Friends of Indi

Updated: 23 December 2010

This advice sets out the Australian Electoral Commission's (AEC's) conclusions in relation to the matters described below.

The matter:

Whether the Friends of Indi is an associated entity of the Liberal Party of Australia (Victorian Division) and whether there were any outstanding disclosure obligations in relation to the Friends of Indi.

When matter raised:

On Friday 9 February 2007, a report appeared on the news.com.au website alleging that an organisation called Friends of Indi had received significant donations from the tobacco industry during the 2005/06 financial year but had failed to lodge a disclosure return for that year. Similar articles appeared in News Ltd newspapers in the next few days.

The AEC received an associated entity disclosure return from the Friends of Indi for the 2005/06 financial year on Monday 12 February 2007, and an associated entity return from the Friends of Indi for the 2004/05 financial year on Tuesday 13 February 2007.

At the Senate Finance and Public Administration Committee's Additional Estimates hearing on of 13 February 2007, the AEC agreed to treat the Friends of Indi as a special matter.

Legislation:

The AEC's examination of this matter focussed on the definition of an associated entity contained in section 287 of the Commonwealth Electoral Act 1918 (the Act) and various disclosure provision in Part XX of the Act.

Section 287 of the Act defines an associated entity as:

  • an entity that is controlled by one or more registered political parties; or
  • an entity that operates wholly, or to a significant extent, for the benefit of one or more registered political parties; or
  • an entity that is a financial member of a registered political party; or
  • an entity on whose behalf another person is a financial member of a registered political party; or
  • an entity that has voting rights in a registered political party; or
  • an entity on whose behalf another person has voting rights in a registered political party.

AEC process:

This inquiry has taken ten months to complete. The inquiry involved the close examination of the Friends of Indi and its expenditure activities, including the use of the AEC's investigative powers under section 316 of the Act and obtaining legal advice.

AEC conclusion:

The AEC wrote to Friends of Indi on 23 March 2007 to ascertain whether Friends of Indi was an associated entity. The AEC requested advice from Friends of Indi on the following:

  • which of the six grounds for being an associated entity did the Friends of Indi meet;
  • what was the purpose of the Friends of Indi;
  • was there anything documenting this purpose (such as a constitution or documents of associations); and
  • were the funds raised by Friends of Indi intended to be given to a person or organisation or used for some other purpose?

Friends of Indi responded on 16 April 2007 to advise that it operated to promote and advance the Member for Indi, Mrs Sophie Mirabella, and provided documentary evidence in the form on an extract from its rules of association to support this statement.

Based on this information, the Friends of Indi would not constitute an associated entity because it exists to raise money to support the election of a particular candidate, rather than a registered political party.

However, the constitution of the Liberal Party of Australia (Victorian Division) indicates that all contributions to candidates endorsed by the Party are to be deemed contributions to the Party. Consequently, the AEC believes Friends of Indi is an associated entity of the Party.

A compliance review of the Friends of Indi was then undertaken to determine whether any outstanding disclosure obligations existed.

The AEC determined that the Friends of Indi had met its disclosure obligations, but that one of either Liberal Party of Australia (Victorian Division) or Ms Mirabella had a disclosure obligation in relation to gifts in kind provided by Friends of Indi at the 2004 federal election.

The Liberal Party of Australia (Victorian Division) responded to advice about this finding with an amended return for the 2004/05 financial year disclosing $23 514 in additional total receipts and $16 158 in additional detailed receipts.

Date: 05 December 2007

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