Party Favours: The Groups That Keep The Cash Flowing

Sydney Morning Herald

Wednesday February 2, 2005

Mark Coultan

Some of the largest donors to the major parties are the faceless foundations and trusts set up to provide a steady income stream in good times and bad.

The Liberal Party has the Cormack Foundation, the Free Enterprise Foundation and the 500 Club, among others; while the Labor Party uses John Curtin House and a series of state-based corporate entities, such as Labor Holdings and Labor Resources.

Labor Resources gave $4.9million to the Queensland branch of the ALP, which fought and won a state election during the disclosure period.

Another Queensland-based investment vehicle, Labor Holdings, recorded $10.1million in transactions during the year, but said that none of this was political donations.

Although these groups are often described as shadowy organisations - the Greens yesterday called them the "veiling of corporate donations" - they must disclose to the Australian Electoral Commission where they got their money from.

For example, the Cormack Foundation, an investment company set up from the proceeds of Melbourne radio station 3XY, made the single largest donation to the Liberal Party - $800,000 to its Victorian branch.

The foundation has a portfolio of blue-chip stocks and received $4.9million from dividends, investment returns and capital returns, including the sale of Westfield Trust and Lend Lease, but received no new capital.

These investment vehicles provide the major parties with guaranteed sources of income irrespective of their political fortunes or the electoral cycle.

The Labor Party continued to benefit from the generous rent deal it obtained from its tenants, the Commonwealth Government, for its Canberra headquarters, with John Curtin House Ltd - the owner of the building - giving the party $1.2million, despite continuing to carry debts of $23million.

The ALP's debt increased markedly before the last election, from just under $2million in 2002-03 to $4.8million in 2003-04. This included $2.8million owed to Westpac and $550,000 owed to the Victorian ALP, a payment that was described as an "interest-free loan payable by June 30, 2004 or extendable by agreement".

The Liberals' debt remained steady at $4.35million, despite paying out $1million more than they received in 2003-04.