The Gift Register: When is a donation not a gift?

From time to time an elected person gets an unsolicited gift from grateful elector or from a business, religious or community group.  And asking around, the most common gifts include a bunch of flowers, bottles of wine or boxes of chocolates, cakes, sometimes items of religious significance and such like, usually given at Christmas or after opening an event or as part of it or presiding over the AGM.

After declaring the gift on the Gift Register, the most common practice is to pass the gift on to either Council staff or friends or family or another community group or donate it as a raffle prize at a later date.  Conscience is then clear as not actually receiving the benefit of the gift, but at least not offending the giver.

Hospitality can be a very tricky thing at times.

I remember getting an enormous bunch of roses from a grateful development applicant.  Or at least I think that’s what they were.  The florist delivered them to my home in Fern Tree, left them on the deck and as I had come home late, hadn’t seen them. 

The possums did. 

Ringing the applicant the next morning, I stated that Aldermen were not allowed to receive gifts and it had to be returned.  She was most offended until I explained that the gift had been reduced to a nicely tied bunch of battered and stripped rose stems, so honour was satisfied and at least the possums derived a benefit.  Even so, she was most put out that she was not allowed to express her thanks in a way that was most natural to her.

As I said, hospitality can be a very tricky thing.

Other times a common gift is the event ticket.  As most Councils support sporting and cultural events, the organisers provide tickets back, particularly for opening nights.  In Hobart City Council such tickets are automatically declared on the Gift Register.  In some cases, tickets for the funding organisation are part of the commercial/grant arrangement.

Observe the front three rows on a first night at the Theatre Royal in the Dress Circle.  Given the familiar faces it’s a pretty good indication of how many complimentary tickets are flowing about between various layers of Federal, State and Local government, as well as funding arts bureaucrats and sponsors.

So how do we deal with gifts?

At the local government level, a statutory Code of Conduct guides Aldermen/Councillors how to deal with the ethics of gift receiving. 

You can find the current Code of Conduct at http://www.hobartcity.com.au/Council/Aldermen  on the Aldermen’s page with a .pdf link to the Aldermanic Code of Conduct.  I’ve excerpted the sections dealing with gifts below.  At Hobart after much discussion it was decided that gifts below a certain value did not have to be declared ($100).  Why?  In interpreting the Code, I and others were down to declaring individual cups of coffee whilst other Aldermen didn’t see the need to declare unless the gift was significant in value.  As the statutory bare bones code was not clear as to what level to declare or not, the line was drawn at $100.  Ah, the slippery slope in not declaring everything, said some.  So it was decided repeated amounts to $600 over 12 months have to be declared as a lump sum.  Not too many lunches in that, I hear some of you say.

You can find the full current Code of Conduct at http://www.hobartcity.com.au/Council/Aldermen  on the Aldermen’s page with a .pdf link to the Aldermanic Code of Conduct.  I’ve excerpted the sections dealing with gifts below.

The Code is not perfect, and if a person wants to rort the system, I’m sure they’ll find a way to do it.  And it still relies on the honesty of the Aldermen/Councillors to declare.  It’s the spirit of the thing that matters. 

Currently, after every election, the Code is reviewed to make sure it is up to date as events move on.  It is also being reviewed by the State government with a number of legislative changes being proposed for post the October elections.

And one thing we will have to get finally clarified out is what is meant by donation and what is meant by gift.  Is a donation political or otherwise the same as a gift received while a person is an elected member and a candidate? 

Let’s look at how is gift and donation is defined - click onto any online dictionary or if you like, wander off to the State Library and consult its excellent 27 volume Oxford edition:

Donation - noun

1. an act or instance of presenting something as a gift, grant, or contribution.

2. a gift, as to a fund; contribution.

Gift - noun

1. something given voluntarily without payment in return, as to show favour toward someone, honour an occasion, or make a gesture of assistance; present.

2. the act of giving.

3. something bestowed or acquired without any particular effort by the recipient or without its being earned.

When is a donation not a gift, and a gift not a donation?  I believe it is reasonable to say gift and donation are interchangeable in their meaning, and within the context of the Code of Conduct.  And I’d argue that a political donation is the same as a political gift – after all, if you were not an elected member would you be receiving the gift?  Or the donation?

It is not before time that State legislation is proposed to fix this situation.  However, it has to get through Parliament yet.

There are some who say a political donation is not a gift, due largely to the timing and the purpose for which it is used.  Well, I find that difficult.  Surely if someone gives you cash for an election campaign, they are also ensuring you’re around to make decisions that may or may not benefit them?  Okay, if you’re not elected, well and good, it is clear you’re a candidate accepting political donations.  But if you are a sitting Alderman/Councillor, how can you distinguish when you are re-nominating for Council at the same time?

So what does the Code of Conduct say?

So here’s the thing.  The Code at 7.2 states what is expected of Aldermen:

“As an Alderman of the HCC, you are expected to ensure that as part of your Aldermanic duties, you:

(a) never accept an offer of money, regardless of the amount”

And an offer of money, whether a gift or donation, is an offer of money.  Whether it is a political donation or not.  Because as the Code states, “as part of your Aldermanic duties” and please don’t tell me that “Aldermanic duties” are not political in nature.  It is an elected position.

Why raise this now?  Well it appears that after the local newspaper had done its usual pre-election FOI on the Gift Register, I went back to have a look at it the other day to check the facts on another issue, and noted a curious thing that appears to have been passed over somewhat lightly.  http://www.themercury.com.au/news/tasmania/hcc-gifts-tally-hits-72000-as-aldermen-wined-dined-and-shouted-to-the-best-shows-in-town/story-fnj4f7k1-1227069551433  Three years of the Gift Register are available for download and perusal. 

And if I might diverge a few paragraphs, yes, the Aldermen are and were quite sanguine about the contents being revealed, although as one was quoted, the Alderman hadn’t realised the value of the gift (which is weird, as it is the Aldermen that usually puts the entry in with its value at the time).

Council at its meeting on13 October voted to get the Gift Register on the Council’s website, which no one opposed, and it is about time.  At least that will save any FOI fees for any inquirer and the information will be available year round, rather than just before an election for some lazy journalist to pick over as a page filler.

[And I’m not trying to claim any high moral ground here.  I’ve accepted a bottle of wine from the War Widows Guild at Christmas.  I’ve accepted occasional tickets to cultural events (although the recent ones to the Dark MOFO weren’t taken up – I’d come down with a nasty cold after going through Melbourne Airport coming back from a local government conference and missed every performance).  And I’m down for a Christmas Hamper although I think that year I attended on my own as my glorious other half was elsewhere, I needed a stick to walk and couldn’t carry heavy objects so left it for Council’s Committee Support staff to enjoy.]

What was the curious thing, I hear you impatiently ask?  Now under Tasmania’s Electoral Act, I can’t mention a particular candidate’s name in these blogs without their permission, as they effectively constitute (at least to my mind) electoral material and I’m not taking the risk of breaching the Act.  Follow the links and make some deductions.  You’ll work it out who I’m referring to in the next paragraph.

So given 7.2 of the Code, how to explain the acceptance of a total of $5,200 cash donations to one Alderman?  Even allowing that it looks like party donations given my knowledge of the donors names, it still breaches the Code that states “never accept an offer of money”.

And when is a donation not an offer of money?  Even if the donation was subsequently passed onto a party organisation, that’s where it should have been directed in the first place and not offered to, or accepted by, the Alderman.  What sort of party can’t get its act together to hold donations in trust for a candidate’s election campaign? 

Given that on the campaign trail there has been a persistent thread of comments against certain of the candidates for Lord Mayor by others seeking the same position as to sources of that candidate’s funding, it leaves this particular candidate looking as if either judgment is wanting or a double standard is being applied, or worse, has been unwittingly manipulated into making a public stand on an issue without thinking the whole thing through. 

And more so since the website Funding and Disclosure was opened.  Have a look at whose actually declaring cash donations in Hobart.  http://www.fundinganddisclosure.org.au/index.php?act=candidates&divisionId=43&electionId=1

Railing against the lack of political donation legislation in Tasmania for local government, an already elected member of the same political grouping has inadvertently self-revealed as possibly in breach of Section 7.2 of the Code of Conduct, depending on how you define donation or gift as fitting into the meaning of “offer of money”.

So while folks are all off counting angels on pinheads, and trying to find the way though the murk of grey areas of sorting this issue out, what to do?

It presents an interesting ethical problem for any elected members who are part of a political party structure.

For those who are independent, how are they to handle campaign funding?

For a start, let’s look at the status of local government.  Aldermen, unlike State and Federal elected people, even if in campaigning mode, are still sworn in as elected people until the poll is closed.  There are no caretaker provisions.  So in my opinion it is reasonable to say that no Alderman should be personally receiving cash donations or gifts at any time while they are still actively making decisions.

Does this mean introducing a caretaker mode for local government?  If yes, gifts of cash or donations of cash/in kind can then be distinguished as political campaign funds, and declared appropriately.

The Code of Conduct should guide us in our behaviour during an election, let alone the clear and stringent requirements of the Tasmanian Electoral Act and the Local Government Act.

So here’s the other thing that got me thinking about the ethics of local government and prompted me to go back to the newspaper article in the first place:

At 7.2 (c), the question arises how Aldermen can get away with accepting hospitality at a time when a vote for financial largess via a grant is presented to Council.  All very well to say the provision of tickets to say, AFL games, is part of a contractual arrangement, but how does the public perceive it, when an organisation is asking for a pretty hefty sum from the ratepayer pot? 

Just before the vote at Council to fund future AFL games, ratepayers approached me asking whether there was a conflict of interest when the Aldermen were seen visibly enjoying the Corporate Box hospitality the week prior.  The Code says Aldermen should:

(c) strive to avoid situations in which the appearance may be created that any person or body, through the provision of hospitality or benefits of any kind, is securing (or attempting to influence or secure) a favour from you or the HCC.

On asking the General Manager whether being given multiple tickets and/or dinners for the AFL North Melbourne v St Kilda game at the same time as considering funding was a breach of the Code, the technical reply was that the tickets to the games and free dinner were part of an earlier contractual funding arrangement. 

Technically correct, but seriously, hardly capable of creating a strong public perception that Aldermen were not influenced in their decision making to fund AFL games.  Especially if the future arrangements ensured more free games tickets and dinners. 

The whole public perception thing has been made worse by the fact that discussion on funding was held in the Closed meeting of the Council committee.  (And this is something I’ll blog on later.)

And no, I didn’t accept any tickets or dinner invitations, and no, I didn’t support funding a multi-million dollar business organisation that could afford $3.2M for one of its programs and pay its CEO over a million in bonuses and salary one year but not able to afford to fund a mainland team to visit Tasmania three times a season. 

(And for that decision, had my name read out at an AFL dinner as a person to not vote for in the current elections.  I’ll take that as a badge of honour, thank you.)

So what reforms are needed?

After the election at Council when the Code of Conduct is reviewed, there are two changes needing to be made.

Firstly, clarifying cash party donations.  It has to be made clear to Aldermen that they must never accept cash donations personally, and if their parties can’t sort out arrangements for this, that’s something they need to do!  Certainly it has to be clarified why a donation is not the same as a gift.  With luck the State legislation proposed may clear this one up or at least provide some clear guidelines on how such monies are handled.

Secondly, I think it’s high time we got rid of the contractual arrangement/grant conditioned free tickets.  Aldermen are paid a significant allowance in Hobart, and the Lord Mayor and Deputy even more so, and if being seen at events as an Alderman or Lord Mayor or Deputy Lord Mayor is part of the role, then the cost of events is tax deductible under the “any other contribution” part of deductions.  If we want true transparency, and a public perception of not being influenced in our decision making, isn’t it time to pay our way, nes pas?

 

Aldermanic Code of Conduct

Standard #7 Giving and Receiving of Gifts or Benefits: Consistent with Standards #3 and #4, you are expected not to personally and unjustly benefit from, nor be unduly influenced (or be perceived to be unduly influenced) in making decisions as part of your role with the Council as a result of financial inducements, gifts or entertainment or other benefits.

7 Giving and Receiving of Gifts and Benefits

Standard #7 – Giving and Receiving of Gifts or Benefits: Consistent with Standards #3 and #4, you are expected not to personally and unjustly benefit from, nor be unduly influenced (or be perceived to be unduly influenced) in making decisions as part of your role with Council as a result of financial inducements, gifts or entertainment or other benefits.

7.1 Key concepts:

Aldermen hold positions of trust within the community. They are expected to exercise their powers and carry out their duties without being influenced by personal gifts or benefits which they might otherwise enjoy and so must adhere to the highest standards of transparency and accountability in relation to the receipt of gifts and benefits.

7.2 What is expected of you?

As an Alderman of the HCC, you are expected to ensure that as part of your Aldermanic duties, you:

(a) never accept an offer of money, regardless of the amount;

(b) do not accept gifts and benefits, without ensuring that they are disclosed and recorded in the Gifts Register in keeping with Council policies and procedures.  Such gifts may include a meal and/or beverage, tickets to sporting or theatrical events, corporate hospitality at a corporate facility or at a sporting venue, discounted products for personal use, use of facilities such as gyms, use of holiday homes, free or discounted travel and free training excursions.

(i) Gifts and benefits received by Aldermen with a value under $100 do not need to be disclosed and recorded in the Gifts Register.

(ii) An accumulative amount in excess of $600 from any single source within a 12 month period is to be declared and recorded in the Gifts Register.

(c) strive to avoid situations in which the appearance may be created that any person or body, through the provision of hospitality or benefits of any kind, is securing (or attempting to influence or secure) a favour from you or the HCC.

NOTE: On those occasions that the Council provides Council-issued tickets to Aldermen, details of the tickets will be subsequently automatically recorded in the Aldermanic Gifts Register.

7.3 Supporting example:

As examples only:

•        If you are involved in the allocation of tenders for any work supplied to the HCC, you must not accept any benefits (whether monetary or otherwise) from a tenderer as this might be expected or perceived to influence your decision.

•        If you are provided with tickets to the theatre or any form of corporate entertaining, whether it is pursuant to a Council sponsorship arrangement or otherwise, which is provided to you due to your public office, then you are responsible to ensure that this is declared in the HCC Gift Register in keeping with guidelines and policies relating to gifts and entertainment.

7.4 Supporting material:

Local Government Act 1993 - Section 339A – Misuse of office

 

Authorised by Eva Ruzicka, 10 Congress Street, South Hobart