China — boldly doing what corporations have been doing for decades

There’s a common theme uniting claims the Chinese government offered to fund the election campaign of a Liberal Party member in Victoria, recent revelations of the role of Beijing-backed community groups in supporting local government politicians in Sydney, and the NSW Labor party’s ongoing problems with Chinese influence.

And it’s one that goes well beyond the efforts of the Chinese government to interfere in Australian politics. It’s money, the dominant role it plays in Australian politics, and the lack of transparency around it.

At the heart of allegations by the late Bo Zhao that a Chinese-Australian businessman (one with Belt-and-Road links — Daniel Andrews’ decision to sign up to that looks ever more dubious) offered to fund a campaign for a Victorian seat is the importance that fundraising has in major party politics. It’s no wonder the Chinese government sought to fund their own politician.

Corporations, private interests and the very wealthy have been doing the same for decades, in forms egregiously corrupt (see Eddie Obeid and the pervasive corruption of the NSW Labor Party) or outlawed in recent times (property developer donations) or still permitted, even encouraged, under our lax and obscure political donation and funding laws.

While donations from foreign sources are now prohibited, the ban is trivially easy to circumvent, as are federal disclosure requirements: donors can give up to $13,000 a year without either donor or recipient disclosing it.

A relatively small number of individuals can thus provide substantial funding to a candidate with no disclosure. Even above the disclosure threshold, there are few consequences for failing to disclose, and none for disclosing late, even many years afterwards.

Funding provided by Chinese-Australian business figures has been at the centre of the most recent scandal of the NSW Labor Party — that’s the one after Sam Dastyari’s Chinese funding scandal. Long-time Labor and Liberal donor property developer Huang Xiangmo — previously linked to Dastyari — is alleged to have channelled $100,000 to NSW Labor via fake donors after a Chinese Friends of Labor fundraising dinner in 2015 (Huang denies it).

Figures within the party are alleged to have known about the donation but done nothing. The party secretary at the time of the donation, Jamie Clements gave evidence to ICAC that “I think the donations system is something that leads, when there are big donations, to people being able to have access and all sorts of special treatment”. Donations, he agreed, were “a price paid for influence”.

It’s unclear whether Huang — who has given millions to both parties — made the donations to further his property interests or those of Beijing (for example, in relation to Australia’s approach to the South China Sea issue), or a combination of both. But that very lack of clarity illustrates how something our political class and even much of the media takes for granted as business-as-usual — the wielding of influence and the exploitation of access bought with donations — is used to undermine Australian democracy.

The alleged $100,00 Huang donation is being considered by ICAC because it broke the rules around donations by one particular industry — property development — which has strong incentives to corrupt officials and policy-making process at state and local level.

But many other, more high-profile industries have strong incentives to influence and suborn those as well: fossil fuel industries to prevent climate action; banks to prevent or circumvent financial regulation; the gambling industry to prevent gambling regulation; the Big Four accounting firms to encourage more government contracts for them.

And they are not banned — the major parties still happily accept their cash.

Companies that are based here, like the big four banks, at least have an incentive to further the national interest economically, as they rely on the health of the Australian economy. Foreign corporate donors like Chevron or Deloitte don’t even have that. Yet their donations pass unexamined.

For many years, transparency and governance advocates, and small outlets like Crikey, have been criticising the role donations are allowed to play in our democracy, and the lack of transparency around that role. While it was corporations and the super-wealthy exploiting that role, no one seemed to mind.

Now that a hostile foreign power is exploiting the same systemic flaws — now that it’s a national security issue — perhaps the political class will discover an incentive to address it.