Phil Hogan (Carlow-Kilkenny, Fine Gael)

Amendment No. 2 will have the effect of deleting section 5 and replacing it with new text. Section 5 provides for the amendment of section 22 (2) of the Act of 1997, namely, the interpretation section for Part 4 of that Act which deals with the disclosure of donations.

The original provisions in section 5 are restated in paragraph (b) of the new section 5. Definitions for the terms "company" and "corporate donor" are being inserted by that paragraph. Because these terms are being introduced into this part of the Act of 1997 by the Bill, it is necessary to include definitions in section 22(2).

The provisions of paragraph (a) of the new section 5 did not appear in the Bill as published and debated on Second Stage and are being introduced now. Paragraph (a) of the new section 5 provides that membership fees paid to a political party will, for the purposes of the Act of 1997, be treated as donations. This provision is necessary to eliminate the scope for membership fees to be used as a means to circumvent the new restrictions on corporate donors and donations in the Bill.

Membership fees paid to political parties are not explicitly mentioned in the Electoral Act 1997. Heretofore, the Standards in Public Office Commission, in applying the provisions of the 1997 Act, has not regarded membership fees as falling within the definition of a donation under the Act. A concern was identified in drafting the Bill that this could represent a potential loophole which would allow corporate type bodies to provide funding to political parties by way of membership fees. A new category of membership, namely, corporate membership, could be created and fees paid that would be exempt from the donation limits and the restrictions and the declaration provisions.

It is therefore necessary to take action. Ignoring the loophole identified is not an option. The Bill before the House is introducing significant restrictions and transparency measures on corporate donors and all corporate funding of political parties must be covered thereby. The most effective way of dealing with this matter is to provide that in the case of a registered political party the definition of donation is taken to include a membership fee, whether paid by an individual or a group. The effect of adopting this approach will be to apply the same restrictions on group or corporate membership fees that are to apply to corporate donations.

However, I stress that membership fees paid by individual members of political parties will not be subject to any registration requirement and this provision will not place any additional responsibilities on members of a political party. Arrangements will continue as they have done before. Where the Electoral Act 1997 legislates for the disclosure of donations given for political purposes and the regulation of spending on Dáil, Seanad, European Parliament and Presidential elections, the equivalent provisions in respect of local elections are set out in the Local Elections Disclosure of Donations and Expenditure Act 1999.

For the amendment of section 5 of the Bill to apply at local government level it is necessary to insert a separate albeit identical paragraph into section 2 of the Act of 1999, namely, the interpretation section of that Act. This is amendment No. 19, which will have the effect of inserting a new section into the Bill that will become section 18. The new section 18 is being inserted into Part 3 of the Bill which deals with amendments to the Act of 1999.