Darragh O’Brien TD,

Minster for Housing, Local Government and Heritage,

Custom House,

Dublin,

D01 W6X0

Malcolm Noonan TD,

Minister of State for Heritage and Electoral Reform,

Custom House,

Dublin,

D01 W6X0

24th of February, 2021

Re: Electoral Funding

Dear Minister O’Brien and Minister Noonan,

Thank you very much for the opportunity to set out the views of the Party on this important matter.

Ireland’s electoral funding regime is amongst the most transparent and well-regulated anywhere in the democratic world. The opportunities that existed in the past for special interests and wealthy individuals to influence political developments through donations to political parties have been ended. We have a system of electoral campaign funding in Ireland which requires political fundraising to be focused on a large amount of small donations from citizens and it is important that this is maintained.

It is a great source of pride to our party, that it was a Fine Gael Minister and a Fine Gael led Government that brought through the Electoral Amendment Act 2012.

We welcome the fact that Fine Gael’s proposals to strengthen our electoral regime were included in the Programme for Government. We look forward to you delivering on the commitment to establishing the Electoral Commission. We will make our views on the issues pertaining to the published legislation known through the Pre-Legislative Scrutiny process.

There are several issues that we believe need to be considered arising from your letter. They are:

• Funding from outside of the State • Political Parties’ property portfolios • Transparency from subsidiary organisations • Activities by Third Parties

The concerns expressed in this letter are not abstract. We do not need to look too far to see the real and substantial danger presented to democracy by opaque political financing laws. The United Kingdom’s 2016 Referendum on European Union membership is a textbook example of the dangers of liberal funding laws. Funding from outside of the State In normal circumstances, where there are different regulatory regimes in place, reputable organisations would seek to apply the highest standards that exist across the various jurisdictions. This happens across the world in areas like food safety, healthcare, data privacy and other matters. By applying the highest standard applicable, you save on the costs of regulatory compliance and you also send a powerful message to consumers about your own internal standards.

But it is a concern of ours that one political party, Sinn Féin, is seeking to exploit the liberal political funding regimes in the United Kingdom and the United States in order to accept donations there that would otherwise be illegal here, and then possibly utilising that money to their advantage in this jurisdiction.

We wish to cite two examples: the case of the donation from the Estate of William Hampton to Sinn Féin and the current practice in relation to their website. William Hampton The case of the donation of William Hampton is reasonably well known, but to repeat certain important facts:

According to the Last Will and Testament of one William Edward Hampton, an English citizen who described himself in his will as being of no fixed abode, he appointed Joe Cahill and Dessie Macken, both of 44 Parnell Square, Dublin 1 to be executors and trustees of his estate.

In that will, he directed as follows:

“All the rest, residue and remainder of my estate of whatsoever nature and wheresoever situate, to include my assets in Ireland, England, Singapore and New Zealand and other assets I may have anywhere else in the world I give devise and bequeath to my Executors and Trustees, Joe Cahill and Dessie Macken, in trust for the political party in the Republic of Ireland known at this time as Sinn Fein. This money is to be applied by my Executors and Trustees to cover election expenses, to fund Sinn Fein offices and advice centres and to aid Republican prisoners and their families in both Ireland and Britain. …

In the event that the organisation which is now known as Sinn Fein should cease to be in existence or should have split or taken on a different name at the date of death then I direct that my Executors and Trustees are to apply my monies to the political party to which Mr Gerry Adams, M. P. then belongs. Should Mr. Adams predecease me or not be a member of any political party at the date of my death then I direct that my Executors and Trustees shall apply my monies to the Republican or Nationalist party in the six counties other than the S.D.L.P. which has the largest number of elected local Councillors.”

When this matter was first raised with Sinn Féin by the Standards Commission, the President of Sinn Féin, Mary Lou McDonald TD, replied to SIPO stating:

“As you are aware Sinn Fein is organised on a 6 and 26 county basis and complies with all political and financial regulations within both jurisdictions on the island. The donation you refer to was not offered to or accepted by the Sinn Fein party in the 26-county jurisdiction. The bequest/donation from Mr. W. E. Hampton was received by the Sinn Fein party registered in the 6 counties with the British Electoral Commission. …

Sinn Fein in the 26 counties shall continue to adhere to the regulations as set out in section 23(A)(2) of the Electoral Act 1997.”

According to the documentation furnished by Sinn Féin, the sum of Stg£500,000 was received on 9 April 2019 and Stg£1 million on 21 May 2018 by Sinn Féin. We understand that the total sum involved is far greater.

According to the information available, the donor in question, Mr. William Hampton, was not, at the time of his death, resident on the island of Ireland, nor was he an Irish citizen.

In the circumstances, he was not entitled to make a donation for the purposes of the Electoral Act 1997.

Furthermore, the clear intention of Mr. Hampton’s will was to give money to the political party in the Republic of Ireland known as Sinn Féin. We know this, as in his will, he made a distinction between the whole of Ireland, described in the will as “Ireland”, the Republic of Ireland, described as such and the six counties of Northern Ireland, described in the will as “the six counties”.

There is no ambiguity in the will and the statement by Sinn Féin that a donation was not offered to the Sinn Féin party in this State is simply not correct.

As such, both by its size and the identity of the donor, it was a prohibited donation.

Furthermore, the gift was directed to be held by Mr. Hampton’s Trustees, Joe Cahill and Dessie Macken, in trust for the political party in the Republic of Ireland known at this time as Sinn Féin. The monies were to be applied by the Trustees for benefit of the party in the Republic of Ireland for the purposes of and as set out in the will.

Rather than refuse the bequest as being a non-permissible donation under Irish law, Sinn Féin sought a loophole. They accepted the donation in Northern Ireland rather than in this State and are now over £4 million richer as a result. Sinn Féin website If you visit the website of the Sinn Féin party – www.sinnfein.ie – you are presented with the opportunity to donate to the Party. This is at the page - https://www.sinnfein.ie/donation-form. However, before you can visit that page a question is asked:

Given that donations from people who are not residents or citizens of Ireland are expressly prohibited under Irish law, one would presume that following that link will see you being told that you cannot donate to Sinn Féin.

Surprisingly though, that is not the case. Rather you are still given the opportunity to donate to Sinn Féin. Furthermore, the website also states that “Please note that residents of the USA should donate to Friends of Sinn Féin USA here.” Therefore, it would appear that where a person is a neither a resident or citizen of Ireland, their donations are being funnelled to different parts of the Sinn Féin organisation where different and more liberal political financing laws apply. Steps forward In the Standards in Public Office Commission’s recently published document, Response to resolution of Seanad Éireann dated 11 November 2020, it is stated that:

Where a person, body corporate or unincorporated body of persons, including a political party, wishes to give funds to a party, elected official, candidate or third party in the Republic, this would count as a donation and would be subject to the limits and disclosure provisions set out in the Act. This includes the movement of funds from a party registered in the North to a party registered in the Republic – even in circumstances where it is structurally the same party.

It is noted that donations include donations in kind. The matters referred to by the Seanad in its query, such as the conduct of research, provision of social media services or employment of staff funded in the north and employed in this jurisdiction, could potentially fall within the definition of donation. As per Sinn Féin’s audited accounts published by the Standards in Public Office Commission for its activity in this State, and by the United Kingdom’s Electoral Commission in respect of Northern Ireland activity, there is a regular flow of such monies which is set out below.

It is essential that the legislation is made crystal clear to ensure that this funnelling of money is illegal. It is essentially the act of arbitrage between two separate regulated jurisdictions. To that end, we propose that the legislation is strengthened to explicitly state that any transfer of money or resources from a subsidiary or related entity of a party based outside of this State to the party in this State must be treated as a donation, how so ever received or resourced. The intention of this is that the maximum that any subsidiary outside of the State could transfer to their operation in this jurisdiction would be the €2,500.

We are concerned that while it may be relatively easy for a party to seek to evade scrutiny of the existing legislation by not transferring money from their operations in Northern Ireland, but commissioning work (benefit in kind) in Northern Ireland or elsewhere and then transferring it directly to their operation in this State.

Examples of this could include, but are not limited to:

• Commissioning and paying for political research through their Northern Ireland or other external offices but transfer the findings to their operations in this State. • Deploying paid party officials from Northern Ireland to work on campaigns in this State. • Having staff outside of this State manage social media accounts active in this State. • Having politicians elected in this State receive training and political advice paid for by units of the party outside of this State.

It is imperative that the legislation clearly prohibits such activity.

We believe it important that there is political accountability for this as well. To that end, all Party Leaders should sign a declaration at the end of each year stating that all transfers from outside of the State, either in cash or in kind, from subsidiaries or other related parties, have been declared and that no other transfer, either in cash or in kind, took place.

We also believe that it should not be permissible for a political party in this State to funnel donations that are in contravention of the Electoral Acts here, to other parts of their organisations outside of the State. If a person contacts Sinn Féin in Northern Ireland and wishes to donate to them there, then that is their right. However, it should not be permissible for a person to contact a Party in this State and when that Party discovers that the donation would be illegal and not permissible, to funnel them towards the Party in Northern Ireland, United States of America or any other jurisdictions. There should be an explicit reference included within the legislation to prevent such activity by a political party.

It should be noted that while these measures will stop illegal support for elections in this State, this whole issue will require detailed and careful consideration in the context of the proposal from our Party to extend the franchise in the Presidential Election to Irish citizens living outside of the State. It is important that prior to bringing this proposal to the Irish people in a referendum, that there is clarity on how we can ensure that if there is an election for President, that it is fought in a manner which is fair, equitable and only funded from resources allowable under Irish electoral law. Political Parties Property Portfolios The Irish Times reported the following in March 2020:

Sinn Féin owns up to 50 properties in constituencies around the island, over and above the four properties in Dublin and Belfast owned directly by party headquarters, Mackin said.

The individual referenced there, is Mr Des Mackin. Mr Mackin is the Director of Finance for Sinn Féin. According to the published accounts of Sinn Féin, “the Director of Finance is accountable to the National Treasurers as directed by An Ard Comhairle.” The National Treasurers are Deputy TD and Minister Conor Murphy MLA.

Fine Gael is a well-resourced political party that has enjoyed strong levels of public support over many decades. We own one property, our national headquarters. Two further properties are owned by constituency organisations.

It is entirely unclear to us, how a political party could develop anything close to the property portfolio Mr Mackin describes. It is all the more baffling considering the extremely limited declarations of donations from Sinn Féin over the past twenty years, and their low levels of political support across this island prior to that.

When examining the published accounts of Sinn Féin, both those presented to the Standards Commission here and to the Electoral Commission in the United Kingdom, there is a significant divergence between Mr Mackin’s statement and what Sinn Féin publish. According to Sinn Féin’s accounts with the United Kingdom’s Electoral Commission it holds no properties. Sinn Féin’s accounts for this jurisdiction reference four properties:

• 44 Parnell Square, Dublin 1 • 58 Parnell Square, Dublin 1 • 535 Falls Road, Belfast • 51/53 Falls Road, Belfast

This would suggest that Sinn Féin own some forty plus properties across the island which are not reported in national accounts.

If we conservatively estimate the value of each property at €100,000, that equates to a property portfolio worth €4 million in addition to the four declared projects.

We suggest that each political party is required to submit with its annual accounts, a report on all properties currently held by that party or subsidiaries of that party. We also suggest that each party in making that declaration is required to state when and how it came into ownership of that property. Transparency from subsidiary organisations If we look to the United Kingdom’s Electoral Commission, we believe there maybe precedent which is worth examining in relation to transparency from subsidiary elements of a registered political party. Learning from that we propose that where a subsidiary or unit of a party has an income of in excess of €10,000 in a calendar year or holds cash or similar assets of more than €40,000, they should be required to submit annual accounts to the Standards Commission providing income, expenditure and assets held. Where those subsidiary units have income or expenditure in excess of €40,000 in a year or hold cash or similar assets of more than €100,000 in value or hold any property assets, they should be required to make an audited return to the Standards Commission.

These provisions would exclude intra-party transfers within this jurisdiction, to avoid double counting.

Where a party fails to comply with these requirements, the Standards Commission/Electoral Commission should be empowered to remedy the situation with appropriate enforcement and sanctioning powers.

This will create an increased regulatory and training burden for all the political parties over and above the existing levels. If parties were required to fund additional compliance from our existing resources, it would be at the expense of normal political activity. We suggest that there is pro-rata support for each Party to fund the additional work required. We estimate that it would cost a Party of our size a further €80,000 per annum to do this work to satisfy the required standard. All expenses in this area should be on a reimbursed basis and should not be allowed be carried forward into future years. Activities by Third Parties Another lacuna within the legislation which should be responded to relates to Third Parties. Currently a Third Party must only register when they receive a donation. It would appear to us, that this is a lacuna which allows interest groups and individuals to campaign on political matters from their own resources without any requirements for declaration, other than if it is at the time of an election or referendum. This is something that the Standard’s Commission have also drawn attention to in their annual reports.

Therefore, we suggest that the Register of Third Parties is expanded to cover all organisations and individuals who are spending more than €10,000 in a year to engage in activity with political purposes which are currently defined as below. In addition, the requirements of those on the Register of Third Parties should be expanded so that there is a requirement for such organisations to set out in broad terms the nature of their expenditure and the purpose pertaining to it. This would not apply to individuals who are declared election candidates.

Political purposes means any of the following purposes, namely:

• to promote or oppose, directly or indirectly, the interests of a political party, a political group, a member of either House of the or a representative in the European Parliament, or • to present, directly or indirectly, the policies or a particular policy of a political party, a political group, a member of either House of the Oireachtas, a representative in the European Parliament or a third party, or • to present, directly or indirectly, the comments of a political party, a political group, a member of either House of the Oireachtas, a representative in the European Parliament or a third party with regard to the policy or policies of another political party, political group, member of either House of the Oireachtas, representative in the European Parliament, third party or candidate at an election or referendum or otherwise, or • to promote or oppose, directly or indirectly, the interests of a third party in connection with the conduct or management of any campaign conducted with a view to promoting or procuring a particular outcome in relation to a policy or policies or functions of the Government or any public authority; • to promote or oppose, directly or indirectly, the election of a candidate at a Dáil, Seanad, Presidential or European election or to solicit votes for or against a candidate or to present the policies or a particular policy of a candidate or the views of a candidate on any matter connected with the election or the comments of a candidate with regard to the policy or policies of a political party or a political group or of another candidate at the election or otherwise; • otherwise to seek to influence the outcome of the election or a referendum or a campaign.

More generally, it would be important that the transparency requirements of Third Parties and their engagement at election and referenda time be increased, and that in addition to the above, that they are required to make expenditure returns in relation to any such electoral event where they spend more than €2,500. Conclusion In addition to the above, we believe it important that the current sanctions and enforcement powers available to the Standards Commission are reviewed and that the new Electoral Commission is given the appropriate tools to ensure compliance with this legislation.

We thank you for the opportunity to offer our views. We would be happy to engage with officials directly in relation to any of these matters.

Yours sincerely,

John Carroll

Fine Gael General Secretary

CC: Minister , Minister of State for Local Government and Planning