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Finance and Public Administration References Committee
Legislative oversight of associated entities of political parties

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PIRANI, Mr Paul, Chief Legal Officer, Australian Electoral» Commission

ROGERS, Mr Tom, «Electoral» Commissioner, Australian «Electoral» Commission

Committee met at 11:36

CHAIR ( Senator McAllister ): I declare open this hearing of the Senate Finance and Public Administration References Committee inquiry into the legislative oversight of associated entities of political parties. This is a public hearing and a Hansard transcript of the proceedings is being made. We are also streaming live via the web at Before we begin with our witnesses, I wish to make a few remarks in relation to Senator Sinodinos and the order by the Senate that he participate in this inquiry. The committee has met this morning and has resolved to report to the Senate on two «matters» : firstly, Senator Sinodinos' failure to comply with an order of the Senate that he appear before this committee; and, secondly, the possible unauthorised disclosure of Senator Sinodinos' response to the notice to appear. It will be a matter for the Senate, not this committee, to determine any possible consequences arising from the committee reporting these «matters» .

The committee has, further, resolved to publish correspondence between the committee and Senator Sinodinos. As chair, I note the following in relation to Senator Sinodinos' response to the committee, which was received last night and has been broadly circulated. Senator Sinodinos has contended that his availability was not ascertained before this hearing was scheduled. The Turnbull government, in which Senator Sinodinos serves as cabinet secretary, scheduled Thursday, 28 April 2016 as a Senate sitting day. It circulated a Senate sitting pattern showing Thursday as a sitting day. Ministers make themselves available to attend parliament on sitting days. Further, Senator Sinodinos has known since last Tuesday, the date the Senate ordered him to appear, that the would be called before this Senate committee. This committee must report before 4 May 2016. The committee has contacted Senator Sinodinos in writing on two occasions, as will be disclosed in the correspondence which today has been authorised for release by the committee. The secretariat has made numerous attempts to contact him informally on other occasions.

Senator Sinodinos has also claimed that his appearance before this committee would be inconsistent with Senate practice. Senate standing order 177(3) provides that the Senate may order a senator to attend a Senate committee and to give evidence to a committee. Senator Sinodinos says a previous minister did not attend a committee when requested to do so. I note that the previous minister to whom Senator Sinodinos refers was not subject to an order of the Senate; and, in any event, past events are not relevant to the present. The Senate has ordered Senator Sinodinos to appear and he has refused to comply with that order.

I further note that Senator Sinodinos says that this inquiry is 'too short'. In closing, I note that this committee would be very happy to entertain a recommendation from Senator Sinodinos that an inquiry be re-established for a longer period in the next parliament.

Senator SESELJA: Chair, I have a point of order. I would like to get a clarification if I could. Some have referred to this inquiry as a witch-hunt. In relation to other witnesses whom coalition senators wanted to see called, I would seek your clarification in relation to witnesses who could have shed light on the $40,000 donation washed through the Victorian AWU—people like Cesar Melhem; Ted Lockyer, from Unibilt; and a range of other players. Is there a reason why they were not asked to appear, or is this just about Senator Sinodinos?

Senator RHIANNON: Is there a reason that the New South Wales Liberals are not turning up and all the Liberal Party leadership—

Senator SESELJA: Senator Rhiannon, I have asked a question of the chair—and that was put to the committee, as I understand it. If you are going to pretend that this is not a witch-hunt and just about Senator Sinodinos, I think it is probably good to explain why Cesar Melhem and a range of others were not called given that there were serious allegations at the royal commission in regard to the washing of donations through the AWU, an associated entity—which is obviously directly within the terms of reference.

CHAIR: Those witnesses were considered by the committee and the committee resolved not to call them on the basis that they were not relevant to the terms of reference. You are putting a case—

Senator SESELJA: How are they not relevant?

CHAIR: It was not possible for the committee to discuss that because—

Senator WONG: Chair, on a point of order: Senator Seselja has asked for an explanation and you have provided it. We have witnesses before us. If we could proceed with the inquiry, we would appreciate it.

Senator SESELJA: So this is a 'get us' inquiry, not a 'get to the truth' inquiry.

CHAIR: Senator Seselja, we are now going to hear from our witnesses. I am unable to disclose to you or to anybody else the deliberations that took place in a private meeting, as you well know. The questions you are asking our out of order.

Senator SESELJA: But none of those people were called. Interesting.

CHAIR: I now welcome Mr Tom Rogers, the «electoral» commissioner, and Mr Paul Pirani, the chief legal officer, of the Australian «Electoral» Commission. On behalf of the committee, I would like to think the witnesses appearing today for their cooperation with the inquiry. Before the committee starts taking evidence, I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. The committee prefers all evidence to be given in public but, under the Senate's resolutions, witnesses have a right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to give evidence in camera. I now invite you to make a short opening statement, should you wish to do so. At the conclusion of your remarks, I will invite members of the committee to ask questions.

Mr Rogers : Thank you for the invitation to appear before the committee today. I acknowledge that the «matters» before the committee are important to the health of Australia's democracy and are therefore of understandable interest to the wider community. Since my appointment, I have made a number of statements to hearings of the Joint Standing Committee on «Electoral» «Matters» , and to various meetings of the relevant Senate estimates committee, that the AEC considers its main focus in the regulation of political parties and associated entities is to achieve disclosure. This is not a new position. It has, to the best of my knowledge, been the AEC's underpinning principle in this area since the relevant legislative principles were passed. This approach is based on what the AEC has always perceived to be the legislative intent of the relevant sections of the act, as outlined in the then Special Minister of State's second reading speech. Among other comments, the minister at the time the legislation was enacted emphasised the importance of disclosure, saying:

An essential corollary of public funding is disclosure. They are two sides of the same coin. Unless there is disclosure the whole point of public funding is destroyed.

The minister also reflected on the responsibilities of political parties, saying:

The Government believes that the independence of the Commission must be reinforced by a similar faith and trust in the integrity and independence of our political parties.

Again, if I look to the discourse around the provisions in question, I note from an inquiry into «electoral» expenditure a recommendation by Sir Clarrie Harders, former secretary of the Commonwealth Attorney-General's Department, that 'imprisonment would be an appropriate penalty for wilful submission of false returns'. The Joint Standing Committee on «Electoral» Reform considered this recommendation and rejected it, concluding:

The Committee is not inclined to a penalty of imprisonment. Any private person or party official who is convicted of knowingly providing false returns and is fined would pay sufficient penalty with the consequent probable denial or loss of public office or office of trust.

The AEC takes its role in achieving disclosure very seriously and, during the last few years, has introduced a risk based framework to ensure the program of compliance reviews is conducted in the most efficient and effective way possible. This risk based matrix was developed with the assistance of external audit specialists and is reviewed on a regular basis. Where a compliance review indicates an error or omission, the AEC contacts the individual or group in question, and in the overwhelming majority of instances the individual or group takes immediate steps to correct the error through a revised return. The AEC only takes more punitive action when it becomes clear the individual or group does not intend to fulfil their obligations.

If the AEC were required to prosecute every instance of error or omission then over the last three financial years it would have litigated 80 amendments from political parties, 36 amendments from associated entities, 92 amendments from donors and six amendments from third parties. Many of these amendments occur as a result of the AEC either checking party and associated entity returns or conducting more formal compliance reviews. In its 2015 program, the AEC undertook 38 compliance reviews, and this includes a variety of parties and associated entities, including unions.

The AEC does not resile from pursuing cases where an individual or group appears to attempt to avoid its disclosure obligations. In April 2014, the AEC referred 10 candidates who contested the 2013 federal election to the Commonwealth Director of Public Prosecutions. Of the six proven cases, two were fined, two received no penalty and two were placed on good behaviour bonds. The AEC continues to give active consideration to incidents of apparent wilful refusal to meet disclosure obligations. I am currently examining the cases of around 20 entities and donors that have not acquitted fully their reporting obligations for 2014, and I am likely to refer some of those to the Director of Public Prosecutions as well.

I am conscious that there are a wide variety of legislative frameworks that parliament could enact in this important area, and there are in fact a wide variety of schemes in operation globally, including within Australia with the states and territories. Clearly, the legislative design of the disclosure scheme, including penalties and other sanctions, is a matter for parliament. The AEC's role is to administer the legislation and to provide advice. To that end, the AEC has provided options for improving the system on a number of occasions. For example, during the life of the previous parliament, the AEC put to the Joint Standing Committee on «Electoral» «Matters» 17 options designed to strengthen the existing Commonwealth framework. I note that none of those options were ultimately legislated either in the life of the last parliament or in this one.

I previously mentioned the review by Sir Clarrie Harders. As he succinctly noted, it is 'in the public interest that «electoral» expenditure should be publicly disclosed'. The AEC intends to continue to pursue this goal within the framework of the current legislation, and I am happy to take any questions that any members of the committee may have.

CHAIR: Thank you, Mr Rogers. Mr Pirani, do you have anything to add?

Mr Pirani : No, thank you.

Senator WONG: Mr Rogers, first, thank you for starting with your reference to the intent behind the act, which I think you correctly identified as being to achieve disclosure. You also correctly identified that as being important to the health of Australia's democracy. In this inquiry, we have been tasked with inquiring into 'the funding and disclosure regime relating to annual returns' by associated entities, as well as the powers of the AEC 'with respect to supervision of the conduct of, and reporting by, associated entities'. You referred to compliance activity, but—I cannot speak for others on the committee—I am also interested in what deficiencies there are in the existing legislative framework and regulatory framework. I am trying not to get into a long discussion about what the act particularly means. It seems to us—the Senate did resolve to make this inquiry—that there has been quite a lot of evidence on the public record about the activities of associated entities which appear to have frustrated proper disclosure. Obviously the New South Wales «Electoral» Commission has taken certain action in relation to one such entity. I think the concern is that the very intent that you are describing may not in practice be fulfilled because of both activities and deficiencies in the framework.

I want to start first with the framework, which is the definition of an associated entity. Can you tell me how the act defines an associated entity? Can you also tell me whether you think the act provides sufficient clarity for the AEC and indeed for entities that might be captured by these provisions?

Mr Rogers : Certainly. I will take that in several parts, if I may.

Senator WONG: Sure.

Mr Rogers : There is a definition in the act that has several parts to it. I think members would be aware that that has been before a number of courts over a long period of time. The particular section of the act I think causes grief occasionally is 2871D. The definition there is 'an entity that operates wholly, or to a significant extent, for the benefit of one or more registered political parties'. Mr Pirani has more or less a photographic memory in this particular area. If I falter here, I am going to call on him. But my recollection is that we have asked previously, through the joint standing committee, for that definition to be tightened to make it easier for everyone involved in the process to understand what an associated entity is.

Again, it is the parliament's decision to legislate this; we are just providing advice on it. In our submission in 2011 we went further and said that one particular way of doing that would be to abolish altogether the definition of associated entity and establish a third-party scheme similar to the one that operates in Canada and the UK, thus avoiding the issue of whether or not an associated entity is an associated entity. Anybody who contributes to the political process during the period would be caught under that third-party scheme. It was considered by the joint standing committee previously. From memory, I do not think any of the parties agreed to that change and, in the end, it did not make it into legislation. But we remain of the view that it would be useful for a further definition about what an associated entity actually is to be put in the act.

In the second part of the question you asked about our powers in that regard.

Senator WONG: Yes. Does the regime adequately regulate associated entities?

Mr Rogers : There are two parts to that. First of all, in my view, yes. I note one of the submissions, which was a letter by the chair of the New South Wales «Electoral» Commission, Keith Mason, spoke about the regulation of associated entities in New South Wales. To my mind, we have that regulation in the Commonwealth legislation already. Associated entities are required to declare on an annual basis the activity they have been through in the previous financial year. To my mind, that is a significant piece of regulation.

Senator WONG: I will come back to that. Certainly demonstrably in relation to Keith Mason and the findings of that body, leaving aside the prohibited donors issue in New South Wales, the way in which the funding and disclosure regime works in relation to associated entities I put to you leads to far less disclosure than is optimal.

Mr Rogers : That is where I was going to head in my second part about our powers under that act. As I mentioned during my opening statement, every year we conduct a number of compliance reviews, not just on political parties but on other parties or associated entities, including unions. Each one of those compliance reviews is launched under the scope of section 316(2A). So at the start of those compliance reviews we use our powers under section 316(2A). We send a letter to the party or associated entity that is being reviewed. We require them to produce a range of documentation. It is our experience that overwhelmingly the vast majority of parties and associated entities, including unions, actually want to comply with the act and they do. If we were required to go further than that, if we met some sort of resistance, we would then proceed under section 316(3) the power of investigation, or section 316(3A) in the case of associated entities. From my perspective, those coercive powers—which is a term that has occasionally been used—are sufficient.

However, there are some other recommendations we made previously in 2011 that I think would help us in that regard. The big one that the AEC still considers would fundamentally change the approach of all parties in this would be the imposition of administrative penalties for noncompliance. I am not referring to that as a coercive power; it is just a power. But at the moment the likelihood of a successful prosecution if there were to be some sort of resistance is limited. The penalty itself has not changed since 1983. It is a $1,000 penalty. We have recommended that parliament increase that penalty in any case.

I am comfortable with the coercive powers, if I can call them that. There are some fundamental changes in some of the recommendations that we made in 2011 that were considered again. Let me free rephrase that. They were not recommendations. I want to be specific with my language. They were options for the committee to consider. I do not want to categorise them as recommendations. They were considered again, particularly the administrative penalties part.

The third part of the question relates to the New South Wales «Electoral» Commission and their decision to do what they did the other week. Clearly I do not want to either criticise the New South Wales «Electoral» Commission or become involved in what is a state matter, but I have adopted a different approach. In fact in Senate estimates I made a commitment to the Senate that, when the reports from Operation Spicer and Operation Credo are handed down, I will examine those reports in detail and take action on any «matters» that emerge from those reports.

Senator WONG: How many associated entities are there?

Mr Rogers : I can tell you how many returns were put in last year, which might assist with that. I have that information here. It is in our annual report for last year. In the last financial year there were 92 returns submitted by political parties and 189 returns submitted by associated entities.

Senator WONG: I want to go to the funding and disclosure regime and what I suggest to you are the deficiencies in it that have been identified by a range of factual circumstances. Let's start with a description of the funding and disclosure regime relating to annual returns by associated entities.

Mr Pirani : Section 314AEA of the act sets out what is required to be included in an annual return by an associated entity. That includes:

(a) the total amount received by, or on behalf of, the entity during the financial year, together with the details required by section 314AC—

I will come back to that because 314AC means that if people give amounts that are underneath the disclosure threshold they do not accumulate and therefore require a return in relation to the actual donor—

(b) the total amount paid by, or on behalf of, the entity during the financial year; and

(c) if the entity is an associated entity at the end of the financial year--the total outstanding amount, as at the end of the financial year, of all debts incurred by or on behalf of the entity, together with the details required by section 314AE.

In essence, it is an annual return that is put in. The disclosure threshold, which is what is referred to in 314AC, varies for each financial year. Note that the last part, 'if the associated entity is an associated entity at the end of the financial year', recognises that it is possible for an entity to change from being an associated entity to not being an associated entity due to a range of circumstances. Those can include things like whether they are still a member of a political party, financial membership of a political party, whether they have voting rights et cetera. If an associated entity were no longer to be a voting member of a political party then they would not fall within the definition. Those annual reporting obligations are similar to what applies to a registered political party under section 314AB. They are virtually treated as though they are similar to a political party.

Senator WONG: When was 314AEA or its equivalent first put into the act?

Mr Pirani : I think it was 2006.

Senator WONG: Perhaps on notice—because we do not have a lot of time—you could tell me when and the reason for it. There are a number of terms. What does 'financial controller' of an associated entity mean?

Mr Pirani : The financial controller is the person who is given the responsibility of reporting. The financial controller is also referred to in section 316, when we issue a notice on the associated entity to provide various documents and financial information. That term, as far as I am aware, is not defined in the act separately. It is a question of fact who would be the financial controller. I go to section 316(2A), which says:

An authorised officer—

which is the AEC officer—

may, for the purpose of finding out whether a prescribed person, the financial controller of an associated entity or the agent of a registered political party has complied with this Part, by notice served personally or by post on … the financial controller …

So it is a question of fact as to who is the financial controller.

Senator WONG: I have looked at the associated entity disclosure form. You have total receipts—

Mr Rogers : In part 1.

Senator WONG: Yes, included in the form. Does that include cash and in-kind donations?

Mr Rogers : Yes. It is actually prescribed in the act, but you are correct. In essence, there is a total amount that is not broken down in section 1 but is then broken down further in section 2.

Senator WONG: Are other benefits captured?

Mr Rogers : Other benefits, Mr Pirani?

Mr Pirani : Senator, if you are referring to the definition of a gift, section 287 of the act does include other benefits. The act does not refer to donations, even though the form does; the act actually refers to the word 'gift'. That is what appears on the form as 'donations and others'. Section 287(1) says:

"gift" means any disposition of property made by a person to another person, otherwise than by will, being a disposition made without consideration in money or money's worth …

So yes, it is capable of including something that is not directly monetary.

Senator WONG: I am looking at the 2013-14 form for the Free Enterprise Foundation, but I am not going to be asking questions at this point about that entity. It appears that, in terms of money coming in, there is obviously a current disclosure threshold—which is what? More than $13,000 currently?

Mr Rogers : That is correct.

Senator WONG: Money coming in that is above the threshold has to be declared by the entity—correct?

Mr Rogers : That is correct.

Senator WONG: Money coming in that is obviously below the threshold does not have to be declared by the entity?

Mr Rogers : All money has to be declared, in part 1 of the form.

Senator WONG: Sorry, the identity of the donor—correct?

Mr Rogers : Yes, that is correct.

Senator WONG: On this 2013-14 financial return form there is a set of above threshold donations from Ramsey and others which are declared. Part IV looks to the total payments for a financial year, which were just under $1½ million, but that is not disaggregated. Is that correct?

Mr Pirani : That is correct.

Senator WONG: An entity can get many people, both above and below the threshold, donating to it, but the entity does not have to say how it disbursed that—how it paid that out. It just gives an aggregate figure. Is that correct?

Mr Pirani : That is correct. When you go to the powers in section 315, which refers to gifts to candidates and gifts to political parties, associated entities are specifically excluded from those disclosure requirements.

Senator WONG: Coming back to your disclosure point, isn't the problem with that this: if a member of the public wants to know where the money went, all they get is an aggregate figure—which in this case is just under $1½ million—and in order to work out where that went they would have to try to go through every party return to identify who had received a component of the $1.5 million. Is that correct?

Mr Pirani : That would only be the case if the person who was making the donation intended it to go to the political party. It is complicated, I acknowledge, and it is an issue.

Senator WONG: I am utilising the Free Enterprise Foundation, an associated entity, as an example. So let's not get into going down a path that we are not talking about, which is associated entities donating to someone else. People are interested in knowing where the money went. They want to be able to understand what influence a donor may or may not have, because it goes to disclosure and it also goes, ultimately, to conflicts of interest and making sure that the transparency associated with donations that our system requires is demonstrated. Let's leave aside the FEF. Entity A gets a range of donations from multiple sources and donates all of it to the Liberal Party, and entity A only has to say outgoings—or payments, I think it is, on that form—are $1.5 million. If I want to know where that money went, there is nothing that entity A files that enables me to do that. Is that correct?

Mr Pirani : That is correct.

Senator WONG: If I want to know that, how would I find that out? Would I have to go to, let's say, for the purposes of this example, the Liberal Party? I would I have to go and look at all of their receipts, wouldn't I?

Mr Pirani : No, in that one, the Liberal Party would only show the amount that came as a single amount from the associated entity.

Mr Rogers : But, Senator, if your question is then, 'Do you know who is providing that money to the associated entity?' those donors that have given that money to the associated entity will accrue a liability to put a donor return in.

Senator WONG: Only if they are above threshold.

Mr Pirani : Only if they are above the threshold.

Mr Rogers : Yes.

Senator WONG: But that is only one side of it, because there are two points—are there not?—who is donating to entity A, and then who does entity A donate to? To which branch, which party, which bit of which party are they donating. In other respects, our disclosure regime does require people to tell you that, but the point is that the associated entity regime does not. Is that right?

Mr Rogers : The associated entity return provides, as you have said, an aggregate figure of the total. It also does provide a disaggregated figure.

Mr Pirani : If it is above the threshold.

Mr Rogers : If it is above the threshold—but not below the threshold, Senator; you are correct.

Senator WONG: That is not right.

Mr Pirani : Sorry, that is for the money in, but not for the money out.

Senator WONG: No, the money out is in aggregate.

Mr Rogers : You are correct on that aspect.

Senator WONG: So, essentially, it is a regime that means that you cannot follow the money.

Mr Pirani : Unfortunately, Senator, I believe that is what our submissions to previous parliamentary inquiries have been. We cannot match, often, some of the money that comes through in the donor forms with that received in the associated entity or the political party returns.

Mr Rogers : Senator, at the start I made mention of a submission that we had put to the joint standing committee in 2011.

Senator WONG: You have mentioned that.

Mr Rogers : One of those recommendations is for the establishment of a thing called a campaign account. Again, that was not picked up by the joint standing committee, but that is where all money coming in and going out is actually tracked contemporaneously so people can understand where that money comes from and goes to.

Senator WONG: Do I assume then that, given that evidence, you do not cross-reference? I am not criticising you for this, I just want to understand this as a matter of fact: you do not cross-reference entity A's $1.48 million donation to the Liberal and National parties against their records, or any returns from the party?

Mr Pirani : The money that would come out from the associated entity would be cross-referenced to the money going in to the party. With any other donor return we would try and match donor returns—

Senator WONG: So you do do that?

Mr Pirani : Yes, but the step before that—the donor going into the associated entity, with the donor going through to whatever money might have gone through to the political parties—

Mr Rogers : The act does not provide for us to do that.

Senator WONG: You gave me evidence, and you might need to take this on notice, that there were 189 associated entities—was that the figure?

Mr Rogers : As at today's date there are 192.

Senator WONG: Sorry, 192. Is this for the current financial year?

Mr Rogers : That is correct.

Senator WONG: Does the number of associated entities vary substantially from year to year?

Mr Rogers : That is hard to answer. I might take that on notice in terms of the figures but, as Mr Pirani was indicating before, an entity that is not necessarily an associated entity in one year may become an associated entity in the next year through its activities. I will come back to you on that.

Senator WONG: Sure. I am just asking a numerical figure, because I think it would be of use to understand what the behaviour is—do we get fewer returns from associated entities at different points in the «electoral» cycle?

Mr Pirani : Yes.

Mr Rogers : I would almost guarantee that is the case, and we will confirm that through the figures.

Senator WONG: On notice, could you give us the number of annual returns submitted by associated entities over the past five years by year?

Mr Rogers : Certainly.

Senator WONG: Thank you. I will appreciate that. Mr Rogers, when I asked you previously about another entity, Foundation 51, I think in additional estimates, you said:

… they have not self-declared as an associated entity but rather they have submitted their disclosure returns as if, to all intents and purposes, they were an associated entity.

I will ask you some questions about Foundation 51 subsequently, but I want you to explain the difference between self-declaration and lodging an annual return.

Mr Rogers : First of all, to all intents and purposes, once an entity has submitted return as an associated entity they are treated as being an associated entity. I think you are referring to the conversation that you and I had at Senate estimates last time, and I was reflecting back to you what I think was in the public domain. Mr Graeme Lewis had said that we are essentially submitting these returns not necessarily to declare that we are an associated entity but for the avoidance of doubt—submitting the documentation as if we were. So for my purposes, as I think I indicated last time, we are treating them as an associated entity because they have submitted those returns.

Senator WONG: Turning now to the FEF—Free Enterprise Foundation—can you tell me when—

Senator SESELJA: Chair, a point of order: are you able to get some indication of the time allocation here? Senator Wong has been going for some time. I am not asking you to cut her off now, but noting that we have another 50 minutes. How do you intend to allocate the time between senators?

CHAIR: My intention would be to allow Senator Wong to continue for at least another 10 minutes. She is pursuing a fruitful line of inquiry. But I will, of course, be allocating time to other senators.

Senator WONG: How much do you want?

CHAIR: How much do you need?

Senator SESELJA: As much as I can get, but certainly at least about 20 minutes.

CHAIR: How much time do you need, Senator Rhiannon?

Senator RHIANNON: Probably about the same as Senator Seselja.

CHAIR: Alright. We will do our best.

Senator WONG: I will try and skip through this. Mr Rogers, can you tell me when the FEF was first recognised as an associated entity—was it in 1998-1999? That is the first return we can find.

Mr Rogers : I will have to take that specific question on notice.

Senator WONG: In the evidence before the Independent Commission Against Corruption—this is on the public record—Mr Anthony Bandle agreed with counsel assisting that one could see the foundation as set up just to provide funding for the Liberal and National parties. Are you aware of that evidence?

Mr Rogers : I am aware of some of the proceedings that occurred in the Independent Commission Against Corruption.

Senator WONG: I am reading from New South Wales ICAC exhibit S64, page 1013PT:

Just going back to where we were I think you probably see where I'm taking this. Could, could I just ask you this, the Free Enterprise Foundation, it's only really just set up to provide funding for the Liberal and National Parties, isn't that right?

The answer was:

One could see it that way.

Are you aware of that?

Mr Rogers : As I said at a number of committees, I am deliberately not commenting on «matters» that are before the ICAC.

Senator WONG: I did not ask you to comment. I asked you if you were aware of that evidence.

Mr Rogers : I have spoken previously about the Free Enterprise Foundation. It does lodge disclosure returns as an associated entity on an annual basis, so, for all intents and purposes, as Mr Pirani was just indicating to me, it is an associated entity—or we treat it as an associated entity, in any case.

Senator WONG: Where can I find all the donations made by the FEF to the Liberal and National parties since its inception?

Mr Rogers : You would find those listed on the Liberal Party returns for the various years. To clarify, you have asked: where would you find any donations from—

Senator WONG: All donations made by the Free Enterprise Foundation to the Liberal and National parties since the foundation was first established.

Mr Pirani : As an associated entity, it would be in the money going out from the associated entity.

Senator WONG: But, again, that would only be an aggregate—

Mr Pirani : That is correct.

Senator WONG: so we would not be able to disaggregate between state or federal Liberal or National parties.

Mr Pirani : No.

Mr Rogers : That is right.

Senator WONG: Have you acquainted yourself with the evidence given to ICAC about the FEF and other associated entities?

Mr Rogers : Not in detail yet. As I have said, I am waiting for the final report to come out before I make any determinations about those «matters» .

Senator WONG: Have you had any direct engagement with ICAC on these «matters» ?

Mr Rogers : I have not, personally. I would need to check whether anyone in the organisation has or whether we were requested to provide any information. I am not sure at this stage. I think I am confident in saying no, but I certainly have not.

Senator WONG: Has anyone from the AEC had contact with the Free Enterprise Foundation in relation to «matters» raised at the ICAC?

Mr Rogers : Again, I have not, and I would almost guarantee you that no-one from the organisation has, but I will check that.

Senator WONG: I understand your point that you want to wait for ICAC's findings, but there is evidence on the public record which goes to the disclosure regime that you administer. Are you not troubled by evidence about the role played by this entity in channelling and disguising prohibited donations under New South Wales law?

Mr Rogers : I made the comment previously that I am not going to comment on those «matters» until the report is handed down, for, I think, very sound reasons. The evidence that has been presented in the public domain is potentially contested evidence until that report is handed down, so—

Senator WONG: But, if there is evidence of systemic abuse, why wait? The New South Wales «Electoral» Commission has not waited.

Mr Rogers : I note the comments of the inspector of the New South Wales ICAC, Mr Levine. He commented specifically on the actions of the New South Wales «Electoral» Commission in making that report. Mr Levine said—

Senator WONG: Are you seriously telling me you are critical of the New South Wales «Electoral» Commission for its actions? Is that what you are doing at this committee?

Mr Rogers : I am actually reading out a comment from the inspector of the New South Wales ICAC. That is all I am doing.

Senator WONG: Are you critical of the New South Wales «Electoral» Commission?

Mr Rogers : I am just trying to read out the comment from the inspector, who said 'it would have been preferable for the «Electoral» Commission to have waited until after ICAC had published its report based on all the material that had become available during Operation Spicer'. He said 'the commission, which was not bound to wait for ICAC's report, had only considered material from Spicer that was publicly available'.

Senator WONG: Why is this relevant?

Mr Rogers : Only because you have asked me a question about the New South Wales ICAC.

Senator WONG: No. What the inspector of ICAC says is, frankly, not of relevance. I am asking you why it is that you have turned a blind eye to the systemic abuse—

Mr Rogers : Senator, I am not—

Senator SESELJA: A point of order, Chair.

Senator WONG: Let me finish, Mr Rogers. I have not finished the question.

Senator SESELJA: Chair, I have a point of order. Senator Wong is now badgering the witness.

CHAIR: That is not a point of order.

Senator SESELJA: It is a point of order because it is unruly to badger witnesses, as it is to cast aspersions on witnesses, as Senator Wong just did.

Senator WONG: I am happy to rephrase, if it would be helpful.

CHAIR: Thank you.

Senator WONG: Why have you not acquainted yourself with evidence before the ICAC which suggests, frankly, systemic abuse, evidence which the New South Wales «Electoral» Commission has been prepared to act upon?

Mr Rogers : I have spoken at length about this to previous inquiries and I do not intend to resile from my position on this. It would be, I think, incorrect of me to make comment on the actions of the New South Wales ICAC until that report is handed down. Much of that evidence before the ICAC is contested evidence. I intend to wait until those reports are produced. Secondly, I have given a commitment to the Senate that, once those reports are published, I will see whether there are any issues that need to be acted on, with reference to the Commonwealth legislation, and I will still keep true to the commitment that I made. Thirdly, I might come back to where you said I was turning a blind eye. I was reading out the comments of the inspector of ICAC.

Senator WONG: He has no role.

Mr Rogers : I am sorry?

Senator WONG: He has no role in relation to your conduct and he has no role in relation to the New South Wales «Electoral» Commission. You are using him to justify your position. I do not think it is to the point.

Mr Rogers : Excuse me, Senator. I have no role with regard to the New South Wales ICAC. You are asking me a question and I am reading in evidence to make you understand why I have taken the decision that I have taken. I am not resiling from the fact that we will look at that report when it comes out.

Senator WONG: With respect, I do not think it meets the public test. For you to say, 'I'm going to ignore evidence on the public record'—

Mr Rogers : Excuse me, Senator—

Senator WONG: If I could finish—

Mr Rogers : You have just maligned me. I—

Senator WONG: For you to say, 'I'm going to ignore, for the moment'—is that better?—'evidence that's on the public record that the equivalent state authority is declining to ignore and has acted upon,' with respect, I do not think gives the public much confidence in the health of the disclosure regime.

Mr Rogers : I fundamentally disagree with you.

Senator WONG: That is fine. When and how did you first become aware of the practice of disguising donations by washing them through the Free Enterprise Foundation?

Mr Rogers : I am sorry?

Senator WONG: When and how did the AEC first become aware of the practice of disguising donations by washing them through the Free Enterprise Foundation? If you are not aware, I am happy to take you through the ICAC evidence which demonstrates this. In evidence to ICAC, Mr Bandle agreed that the only reason donors give money to the FEF is keep their donations secret. This is exhibit from S64 at page 1019PT. He further agreed that some donors make below-threshold donations to keep their identities completely secret—that is from the same exhibit. We also established earlier today that, when donations are channelled through the foundation to the Liberal Party, the FEF, not the donors, are identified on party returns. We have already established that a person cannot disaggregate where the total amount went to individual parts of the party.

Mr Pirani : You are referring to below the threshold.

Senator WONG: No, I am not.

Mr Pirani : But you were. You read out 'below-threshold'.

Senator WONG: Both. The lack of transparency is both below the threshold—leave that aside for the moment—and also in the proposition that I put to you earlier, which is: if you track money through the FEF, all you get is an aggregate payment from the FEF to the Liberal and National parties.

Mr Pirani : Which is what our legislation provides.

Senator WONG: Right, and I am saying to you that is problematic.

Mr Pirani : But we have no power to go behind or beyond what the legislation provides.

Senator WONG: But that is not an excuse to turn a blind eye to the evidence.

Mr Rogers : Senator—

Senator WONG: You have a role in relation to associated entities.

Mr Rogers : You have now accused me on a couple of occasions of either ignoring evidence, turning a blind eye or ignoring evidence for the moment. What I am doing is administering the legislation as it has been provided by this parliament.

Senator WONG: With respect, you say I have accused you of ignoring evidence for the moment, but that is actually what you are choosing to do. You have said that you have not engaged with ICAC. You have said that you are not going to take any action in respect of evidence that is before ICAC until ICAC has reported, notwithstanding that the New South Wales «Electoral» Commission has pointed out that the FEF was used to channel and disguise donations. Now, you can call it something else, but I think 'ignore it for the moment'—or 'not act on it for the moment', if you would prefer—is actually a very accurate description of what you have chosen to do.

Mr Rogers : I disagree with you fundamentally.

Senator WONG: So you disagree?

Mr Rogers : Absolutely.

Senator WONG: What would you describe it as?

Mr Rogers : Exactly as I have said previously, which is that I am waiting for the reports of the New South Wales Independent Commission Against Corruption—which I have been very public about—before I take any further action.

Senator WONG: You are declining to act on evidence that is before the corruption commission until they have reported. Can we agree on that?

Mr Rogers : No. I just said exactly what I have said: I am waiting—

Senator WONG: You are declining to act until they have reported.

Mr Rogers : I am not declining to act.

Senator WONG: You are not declining to act?

Mr Rogers : No. I am waiting until the report is issued.

Senator WONG: You are not listening to me. I said that. You are declining to act on evidence before the ICAC until the ICAC has reported. That is what I put to you.

Mr Rogers : I am listening to you very carefully, and I am deliberately telling you that I do not agree with what you are saying about declining to act. There is no requirement on me to act. It would be inappropriate for me to act. What I am telling you is that I am waiting for those reports to be handed down before I take action. I have given a commitment to the Senate that I will do so, and I do not resile from that. As I said at the start of this, much of the evidence at ICAC is contested evidence.

Senator WONG: But $4½ million has been withheld from the New South Wales Liberal Party because another statutory body thinks there is a problem.

Mr Rogers : The New South Wales «electoral» laws are very different from the Commonwealth «electoral» laws, in any case. I would not comment on the actions of the New South Wales «Electoral» Commission—they are entirely separate; they make their own decisions—and it would be inappropriate for me to do so. I do note that there are classes of prohibited donors in New South Wales that we do not have under the Commonwealth «Electoral» Act.

Senator WONG: But there is a disclosure requirement. I will try to wind this up. I asked you a question and I do not think you have answered it: when and how did the AEC first become aware of the practice of disguising donations by washing them through the FEF?

Mr Rogers : What you are asking me is not really a question. You are asking about the activities of an associated entity that could potentially apply to any associated entity. I have mentioned it previously—

Senator WONG: Why is that not a question? It is very simple question: when and how did the AEC first become aware of the practice of disguising donations by washing them through the Free Enterprise Foundation?

Mr Rogers : They are your words about disguising donations.

Senator WONG: Actually, they are not; they are the words of the New South Wales «Electoral» Commission.

Mr Rogers : That is for the New South Wales «Electoral» Commission. From our perspective, we have conducted a compliance review on the Free Enterprise Foundation, they have disclosed appropriately under the Commonwealth «Electoral» Act and I am waiting until that report of the New South Wales Independent Commission Against Corruption is handed down before I take further action.

Senator WONG: Are you aware that the New South Wales commission has concluded that the Free Enterprise Foundation is not a validly constituted charitable trust?

Mr Rogers : I have read the media reports of that.

Senator WONG: You have read the media reports. Have you considered their conclusion?

Mr Rogers : No, I have not.

Senator WONG: Does it have any implications for the way in which donations made by the FEF are disclosed under the Commonwealth «Electoral» Act?

Mr Rogers : I will consider that in detail when I consider the report of the New South Wales Independent Commission Against Corruption.

Senator WONG: So you are not going to consider the fact that the New South Wales commission has found that; it has made that clear. You are not going to act on it, notwithstanding that this may or may not be a matter that ICAC determines. The statutory body in New South Wales has said, 'This is not a validly constituted charitable trust,' but you are not going to act upon it until ICAC delivers its report. Is that right?

Mr Rogers : That is correct.

Senator WONG: Okay. In 2010-11, the Free Enterprise Foundation declared receipts of $1.6 million. In 2009-10, it declared receipts of $75,000. Was the $1½ million jump in declared receipts coinciding with changes to the donor laws in New South Wales a matter of interest to the AEC?

Mr Rogers : If you are referring to the 2010-11 return, we did a compliance review on the Free Enterprise Foundation in 2011-12, and we found that they had met all of their requirements under the Commonwealth act.

Senator WONG: That is not my question. There were donations of $75,000 in one year and $1.6 million the next year, and it happens to coincide with a change to donor laws in New South Wales. Was that not of interest to you?

Mr Rogers : As I have mentioned, we reviewed the Free Enterprise Foundation in 2011-12 and we found that they had met all of the requirements under the Commonwealth «Electoral» Act.

Senator WONG: I am going to close now and say I find it staggering, and I suspect many members of the public would, that you declined to act on a finding of the New South Wales «Electoral» Commission. I will also finish by saying I understand there have been many submissions made. It would have been helpful if in your submission to this committee rather than just saying, 'Go away and read them,' perhaps some of that had been included in the submission. I think that would have been most helpful.

Mr Rogers : Chair, I would like to respond to that, given an allegation has been made about my character which I find to be offensive.

Senator WONG: Which bit is the allegation that you find offensive?

Mr Rogers : What you have just said, Senator.

Senator WONG: The first or the second?

Mr Rogers : Both, quite frankly. The AEC put in a submission in 2011 and submissions earlier this year, and none of the areas that we have previously canvassed with the joint standing committee have been picked up by parliament. I said very clearly in my submission to this committee that those «matters» remain extant.

Senator WONG: Sure, and I was simply saying it would have been useful, I think, if you could have included some of the salient bits of your past reports in your submission, rather than telling us to go back and look through a range of reports. That is what I was saying.

CHAIR: Senator Rhiannon, I will come to you now, but I am conscious that Senator Seselja also seeks the call, so can I ask you to keep an eye on the clock. We are scheduled to finish at one o'clock.

Senator RHIANNON: Mr Rogers, you have told JSCEM, and you have also repeated it here today, that you are waiting for the ICAC reports before you take action. Could you go through the preparation you are doing? Surely there will be more to your decision than just what is handed down by ICAC. Have you met with the New South Wales «Electoral» Commission? Have you been comparing the donations coming through New South Wales with those coming through the Australian «Electoral» Commission?

Mr Rogers : As you would know, we meet with our colleagues in the state and territory «electoral» commissions fairly regularly, but we do not discuss individual cases, for a whole range of reasons. I think if we did so we would be acting outside the framework of the legislation. However, the commitment that I have given to the Senate is we will examine all «matters» relevant at the time that the New South Wales ICAC hands down its reports.

I am very conscious, though, that part of what you have indicated there is about examining what the New South Wales Election Commission are doing. Their legislation is very different to ours. They have a list of prohibited donors, which we do not, and different disclosure thresholds. So there is not a huge amount of benefit in us doing that at the moment, but we will be—

Senator RHIANNON: But that is precisely my question. You have acknowledged that there is a huge difference. Are you discussing the implications of that with regard to disclosure and these controversial issues that you have now committed that you will report on?

Mr Rogers : There are two parts to the question that you have just asked. Firstly, there are the generic differences between the Commonwealth and state and territory legislation. I know there have been moves in the past to try and harmonise that legislation, and none of those have yet been successful. I think it was raised most recently by Premier Baird in response to some of the issues that emerged in the Spicer and Credo «matters» . Again, that is a matter for parliament and I could not comment on that. Clearly there are some benefits that would accrue from having harmonised legislation across the Commonwealth and states and territories, but again it is a matter for the parliament.

The second part is that, because the specific case in New South Wales is so different, there is not a lot of benefit that accrues to us by spending time going through what each associated entity may or may not have done under New South Wales laws compared to the Commonwealth's. So we are waiting for that report to come out and then we will go through that in detail.

Senator RHIANNON: But considering the enormity of this issue, even if you do not discuss individual cases with the New South Wales «Electoral» Commission, are you looking at the donation trends that are occurring? Let's stick with the Free Enterprise Foundation. According to the New South Wales «Electoral» Commission, the FEF donated the following amounts to the Liberal Party coming up to the 2011 election: $94,000 in August 2010, $171,000 in December 2010, $358,000 and $64,000 on 23 December 2010, and $100,000 on 24 December 2010. As we have heard in earlier evidence, there was an increase in the amount of money coming from the Free Enterprise Foundation into the New South Wales Liberal Party. Do you look at this and look at what you are picking up federally and see if there are any issues here that need to be explored or reported on?

Mr Rogers : As I said previously, we will examine the material that comes out of the New South Wales ICAC. That will include information on the issues that you have raised, and we will examine it at that time, but until then there is no point in me looking at that other than when the report is actually issued.

Senator RHIANNON: My first question was: what preparation are you doing apart from just waiting for the report to come down? The conclusion, after these answers that you have given, is that you are not doing preparation for the actions that you will be recommending once you have looked at the ICAC report.

I will go on to some issues to do with the legislation and trying to understand how associated entities operate under the AEC. Some of this you have covered, but I want to work through it. The AEC's financial disclosure guide for donors states:

If a donation is made to an Associated Entity with the intention of benefiting a particular political party, it is considered to be made to that political party.

Do you agree that it is possible that some donors to associated entities do not realise that they have the same disclosure obligations as donors to political parties, or that the recipient of the donation is classed as an associated entity?

Mr Rogers : I think you are asking me to speculate on the motivations, or understanding, of various donors there, which I would find hard to answer.

Senator RHIANNON: Again, you are seeing the disclosures come in. You see trends here. You have made recommendations in your reports to JSCEM. Sometimes we have sat here in inquiries and been frank about it. You say, 'The law's this,' and that is as far as you go. But, when you look at your reports—and you have said it today—you are making recommendations which identify where there are problems. I think that is fair enough for you to answer that question about: do you agree that it is possible that some donors to associated entities do not realise that they have the same disclosure obligations as donors to political parties? Surely you can see that coming through?

Mr Rogers : I guess the answer is: it is quite possible that that would be the case. The same as occasionally there is confusion with donors to political parties, which you have indicated in that question, there is occasionally confusion, I would imagine, with donors donating to associated entities.

Senator RHIANNON: I will move on. I will ask this question, but before I ask for the answer to the question I want to go into some aspects of the legislation which I find confusing. I want to establish if it is correct that a donor to an associated entity could donate as much as $100,000, say for a year, without their name and donations being disclosed to the AEC provided that no single donation was greater than the $12,800. We will start with the legislation. Your Financial Disclosure Guide for Associated Entitiesstates:

Section 314AEA(5) and Section 314AC(1) of the Act requires that if the sum of all amounts received by, or on behalf of, the associated entity from a person or organisation during a financial year is more than the disclosure threshold details of that sum must be disclosed.

I am emphasising 'sum', because then I read this section:

Section 314AEA(5) and Section 314AC(2) of the Act provides that when calculating the sum, individual amounts received from the same source, that are less than the disclosure threshold, need not be counted.

When I read those two, they seemed contradictory. Having read them many times, I think I understand what you mean. Is it correct that a party does not have to disclose the donor details even if the cumulative donations amount to, say, $100,000 a year? Sorry, I need to ask my first bit first. Is it correct that a party does not have to disclose donor details if cumulative donations exceed the donation disclosure threshold of $12,800 but no individual donation exceeds this cap?

Mr Pirani : That is section 314AC, yes, you are correct.

Senator RHIANNON: So that bit is correct. So a party does not have to disclose donor details even if the cumulative donations amount to, say, the $100,000. Therefore, if the donor fails to lodge and disclose when they are obliged to—that is, if cumulative donations exceed the donations exceed the donation threshold—is it true that the AEC has no way of knowing about such donations?

Mr Pirani : That is correct.

Senator RHIANNON: So that is where we could be missing out on a whole chunk of information?

Mr Pirani : That is correct. That is one of the issues that we have in relation to 314AC, but it is the same for an associated entity and it is the same for a political party.

Senator RHIANNON: So you have made that recommendation in previous reports to JSCEM on that very point?

Mr Pirani : We have, yes. It is one of the reasons why we recommended the abolition of associated entities as a test, and the adoption of the UK and Canadian model whereby anyone who engages in campaign or «electoral» expenditure has to be registered if they incur any expenditure over a prescribed amount. That would make it easier for us to be able to identify people who become involved in the political process. Tied with that, would be the issue of campaign accounts—no money can come into election campaigns unless it comes out of an election account.

Senator RHIANNON: Going back to my question about your discussions with the New South Wales «Electoral» Commission—and I note, Mr Rogers, you said you have regular meetings—I am not asking that you discuss specific cases, but considering that you have identified that there is confusion about the laws with regard to associated entities at a federal level and there is inconsistency around the country, surely that is something that you would put on the agenda, to discuss how that is resolved and maybe put forward other recommendations?

Mr Rogers : Given that that matter is largely to be solved legislatively, that is a matter for parliaments—not just this parliament but the state parliaments as well. My understanding, and I would have to check the record, is that there was an attempt by a previous Special Minister of State, Senator Faulkner, to achieve a degree of harmonisation. I am not sure what year that was, but it might have been—

Mr Pirani : It was 2008. There were two green papers on «electoral» reform. The first one was in the finance and disclosure area. That paper indicated that, in the absence of harmonisation, there was always the potential for loopholes.

Mr Rogers : That was not achieved back then. As I mentioned at the start, Premier Baird has put that out as an item that would be worthy of COAG looking at. But these «matters» are not going to be solved by the «electoral» commissions of the states, territories and the Commonwealth. These are legislative issues that need to be addressed by parliament.

Senator RHIANNON: But my question was have you discussed it when you have these meetings about harmonising it or even the steps that need to be taken to be giving advice and making a contribution to solving this? Has it been on the agenda? Let us start there.

Mr Rogers : I would have to check in detail, but I would tell you that it has not been a formal agenda item on one of the «Electoral» Council of Australia and New Zealand meetings. We, of course, discussed this in the margins.

Senator RHIANNON: What does 'in the margins' mean?

Mr Rogers : In the margins of the meeting.

Senator RHIANNON: Informally, you mean?

Mr Rogers : Yes.

Senator RHIANNON: So it is not on the agenda, but you discussed it informally?

Mr Rogers : Over the years, there has always been a discussion about harmonisation of laws. You will know from your time with the Joint Standing Committee on «Electoral» «Matters» , that a lot of the focus on harmonisation over the last few years has been on harmonisation of legislation around the «electoral» roll, and there are a number of areas of our «electoral» operations where we discuss how we might be able to better work together on. But this is specific. Because the regimes in some of the states are so different from what exists federally, it is very difficult. New South Wales is a very different piece of legislation from the Commonwealth. Victoria, in fact—

Senator RHIANNON: But we have a growing controversy around associated entities, and this issue has never been formally put on the agenda when the various «electoral» commissions around the country meet?

Mr Rogers : You are correct. You said at the start that we have not contributed to the debate. It is one of the reasons why we put the submission in 2011 with a wide range of suggestions and options for improvement. So we think that we are contributing to that debate by providing those items.

Senator RHIANNON: You have covered this before, but considering the confusion about it I did want to ask is it correct that the associated entity must report all amounts above and below the threshold when reporting its total receipts and that this amount is only reported as a total without any information as to what the receipts went towards in this total?

Mr Pirani : That is correct. That is section 314AEA.

Senator RHIANNON: You have made recommendations in your reports to JSCEM on that?

Mr Pirani : We have made recommendations that the whole concept of associated entities should be removed.

Senator RHIANNON: Specifically on that point, what have been your recommendations?

Mr Pirani : The recommendations went to campaign accounts so that all money in and all money out would be able to be disclosed. That was the recommendation, and that would deal with the perceived mischief here.

Mr Rogers : The specific point that you have raised, yes.

Senator RHIANNON: With the New South Wales «electoral» law, they do not have this concept of associated entities. You are obviously aware of that. Have you considered how that is managed in New South Wales as possibly one of your recommendations?

Mr Rogers : No, we have not. I note the letter that we spoke about earlier on from the chair of the New South Wales «Electoral» Commission, which I think mentions the need for regulation of associated entities within New South Wales. I note that, but that is as far as I note.

Senator RHIANNON: Thank you.

Senator SESELJA: Mr Rogers, in relation to associated entities, it is fair to say, isn't it, that the vast bulk of revenue declared by associated entities is by associated entities associated with the Labor Party?

CHAIR: May I interrupt you briefly. I am conscious that you had asked for 15 to 20 minutes. Can I ask our witnesses if they would be willing to extend their availability to the committee for another half an hour to allow Senator Seselja to complete his questioning? I understand Senator Wong has another question also.

Mr Rogers : Chair I could think of nothing more pleasant to do this afternoon than provide evidence to the committee, so I am more than happy to make myself available. I am sure Mr Pirani is the same.

CHAIR: Thank you, Mr Rogers and Mr Pirani, that is much appreciated. Senator Seselja, I apologise for interrupting you.

Senator SESELJA: Do you remember the question?

Mr Rogers : I think it was 'Does most of the money given to associated entities come from the Labor Party or unions?'

Senator SESELJA: Entities associated with the Labor Party?

Mr Rogers : I would have to disaggregate that material to provide you an answer. I am happy to do that and come back to you.

Senator SESELJA: My understanding, and you can come back to us as to whether this is correct or not, is that of the $843-odd million that has been disclosed by associated entities, $818,835,000 is from Labor associated entities, primarily trade unions. Could you, on notice, confirm that?

Mr Rogers : I will confirm that for you.

Mr Pirani : Which financial year?

Senator SESELJA: I believe this is for 2014-15. That being the case, obviously if you are following the money that is where most of the money is. I am interested in your evidence that you have undertaken that, once Operation Credo and Operation Spicer are completed, you will then look into those «matters» as they pertain to associated entities. The royal commission into trade union corruption has concluded, and obviously there was significant evidence in relation to a number of associated entities and the various ways that money flows to them. Given that that has now concluded, what investigations do you plan on the back of that damning evidence that we saw in the royal commission?

Mr Rogers : That report, as you say, has been handed down. It was handed down a little while ago; from memory, I think at the end of last year. There are still «matters» ongoing. First of all, there was no explicit finding in the report of the royal commission, that I am aware of, that mentioned any infraction of the «electoral» law, and in fact I do not think it was mentioned at all—I am looking at Mr Pirani; I stand to be corrected if I am wrong, but I am fairly sure that was the case. As a result, I think, of some of the evidence that came out at the trade union royal commission, there were some amendments to returns that were then lodged with the AEC later on. As to whether they were as a result of evidence given, amendments were lodged with the AEC, in any case, around the time of the trade union royal commission. I know that prosecutions have not yet been determined as a result of the evidence that was given at the trade union royal commission. And we continue to monitor that process.

Senator SESELJA: But, given what we have seen, and, as I say, given that it has concluded now, as opposed to those other investigations that you talk of, and that there is widespread evidence of money coming in to associated entities in all sorts of inappropriate ways and there are reams of evidence on the record—I will give a couple of examples. We had one of the case studies from the trade union royal commission's report. It looked at the Thiess-HOCHTIEF joint venture which was constructing the Epping to Chatswood rail link in Sydney and paid $100,000 to the Building Trades Group of unions' drug and alcohol committee. The payment was purportedly for drug and alcohol safety training. However, most of the money ended up in the fighting fund general account of the CFMEU in New South Wales. So maybe you could explain to me: in those circumstances, firstly, what would be the disclosure requirements? If it is coming through this purported safety fund but it is effectively coming to the CFMEU from a developer or from another group, does that need to be disclosed? And how would that be disclosed?

Mr Rogers : Perhaps if I also talk about the approach we take on information that is given to us or that might be in the public domain, that might help part of that process—that is the first part of your question. As I mentioned during my opening statement, we have a risk based matrix that we use to determine our activities in a particular year, and in 2015 and the first quarter of 2016 we completed 38 compliance reviews. They are selected based on our risk based matrix. There are a number of factors that go into making up that matrix. We use information and intelligence that is in the public domain as one of the inputs into that risk based matrix to help us select returns that we examine in more detail in a given year. Without going into the specifics of that case, we use information of the type that you have indicated as an input into our reviews and activities in a given year. So that is the first answer to that.

We have deliberately developed that risk based matrix to help us shape our yearly work. Clearly, given the number of returns I read out earlier on, we cannot do a compliance review on every return; we need to do a subset of that, and we select a number of returns and activities to look at. During those compliance reviews, where there may be evidence of some form of activity that we are unhappy with, we may go further and launch another investigation on top of that, if we get some sort of resistance from the entity that we are investigating.

The second part of your question was a specific question about the money going in, I think, to the CFMEU. I might ask Mr Pirani to comment on that.

Mr Pirani : The associated entity reporting is: money in, money out. So that is all it is required to do—unless of course the money is to be used for the benefit of a registered political party; then the details of a donation have to be separately recorded. So, as to some of the information, it may well be relevant to have a look at a total amount in an annual return, but it is difficult for the AEC to be able to ascertain whether some of the evidence at the royal commission would have affected the total money in, to an associated entity that was a trade union.

Senator SESELJA: Just let me understand: you say it is total money in, but we talked before about, if it is over the $13,000 disclosure—

Mr Pirani : But that is for a donation to be used for a political purpose.

Senator SESELJA: Even if you do not take this particular case, we know there have been all sorts of examples of this. It is a case where someone is either forced or encouraged to donate to a fund which is purportedly for safety, but that money just makes its way to the CFMEU fighting fund to fight elections with. It could be used to campaign directly or actually to donate to the Labor Party—

CHAIR: Are you basing this on information before you that you need to table, or that the other committee members can have access to? We are not aware of the specifics in the way that you are describing them, so if you do have documentation of this example that would be helpful.

Senator LUDWIG: Point of order, chair. Personally, I am not sure how relevant that is to this inquiry—

Senator SESELJA: It is highly relevant!

Senator LUDWIG: He can make these submissions at estimates or other meetings or, alternatively, if the Senate so directs that this committee look into this matter.

Secondly, you are right, Chair: if he is going to read out some wild accusations on the public record (a) I would caution against that and (b) the committee should have that information available to it, if it is relevant to this inquiry.

Senator WONG: Just assume that he wanted the—

Senator SESELJA: Well, to respond, Chair: apart from the extraordinary claim that you now want to shut me down from talking about associated entities because they are not what you want to hear about—or what Senator Ludwig wants to talk about—

CHAIR: Senator Seselja, could you avoid—

Senator SESELJA: This comes from the trade union royal commission report—

Senator WONG: Is this because it did not work there so you want to do it here?

Senator SESELJA: No—

Senator WONG: This is an inquiry about the act—

Senator SESELJA: And it is about associated entities.

Senator WONG: All right. So you are going to be asking him about the act, are you?

Senator SESELJA: I do not know if you heard any of the questioning—

Senator WONG: Yes, I have been listening to you closely.

Senator SESELJA: but it was about associated entities.

CHAIR: Order!

Senator SESELJA: Do not try to shut me down on associated entities—

CHAIR: Senator Seselja, I am listening, ready and waiting—

Senator WONG: Oh, come on!

Senator SESELJA: You talk about a witch-hunt! The second we go off what the what the Labor Party-Greens line is we cannot have questions!

CHAIR: Order! Senator Seselja, I am waiting to hear your point of order. I am all ears.

Senator SESELJA: I do not have a point of order. I simply responded to the absurd point of order from Senator Ludwig.

Senator WONG: That you should be relevant.

Senator LUDWIG: Yes.

Senator SESELJA: I am being highly relevant on associated entities.

Senator LUDWIG: It sounds precious to me.

CHAIR: Senator Seselja, are you ready to hear my ruling on that?

Senator SESELJA: Very pleased.

CHAIR: I am concerned that you have not made the clear connection between the activities you are talking about and the question of political donations, because—

Senator SESELJA: You've got to be kidding!

CHAIR: nothing that you have presented describes or speaks to a political donation. However, I am prepared to give you the benefit of the doubt. I think the second point that Senator Ludwig makes, which is if you are in possession of documentation that is underpinning your line of questioning it would be helpful if other senators were able to take it.

Senator SESELJA: Well, they can go on the website of the trade union royal commission. It is publicly available information. This is obviously, clearly, just designed to shut down my questioning, Chair.

CHAIR: Senator Seselja, you have a piece of paper in front of you—

Senator SESELJA: I have a piece of paper, which is the terms of reference. I can read from the terms of reference to point out how relevant this is if you would like. It is an absurd proposition. I am asking questions about how associated entities are getting their money, and we have an inquiry into:

b.the powers of the Australian «Electoral» Commission with respect to supervision of the conduct of, and reporting by, associated entities …

What part of my questioning about these associated entities is not relevant?

CHAIR: Because the witnesses have already provided evidence that there were no findings in the trade union royal commission—

Senator SESELJA: But that is not what I am asking! You are now saying that you do not like the tenor of my questions—

CHAIR: I have offered you the opportunity to return your questioning to the terms of reference, and I am happy to—

Senator SESELJA: Which is exactly what I am doing, Chair.

CHAIR: Well, perhaps arguing with me—

Senator SESELJA: I would just note that after waiting, and having 75 minutes of Labor and Greens questioning, the second I start asking questions you claim that they are not relevant when they are specifically relevant to your terms of reference. May I continue?

CHAIR: I have offered you that opportunity on a number of occasions.

Senator SESELJA: As I said, it is getting to the bottom of how these payments would be disclosed. Where I was, before I was interrupted, was to try to outline it. Maybe you can clarify this for me? If these payments are made, and they are made purportedly to some structure about safety or some such thing—which we have heard a lot of evidence about—unless it is directly known, is it about the knowledge of the donor as to whether it is going for political purposes? Or is it about—

Mr Pirani : It is the intention.

Senator SESELJA: So it is the intention of the donor. When unions, as associated entities, encourage, coerce or otherwise organisations or companies to donate to particular causes which they then go and use for political purposes—either through direct campaigning or through donations to associated political parties—none of that is actually disclosed, except the total that is coming into that associated entity. Is that correct?

Mr Pirani : That is correct.

Mr Rogers : The aggregate amount.

Senator SESELJA: So when we see that example I used of the $100,000 going to the building trades group of unions drug and alcohol committees, which the royal commission found the payment was most likely made by THJV via a false invoice, which concealed the payment to avoid industrial action during enterprise bargaining and which may have been a corrupt commission, would the detail of that money not have to be disclosed in any way by that associated entity?

Mr Pirani : Only the total amount it received. Other than the aggregate amount, this is money that came in and therefore it can be in the total amount of moneys received.

Senator SESELJA: And they would not have to say where they got the money from?

Mr Pirani : No.

Senator SESELJA: So no-one is going to know if there are bogus entities set up which effectively are funnelling money to political campaigns or funnelling money to that Labor Party or the Greens or whoever these associated entities donate to? So nobody is going to know where that money comes from?

Mr Pirani : That is the requirement of the act.

Senator SESELJA: Going to my earlier question, you talked about a risk-based matrix. Obviously when it comes to certain unions, certain associated entities, we have seen patterns of behaviour. Given that that process has now concluded, is there anything in that evidence that would then cause the AEC to investigate, to look at whether or not those associated entities are behaving properly and in accordance with the law? Would that kind of evidence cause you to do a further investigation?

Mr Rogers : The compliance review function that we undertake is an important part of ensuring that disclosure has been achieved and that parties meet their obligations under the act. It is why we developed the risk-based matrix, to assist us to target in an effective and efficient way those returns that we think should be looked at. There are a number of inputs into that risk-based matrix and that includes information that is in the public domain that we may wish to have a look at.

Our experience has been, as I said earlier on, when we do look at the compliance reviews, that generally speaking most parties and most associated entities want to comply with the act. Where it has been pointed out to them that they are not, they submit an amended return or they work with us to resolve that issue, which, again, as I said at the outset, is part of that underpinning approach that we take to achieve disclosure.

Senator SESELJA: So are you saying entities like the CFMEU for instance want to comply with that act even though we have heard a lot of evidence of them not wanting to comply with various pieces of legislation? Are you saying when it comes to «electoral» disclosures, they are happy?

Mr Rogers : What I am saying is our experience with most associated entities and parties is that when we point out issues with their returns, most entities and parties are more than willing to comply with our directions in that regard and submit amended returns.

Senator SESELJA: I have some specific questions. You were asked questions which you did not answer at the time—fair enough because there was an ongoing royal commission but that has now concluded. There were some questions around Unibilt's donation of $40,000 for a staffer, Mr Lance Wilson, for Bill Shorten's 2007 campaign for Maribyrnong, a position subsequently rooted by the Victorian AWU, which of course is an associated entity. The evidence that was presented was that false documents and invoices were created and that neither Unibilt nor the AWU nor Bill Shorten nor the Victorian ALP disclosed this donation for eight years, in fact not until Mr Shorten appeared before the royal commission. Is it a fact that Mr Shorten lodged a nil return with the «Electoral» Commission which did not disclose any donation to his campaign for Maribyrnong in 2007 let alone one from Unibilt or the AWU and that Mr Shorten's evidence to the royal commission was that he expected such donations to be included in the Victorian ALP's returns?

Mr Pirani : The normal practice is for most MPs to not lodge a return. Your party agent will lodge a return on your behalf and the party agent relies upon the information that is provided. There was a return that, as I understand, came in for that financial year. It was not signed by Mr Shorten; it would have been signed by the party agent. And as is normal practice, it would have been nil because that is not what normally takes place.

Senator SESELJA: As I understand the evidence, it was expected it would be included in the Victorian ALP's return. Did the Victorian ALP's 2006 original return to the «Electoral» Commission disclose any donation from Unibilt?

Mr Rogers : No it did not.

Mr Pirani : I think it is on the public record that those amendments to the 2006-07 and 2007-08 returns were lodged with us in July 2015.

Senator SESELJA: Did the Victorian ALP's 2007-08 original return to the «Electoral» Commission disclose any donation from Unibilt or from the AWU?

Mr Rogers : It was amended. We received an amended return for the 2007-08 return.

Senator SESELJA: That was an amended return which was lodged when?

Mr Rogers : It was Friday 10 July 2015.

Senator SESELJA: So the amended return did not get lodged in 2007-08 but was lodged in 2015—eight years later it was amended. I refer again to the 2007-08 Shorten Maribyrnong internal campaign return to the Victorian ALP, which was filled in by Lance Wilson, Mr Shorten's campaign manager, who, by the time he filled in this return was working as an electorate officer for Mr Shorten. Can I draw your attention in particular to the declaration made by Mr Wilson that the information was true and correct to the best of his belief. The internal return signed by Mr Wilson in 2009 does not mention the donation of $40,000, which was for his own position, paid by Unibilt on receipt of false invoices from the Victorian AWU. It makes no mention of it, does it?

Mr Rogers : If I have understood your question, the 2007-08 amendments that we received on 10 July 2015 were to add a donation from the AWU national office of $11,000, add a donation from AWU Victoria of $42,968 and therefore increase the total receipts by $54,742. That was the amendment to the 2007-08 return.

Senator SESELJA: That was the amendment but the initial return, which was filled out by Mr Wilson, makes no mention of his own position, which was being funded to the tune of $40,000.

Mr Rogers : I do not have that return in front of me but I can check that and I can get back to you.

Senator SESELJA: So these later on had to be amended just before the royal commission. Are you aware of any other situation where someone who is being funded for a position and fills out a return in relation to that has filled out a nil return notwithstanding that they would clearly know that their position is being funded by that money, which of course has to be disclosed?

Mr Rogers : If you are asking me do I know specifically of any other case, I do not but somebody else in my organisation may. As we are going through the process of doing compliance reviews, that situation may or may not have emerged previously. I can check for you.

Senator SESELJA: Will you take on notice whether that situation has emerged in the past? In relation to that evidence, going back to my earlier question, you have got your risk based matrix where you look at things in relation to some associated entities, CFMEU being one but AWU being another, where pretty damning evidence has been laid against them. Is that enough for you to make further inquiries or does there need to be something else which would lead you to actually inquire as to how these associated entities have disclosed things, how these associated entities have received their funds?

Mr Rogers : I mentioned at the outset the term 'coercive powers'. I think our powers are sufficient in that regard. We launch all of our compliance reviews using a 3162A notice in any case requiring people to produce documentation. Were we not satisfied with the response or if there was evidence there that we needed to go further, particularly with an associated entity, we do have powers under section 3163A that provide us with the ability to ask additional questions and get additional material to come to a view. I think in that regard we have sufficient powers to do that and if we need to do it, we will use those powers.

Senator SESELJA: Is there any difference in the way you treat any sort of investigation? Obviously returns are amended all the time—you made that point earlier—and presumably the vast bulk of the time it is an error. For whatever reason, it is human error; they did not know about something or there was not a proper invoice or whatever there might be and that happens across the board when it comes to «electoral» returns. But do you look at things differently where there is evidence as there was in this case? There were a number of steps taken to disguise it the initial return; I think it was misdescribed. It went through the AWU even though it was being paid by Unibilt. Does that sort of evidence cause you to take a different look and a deeper look rather than say, 'Oops, the number was wrong. There is no other evidence. We have corrected it and have all moved on?'

Mr Rogers : In essence, yes. We always use the information we receive during a compliance review to shape how we proceed with that. You are quite right: the vast majority of cases, we think, are inadvertent. Sometimes these «matters» are self-declared either by the party or the associated entity. Occasionally, it might even be picked up in a superficial check by us when the return is actually submitted. And sometimes these «matters» are picked up when we do a more detailed compliance review. But we treat all of these «matters» very seriously: we use the information during the compliance review to shape what we do with the compliance review and how we come up with a finding, and we use all of the information that comes out during these processes.

Senator SESELJA: So in relation—

CHAIR: Senator Seselja, you initially indicated you needed 20 minutes. You have been going for a little bit—

Senator SESELJA: I said at least 20 minutes, but as much as I could. I do not think that the 20 minutes has been—I have not been allowed to ask questions for the entire time. I would just make the point that I was interrupted by Senator Ludwig.

CHAIR: Senator, you have chosen to dispute with me, and to chew up your own time. However, I am asking: how much longer do you think you need, because I am conscious that other senators have follow-up questions. Indeed, Senator Rhiannon quite generously truncated her questioning. How much longer do you think you will need?

Senator SESELJA: I do not think it will be much longer. There will be a couple more questions to bring this to a close.

Following on from that answer then, in the particular case that I have just drawn your attention to and given that there is a range of evidence that has been led at the royal commission which suggests it may be, and clearly appears to me to be, more than just an inadvertent error, what follow-up has there been from the «Electoral» Commission to look into this matter?

Mr Rogers : If you are talking about the specific issue from 2006-07, then, as you would also know, the act is very clear with us that there is a three-year limitation on our ability to take action over any issues. So with that specific issue, no further action was taken. We have no power to go back beyond a three-year period. What we will do, however, is include, as part of our approach with a risk based matrix for future reviews, information that emerged during that period. But in terms of the specific incident, there is nothing further that we are going to do about that because the time period of three years has expired.

Senator SESELJA: And if the three-year statute of limitations was not in place, is that the sort of thing that you would be then further investigating?

Mr Rogers : I will not speculate on that for a whole range of—

Senator SESELJA: But there is a range of facts there. Are you saying the only reason you would not look into it further is because of the statute of limitations?

Mr Rogers : Slightly different, Senator. Again, I am just being very precise with my language. The act currently has a three-year statute in it; I am unable to look beyond that three-year period.

Senator SESELJA: So if these kinds of—

Senator LUDWIG: You are now asking him for an opinion.

Senator SESELJA: No, I am not. If these kinds of facts then came before you, if similar facts came before you and it was not beyond the three years, would you investigate?

Senator Ludwig interjecting

Mr Rogers : Again, all I can say is: the act contains a three-year period beyond which I am not able to look. I think my earlier answer about having a risk based matrix, where we consider a whole range of issues to help us design our work plan in any given year—we use information like this to help us design those work plans.

Senator WONG: Just a couple of things first. Just to demonstrate the sort of disclosure proposition that we were discussing earlier, FEF in 2013-14 made a donation of $1.25 million to the federal Liberal Party. The ACT division of the Liberal Party received $230,000 from the federal Liberal Party. So how do we know whether or not—perhaps Senator Seselja can tell us: did the FEF money, or some of it, $230,000 of it, end up with the ACT Liberal Party?

Senator LUDWIG: Funding his campaign I suspect.

Senator WONG: Did it fund your campaign, Zed?

Senator SESELJA: Well, make an allegation.

Senator WONG: We do not know, do we, because it is aggregate?

Mr Rogers : It is an aggregate figure.

Senator Rhiannon interjecting

Senator WONG: Correct; I know. Mr Rogers and Mr Pirani, I am going to ask you some questions in relation to a submission that was made to this inquiry on Foundation 51, which is a topic I have also asked you about previously. Have you had the opportunity to turn your mind to that submission?

Mr Rogers : I think that submission came in last night or last evening. I am indicating I have not read it in detail, but I have read it.

Senator WONG: Sure, and if you need to take things on notice you are entitled to do so. Has the AEC concerned itself to ensure Foundation 51 has complied with all of its disclosure obligations?

Mr Rogers : Yes, we have.

Senator WONG: The submission contends, and I think I have put this to you previously, that Foundation 51 failed to comply with disclosure provisions set out in the «Electoral» Act—is that accurate or not?

Mr Rogers : Sorry, you said you put that proposition to me previously?

Senator WONG: I thought I had in Senate estimates.

Mr Rogers : Yes, I think you have. I think your proposition was that Foundation 51 had not complied with the «Electoral» Act over a number of years. I am summarising, Senator.

Senator WONG: Can you respond to that proposition?

Mr Rogers : Without wishing to antagonise you, that was your proposition—that Foundation 51 had failed to adhere to requirements of the «Electoral» Act over a number of years, and that resulted in a complaint by the Northern Territory Labor Party to both the Australian «Electoral» Commission and the Northern Territory «Electoral» Commission regarding activities of Foundation 51. I think at the last estimates, Senator, that is where you and I spoke about the actions of the Northern Territory «Electoral» Commission and us in dealing with that alleged breach.

Senator WONG: And I am asking you now, Mr Rogers—I am asking you, in light of what is on the public record—has Foundation 51 complied or not with the disclosure provision set out in the act that you administer?

Mr Rogers : Yes, it has.

Senator WONG: What are the disclosure obligations in relation to Foundation 51? Can you tell me how they have complied? And in doing so—I will come to the next bit. You tell me that.

Mr Rogers : We have completed a compliance review of Foundation 51 and the returns that they have submitted, and in my view they have therefore met the requirements under the «Electoral» Act.

Senator WONG: By returns they have subsequently submitted?

Mr Rogers : That is correct.

Senator WONG: I refer you to the email, which I have previously questioned you about, that is attached to the submission. This is an email from a Mr Graeme Lewis to Mr Davis, Mr Connolly and Mr Terry Mills. It contains evidence of an expenditure of $216,000 on the 2012 Northern Territory election, and it states:

In the months to 31 August—

of that year, obviously, I will interpolate—

another $200,000 was received, spent on polling $110000, consultants re the debt strategy and policies … concept development $34160, plus travel, McGrath, outgoings etc. Once again, the contributors were clearly aware, and did generally stipulate that the funds raised would be devoted to [Northern Territory] elections in 2012 or thereafter.

In relation to those amounts, were all of those amounts, Mr Rogers, declared by Foundation 51 in the statutory period for declaration?

Mr Rogers : I will take that on notice.

Senator WONG: You do not know?

Mr Rogers : I have just said we conducted a compliance review. You asked me the initial question about whether I think that Foundation 51 have met their requirements, and I am telling you they have. I will take it on notice to provide the detail of the breakdown of that.

Senator WONG: If you could provide the detail of that specific question, I do want to come back to why you say they complied. Perhaps we will come back to that. But I want to go on to read you another paragraph in this email. It says:

Like you, I will be mortified if this information becomes widely known. It must be closely held for obvious reasons.

Are you aware of that statement?

Mr Rogers : Yes, I am. I am looking at it as we speak.

Senator WONG: Does it concern you?

Mr Rogers : That is a matter for Mr Lewis and Mr Davis, Mr Connolly and Mr Mills—I think they are the addressees of that email—rather than for the AEC.

Senator WONG: Does it really not concern you that someone is making it clear that they do not want «electoral» expenditure to be widely known? That does not concern you at all?

Mr Rogers : There may be a whole range of political reasons, well outside the requirements of the «Electoral» Act, as to why that statement may be there. I certainly do not pass judgement on the motivations of political parties or associated entities, or why they might want to spend their money in a particular way. That is absolutely outside the requirements of the «Electoral» Act.

Senator WONG: I wonder what the public think. Can we come back. I asked you whether or not Foundation 51 had complied with the disclosure provisions set out in part XX of the Commonwealth «Electoral» Act. Can you tell me on what basis—

Mr Rogers : I am sorry, I missed that question. Could you repeat that, please.

Senator WONG: I asked you, I think at the outset, whether or not Foundation 51 had complied with the disclosure provisions set out in the Commonwealth «Electoral» Act. You said they had. Can you please explain to me the factual basis of your finding?

Mr Rogers : Certainly. As I said at the outset, when the complaint was lodged with us from the Northern Territory Labor Party—and I would have to check the exact date where that was—we spoke to Mr Lewis and he subsequently submitted returns for those years where Foundation 51 were purported to be an associated entity. Those returns were lodged and we conducted a compliance review of the relevant returns. I was satisfied at that stage that they had met their requirements under the «Electoral» Act.

Senator WONG: So they are subsequently made disclosures which they have failed to make. They made disclosures that they had failed to make after you contacted them and your view is that that satisfies the requirements under the act. Is that a fair summary of your evidence?

Mr Rogers : It certainly is. As I said at the outset, every year parties and associated entities from across the political spectrum put in amendments and make late amendments, sometimes years after the event, and we accept those as part of achieving disclosure.

Senator WONG: Sure, except that here the evidence that has been put to you is that is that this was a systemic arrangement. It was an arrangement whereby disclosure was systematically avoided; disclosure was only put in place after this matter was made public and a complaint was made. Does it not concern you that it is a very reactive position where something is allowed to happen until someone blows whistle?

Mr Rogers : It always concerns me when the obligations of the act are not being adhered to. I point out, if I look at how compliance reviews, in 2015 in the first quarter of 2016 we have completed 38 reviews. Of those 38 returns that we reviewed, something like 58 per cent of them we found required amendment from across the political spectrum. This is a very common practice. We allow this practice across the board because, as I mentioned at the outset, the underpinning principle of this is to achieve disclosure.

Senator WONG: Right. But it is the case, is it not, that the amounts declared by Foundation 51 were not declared in the statutory period for declaration?

Mr Rogers : That is correct.

Senator WONG: So there was a breach of the act, which you say was subsequently remedied but only remedied after public information about this and you regard the matter as closed. Is that what you are telling us?

Mr Rogers : That is correct.

Senator WONG: So someone can keep doing something that is contrary to the act until someone finds out?

Mr Rogers : As I said in my opening statement, if we took that view of every amendment that is made during a financial year, I would be taking every party, virtually every associated entity, to court for perceived infractions of the «Electoral» Act.

Senator WONG: I make two points. Firstly, there is a difference between incomplete returns no returns at all. And there is a difference between a mistake or an oversight—which I accept all political parties, I am sure, make—and an entity which is set up to engage in the avoidance of disclosure. They are qualitatively different propositions. You do not agree?

Mr Rogers : I am coming back to the evidence I gave when you asked me this question to start with. We looked at Foundation 51. They put returns in. We conducted a compliance review. They were responsive to requests we made, so we have decided not to pursue this matter. And let me go further, given the interest in this, I note that the Northern Territory «Electoral» Commission took a different course of action.

Senator WONG: Correct. It is amazing how the state and territory commissions seem to be much more proactive than you, Mr Rogers.

Mr Rogers : Well, it might be amazing, Senator, that their legislation is better than ours. That could also be—

Senator WONG: They are not deciding to leave things aside.

Mr Rogers : I am not leaving things—

Senator WONG: The New South Wales «Electoral» Commission—leaving aside the primary legislation—has made a decision to look at what ICAC did. You have made a decision—and which you have given evidence about—to not look at what the evidence is of ICAC until the findings are made.

Mr Rogers : Which I think is highly appropriate. I dispute your inference with that—

Senator WONG: That is your opinion.

Mr Rogers : Well, it is your opinion the other way, Senator. And I stand by—

Senator WONG: No, actually, it is Mr Mason, who is quite a distinguished individual.

Mr Rogers : I am not criticising Mr Mason.

Senator WONG: I am assuming you are not impugning him, although you did seek to suggest that it was regrettable earlier.

Mr Rogers : Senator, I did not seek to impugn the honour of the judge in any way shape or—

Senator WONG: You said it was 'regrettable'—I think that was the phrase you used, but I am happy to be corrected.

Mr Rogers : I was quoting, Senator, as you know I was quoting, from the inspector general of ICAC.

Senator WONG: In order to give yourself room. Anyway, let's leave this. I also asked you some questions in relation to Foundation 51 about $33,000 going to Kormilda College, a non-government school. Media reports said that a receipt of $33,000 from the college was submitted to the AEC by Foundation 51. Media reports subsequently suggested that the consultancy paid for by the college was undertaken by Crosby Textor. The school's website indicated that the consultancy was undertaken by Crosby Textor. And the board was never aware that Foundation 51 had any involvement. There were subsequent media reports about this. There was an ABC report, et cetera. Did you, as a result of those reports, make any inquiries or conduct investigations into that donation?

Mr Pirani : It was not a donation.

Mr Rogers : It was not a donation at all.

Senator WONG: Sorry—that payment.

Mr Rogers : I think we answered this at Senate estimates, from memory. I do not have the transcript in front of me, but it is not unusual for that to be a circumstance. Mr Pirani, you might have some views on that, as well.

Mr Pirani : This was recorded as an 'other' payment on the actual return from Foundation 51. According to the media reports, it was a service for doing some research for the school, which was looking to decide whether it would open another primary school. The school, obviously, was not aware that the money would be going through to Foundation 51. I accept that, from the media reports.

Senator WONG: That does not worry you?

Mr Pirani : Why, Senator?

Senator WONG: It does not worry you that the money goes to Foundation 51 from a school?

Mr Pirani : The school acknowledged that they had contracted someone to provide a service. This was a company that was involved in providing research, et cetera.

Senator WONG: They did not—

Mr Pirani : The fact that it has gone through another set of hands in relation to whether it was subcontracted, et cetera, it was still disclosed as a service. It was not disclosed as a donation.

Senator WONG: Part of your justification, or your rationale, for not taking the matter any further is: we deal with lots of amendments. Correct? It is the case, isn't it, with Foundation 51 that it is not an amendment? There was no return filed for the relevant year. Is that correct?

Mr Rogers : That is correct.

Senator WONG: You do not regard that as a qualitative difference—that they are seeking not to disclose at all, or they are choosing not to disclose at all? It is a different thing from someone disclosing and there is an amendment to a return, et cetera—an oversight.

Mr Rogers : I think when we first started having this interaction today about Foundation 51, you asked me a question about the difference between—if I mischaracterise this, forgive me—self-categorisation as an associated entity and the actions of Foundation 51. I mentioned to you that, as far as I am aware, publicly Mr Lewis had said that he did not think he was an associated entity. But he was submitting those returns as if he was for the avoidance of doubt.

Senator WONG: He did not think he was an associated entity, but you have, from November 2012, an email from him which goes through how much money was given for the Northern Territory elections.

Mr Rogers : Again, as part of that process, once that complaint was lodged Foundation 51 lodged financial returns for those years.

Senator WONG: Yes, that is my point. That is my point to you: there is a difference between an amended return where one might say, you would think, 'Okay, oversight mistake is possible,' and then someone who is knowingly donating money to a CLP campaign in the Northern Territory, not providing any returns and only putting in a return when you contact them.

Mr Rogers : I mentioned before that, as part of our yearly activities of compliance reviews, frequently we come across the case that parties from all political persuasions and associated entities make amendments.

Senator WONG: We are not talking about an amendment, though, are we. We are talking about actually not disclosing and then disclosing after public complaint is made.

Mr Rogers : Sometimes those amendments are a result of nondisclosure of particular «matters .

Senator WONG: I will not go through this now, but I will give you notice that I will be seeking the production of some documents relating to Foundation 51 held in your possession. We would appreciate your assistance.

Mr Rogers : Certainly.

CHAIR: Thank you very much to our witnesses. I would like to thank you for appearing and for giving evidence to the committee today, and for extending the time that you are able to make available to us. We appreciate it. Can I suggest that answers to questions on notice be provided by Monday, 2 May to allow for the committee's reporting time frame. I now declare this meeting of the Senate Finance and Public Administration References Committee adjourned.

Committee adjourned at 13 : 30