingston’s 2007 book Still Not Happy, John. Read the first extract here and the second here. Read Kingston on why New Matilda is publishing this material now here.

Tony Abbott wasn’t the only one who had demeaned our democracy with his Australians for Honest Politics Trust. The least the media could do, I thought, was atone for our professional failure to scrutinise everyone’s Electoral Act dealings, regardless of our own biases. Besides, I’d harried Pauline Hanson for five weeks during that 1998 election race trying to make her accountable for what she said — so much so that she’d accused me of destroying her entire campaign. The least I could do was apply the same standards to Tony Abbott.

It was only fair.

We learnt of Abbott’s fellow trustee Peter Coleman’s motivation for setting it up when he wrote in The Australian on 28 August 2003 that, "I saw One Nation as a threat not so much to civilisation as to the Coalition". John Howard had already made the reason for the trust even clearer in a doorstop exchange with a reporter on 27 August.

Howard: …but the important thing is that [Abbott’s trust] was disclosed in the media in August of 1998, and he made no secret of it.

Reporter: Are you happy with ministers of your Government being involved in destabilising other parties like that?

Howard: Well it’s the job of the Liberal Party to politically attack other parties, there’s nothing wrong with that.

So here we have the parliamentary leader of one "registered political party" describing an entity’s attacks on an opposing "registered political party", in the lead-up to an election, as the Liberal Party doing its political job. This is a public admission by Australia’s senior Liberal that the AHPT was an "associated entity" operating "wholly or to a significant extent for the benefit of" his own party.

So Australian voters could be told the identity of the trust’s donors, right? Wrong.

On 27 August 2003 Abbott, through the Sydney Morning Herald’s Mike Seccombe, told the Australian people something else they’d been kept in the dark about. The
Australian Electoral Commission had asked him, in a letter dated 18 September 1998, to disclose his donors. He released the reply he had written on 20 October 1998 — but not the trust deed enclosed with it — and the AEC’s response, to the Australian Financial Review. (The AEC had refused to release the correspondence to the media.) In the reply Abbott had advised the AEC that, "Before seeking donations to the Trust I spoke with one of Australia’s leading electoral lawyers who assured me that the Trust would not be covered by disclosure provisions".

When the AEC eventually wrote back — on 10 June 1999 — it accepted Abbott’s word: "On the basis of the information provided, I am of the opinion that the Trust does not constitute an associated entity at this time, and accordingly is not required to lodge a disclosure return."

Once that was out Mike Seccombe contacted experts in electoral law, who expressed surprise that the AEC had backed down, said the AHPT looked like an "associated entity" of the Liberal Party, and urged the AEC to release any legal advice to the contrary. Please explain!

And anyway why would Abbott want to keep secret the donors who’d helped him act "as a citizen and a democrat" to expose "a fraud on taxpayers"? And why wouldn’t those donors be glad to out themselves if, as Abbott now claimed, they were acting in the public interest "for all of us", not just the Liberal Party?

Would the outing of Abbott’s money-men be the people’s first glimpse of how business really gets done in John Howard’s Australia?

Would it embarrass Howard’s rich mates? Were media or National Party figures involved? Were any of Saint Tony’s 12 faceless donors linked to the PM’s office?

Two were quickly exposed. The Age’s political editor, Michael Gordon, outed millionaire businessman Trevor Kennedy, the former Packer executive, who’d kicked in $10,000. Once a Labor man, he was later strongly pushed by the Liberals to become the ABC’s managing director when Jonathan Shier got the sack. Kennedy’s motivation? He said he was proud to donate because Hanson "was not only a great menace to this country, but a crook as well".

Soon after his remarks Kennedy resigned his many directorships amid revelations of Swiss-account tax-dodging and the exposure of his long-denied involvement in Offset Alpine, a controversial company under investigation by the corporate regulator.

Terry Sharples outed another trust donor: Western Australian construction magnate, major Liberal Party donor and board member of Melbourne’s neo-liberal Institute of Public Affairs, Harold Clough.

Worth about $120 million in the early 1990s, Clough had helped finance a legal persecution of the WA Democrats by businessman John Samuel, who’d been expelled from that party after trying to seize control of his branch. The long, expensive legal action had nearly destroyed the WA Democrats.

Funnily enough it turned out that Samuel had since shifted his "support" from the WA Democrats to WA One Nation — and had promptly begun legally attacking them, too. (Abbott admitted that the same John Samuel had been a "close collaborator" in stumping up the cash to fund Sharples.)

On 5 September 2003 WA Democrat Senator Andrew Murray sent details of the Clough-Samuel Democrats party hijack attempt to the AEC. "This is why you need disclosure and transparency — that’s why people need to drive the connections hard," Murray said.

An ugly pattern was beginning to emerge. Destroying the competition through the legal system was starting to look like no mere one-off tactic aimed at One Nation, but part of a systematic "anti-competition" campaign by Liberal power-players to stop new parties gaining a foothold in the political "marketplace".

It was beginning to seem as if John Howard the free marketeer was after a "democratic Monopoly" — squeezing out "consumers" of "minor brand" parties by using Big Money and our courts behind the scenes.

Who were the 10 remaining mystery donors? Why was Tony Abbott so determined to keep their identities a secret from the people? And where was a public servant with the strength of Professor Allan Fels, our former competition watchdog and people’s champion, to tell him to do the right thing?

In his letter to the AEC Abbott had said the Australians for Honest Politics Trust sought to "preserve and strengthen the integrity of the electoral process".

OK, Tony, I thought. Let’s see whether you have been, and would continue to be, the recipient of favoured treatment under Australia’s electoral laws.

First I checked out the AEC’s track record.

Way back in May 2002 Labor Senator John Faulkner had asked the AEC’s officers in Senate Estimates whether the Liberal lawyers’ donation of services to Sharples for his Supreme Court case and Abbott’s indemnity should have been disclosed to the Australian people. The AEC replied that it would seek legal advice and advise further "as soon as possible".

Fifteen months later it was yet to do so, and when Faulkner gave it a nudge after Hanson’s jailing, the AEC promised to get back to him! In a 28 August 2003 brief to the Special Minister of State, Eric Abetz, obtained under FoI laws, the AEC claimed it had not replied to Faulkner "as its inquiries to date have been inconclusive". (It would become apparent that no fresh inquiries had been undertaken after receiving the legal advice.)

Not a bunch of movers and shakers, then.

On Monday, 1 September 2003, I questioned AEC Director of Communications Brien Hallett, who’d been handling Abbott queries for several days.

"On what basis did the AEC decide not to require disclosure of the donors to the Honest Politics Trust?"

He said he didn’t know.

"Did it consider the trust deed before making the decision?"

He said he didn’t know.

"Did it receive a copy of Abbott’s legal advice?"

He said he didn’t know.

"Did the AEC take its own advice before making the decision?"

He said he didn’t know.

"Would the AEC release its correspondence with Abbott?"

No.

"Why not?"

That wasn’t "usual practice".

"When did the AEC receive its legal advice?"

He said he didn’t know.

"Would the Commission release that advice?"

No.

"Why not?"

It was "privileged".

When I pointed out that legal privilege belongs to the client, and that the AEC could therefore freely release its legal advice, the Director of Communications again refused to do so, saying he would get back to me later that day. He didn’t.

Hallett was behaving exactly like a political media-minder whose boss had something to hide; if he really didn’t know those answers it meant he deliberately hadn’t been briefed. Politicians play that game with their mouthpieces when their aim is to kill an issue. For an independent statutory body whose explicit duty was to the voters, not ministers or government, this was untenable. The AEC’s job was to keep our democracy clean, and to be seen to be doing so.

It was supposed to be on our side.

I decided to report the story on Webdiary transparently, declaring questions I had asked and answers I had got so that readers could see the games being played for themselves. I also decided to supply all the information they needed to participate directly in my attempt to get the truth. So I published the AEC’s charter and contact details.

Brien Hallett rang later that day, after issuing a bland press release by AEC Electoral Commissioner Andy Becker stressing the AEC’s statutory independence, its political neutrality, its earnest intention to address the "complex issue" in a "measured and deliberate" way, blah blah blah. Yet again Hallett stonewalled. He was playing political spinner and I copped the requisite "prepared line": "We made a decision in 1998 and are monitoring it, and if new information comes to hand it might change but we do not yet have enough information to form an opinion."

"So on what basis did the Commission make that 1998 decision?"

"Correspondence with Mr Abbott."

"Did that correspondence include his legal advice?"

"I’m not going into the details. We don’t give running commentary on the specifics."

"What was the basis of the AEC’s 1998 decision not to order disclosure of donors?"

"The evidence before us at the time."

"What was that evidence?"

"Correspondence … among other things."

"Did the AEC read the Honest Politics Trust deed Abbott says he sent?"

"I can’t tell you."

"But Abbott has already told us he sent it to the AEC!"

"We don’t normally comment on such things."

"Did the AEC get its own legal advice to check if Abbott’s claim that he need not disclose his donors was correct?"

"I’m not going to comment."

"Why not?"

"We don’t give a running commentary on individual decisions on matters to do with disclosure."

"Why not?"

"It’s between us and the individual concerned."

I was gobsmacked. So the Australian people the AEC was supposed to be serving didn’t have the right to a full report from their statutory body!

"What is the Commission doing now that its decision is being strongly questioned by independent legal experts?"

"We’re monitoring the situation."

"Are you investigating, or reading the [news]clips?"

"We’re aware of Abbott’s statement last week, and comments made by him and others. If someone brings a complaint, we’ll consider it."

I couldn’t believe it. In response to serious questions about whether the AEC had done the job, it didn’t even see fit to investigate and was relying on the media to do it. And if we asked questions the AEC’s spin doctors would stonewall anyway.

"You’re saying you don’t investigate, but you’re supposed to be the people’s representative here. Surely you must investigate this for yourselves, on their behalf? Why won’t you release the legal advice you’ve got now so people can judge for themselves?"

"We don’t give out our legal advice. That’s standard practice."

"Why?"

"We see this as part of our duty to implement the Commonwealth Electoral Act."

"So why don’t you give the people the legal advice, if that’s your duty — to implement this Act on behalf of voters?"

"Because it’s standard practice."

"But the AEC’s credibility is on the line — its own press release showed that. Why won’t the AEC let the people know what’s going on if there’s nothing to hide?"

"These are matters between individuals or groups under disclosure obligations and the AEC."

Got it by now? The AEC was not administering the Electoral Act in accordance with its own stated goals, much less its civic duty. There was nothing in electoral law that obliged it to be at all secretive, yet it chose to impose confidentiality to suit the politicians. It was playing the game of those who wished to avoid scrutiny and could well be breaking the law! The AEC had become part of the Big Party closed shop. Part of the Beast.

I wondered aloud if the part-time Chairman of the AEC, Justice Trevor Morling QC, would approve, and asked for his phone number.

Hallett said he’d get back to me.

By now most reporters who’d taken an interest had moved on. That’s the spinner’s main aim. First defence: the stonewall. Second defence: meaningless verbiage from the boss. Then more stonewall. These tactics usually kill the story.

Unfortunately for the AEC, Australians were taking matters into their own democratic hands — several other Webdiary "primary customers" emailed, phoned and wrote to the AEC.

Joo-Cheong Tham wrote a legal opinion for Webdiary that said the donors must be disclosed by law and agreed to answer Webdiarists’ legal questions. In a piercing aside, he warned, "if political litigation becomes the norm, it will then become another way of insulating the major political parties against less well-off competitors".

This is the third of a series of edited extracts from Margo Kingston’s 2007 book, Still Not Happy, John (Penguin). Read the fourth and final extract here

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