Fran O'Sullivan: Labour and big business make unlikely bedfellows

Helen Clark is the front-person for a bunch of anonymous corporate pariahs who backed her into power with a $824,000 "cash-for-policy" deal nearly seven years ago.

Hardly rings true does it, when you look at the relationship of the Clark Government with big business.

Take note of the fact that Clark's Labour Government hasn't even got round to cutting company tax rates yet - which has been the biggest bugbear the corporate sector has had with her Government.

Let alone has it sold off the rest of the state-owned assets portfolio to a bunch of business cronies, or protected foreign-owned monopolies from the exigencies of the Commerce Commission, or thrown a protection blanket around the Australian-owned banks which have been hit up with mammoth tax bills by Inland Revenue.

All of which you might have expected to see if the "business-backed" Labour Party of 1999 was as corrupt as the Labour Party of 2006 now claims its political opponents to be.

It's true that this is the more scrupulous times of the 2000s, not the rip-snorting era of the 1980s "reform era" when Labour was last in power and its Finance Minister, Sir Roger Douglas, acted as the personal bagman for the party when it swept back to power in 1987 fuelled by a top-class war chest and fell prey to similarly whipped-up suspicions as the line between party funders and the political wing of the party became too close.

But when you take a closer look at Clark's ringing accusations against National this week over the extent of its anonymous funds for the 2005 election - then apply the type of ruthless logic that the Prime Minister is renowned for - it's not too big a stretch to say that National Leader Don Brash is hardly the only political leader in town who "has form" when it comes to leading a party which is primarily funded by donors whose identity is not disclosed to the general public.

Sweep back to the 1999 election when Clark, promising to rid New Zealand of a climate of political sleaze, bulldozed her way into the Beehive. Take a look now at the campaign donation returns from that era.

Labour had a $1.115 million war chest. It might seem difficult to believe now but 93 per cent of Labour's campaign funds either came directly from big business or were funnelled to the party as anonymous donations.

I'm not sure what the anonymous donor who stumped up $195,000 got for their "cash-for-policy" deal. Or the three other $100,000-plus Labour donors. Labour does not do cash-for-policies.

But if Brierley Investments, which (publicly) stumped up $25,000, thought it was in with a chance with Clark's Government then it would have been disappointed when Finance Minister Michael Cullen rejected its point of view during ownership negotiations over the troubled Air New Zealand just two years later (in which BIL had a stake). The value of BIL's stake was cut to a pittance.

Telecom chipped in an anonymous $70,000 to Labour's 2005 campaign. Clark and Cullen have since dealt to Telecom's broadband monopoly - hardly the type of action you would expect from politicians who maintain anonymous corporate donors are basically buying policies that suit them.

But here's Clark in fighting form on Monday telling the Herald she's going to give it back to National with "both barrels".

"The National Party had so much covert funding which you will not be able to find out the origin of because it drops its major corporate funding - cash for policy - into trust funds which cannot then be traced," said Clark.

"If there is one thing that needs to be corrected with a review of the election it is to prise open that kind of secret funding, because if anything is going to lead to corruption in New Zealand politics it is big corporates buying elections."

In fact, on strictly proportionate terms, the 2005 National campaign did attract more anonymous donors than Labour's 1999 campaign. But it's difficult to claim that National benefited from the concurrent Exclusive Brethrens ham-fisted attempt to "help out" with its own billion-dollar spend. The involvement of a ridiculous group whose believers don't even vote themselves in the 2005 campaign cost Brash personal credibility and probably the election.

What's obvious from a study of corporate funding over the last few elections is that business likes to back the main chance. In 1999, Clark was clearly going to bring home the bacon. Business went with her. Right-of-centre business backers who thought National had done its chips threw their $800,000 weight behind Act NZ.

In 2005, Brash's corporate funds were buoyed by Act's backers, who clearly believed he was the main chance for a change of Government, not angst-ridden Act.

National insiders suggest party President Judy Kirk intends to ask prospective corporate donors to make their contributions publicly, rather than through mechanisms like the Waitemata Trust.

Labour insiders suggest Clark will proceed with plans to legislate to make corporate donations public for tactical reasons.

First, because Labour believes it is unlikely to attract much big business backing for a fourth-term Government, and second because removing anonymity from donations will cause National's potential backers to think twice about feeding its campaign, particularly if they are subsequently likely to be tarred with cash-for-policies smears.

Smart politics - but hardly the full story given the 1999 election scenario.