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If a party were to be guilty of a deliberate acceptance of a donation from a source outside the definition of a permissible source, criminal sanctions should attach to all responsible, and a sum not less than the donation should be liable to forfeiture from the partys funds; in significant cases of attempted evasion of... |
A forfeiture power should also apply even if the receipt were innocent or inadvertent, although the courts would clearly take into account the degree of culpability in setting the level of forfeiture. Ratio |
R30 The Election Commission should have wide powers to call for information and to institute investigations into any suspect foreign donations received by a political party or a sub-unit. Ratio |
R31 Criminal sanctions should attach to a deliberate acceptance of a donation from a source falling outside the definition of a permissible source. Ratio |
There should be a power for the court to order a defaulting political party to forfeit a sum of up to ten times the donation wrongfully accepted. Ratio |
There is a contrast between the power of forfeiture recommended in para 4.61, a sum not exceeding the unreported donation, and that in para 5.42, a sum not less than the donation. Ratio |
The reason for this contrast seems likely to be the following. Ratio |
Para 4.61 was providing for a sanction for failure to report a donation from a permissible source. Ratio |
Para 5.42 was dealing with the receipt of a donation from an impermissible and, under the Neill Committees scheme, a foreign source. Ratio |
In the latter case the forfeiture of the entire donation was likely to be desirable, regardless of whether or not the breach of the regulations had been deliberate. Ratio |
It is noteworthy that the Committee recommended that, where acceptance of an impermissible donation was innocent or inadvertent, there should still be a power of forfeiture but that the courts would take into account the degree of culpability when setting the level of forfeiture. Ratio |
The Government published a White Paper (Cm 4413) to which was annexed a draft Bill dealing with the funding of political parties. Ratio |
Clause 51 of the Bill does not differ significantly from section 58 of the Act. Ratio |
At the beginning of Chapter 4, which dealt with the sources of funding, the Government welcomed the Neill Committees endorsement of the manifesto commitment to ban the foreign funding of political parties. Ratio |
Dealing with permissible sources of funding the White Paper commented as follows: Individuals 4.5 The Neill Committee recommended (R26) that political parties should be able to receive donations both from those who are registered voters in the United Kingdom and from those who are entitled to register to vote in the Un... |
Clause 50(2)(a) departs from this recommendation by providing that registered political parties may accept donations only from those individuals whose names appear on the electoral register. Ratio |
Entitlement to register, whether as a resident or overseas elector, will not qualify an individual as a permissible source. Ratio |
4.6 Checking that a particular donor appears on the electoral register offers a test that is both conclusive and simple to administer. Ratio |
It would be far less straightforward for political parties to verify that a donor not appearing on the register was nevertheless entitled to do so. Ratio |
It is in the interests of the parties to have available a test which offers certainty as to the eligibility of a donor. Ratio |
With the introduction of rolling registration it would be open to anyone who was entitled to be registered as an elector, but was not on the register for whatever reason, to take the necessary steps at any time to secure his or her registration. Ratio |
Once registered, it would then be open to a political party to accept a donation from such a person. Ratio |
In practice, therefore, little is lost by the proposed departure from the Neill Committees recommendation. Ratio |
The objects of the legislation Ratio |
The legislative history provides a particularly clear picture of the objects of Chapter II of Part IV of the Act. Ratio |
The primary object is to prevent donations to political parties from foreign sources. Ratio |
From the Labour Party manifesto in 1997 the concern in relation to the source of funds has focussed exclusively on foreign donors. Ratio |
The Neill Committee recommended that the exclusion of foreign funding should, in the case of individual donors, be achieved by prohibiting donations from anyone who was not a registered voter in the United Kingdom or eligible to be put on an electoral register in the United Kingdom. Ratio |
As I have observed this test drew a realistic line between domestic and foreign donors. Ratio |
Eligibility to be placed on an electoral register demonstrated a sufficient connection with the United Kingdom. Ratio |
Ineligibility demonstrated a lack of such connection. Ratio |
Parliament made a significant change in restricting permissible donors to those on an electoral register, excluding those eligible to be put on one. Ratio |
This change was made not because there is anything intrinsically undesirable about parties being funded by those who are not on an electoral register, provided that they are eligible to be placed on one. Ratio |
So far as connection with the United Kingdom is concerned there is no distinction between a person who is on an electoral register and one who is entitled to be placed on an electoral register. Ratio |
The change was made for purely pragmatic reasons. Ratio |
It is much easier to demonstrate that a person is not on an electoral register than it is to demonstrate that he is not entitled to be placed on an electoral register. Ratio |
Two facts demonstrate that Parliament did not consider that entitlement to vote was, of itself, an essential quality in a donor, rather than a convenient test of the donors connection with the United Kingdom. Ratio |
The first is that section 54 permits donations from corporations, trade unions, building societies, limited liability partnerships, friendly societies and unincorporated associations, provided that they have sufficient presence in the United Kingdom, notwithstanding that none of them can vote. Ratio |
The second is that donations by bequest are permissible from anyone who was on an electoral register at any time during the period of five years before his death. Ratio |
Such a person cannot, of course, cast a vote posthumously, but it is significant that it is permissible for his bequest to have been made at a time when he was not on the register, provided that he was registered to vote at some point during the five years before his death. Ratio |
Had Mr Bown bequeathed, rather than bestowed, his donations during the period that he was off the electoral register, and then died, there would have been no objection to UKIP receiving the bequests. Ratio |
The White Papers comments that I have quoted at para 24 above underline the fact that entry on an electoral register is not per se an essential attribute of a donor. Ratio |
The comment that little is lost by the proposed departure from the Neill recommendations appears to recognise that depriving parties of donations from those entitled to be on an electoral register, but not actually registered, involves a degree of sacrifice, albeit one that is justified on grounds of practicality. Rati... |
The secondary object of Chapter II of Part IV of the Act is to provide a scheme for achieving the primary object that is easy to apply, easy to police and that contains adequate sanctions for non-compliance. Ratio |
The purposes of the power to forfeit Ratio |
Mr Beloff submitted in his written case that there were three purposes of the power to forfeit. Ratio |
The first was to deprive a political party of the wrongful gain acquired by accepting a donation from an impermissible source. Ratio |
The second was to deter breaches of the Act. Ratio |
The third was to provide simple and effective sanctions in the form of a rigorous civil enforcement scheme to enforce the prohibition on acceptance of impermissible donations. Ratio |
The third object is, in fact, no more than a more detailed way of describing the second object. Ratio |
I agree that there are two distinct objects of the power to forfeit. Ratio |
As to the first, I do not find the description wrongful gain helpful. Ratio |
The primary object of forfeiture is the direct prevention of the mischief that the legislation is designed to prevent the receipt by a political party of foreign funding. Ratio |
This would normally dictate the forfeiture of the acceptance of any donation received by a party from a foreign source, regardless of whether or not that acceptance had come about as a result of a culpable fault on the part of the party. Ratio |
As I have said, that is probably why the Neill Committee recommended that where a donation was received from a person who was not entitled to be placed on an electoral register, forfeiture from the party funds should be of not less than the amount of the donation. Ratio |
The fact that the donor was not entitled to be placed on the register demonstrated that he had insufficient connection to the United Kingdom to be an acceptable source of funding. Ratio |
The Act has radically changed the Neill Committees scheme. Ratio |
A donor whose connection with the United Kingdom would entitle him to be placed on the electoral register and thus to vote is rendered an impermissible donor by reason of the simple fact that he is not on the register. Ratio |
Under this scheme an unregistered donor may or may not be foreign. Ratio |
If he is foreign, or if he is unable to prove that he is not foreign, then his donation is intrinsically undesirable. Ratio |
It is the type of funding that the Act was designed to prevent. Ratio |
His donation should, barring exceptional circumstances, be automatically subject to forfeiture in its entirety. Ratio |
If it is not forfeited, the very mischief that the Act was designed to prevent will have occurred. Ratio |
Whether or not the party accepting the donation exercised due care should not normally be relevant. Ratio |
This may well be why the Act expressly provides that a forfeiture order may be made, whether or not proceedings have been brought against any person for an offence in connection with the donation. Ratio |
I agree with Mr Beloff that the second object of the power to forfeit is to provide a deterrent or sanction against failure to comply with the requirements of the Act that are designed to make sure that donations are not received from an impermissible donor. Ratio |
Thus the power to forfeit is intended to further both the primary and the secondary object of the legislation. Ratio |
The nature and purpose of the discretion Ratio |
I now come to the interrelated questions of whether the power to forfeit is all or nothing and how the discretion whether or not to exercise that power should be exercised. Ratio |
If Parliament had enacted the Neill Committee scheme there would have been a strong presumption in favour of forfeiting the whole of a donation from an impermissible source. Ratio |
It would, or would be likely to, be a foreign donation and objectionable as such. Ratio |
Indeed there would have been a case for making forfeiture of such donations automatic. Ratio |
But Parliament adopted a scheme under which impermissible donations may or may not be foreign. Ratio |
Under this scheme the significance of an individual impermissible donation may vary widely. Ratio |
At one extreme it may be a donation from a foreign source, accepted by a political party with full knowledge of its provenance. Ratio |
At the other extreme it may be a donation from an individual who is entitled to be on an electoral register and has in the past been on an electoral register, been believed to be on an electoral register, but who, because of some administrative error for which he is not responsible, has been removed from the register a... |
Parliament plainly made the power to forfeit discretionary with the intention that the magistrates court should discriminate between cases where forfeiture was warranted and cases where it was not. Ratio |
It seems to me natural to assume that Parliament intended the court to consider whether forfeiture was a proportionate response to the facts of the particular case. Ratio |
This involves considering whether forfeiture is necessary to achieve either the primary or the secondary object of the Act. Ratio |
The most relevant consideration is whether forfeiture is necessary to prevent the retention of a foreign donation in the individual case. Ratio |
Proof of acceptance of a donation from an impermissible source should raise a presumption that the donation is foreign. Ratio |
If the party cannot rebut that presumption, forfeiture should follow. Ratio |
If the party succeeds in demonstrating that the donor was entitled to be placed on an electoral register, forfeiture should then depend on whether it is an appropriate sanction for such shortcomings as led to the acceptance of the donation. Ratio |
This will require consideration of culpability, the size of the donation and the effect that forfeiture will be likely to have on the political party. Ratio |
Partial forfeiture, if permitted (as to which see below), will enable the court to impose an appropriate sanction where total forfeiture would be disproportionate. Ratio |
The Court of Appeal held that the power to forfeit was all or nothing and that there was a presumption that it should be exercised in the absence of exceptional circumstances. RLC |
The Courts reasons for holding that there was a strong presumption that the power to forfeit should be exercised were as follows: i) Unless forfeiture was the normal consequence of the acceptance of an impermissible donation, parties would be free to disregard with impunity the obligations not to accept or to return im... |
ii) Forfeiture would never be disproportionate if it was limited to a donation which should never have been accepted. RLC |
iii) It was irrelevant whether or not the impermissible donor was a foreign donor, because Parliament had not made that the test. RLC |
Parliament had made being on an electoral register the test. RLC |
The Court should not re-introduce the Neill Committee test by the back door. RLC |
iv) The fact that a party might not know that the donation was impermissible was irrelevant. RLC |
Parliament had not made that a bar to forfeiture. RLC |
v) The fact that the state of the partys finances might make forfeiture particularly onerous was irrelevant. RLC |
The receipt of the donation was illegal and the full extent of the donation was an advantage that the party should not have had. RLC |
vi) Furthermore, if it was necessary to investigate a partys finances before making a forfeiture order, the sanction would be unwieldy. RLC |
Mr Beloff expanded this to a more general point. RLC |
If there was a wide discretion, this would give rise to complex factual inquiries that the simple scheme of the Act was designed to avoid. RLC |
I will deal with each of these points in turn. RLC |
I do not accept that almost automatic forfeiture of the totality of an impermissible donation is necessary to provide a realistic sanction against non- compliance with the requirements of the Act. Ratio |
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