OPINION: Referendums are particularly susceptible to the influence of wealthy individuals, writes GAVIN BARRETT
ECONOMIST MILTON Friedman hit a political nail on the head when he observed that “only a crisis – actual or perceived – produces real change”.
With Ireland now confronting a whole array of crises, major changes in the political system were thus perhaps to be expected. One badly needed, long overdue reform has now been revealed to be in the pipeline: the introduction of appropriate restrictions on the use of money to gain influence in Irish politics.
The proposed reforms will have two aspects, and separate announcements were made in relation to these. One was made on Saturday, when Minister for the Environment John Gormley told the Green Party conference that legislation would be introduced to stop political donations by large companies, restrict expenditure by political parties between elections and reduce the limits at which donations must be declared.
The need for changes of this kind can scarcely be doubted.
Last June, the Standards in Public Office Commission (Sipo) revealed the astonishing fact that it was “not known” how Irish political parties financed their 2007 election campaigns. The commission noted that “if the intention of [existing] legislation is to provide for transparency and openness, it is not achieving this aim”. Sipo called for a new approach to (and increased transparency in) the general funding of political parties and greater scrutiny of party political expenditure.
The details of Gormley’s new proposals in this respect remain to be seen but he has promised “the most radical piece of legislation on political funding ever”.
Elections reveal only one part of the problem, however. Referendums show the other. Last June’s Lisbon referendum showed the scale of influence capable of being exerted by one single unelected individual who has access to the kind of resources needed to finance expensive campaigns. Thus in a second recent announcement – this time made to the recent Fianna Fáil ardfheis – Brian Cowen announced restrictions on the use of money to influence the outcome of referendums.
It is worth noting that the impact of money on referendums has not merely been seen in Ireland. In Switzerland, multimillionaire right-wing politician Christoph Blocher first rose to prominence by bankrolling a successful 1986 referendum campaign against Swiss UN membership. In America (taking only one example) three billionaires have together spent millions of dollars successfully promoting their views in numerous referendums in various US states – outspending opponents in one 1998 Oregon poll by a factor of 50 to one. (One of them, incidentally, is George Soros, who famously “broke” the Bank of England with currency speculation in 1992.)
The danger of private money distorting referendum results to an inappropriate degree was rendered particularly acute in Ireland, however, by the 1995 Supreme Court decision in McKenna v An Taoiseach (No 2) – one of a series of unfortunate Supreme Court rulings handed down in cases brought by prominent opponents of continued European integration.
In McKenna, it was held unconstitutional for a government to spend public money promoting a particular result in a referendum. The merits of a democratically elected government being forbidden to spend any money at all in exercising its leadership role in a referendum situation are – putting it mildly – debatable.
But once the Irish courts prevented governments from intervening financially in referendum campaigns, the very least the Oireachtas should have done was to intervene immediately to prevent private parties with no democratic mandate whatsoever from doing exactly the same thing on anything more than a minor scale. Instead, a succession of Irish governments did little or nothing, creating the conditions in which a well-resourced corporate entity like Libertas, largely reflecting the views of a single individual, could have a major impact on the 2008 referendum campaign.
The particular susceptibility of referendums – and in particular Irish referendums – to the influence of wealthy individuals has arguably always been a more serious reason for concern than any of the (unconvincing) attempts to suggest that Declan Ganley in some way acts on behalf of right-wing American interests.
John Gormley has promised that the drafting of new legislation on referendums will begin this week, but we already have some details from the Taoiseach's ardfheis speech as to what the new laws will involve. If there is a criticism to be made of the reforms the Taoiseach has proposed, it is that they do not go far enough. Brian Cowen has suggested limits on campaign funding in referendums and improving transparency requirements – cutting the maximum donation that can be given by any donor from €6,348 to €4,000 a year, while revealing the identities of all donors to campaigning groups giving more than €2,500. In addition, all organisations involved in referendums are reportedly to be required to reveal full details about their funding immediately after a campaign is concluded. ( The Irish Times, February 28th).
Such proposals are laudable, but insufficient. The use of loans – availed of in a major fashion by Libertas in the last referendum (with Declan Ganley himself acknowledging having lent €200,000) ( The Irish Times, October 3rd, 2008) – also needs to be regulated, since the continued legality of recourse to loans on commercial terms will obviously greatly undermine any rules designed to control private financial intervention in referendum campaigns. Furthermore, disclosure should be required to be immediate, and not capable of being left until after the campaign has been concluded. At that point it will be too late to undo any damage, the referendum result having been already decided.
Finally, no reforms will make much difference unless the Standards in Public Office Commission is finally given the increased resources and powers it needs – and, in some respects, has already called for ( The Irish Times, December 19th, 2008) – to enforce them.
Reforms will obviously not cure all ills in Irish party politics, or act as a panacea for all difficulties associated with decision-making by referendum. But they will help ensure that both the next Lisbon referendum and future elections are conducted according to rules more appropriate to a modern democracy than those we have at present.
Gavin Barrett is a senior lecturer in the School of Law in UCD, specialising in European Union law