Political donations under the radar

A chance sample of companies has offered a rare insight into a stream of political donations that toothless reporting laws have let go under the radar.

This week’s figures from the Standards in Public Office Commission listed just €30,997 in donations received by political parties in 2011, despite it being an election year.

But separate information, released by the Companies Registration Office, has revealed other donations that parties were legally allowed to keep from public scrutiny.

Details on these donations were provided by the companies themselves. They show how business supported the political system.

They also set out the methods political agents can use to avoid listing transactions in public.

The reports show how loopholes allow large gifts to be split between private and corporate entities; that sums can be solicited below the reporting threshold; and costs incurred during fundraising activities can be written off against the amount donated.

The Irish Examiner has investigated some examples of donations that did not have to be declared with the Sipo commission for various reasons.

* A company that used a secret account to hide more than €235,000 in staff bonuses from Revenue helped to fund Fine Gael’s election campaign in Wexford. Custom Compost donated €2,500 to Fine Gael over 12 months between 2009 and 2010.

In June 2011, the company pleaded guilty to three charges of tax evasion.

Its former managing director and financial controller, Michael O’Sullivan, of Clonattin Rd, Gorey, also admitted to three charges of filing incorrect returns.

The company pleaded guilty in Gorey District Court to concealing the bonuses from tax officials by channelling money through a secret bank account. The company was ordered to make a settlement of more than €450,000.

Separately the company’s annual returns, filed up to July 2011, declared a €2,500 donation to Fine Gael. Fine Gael was not obliged to declare this payment, as it was below the reporting threshold. In a statement, Fine Gael said: “The party is fully compliant with all Sipo regulations in relation to political donations”.

* The brother of junior minister Alan Kelly, and a company co-owned by him, donated €7,500 in one year to help elect the north Tipperary politician to Dáil Éireann.

Mr Kelly has already declared that his brother Declan Kelly, from his address in New York, donated €2,480 in 2010.

A company jointly owned by Mr Kelly, Stone Park Taverns, also gave the new TD €2,500.

Accounts for the same company show that, on top of that, it made a €2,500 payment to “North Tipperary Labour Party”.

Separately in 2010, Declan Kelly’s 50:50 business partner in Stonepark, Michael Madden, donated €1,000 to the junior minister. This was done through his other business, Ronoc Financial Solutions.

Oireachtas members are prohibited from accepting donations in excess of €2,548 from any one individual. However, the overall sum can be written down if there were costs associated with its fundraising.

According to Sipo, individuals who make large donations also have an obligation to furnish statements. “An individual must furnish a donation statement... if he/she, in a particular year, makes donations exceeding €5,078.95 in aggregate value to two or more persons who were members of the same political party when the donations were made, or to a political party, and to one or more of its members,” it said.

No donation statement was received in 2010 from anybody.

In 2009, declarations filed with Sipo showed Declan Kelly donated €2,500 to the campaign, his partner in Stonepark, Mr Madden, donated another €2,400 under his own name and Stonepark itself donated €2,500 as a company.

In addition, Mr Madden’s Ronoc Financial Investments put in €2,500.

Mr Madden’s 50:50 partner in Ronoc, Nessa Kennedy-Madden, donated €2,500 to Mr Kelly in a personal capacity. In 2008, Mr Kelly returned €2,500 to Mr Madden because he had already given the maximum amount allowed that year. A statement from Mr Kelly said all rules that applied to donations were adhered to.

* Ivor Callely received a donation of €1,000 from a company in 2010 which did not appear on his annual declaration. Politicians only have to report gifts of over €635.

In Mr Callely’s case, Diamond Park Developments listed a €1,000 payment to the former senator in its own accounts, but he said it was received as two individual €500 sums.

The firm’s statement, filed with the Companies Office, lists the payment to “Ivor Callely — Fianna Fáil”.

It related to 2009.

Mr Callely disclosed over €7,000 in donations in his 2009 return to Sipo. The €1,000 declared by Diamond Park was not among these.

Diamond Park Developments is mainly owned by David Kidd, of Dublin 3, with a smaller shareholding belonging to Kevin O’Farrell of Worldsend, Kinsale.

In the year in which it donated to Mr Callely, the company’s auditors noted that there was significant uncertainty surrounding its future. This was because it had lost €1.96m in the year but only had assets worth €2.4m. It had a bank loan of €5.3m and the directors noted it may not be able to discharge its liabilities.

Mr Callely said the donation came in two parts so it did not need to be declared. Efforts were made to contact both Mr Kidd and Mr O’Farrell.

* Harcourt Developments, owned by Pat Doherty, which has had to negotiate a survival plan with Nama, stopped funding Fianna Fáil before the last election and backed Fine Gael.

The firm had been prolific funders of Fianna Fáil during its time in power. The company had donated lesser sums to Fine Gael while in opposition. Its most recent returns recorded a single political donation of 1,500 United Arab Emirates dirham (€330) to Fine Gael.

In March, Nama registered a charge against all of Harcourt’s assets arising out of loans it had taken out with AIB and the IBRC. In 2010, the shareholders of the company were paid €1.6m in dividends but this was leant back to Harcourt as it had lost more than €50m in €24 months. The donation to Fine Gael was below the reporting threshold. Fine Gael said: “The Fine Gael party is fully compliant with all Sipo regulations in relation to political donations. Fine Gael will also be fully comply with the new regulations, when they come into effect. The vast majority of the party’s election expenses are funded via events such as the annual Superdraw.”

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