Friday, January 31, 2003

OTTAWA -- Today, Democracy Watch praised many of the measures in the federal Liberal government's new Bill C-24 proposing to change political finance rules, but raised concerns about excessively high donation limits and public financing amounts, and serious loopholes in disclosure requirements.

The positive measures in Bill C-24 are as follows: disclosure requirements for nomination contestants, riding associations and party leadership candidates; spending limits for nomination contests, and; a ban on corporate, union and other organization donations to political parties and party leadership candidates, with penalties for any attempt to violate the ban.

However, Bill C-24 has many flaws as it proposes a system that will allow:

• excessively large donations by individuals;
• secret donations to MP and Cabinet minister's slush funds;
• delayed and vague donation disclosure requiremets;
• donations from corporations, unions and other organizations; and
• more public funding than the parties need.

A key flaw in Bill C-24 is that individuals will be allowed to donate an annual total of $10,000 to each political party (including its riding associations and candidates), an undemocratically high amount. In Manitoba and Quebec, individuals are limited to an annual total of $3,000 in donations to all parties combined.

"Only a tiny minority of wealthy Canadians can afford a $10,000 political donation," said Aaron Freeman, Democracy Watch Board member and Chair of the nation-wide Money in Politics Coalition. "The limit on individual donations must be affordable to most Canadians, and low enough to make abuses such as funnelling of donations very difficult."

A very serious flaw in the donation and disclosure measures in Bill C-24 is that MPs (including Ministers) will still be allowed to have a secret slush fund to receive unlimited, secret donations without any disclosure required. The government claims that the bill prohibits such funds from being used for "political purposes" but this rule will be almost impossible to enforce, and such funds could still be used by politicians in ways that will benefit them politically or personally such as for causes or events they support, or for their retirement or holidays.

"Continuing to allow MPs and Cabinet ministers to receive unlimited, secret donations is a recipe for corruption," said Freeman. "Limits and disclosure requirements must apply to all donations or politicians will continue to be influenced behind closed doors by wealthy corporations, interest groups and individuals."

Other disclosure flaws in Bill C-24 are that a delay of up to 18 months in disclosing a donation will still be allowed because parties and riding associations will not have to disclose their annual list of donations and donors until 5-6 months after the end of each calendar year. Also, the date of a donation will not have to be disclosed, making it impossible connect a donation with a particular government action. As well, adding a measure requiring individual donors to disclose their place of employment and corporate or union affiliations is key to preventing funneling of donations abuses.

Another problem area is that corporations, unions and other organizations will be allowed to donate $1,000 combined annually to nomination and election candidates and riding associations, even though these entities don't vote and have enough levers of power already. This will also make it more difficult to determine who is donating to politicians. If the bill ends up allowing corporate donations, disclosure of each donating corporation's parent company must be required.

"In the U.S., donations are disclosed monthly, and key information such as employer and parent company is listed," said Freeman. "Canadians have a right to know in a timely way exactly who is bankrolling the political system."

Democracy Watch also believes the amount of public financing proposed in Bill C-24 is too high, and called for a lowering of the proposed $1.50 per vote subsidy for each political party (based on the number of votes the party received in the last election). The proposed subsidy would likely mean even more annual funding for parties than they currently have, especially if the overly high $10,000 annual individual donation limit is kept as part of the new system.

The 50-group Money in Politics Coalition, coordinated by Democracy Watch, will push the federal government to correct these undemocratic flaws in Bill C-24 before it is passed by Parliament.