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OZPROSPECT LECTURE

Money and Power in Australian Democracy: The View from the NGO World

Jonathan Liberman

Tuesday 17 August, 2004

In June this year, British American Tobacco Australia made an interesting submission to a Senate inquiry. The Senate’s Community Affairs Legislation Committee is examining, among other things, a proposal to put an end to tobacco industry donations to federal political parties and candidates.

In its written submission to the Committee, BAT had this to say:

“We are strongly opposed to the Bill, whose effect, should it receive assent, will be to preclude Australian tobacco manufacturers, and many distributors and retailers of tobacco products from making donations to political parties and thereby participating in the democratic process.”

Now, there are a couple of things that trouble me about BAT’s statement. The first is the notion that donating to political parties is to be understood as an act of participation in the democratic process. I’m not sure that I totally agree with that characterization. It seems to me to be an act more accurately characterized in a somewhat different way. The second, and, I would say, the even more disturbing part of the comment, is the notion that to be precluded from making political donations is to be precluded from participating in the democratic process.

Now, if that were right, and one had to make political donations to be able to participate in the democratic process, then our democracy would not just be in poor health. It would, I think, be terminally ill.

Surely, participating in the democratic process involves more than writing cheques to political parties. How about, for example, contributing to public debate; writing letters to members of parliament; seeking meetings with ministers, shadow ministers, representatives of the minor parties, their advisors, local members; raising awareness of important issues through the media; creating outlets for voices and perspectives that otherwise go unheard; encouraging members of the community to involve themselves in social and political debates and campaigns. Surely, these are all meaningful contributions to the democratic process – at least as meaningful, I would have thought, as writing cheques to political parties.

Participating in the democratic process is not all about donating money and buying outcomes. Things are not quite as crude as that. But the political process is, whether we like it or not, very substantially influenced by money. For virtually every example of participating in the democratic process that one can imagine, and I listed a few a moment ago, having money is valuable, if not crucial. Participation, and especially effective participation, generally costs money. And, invariably, the more of it you have, the better off you are. Which brings me to the topic of the evening: To what extent is the NGO sector equipped to match the influence of big business?

I’m going to try to answer that question by first looking at some of the ways in which having money, and especially lots of it, is highly advantageous if you want to play the political process to make it deliver the outcomes you want. And then I’ll try to make suggestions about how we might think about changing some aspects of the system that we have; trying to level the playing field somewhat.

But let me begin by defining one of the key terms. By NGO, I’m here referring to non-government organisations that don’t exist for profit, and that don’t exist to serve the interests of those who are motivated primarily by profit. I’m excluding from the term organisations such as a number of business and industry groups, which are, of course, also non-government organisations, though not of the kind that, I think, the evening’s topic is getting at. So, I’m talking about organisations that are driven primarily by a concern about issues of, for example, a social, political, economic, environmental, ethical, or religious nature.

Now, I’m not for a moment suggesting that all NGOs are pure, selfless, lily-white organisations whose views about how the world should be are always right; or that, in a contest between an NGO and a business or industry interest, the NGO always has right on its side. Not at all.

In the end, each issue has to be judged on its merits, and most issues are complex. In an ideal world, our democratically elected representatives would make decisions informed by a process that ensured, as far as possible, the equal input of all members of society who might be affected by the decision and who wished to express a view. And what I really want to talk about here is the process of policymaking, and the way that money can, and inevitably does, influence that process.

One final preliminary point. NGOs have been under quite a ferocious attack recently. Unrepresentative. Unaccountable. Wielding too much power. A threat to the democratic process. And so on.

In their recent report to the Prime Minister’s Community Business Partnership, in which they made recommendations about how government should manage relations with NGOs, Gary Johns and John Roskam of the Institute of Public Affairs, concerned about the influence of NGOs, protested: “In many of their relationships with (Government) Departments, NGOs are granted privileges that are not available to members of the public.”

Now, let me take issue with the idea that is implicit in that comment. To draw a distinction between NGOs on the one hand and members of the public on the other is to either misunderstand or misrepresent the whole point of what NGOs essentially are.

The power of individuals, working alone, to influence the political process is, one would have to say, relatively limited. You might try to write letters to the editor or call talkback radio or write to your local member or hold up a placard on a street corner. All with quite a modest impact, I would suggest. The chances of an individual, working alone, without contacts in high places, getting access to a Minister, for example, are, I would have thought, fairly remote.

So, what do individuals who are concerned about particular social or political issues, and want to make a difference, invariably do? Why, they form groups. They join forces with other individuals who share similar concerns. They pool resources. They share ideas. They realise that, working together, they can make much more of an impact than they could working alone. And, lo and behold, before long, what you have is an NGO.

To distinguish between NGOs and members of the public is to make out as though NGOs are some kind of personless, soulless entity, hurtling undemocratically through the universe, crowding out the voices of real people. Well, guess what? For the most part, NGOs are, in fact, made up of real people. They represent the attempts of real people to organise themselves in ways that allow them to make a difference in the world they inhabit and care about. For the most part, NGOs are not separate from, or a threat to, members of the public. They are members of the public. And, yes, there are genuine issues of accountability – NGOs should be accountable to their members and act in accordance with their constitutive documents, and their leaders should not go off on tangential self-serving flights. But NGOs ought not be portrayed, across the board, as a dangerous threat to the integrity of the democratic process. On the contrary. For the most part, they represent a vehicle through which real people participate in the democratic process. They are, in fact, essential to its integrity.

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When appearing as a witness before the Senate Committee I mentioned earlier, British American Tobacco’s Director of Corporate and Regulatory Affairs, John Galligan, was asked what he saw as the main benefits to his company of donations to political parties. His first reply was this:

“Like any organisation in this country, we are entitled to participate in political debate and the political process. For right or for wrong, participation in the political process in Australia has for some time involved receipt of funds to political organisations.”

Later, he said: “Again, just to be participants of the political process. We have political parties making law with respect to the way our company will operate. Are people saying that political donations are immoral? That is another question. I suppose what you are asking is whether donations from our company are immoral. If you are suggesting that there is some direct benefit from those donations, I think that is a characterisation of the people receiving the donations, not the ones providing it. I believe that any government minister, both of the current government or of previous governments, would find the suggestion offensive that donations have implicated or affected their decisions.”

Well, despite what a cashed-up multinational tobacco company might say to a Senate Committee which is examining a proposal to put an end to its political donations, those who have an interest in understanding how the political process works, and in cleaning up some of its dirtier parts, tend to recognise that political donations are, in fact, problematic, and that they are problematic for a number of reasons.

First, they do give rise to the risk that money will actually buy results. A study of the US Congress carried out in the early 1990s found that the more tobacco money a member received, the less likely the member was to support legislation designed to reduce the harm caused by tobacco. Of a number of variables considered, the amount of tobacco money received was the one most strongly and consistently associated with a lack of support for such legislation. Political donations have not been called “legalized bribery” for no reason.

The second major risk is that of a perception of influence being bought, leading to widespread mistrust of and dissatisfaction with the way the political process functions. Inevitably, the results are a combination of cynicism, anger, indignation, and ultimately alienation and disconnection from the process because it appears corrupt and efforts to participate come to look futile.

Third, and related to the previous point, if donations afford better access to politicians and party machines – as is generally acknowledged – and, in fact, political parties regularly hold fund raisers at which donating sometimes in the thousands of dollars will get you a seat at the table of the Prime Minister or Premier or a senior minister – this means that, the deeper your pockets, the more opportunities you’ll have to develop personal connections with senior political figures, advocate for your interests in informal settings, and establish ongoing relationships in which you are routinely granted access.

It is impossible to overstate the significance of developing personal relationships with powerful policymakers. Familiarity and friendship inevitably lead to one’s concerns or requests getting on the policy maker’s radar and then being heard and seen in a more sympathetic light. Those who aren’t heard or seen can be kept out of mind, their concerns never making it onto the radar of those who make decisions. So bad luck if you lack the money to buy access.

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But political donations are just one part of a much broader story about the role and power of money in the political process. As I said earlier, participating effectively in the political process generally involves money, and the more of it you have the better off you are. Any organization that sits down to work out strategies to make an impact on the political process will think through the various ways of making an impact. Working with community organizations and individuals affected by an issue. Building coalitions with similarly interested organizations. Trying to get access to key policy makers. Writing submissions to public inquiries. Generating media coverage of a story. Using the courts to bring about change when the political process seems impossibly stuck. And so on.

Now, think through what a pack full of spin doctors, media communications directors, directors of corporate affairs, directors of government relations, public relations consultants, advertising executives and lawyers can, between them, do for an issue. How much more can you achieve if you can employ ten or twenty or fifty of these kinds of people full-time than one or two, or even have to rely completely on volunteers contributing in their spare time? What about poaching your senior staff from Ministers’ offices and upper levels of government departments and from inside regulators, with offers of more money than the public purse can pay, with all the guarantees of access that you get for your money? What about paying professional lobbyists who were once ministers or ministerial advisers or chiefs of staff to get you direct access to senior ministers or the Prime Minister?

What about being able to fund other groups to do your bidding in their name so that your constituency looks bigger and broader than it would otherwise be? What about being able to pay for mass media advertising which can give an issue a prominence and an urgency it would otherwise lack? What about paying a talkback radio host to spruik your cause? Wining and dining TV and newspaper proprietors, editors and journalists? Or how about actually buying yourself a TV station or a newspaper or a magazine or a whole media empire?

The public space is limited, and there are so many people and organizations and causes competing for that limited space at any one time. There is simply no question that money can purchase large chunks of that public space; it can distort or manufacture a consciousness about what the real issues of the day are; what are the threats facing us now; what are the urgent things we need to deal with?

And then think about all the issues that just don’t get on the register. What happens to them and the people who are affected by them?

The issues are of course broader than what we usually think of as the political process, in the sense of trying to engineer particular outcomes through politicians, bureaucrats and policymakers. For example, what impact does the culture of mass corporate marketing and commercialism – “buy this product” messages on TV, radio, billboards, shopfronts, trams and tram stops, bus stop shelters, taxis, in our letterboxes, on the net – have on our values as a community? How do the stories and voices of those who are suffering or struggling break through the “buy this, buy this” noise? Where in the public space is there room to talk about things like fairness and equality and the needs of those who are falling through the cracks? Because ultimately, it’s these constructions of public consciousness and priorities that shape what registers in the political process; what our elected representatives are forced to respond to; the criteria against which their performances are judged.

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Much of the attention that we give to the political process, or to the democratic process, focuses on the making of policy – the passage of laws and regulations, and the expenditure of public money – which causes will the government favour in its distributions of taxpayers’ money. We tend to think less about issues to do with whether the law actually works, whether it gets enforced or not; whether those who are subject to laws are made to comply with the legal obligations that emerge from the democratic lawmaking process.

Yet laws and regulations are of little value if they go unenforced; if they can be flouted. The democratic process is not in good health where money plays a significant role not only in what laws get made, but in whether legal obligations are complied with, and whether those who breach their legal obligations are ever held legally responsible. As important as money is in the process of lawmaking, we also need to think about how important it is in the functioning of the legal system. Because the legal system is, after all, the place where our laws are or are not validated and realized.

In the US, over the last decade or so, the tobacco industry has begun to be held legally responsible for decades of consumer fraud and manipulation, with juries who have seen the evidence of extraordinary wrongdoing – in the tobacco industry’s own documents, those that have not been shredded at least – returning massive and record verdicts against it. In addition, litigation by US State governments over the public health care costs of treating tobacco-related illnesses led to a settlement in the late 1990s under which the tobacco industry agreed to pay out nearly US$250 billion over the next 25 years.

Now, litigation is only successful if it can be shown that the person being sued or prosecuted has acted unlawfully or breached a legal obligation. So, successful litigation is, whatever else it is about, also always about law enforcement; that is, enforcing the law that has been made or developed on behalf of the community through the democratic process.

In Australia, the tobacco industry has not yet paid a cent for the harm it has caused, and the consumer fraud it has perpetrated. And the main reason, in my view, has nothing to do with the state of the law or the evidence – it is all about the costs of litigation and the resources that the tobacco industry has to fight it. Every individual who has tried to take the tobacco industry to court in this country has been overpowered by its wealth, by the extraordinary resources it has been able to spend on huge teams of top end of town lawyers. No case has ever even made it to trial on the merits. If your resources are practically unlimited and your wrongdoing is vast, you can invariably beat any individual who dares to take you on in the courts into submission, without ever having to face your day in court.

Last week, the same Senate Committee I referred to earlier was asking the Australian Competition and Consumer Commission why it had never acted on evidence of tobacco industry misconduct. The main answer: the cost of investigating and then taking action. Not whether the tobacco industry has acted unlawfully. Not whether it has flouted the Trade Practices Act. But how expensive it would be to take the tobacco industry to court, knowing the resources it would throw at defending a case. Even the publicly funded fearless consumer watchdog cannot afford to enforce the law it is established and funded to enforce when it comes to an industry as large, powerful and wealthy, and with as much at stake, as the tobacco industry.

As someone who works with NGOs, and is fighting against the tobacco industry and the harm it has caused and continues to cause, I can tell you that if I had unlimited resources at my disposal, I would start both criminal prosecutions and civil proceedings against the tobacco industry to get courts to order it to forfeit the proceeds of its wrongdoing, and to pay for the harm it has done, and for the cost of cleaning up the mess it has left. Such proceedings would, in my view, be soundly based on good law and legal principle and would be simply about enforcing the law against the industry. But, of course, I don’t have access to that kind of money. And the law, the product of our democratic processes, goes unenforced.

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So, if our democratic system is seriously unwell, what treatment can we apply to bring it back to health? The first thing, of course, is to recognize that things needn’t be exactly as they are today. We needn’t sit back and just lament the way things are. There is nothing magical or sacred about the political institutions, practices and conventions we have today. They are, in the end, just the ones we happen to have, for a range of historical and arbitrary reasons, and we should always be thinking about how we might try to reshape and improve them.

Representative democracy is not a fixed state, but an evolving set of institutions, practices, conventions and ideas, that we should always be updating and adjusting in recognition of changes in the world in which we live, responding to the ways that the aims of a democratic system can be subverted by those who have figured out how to play the process, or exploit it, to their advantage.

So, what are some of the solutions? Well, one solution often suggested for at least some of the ills is transparency. Disclosure. On the political donations front, it is sometimes argued that as long as we know who is donating how much to whom, the process is working just fine. And because parties are required to report donations over a certain amount and these are reported by the Australian Electoral Commission for each financial year, we have all the transparency we need.

Now, I don’t happen to think transparency is the complete answer, but even if it were, we shouldn’t pretend that we have it at the moment. One only needs to peruse the AEC records to see huge donations from variously named foundations and institutes. The real donors, the people or companies behind these entities, are not disclosed, though it is implausible that they are not very well known to the recipients of their generous donations.

But even if we had a more genuinely transparent system, I’m afraid that I doubt transparency would, alone, do the trick. To me, transparency connotes being able to see through something; to see what is really going on behind the scenes. Here, it would be by going onto the AEC website and searching the annual returns. But I think, in this context, I’m less interested in transparency than I am in a the idea of visibility. I am more interested in the value of being shown up front what is going on than having to go searching for it behind the scenes.

Perhaps, when a political party receives a donation, rather than this being disclosed on a website at the end of that financial year, the party should put out a press release announcing the donation. “The XYZ party today welcomed a $100,000 donation from British American Tobacco. The Minister for Health has thanked BAT for its donation to the XYZ party and congratulated it on its important contribution to the democratic process. The Minister has assured the community that the donation will not, under any circumstances, influence either the company’s ability to obtain access to the Minister or the Government or the Government’s views on any issues with which BAT is concerned. The Minister said he would be offended by any suggestion that the donation would influence him or his party in any way whatsoever, and would immediately instruct his lawyers to act if such a suggestion were to be published.”

Or perhaps political party websites should list on their home page all of their donors. Perhaps the logos of all of these donors should be reproduced on that page. The site might say: “The EFG party is proudly sponsored by British American Tobacco, James Hardie, TABCORP, and so on.”

Better still, perhaps politicians should be required to wear uniforms with the names and coloured logos of their sponsors emblazoned across them as on footy jumpers or cricket uniforms. It may seem a bit unreasonable to prescribe what politicians must wear at all times they appear in public, so maybe they should only be required to wear these uniforms in Parliament, and outside of the Parliament only when discussing an issue of concern to the donor. Perhaps, when the Prime Minister and environment minister announce the Government’s environment statement they should be wearing the logos of their coal industry sponsors. And the same for the Prime Minister and the Health Minister when they announce new regulations for health warnings on tobacco products that happen to be the preferred option of their tobacco industry donors.

Of course, the Government could reassure the community that the money had nothing to do with the policy decision, and that it didn’t influence access either, and it would be up to the community to decide whether that sounded plausible or not. Now, one can imagine that the wearing of such colours might create uncomfortable perceptions. But if this is so, all the more reason for the associations to be visible, out in the open, front and centre, rather than only transparent, and discoverable only if you do enough work to find out.

While these comments may sound slightly unrealistic, I’m not sure they are unreasonable. Why shouldn’t the associations, if they are occurring, be out in the open?

Better than both transparency and front and centre visibility might be a system in which all private political donations were banned and political parties and campaigns were entirely publicly funded. Much work would need to go into devising fair methods of determining funding, and particularly methods that would not entrench the oligopoly of certain parties. While the idea of banning donations outright gets raised regularly, it seems to me that we could do with a genuine public inquiry into the way things work and feasible options for change, and with a broad-based community constituency passionately arguing for a better system.

On issues relating to who has access, I would like to see all politicians and their staffers required to place on a website by 12 noon each day a list of all of the people from outside government they met or spoke with the previous day, how long these meetings or conversations lasted, and what was discussed. Perhaps, using the wonders of modern technology, all such meetings or conversations could be recorded and made downloadable from a website; and perhaps they should even be webcast live. Who meets with whom and what is discussed should be transparent.

When a Health Minister meets with tobacco industry executives and will not meet with cancer council representatives, this should be a matter of public record. So, too, should the contents of his conversations with the tobacco industry executives be on the public record. How else can the community know what is really happening, try to correct untruths, hold the players to account? While Parliamentary proceedings are, of course, open to the public, I suspect that it is just as important these days to make public what currently goes on behind closed doors. After all, much parliamentary debate these days is little more than staged theatre. It tells us very little about what is actually going on in the political process and why.

Other things worth fighting for include a well-funded public broadcaster which can give attention to issues and voices that it is not in the interests of profit-motivated media corporations to show. Perhaps one of the costs of the privilege of holding a commercial media licence should be the payment of fees that are used to adequately fund a public broadcaster. Perhaps a certain percentage of every dollar spent advertising in the commercial media should go to the public broadcaster.

I’d also like to see laws which gave powers to courts to decide that, in certain cases, they will not order costs against a party. So, for example, a court might be able to decide that a non-government organization that had nothing to gain commercially from litigation, but could show a prima facie case of a breach of a legal obligation by a corporation and damage to the public interest, would not face an adverse costs order if the case was ultimately unsuccessful, unless it had run the case in a dishonest or inappropriate manner. This might allow public interest cases to get to court, rather than the threat of being bankrupted by a wealthy company with an army of $500 an hour litigation lawyers and $10,000 a day barristers allowing large corporations to get away with treating vital public policy statutes like wet pieces of paper.

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So, those are some of my thoughts and observations on corporate wealth and power, and the health, or otherwise, of our democracy. That old adage that money talks is, of course, true; and it does influence the operation of our political processes at virtually every level.

I still, however, harbor some idealistic fantasies. I do at times catch myself dreaming of living in a system in which policy outcomes depend more on the weight of one’s arguments than the weight of one’s wallet, and more on the quality of one’s evidence than the quality of one’s contacts.

Can we create such a system? I don’t know. But the years I’ve spent working in this area have taught me two things. The first is that if you stop caring or stop trying, things can only ever get worse. The second is that every little bit counts, or might count, and that we are all responsible for every little bit we do and every little bit we don’t do. And as tiring or as impossible as things sometimes seem, we have a responsibility to keep plugging away. We can never know in advance what is going to have an impact; what is going to matter; what is going to make some subtle or major difference that will make the world in which we live a little better or a little fairer or perhaps a little more democratic.

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