LNP fundraising furore leads to calls for Qld's donation laws to be beefed up

An anti-corruption body has called for Queensland's tough political donation laws to become even stricter after a day dominated by integrity questions in the state election campaign.

Han Aulby, executive director of the Centre for Public Integrity, said while Queensland had some of the strictest donation laws in the country, these laws could be extended to cover membership fees to peak industry bodies to "avoid any potential for the funnelling of prohibited donations".

LNP leader Deb Frecklington in Redcliffe on Tuesday after reports she had been referred to the electoral watchdog.Credit: Lydia Lynch

"Strong monitoring and enforcement by the ECQ [Electoral Commission of Queensland] and the CCC [Crime and Corruption Commission] is the key to making sure these laws have impact," Ms Aulby said.

In a submission to the Economics and Governance Committee inquiry into the laws, the centre warned that the "narrow" definitions would not cover expenditure on campaign staff and consultants, income from large party membership fees, or fundraising events.

In an open letter, Crime and Corruption Commission chairman Alan MacSporran, QC, warned the lead-up to an election could be a “high-risk” period for those holding or seeking office.

“It is important that elected officials and candidates are aware of their obligations when it comes to disclosing donations and the prohibited donor scheme,” he said.

“Elected officials and candidates should be alert to the strategies and tactics that may be used by some in the private sector to buy or exert influence.”

He said the commission was “proactively” pulling together information, including donations, made to parties and candidates, to “better understand whether these give rise to any new or emerging corruption risks”.

“The CCC’s own intelligence assessment indicates that the lines between government and the private sector are blurring, with overlapping networks of association involving consultants, influencers, lobbyists and executives,” Mr MacSporran said.

In the midst of a furore surrounding donations to the LNP, party leader Deb Frecklington and Prime Minister Scott Morrison attended a $1500-a-head fundraiser at the Brisbane Convention and Exhibition Centre on Tuesday.

The timing was unfortunate, at best.

It was held just hours after the ABC reported that Ms Frecklington had been referred to the ECQ – by her own party – over a dinner at a developer’s home that resulted in a stream of donations.

A source close to the LNP campaign told Brisbane Times the report sent the campaign into crisis mode.

"Crisis would be an understatement – it's chaos," the source said.

Ms Frecklington denied she was referred to the ECQ over the August dinner, and she played down the attendance of developers.

"In relation to private dinners, I attend dinners all the time, I am a politician," she said.

"Prohibited donors can attend fundraising events, they just cannot donate. I stand by my integrity."

The Palaszczuk government introduced tough new donation laws in 2017 that prohibit property developers from donating to state and local political candidates. A further cap on donations to candidates and parties will be enacted from 2022.

Graeme Orr, a professor with the University of Queensland, said while there had been no evidence in this case of money being donated by property developers, there would likely have been a "waterbed" effect after the law changed.

"If you ban donations from one area, they can pop up in another," he said. "It will always be difficult to flush out all the money from the system."

Professor Orr said although he believed the LNP "clearly" hated the laws, it did have a point in that a cap on everyone might be fairer than singling out one industry. Still, that too would likely lead to instances of people "trying to get around" it.

"People with money resent being told what they can do with their money," Professor Orr said.

Addressing the controversy during a campaign stop in Redcliffe, Ms Frecklington said she was "100 per cent" confident that no developers had sought to skirt the rules by donating through a third party.

"Everyone complies with the rules," she said. "The party routinely seeks advice from the ECQ because the donation laws that have been put in place by the Labor Party are complex.

"There are various matters that the party have advised me they write to the ECQ to seek that advice, and there is nothing untoward about that."

The issue dominated the Queensland campaign on Tuesday. Early in the morning, journalists were greeted with an email from LNP headquarters.

"The ABC's allegation that the LNP has referred Deb Frecklington to the ECQ is false. It has not," an LNP spokesman said in the email.

"The LNP regularly communicated with the ECQ to ensure that we comply with the Act."

While the ECQ remained tight-lipped over the matter on Tuesday, its 2019-20 annual report revealed it conducted reviews of all registered political parties between January and April last year to ensure they were complying with the prohibited-donor scheme.

These reviews followed a High Court ruling that overturned a loophole permitting donations from property developers if the funds were, or might be, used for Commonwealth electoral purposes.

Electoral Commissioner of Queensland Pat Vidgen then announced an amnesty for any such donations, which were disclosed in full and returned.

After high-level audits of party bank statements as part of the ECQ's reviews, debt recovery notices were eventually issued to two unnamed political parties for a total of almost $33,000.

On Tuesday, Deputy Premier Steven Miles accused the LNP of playing semantics.

"Rather than being corrupt, she [Ms Frecklington] is simply incompetent and did not know what her office was doing, but the statement from the LNP is nothing short of tricky," he said.

"It doesn't say whether her office has been referred to the ECQ, whether her involvement in events has been referred to the ECQ, or whether those events were referred to the ECQ."

Premier Annastacia Palaszczuk’s own attendance at a fundraiser hosted by former prime minister Kevin Rudd at a private residence on the weekend also came under media scrutiny.

The Premier said she was there, but stressed there were no property developers in attendance.

The government amended state laws to prevent property developers from donating to political parties, and Ms Palaszczuk said the rules were "clear".

"It is the law, and it is a very serious issue," she said.

The LNP pointed to the rules, listed on the ECQ website, which state "a prohibited donor is permitted to attend a political fundraising event for free; however, they cannot pay for food or beverages or any other cost related to the event".

The ambiguity was too much for Greens MP Michael Berkman, who called for all corporate donations and cash-for-access meetings to be banned.

"Regardless of what’s going on with the LNP right now, it’s a disgrace that both major parties are still selling access to ministers and senior party officials, and taking corporate donations to fund their campaign," he said.