As a start, at least two skilled analysts with financial investigative experience are needed if the Commission is to be able to achieve real change. The recommendations in this report and the associated ones in the PwC’s work are aimed at building up the Commission’s investigative capacity. The implementation of the recommendations should give the Commission a greater degree of confidence in the future in assessing the level of compliance being achieved than is possible at present. Even-handedness in a political party sense, in the choice of candidates for inclusion in the compliance review program, is still an important consideration in exercising the section 316(2A) powers, but ought not to dominate the selection process. Associated entities The FAD section undertakes a process annually whereby all registered political parties are contacted and asked to list their associated entities. There is no legislative power to conduct this process and a response cannot be compelled. As indicated elsewhere in this report, this is an imprecise exercise as often political parties themselves are not fully aware of all their associated entities. In the course of conducting compliance reviews of political parties, where staff identify information that indicates a particular body may be an associated entity, it is used to determine whether there are reasonable grounds to exercise the power under section 316(3A) of the Electoral Act. The Commission has also in the past acted on complaints from individuals, media reports and information from other sources. Given the inherent difficulties in comprehensively identifying all associated entities, the FAD section should consider incorporating directed measures in its practices, geared towards identifying comprehensively all associated entities of registered political parties. While it is recognised associated entities can change between financial years, the disclosure and compliance areas could collaborate to determine an appropriate strategy to improve the way in which the section identifies associated entities. One initial suggestion might to include some form of ‘follow-up’ of information received in response to the disclosure section’s initial request for parties to inform the Commission of their associated entities, during the compliance review process. Where the circumstances warrant, section 316(3A) can then be invoked to obtain further information. Recommendation 2: A new business model to facilitate the broadening of the compliance function should be developed involving:
In order to effectively provide a sense of purpose and direction to those that work within it, a strategic purpose and set of objectives need to be devised and agreed to by the staff in the area. It is important that the strategic purpose capture all functions performed by the FAD area and that its role within the agency as a whole is also determined and stated. To assist this process the review has developed a possible approach as follows: [The purpose of FAD is] To play a role in guarding against corruption and the exercise of undue influence in the electoral and democratic process and contribute to creating an informed and aware electorate by administering a disclosure scheme that ensures relevant political financial dealings are transparent by: Maintaining an accurate Register of Political Parties and undertaking the process of recognition of state branches of political parties to act as a basis from which to determine which political parties have obligations to disclose relevant financial dealings; Playing a proactive role to ensure that all participants in the democratic process that have a legislative obligation to disclose particular financial dealings are aware of the nature of the obligation; the ways by which they meet the obligation and the consequences if they fail to meet the obligation; Publicly releasing the required information on political financing by the statutory deadline in a manner that is widely accessible by and available to the community; Using the powers conferred in section 316 and sound risk assessment frameworks to conduct analysis of the financial records of political parties and associated entities, according to best practice methodologies in the auditing field to guarantee the accuracy and completeness of disclosure; and Undertaking prosecution actions against those that commit an offence under Part XX of the Electoral Act. During and following an election period, to: Maintain an accurate Register of Political Parties; Play a proactive role in ensuring that candidates, Senate groups and donors to candidates and Senate groups are aware of their legislative obligation to disclose particular financial dealings, the nature of that obligation and the ways by which they can meet their legislative obligation; Undertake prosecution actions against those that commit an offence under the Electoral Act in relation to financial disclosure following an election; and