Independent Member for Warringah Zali Steggall (Image: AAP/Mick Tsikas)

Independent MP Zali Steggall’s best contribution to the cause of integrity and transparency — one of her favourite causes — might have been to illustrate how farcical the current political donation disclosure rules are.

According to Nine newspapers, Steggall’s campaign-funding vehicle received $100,000 from Sydney’s Kinghorn family, but failed to disclose it for the 2018-19 financial year.

The problem is, under our existing laws, the non-disclosure of the Kinghorn donation was almost, but for some paperwork, perfectly OK. The donation was notionally composed of $12,500 from each of eight donors.

The disclosure threshold that year was $13,800, so no disclosure was required. But John Kinghorn sent Steggall’s campaign a cheque for $100,000 — in effect bundling all the donations together. That pushed it over the threshold. If he’d sent eight cheques in different names, there would have been no problem.

Splitting donations is a time-honoured way of evading political donations rules. Famously, construction firm Brown & Root funnelled hundreds of thousands of dollars in donations to the young Lyndon Johnson in the 1930s, in gross violation of donation laws, by having each employee contribute individually to him. It continues to this day in Australia, where you can donate up to $14,500 to each state and territory branch of a political party without disclosing it. But money is fungible, and state and territory branches of parties shift money between each other routinely.

Judging by the volume of dark money in our political system — in which some branches of both sides of politics only reveal the origin of the minority of their revenue — you can bet donation splitting is an important mechanism for evading disclosure requirements.

It’s expected of the major parties, of course, so it comes with a particularly foul odour when a supposed cleanskin, a politician who has made a virtue of her calls for integrity and a better standard in public life, is revealed to have engaged in the same sort of evasion.

And it’s not that hard to adhere to a higher standard. Labor and the Greens commit to revealing all donations above $1000, regardless of official disclosure thresholds. One Nation and Clive Palmer’s outfit — regardless of what you think of them — reveal every cent of their revenue.

Steggall’s non-disclosure reveals another broken feature of our disclosure laws: there are no consequences for non-disclosure.

Steggall and her team, and Kinghorn, corrected their 2018-19 information in early 2021. By major party standards, that’s almost on time. The fundraising arm of Steggall’s predecessor in Warringah, Tony Abbott, declared a $25,000 donation in 2010 four years later. In 2015, the Victorian ALP corrected its disclosures for the 2007 election campaign as Bill Shorten went to the trade union royal commission to explain them. In fact, late donation disclosure is routine, particularly among state branches.

The issue sparked a fight between the Australian National Audit Office (ANAO) and the Australian Electoral Commission (AEC) in 2020. The ANAO undertook an audit that found around 20% of party donation returns were late, and criticised the AEC for not pursuing the offenders aggressively enough. The AEC responded that they had limited resources and were reluctant to use them taking legal action against parties, preferring “consultation and education”.

Former Liberal Party federal treasurer Michael Yabsley, author of Dark Money – A plan to reform political fundraising and election funding in Australia, says the failure to disclose makes Steggall’s position untenable. “Steggall has spectacularly failed to live up to her own standards. All she can rely on is that her only offence is to have done what all the other parties and candidates have been doing for decades.”

Yabsley pointed out that the donation was a major part of Steggall’s election warchest — 9%. “Single handed Zali Steggell has created her own massive trust deficit. The electorate marks hard those who do not practice what they preach.”

“As a political fundraiser for 40 years, I have fessed up and am happy to call myself a ‘poacher turned game keeper’.”

“Zali has just signed up as ‘game keeper turned poacher’.”

“Political fundraising is like law enforcement generally. For every offence we know about there are many we don’t. We now need to know just how dirty are Zali Steggell’s hands when it comes to political fundraising.”

“The only option is to put the broom through the whole process of political fundraising and election funding in Australia,” Yabsley said.