Legal Beagle by Graeme Edgeler


It's (almost) never that simple

In my post on "The Prime Minister's Hour" yesterday, I raised the prospect that the time Radio Live had allowed Prime Minister John Key to fill might constitute a donation that might have to be declared under the Electoral Act.

And Andrew Geddis asks the same question. But I've been hedging my bets. Now that that debate around this being an election programme has passed (we await a speedy police decision), we can move onto these, potentially more important, questions.

The National Party President is quoted in the Herald:

However, legal commentators yesterday suggested National might have to declare it as a donation instead.

National Party president Peter Goodfellow said he was seeking legal advice on that. He doubted it would be considered a donation because it was not an election advertisement.

I reject this analysis. If I ran a polling company, and gave Labour $100,000 of free polling, that would be a donation, although polling is not an election advertisement. If I had a spare house and gave it to the Green Party, which they raffled off to make money, that would be a donation, even though a house is not an election advertisement. If I was more well off than I am, and gave National $1,000,000, which they put in the bank, that would be a donation, even if the money was never spent on election advertisements, or never spent at all. It doesn't matter what a donation is for, or what a donation is of - a donation is a donation, and all party donations over $30,000 must be declared within 10 working days of their receipt by the party secretary.

So I think there may have been a donation, but even if it is, who is it a donation to, and perhaps even, who is it a donation from?

John Key, I understand, replaced usual host Paul Henry for an hour of his Radio Live show. When a Radio station has a stand-in host, they'd usually pay them. I'm guessing Key didn't charge. So Key has saved Radio Live money.

But more importantly, Radio Live got free publicity. And high profile interviews they'd probably never have got otherwise. And maybe more listeners for the hour, and possibly profile that gets them more listeners going forward. Things that may make them money, and which otherwise would have cost Radio Live money. And when people bring their skills and profile to a commercial enterprise in a way that makes that company more profitable, they tend to charge.

We've rhetorically asked the question: 'what would it be worth to John Key to get an open hour of prime time radio on Radio Live?', but you can turn the question around: 'what would Radio Live pay to get a really popular host to host their show, so well known that his being on the show may raise the station's profile, and who not only hosts the broadcast for an hour, but has his staff arrange interviews with high profile people you may never be able to get (and certainly couldn't get within the space of an hour)?' The answer could quite easily be "a lot". And given that Key didn't charge them anything, could he instead be considered to have donated his time and celebrity to Radio Live?

This is how this is different from an ordinary donation. If I give a party $100,000 of free polling, I may free up money for them to advertise, I might help them get elected, I might buy "access", I might help be enacted policies they've already announce which I like. And while those things may be beneficial to me, it's a different type of benefit to what we've got here. Radio Live gave Key/National something of value, but they got back something of value in return, and the commercial nature of that transaction may be enough to see it fall outside the legislative meaning of "donation".

Or maybe not. Maybe it's an inherent feature of politicians that that will (almost) anything for good publicity. Even if Radio Live got value from John Key's appearance, does that mean he gave something up (like normally happens in a commercial transaction)? And is that even the defining point of a donation anyway? With some luck, the Electoral Commission won't take as long reaching its conclusion on this question.

And, of course, we still haven't answered the other questions: if this was a donation, and a donation made by Radio Live, was it a donation to the National Party, or to John Key? The Electoral Act is clear that goods or services can be donations: how exactly would John Key transfer any live broadcasting time donated to the National Party through him, to the National Party Secretary, as the law seems to require? And if there is a category of donations that cannot be transmitted to a party secretary, does that mean those donations never need to be declared (the two sections of the Electoral Act dealing with party donation returns only require disclosure of donations received by the Party Secretary)?

This may take some time.

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