Legal Beagle by Graeme Edgeler


I have this theory

It always struck me as unlikely that National really cared how the EPMU – or any other union affiliate of the Labour Party – campaigned against them (there are ways they can do it and not break the law even without registering). I know it sounds crazy but the claim may actually have rested on the legal principle at stake.

The EPMU case revolved around the meaning of the word person in the phrase “person involved in administration of the affairs of a party”. Such persons are prohibited from registering as third parties under the Electoral Finance Act. Thus political parties cannot subvert their statutory spending limits by having their senior officials or candidates list as third parties with their own spending limits. Pretty sensible stuff.

Interpreting the phrase “person involved in administration of the affairs of a party” as to only exclude natural persons involved in administering political parties would have allowed political parties to use intimately-connected organisations as campaign proxies. It would have allowed the Wellington Central Branch of the National Party, or the Labour Party Governing Council, to list as a third party. Now this wouldn't have allowed drastic breaching of spending limits – any pro-Labour material would still need to have been authorised by Labour's financial agent etc. (and would count toward its spending limit), but anti-Labour advertising, or election-related issue advertising, could have been engaged in in excess of the party's cap.

So the current argument from National that the Labour Leader's Office should register as a third party must be seen in this light, otherwise it doesn't make much sense. It is not that National wants the Labour Leader's office, or the Parliamentary wing of the Labour Party, to register as a third party to comply with the Electoral Finance Act – it went to court to (rightly) ensure that they cannot. And knowing that the EPMU case established that a “person” like the Labour Leader's Office might properly be denied registration, they must know it cannot list as a third party: the Labour Leader's Office is surely involved in administering the affairs of the Labour Party.

The point isn't to embarrass Labour by making it register (and highlighting a further problem with the Electoral Finance Act). The point is to drastically limit the scope of the parliamentary funding entitlement. It won't be a prohibition on actually spending the money on electioneering advertising, as was found to be in place by the Auditor-General at the last election, rather it would transpose a new Electoral Finance Act limit over the (much less stringent) parliamentary one: the $120,000 limit if they list as a third party, or $12,000 if they don't or can't. Which is quite a bit less than the $800,000 or so National may otherwise fear Labour will spend (either within, or additional to, Labour's spending limit).

But this argument also constitutes an implicit argument than a relatively serious offence has been committed. The argument that the Labour Leader's Office should have registered as a third party is implicitly an argument that it is the Labour Leader's Office (or someone within it) that is the promoter of the advertising. It is not merely an allegation that as an unlisted promoter the Labour Leader's Office has breached the $12,000 (unlisted third party) spending limit (which National recognises), it is also an allegation that the advertising carries a false promoter statement. The budget advertising has a promoter statement listing Labour Party financial agent Mike Smith as the promoter of the advertising; if Bill English succeeds in his argument that it was really the Labour Leader's Office that is the promoter then something will hit the fan.

National is playing hardball on this one.

All published election advertisement must carry a promoter statement, listing the name and address of the promoter of the advertising. And the promoter is the person who initiates the advertising.

The Electoral Finance Act requires that promoters of election advertisement fall into one of four categories – the only people entitled to promote election advertisements are the financial agents of candidates, parties and listed third parties, and those spending under $12,000. If National can establish that the promoter of this advertising was someone other than Mike Smith – whom we must assume assented to the publication – then the initiator/promoter of a whole swathe of election advertisements put out under the name of party or candidate financial agents may be in doubt.

If National is serious, they're not just trying to embarrass Labour, they're trying to break the system.

And it's high risk. National doubtless has a lot of material like this – MP websites etc. funded by its Parliamentary entitlement for example, and most of its privately-funded campaign material will be thought up by professional campaign staff, with the financial agent likely just crunching the numbers to ensure they don't go over their limit. The compromise of adding financial agent-approved promoter statements to old material – or material about which electoral authorities have warned you – may become meaningless. If the financial agent actually has to initiate everything, rather than approve ideas initiated by others political party advertising may dry up.

And I'm just trying to work out whether they've thought this through. Using the Electoral Finance Act to stop Parliamentary spending makes sense from National's perspective, but the implicit allegation of offending that this attack necessarily entails could backfire. Any complaint about Labour's Mike Smith-approved, but potentially not Mike Smith-initiated, advertising could likely be levelled at every parliamentary party.

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