Registering Political Charities: A Gateway to Corruption?
By Alex King
Historically, organisations in New Zealand which had a political purpose were denied charitable status. In 2014, this changed with the Supreme Court decision of Re Greenpeace. Why did this happen, and, more importantly, what problems does the decision pose for our government?
From an international perspective, New Zealand is hardly on the board for anything close to political corruption. In 2017, National raised $4.6m from donors while Labour raised $1.6m. Compare these figures to the Bernie Sanders and Trump campaigns which have, in the first quarter of this year, raised $18m and $30m respectively. Furthermore, the Electoral Act 1993 requires a donor’s name and address to be listed if their contribution exceeds $1500, preventing significant donations from high-profile figures from flying under the radar.
New Zealand has a relatively clean track record when it comes to campaign financing. We have consistently ranked in the top three countries in the world based on our Corruption Perception Index score. However, as noted by Transparency International, a major risk going forward is complacency around where the government is getting its money. One area where this could be most pertinent is the world of charitable trusts.
In Re Greenpeace, the court decided that Greenpeace could register as a charity under s 13 of the Charities Act 2005 despite having overt political aims. This decision diverted from decades of precedent which precluded the operation of charities that had political purposes. As far back as 1917, the House of Lords in Bowman v Secular Society held that political purposes could not be judged to be for the benefit of the public as the court itself cannot comment on the effects of a proposed law change. This was expanded on in McGovern v Attorney-General, where a charitable trust that looked to further the interests of a political party indirectly through pressuring foreign governments was held to be unlawful.
From a policy perspective, this idea makes sense. The mere act of deciding whether a political purpose is charitable is a nebulous task for a judge to undertake. One of the strengths of an objective and unbiased judiciary is its ability to interpret and apply the law without influence from Parliament or any outside body. To make a judgement call as to whether a charity’s political aim is beneficial for the public is an inherently subjective decision. Moreover, providing political organisations with charitable status sets a dangerous precedent whereby undue influence in legislative decision-making is masked as being for the general public’s benefit.
In Re Greenpeace, Elias CJ disagreed that the court was barred from engaging in political discourse, holding that “there is no satisfactory basis for a distinction between general promotion of views within society and advocacy of law change.” In her view, any assessment of whether a political purpose is charitable should be looked at holistically and not be prima facie excluded from consideration, as is the case in the UK.
Despite this quite brazen reformulation, Re Greenpeace did not open the door to all kinds of charities emerging with explicit political purposes. The charity must still be operating for the benefit of the public, regardless of whether it possesses a political motive. A good illustration of this principle arose when Family First challenged its deregistration by the Charities Board last year. In the High Court Simon France J struck down their claim, holding that advocating for the ‘traditional family unit’ was not in the public benefit. In fact, it was illegal as it contravened the Human Rights Act 1993 on the basis of marital discrimination.
This is somewhat reassuring, as it shows the limits of the Re Greenpeace decision. Clearly, New Zealand is not on the brink of a moral crisis. However, this departure from longstanding case law is significant in its own right. In their minority judgment, William Young and Arnold JJ noted that judges are not “well-placed to determine whether the success of a particular cause would be in the public interest.” They concluded that the political advocacy exception is premised on the fact that judges are not adequately prepared to make a judgment call on positions which are often incredibly contentious and dependant on many different policy considerations.
If we are to take Transparency International’s warning seriously and not get complacent around New Zealand’s relatively low level of corruption in politics, then decisions like Re Greenpeace should be given appropriate attention. Classifying political organisations as charities is deeply problematic as it places judges in positions where their individual opinion dictates what advocacy is permissible and what isn’t, leading to situations where certain political ideas are provided influence in Parliament while others are disregarded. Fortunately, this is not the only hurdle these groups must jump through; Re Family First New Zealand shows this to be the case. At the end of the day, it is the public benefit that is given priority by the courts.
Whether or not judges are well placed to determine the ‘public benefit’ of something is a worthwhile conversation in itself. But, as it stands, New Zealand courts are no longer subject to the political purpose exception. Time will tell whether this freedom has any effect on the independence of the judiciary and the legislature.
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