Eyebrows have been raised by National using its leader’s fund to avoid potential legal action against the party’s Clutha-Southland MP Todd Barclay. But it’s not the first time the taxpayer funding has been a source of controversy, and a lawyer says more transparency could be useful.

National MP Todd Barclay’s travails in Clutha-Southland have not come without a cost to the party – both political and financial.

In a text message to Stuart Davie, National’s Clutha-Southland electorate chairman at the time, Bill English revealed prime ministerial funding had been used to help reach a settlement with Barclay’s Gore-based senior electorate agent Glenys Dickson, following allegations Barclay had secretly recorded her.

“Glenys settlement large to avoid potential legal action.

“Had to be part paid by prime ministers [sic] budget. Everyone unhappy.”

English appears to be referring to National’s leader’s fund – part of a fixed annual grant made by the taxpayer-funded Parliamentary Service to political parties, helping them to support their leader’s offices, research and other parliamentary work.

According to the Speaker’s directions, the funding can be used to provide services and resources to support parties and members, including “meeting the operational needs of each party in fulfilling its parliamentary responsibilities”.

However, the money cannot be used for anything that is “not for a parliamentary purpose” – including work undertaken for personal or private benefit, “directly related to the administration or management of a political party”, or for electioneering.

Despite these rules, political parties’ use of the leader’s budget has been a sporadic but persistent source of concern.

Fund concerns

A report from the Auditor-General’s office following the 2005 election found all but one party had improperly used parliamentary funds for campaigning – including, most notoriously, nearly $450,000 spent by Labour on a “pledge card”.

The report said the nature and extent of taxpayer-funded spending on electioneering advertising was “disturbing”, adding: “Party-generated advertising produced by Leader’s offices was of most concern”.

Concerns about the use of the fund have extended beyond electioneering.

In 2008, investigative journalist Nicky Hager alleged National was using the leader’s fund to pay for the services of Australian strategy advisers Crosby/Textor. In response, the party said it was acting entirely within the rules.

In 2012, the Greens spent $75,000 of its leader’s fund allocation to pay signature collectors for a referendum opposing the Government’s asset sales, with Wellington lawyer Graeme Edgeler saying the move, while within the rules, was “a little concerning”.

Interestingly, the leader’s fund has been used before in relation to allegations of an illegally-intercepted recording.

In 2016, Key used the budget to settle a defamation case brought against him by cameraman Bradley Ambrose over the infamous “teapot tapes” from the 2011 election.

Ambrose recorded a conversation between Key and then-ACT leader John Banks in an Epsom cafe after leaving his microphone on the table.

Ambrose said it had been left behind by accident, but Key claimed it had been done deliberately.

After a settlement between the pair, Key’s office confirmed a “pragmatic payment” towards Ambrose’s costs would be made from his leader’s budget.

While some critics said the Prime Minister needed to take personal responsibility, he told media it was within the rules.

Transparency needed

Edgeler told Newsroom it was likely both legal and appropriate for the leader’s fund to be used for an employment settlement, given the money could be used for hiring staff in the first place.

“It’s never going to be paid for by the individual. Whether it’s an MP or a manager or whatever, no company or anyone who employs someone is going to say, ‘Well, you were the one who sexually harassed them, you can pay their settlement fee’, or ‘You were the one who swore at them’ – the money comes out of the company, and in this case the money would come out of the employer which is the Parliamentary Service.”

He said it would make more sense for the leader’s fund to cover the cost of settlements rather than the Parliamentary Service, as it would penalise parties more significantly for their MPs’ behaviour.

“They do not have an unlimited pot of money … and it’s probably a good incentive not to, whatever it is, yell at staff members unreasonably if you know that if you’re going to settle it’s going to come out of your limited pot of money [and] that means you can’t employ extra staff.”

While the leader’s fund was important in allowing parties to draw public attention to parliamentary issues, Edgeler believed it should be subject to the Official Information Act – the Parliamentary Service is currently exempt – so voters could draw their own conclusions about how it was spent while protecting individuals’ privacy.

“If people want to take that into account when they’re voting at the election – ‘No, they’re being wasteful with their parliamentary money, they’re going to be wasteful with Government money’, that’s something voters should know or should be able to find out, media should be able to find out and tell voters about.”

Watch: The full investigation story on Newsroom
Watch: Todd Barclay responds to Newsroom’s questions
Read: The timeline of events leading to Newsroom’s investigation

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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