Prohibited Donor Investigation Outcomes
Compliance review findings in relation to Prohibited Donors
Background
Effective from 1 July 2021, the ACT Government moved to reduce the risk of corrupt conduct in the electoral system by banning property developer donations to local political parties and candidates in the ACT. From 29 November 2023, ‘foreign entities’ was added to the list of individuals or organisations prohibited from making donations to ACT registered political parties, associated entities, MLAs and candidates. These prohibitions are specifically detailed in Division 14.4A and 14.4B of the Electoral Act 1992. Division 14.4A prohibits a property developer, a close associate of a property developer (or a person on behalf of either one of these parties) to give gifts to a political entity. Division 14.4B prohibits a foreign entity, or a person on behalf of a foreign entity, to give gifts to a political entity. It is also prohibited for a political entity to receive a gift from a prohibited donor.
To assist in the identification of any donations that may be prohibited by legislation Elections ACT has engaged an external contractor, McGrathNicol, to conduct regular and ongoing forensic compliance investigations into donations received by political entities in the ACT.
These regular compliance investigations are aimed at maintaining the integrity of the ACT’s funding and disclosure scheme and to provide assurance to the ACT community that political entities are not receiving gifts from prohibited donors.
Scope
The scope of the compliance investigations is to determine:
- if any gifts, of any amount, have been made by a prohibited donor, whether or not they were subsequently accepted by the political entity;
- if any gifts from a prohibited donor have been accepted by a political entity;
- if a gift of money from a prohibited donor has been accepted by a political entity, whether the gift has been deposited into a specifically designated Federal election account, and if so:
- the date the gift was donated and the date the gift was deposited into the Federal election account;
- whether any funds from that Federal election account have been used for other than a Federal election;
- whether any funds have been transferred from that Federal election account into any other account held by the entity;
- if a gift from a prohibited donor is not a gift of money whether;
- the gift has been specifically set aside for use in a Federal election;
- proceeds from the gift, if applicable, have been deposited into a Federal election account;
- the gift, or proceeds from the gift, have been used for a purpose other than a Federal election purpose; or
- any proceeds from the gift have been transferred from that Federal election account into any other account held by the entity. The approach and limitations of this review are outlined in our engagement methodology.
Assessment definitions
A property developer is any corporation that carries on a business involving the residential or commercial development of land to sell or lease for profit; but does not include the following:
- an incorporated association under the Associations Incorporation Act 1991;
- a corporation operated on a not-for-profit basis;
- a corporation declared under section 222K; or,
- any other corporation prescribed by regulation.
A close associate of a property developer is any of the following:
- a related body corporate;
- an officer of the corporation or a related body corporate;
- a person whose voting power in the corporation or a related body corporate is more than 20%;
- any domestic partner of a person mentioned in paragraph (b) or (c);
- if the corporation or a related body corporate is a stapled entity in relation to a stapled security -the other stapled entity in relation to the stapled security;
- if the corporation is a trustee, manager or responsible entity in relation to a trust:
- for a unit trust -a person who holds more than 20% of the units in the trust; or
- for a discretionary trust -a person who is a beneficiary of the trust;
- any other person or body prescribed by regulation.
A foreign entity is any entity that is not one or more of the following:
- an individual enrolled on the Commonwealth roll;
- an individual enrolled on the ACT electoral roll;
- an individual who is an Australian citizen;
- an individual whose principal place of residence is in Australia;
- a company incorporated under the Corporations Act;
- a company incorporated under a territory law;
- an entity which has its head office located in Australia;
- an entity for which the principal place of activity is, or is in, Australia;
- a body politic, or part of a body politic, of the Commonwealth, the Territory or a State (State includes the Northern Territory).
Findings
| November 2023 | The following findings relate to the November 2023 property developer compliance investigation and covers the period between 1 May 2023 to 9 October 2023, and includes gifts disclosed in the 2022/2023 annual return. A total of 458 donations from 114 distinct donors were received during the period under review. Of those donors, a sample of 25 donors were selected for the conduct of the compliance investigation in accordance with sampling methodology. Seven corporate entities were included in the sample and an ASIC search was conducted on six of these entities. 51 individuals associated with these entities were assessed. Further investigations were then conducted to identify possible correlations between donors and property developers that may indicate a breach of the Electoral Act. The results of the compliance investigation were as follows: Number of potential property developers identified in donor sample: 0 Number of potential close associates identified in donor sample: 0 |
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| May 2023 | The following findings relate to the May 2023 compliance investigation and covers the period between 1 October 2022 to 8 May 2023. A total of 199 donations were received by political entities during this period; representing a total of 36 distinct donors. A sample of 25 donors was selected for the conduct of the compliance investigation in accordance with sampling methodology. The remaining 11 donors not selected in this round of investigation had been previously reviewed within the last 18 months. Six corporate entities were included in the sample and an ASIC search was conducted on five of these entities. 29 individuals associated with these entities were also reviewed. Further investigations were then run to identify any correlation between donors and property developers that may indicate a breach of the Electoral Act. The results of the assessment were as follows: Number of potential property developers identified in donor sample: 0 Number of potential close associates identified in donor sample: 1 An additional investigation was completed for the donor identified as a potential close associate of a property developer. It concluded that it is highly unlikely that the individual is a property developer or a close associate of a property developer and accordingly, no breach has been identified. |
| November 2022 | The following findings relate to the November 2022 compliance investigation and covers the period between 1 April 2022 to 30 September 2022. A total of 192 donations were received by political entities during this period; representing a total of 85 distinct donors. A sample of 25 donors was selected for the conduct of the compliance investigation in accordance with sampling methodology. Three corporate entities were included in the sample and an ASIC search was conducted on these entities identifying an additional individual for review as a close associate. 23 individual donors were included in the sample review process. Further investigations were then run to identify any correlation between donors and property developers that might indicate a breach of the Electoral Act. The results of the assessment were as follows: Number of potential property developers identified in donor sample: 0 Number of potential close associates identified in donor sample: 0 |
April/May 2022 | The following findings relate to the April 2022 compliance investigation and covers the period between 1 October 2021 to 31 March 2022. A total of 189 donations were received by political entities during this period; representing a total of 51 distinct donors. A sample of 25 donors was selected for the conduct of the compliance investigation in accordance with sampling methodology. Two corporate entities were included in the sample and an ASIC search was conducted on these entities identifying an additional individual for review as a close associate. 23 individual donors were included in the sample review process. Further investigations were then run to identify any correlation between donors and property developers that might indicate a breach of the Electoral Act. The results of the assessment were as follows: Number of potential property developers identified in donor sample: 0 Number of potential close associates identified in donor sample: 0 |
| November 2021 | The following findings relate to the November 2021 compliance investigation and covers the periods between 18 October 2020 to 30 June 2021 (a legislative transition period prior to the full commencement of the legislation and offences) and 1 July 2021 to 30 September 2021. A total of 302 donations were received by political entities during this period; representing a total of 69 distinct donors. A sample of 25 donors was selected for the conduct of the compliance investigation in accordance with sampling methodology. Three corporate entities were included in the sample and an ASIC search was conducted on these entities identifying an additional eight individuals for review as close associates. 22 individual donors were included in the sample review process. Further investigations were then run to identify any correlation between donors and property developers that might indicate a breach of the Electoral Act. The results of the assessment were as follows: Number of potential property developers identified in donor sample: 0 Number of potential close associates identified in donor sample: 0 |
