Company Political Donations and the Ultra Vires Rule
| Author | K. D. Ewing |
| Published date | 01 January 1984 |
| Date | 01 January 1984 |
| DOI | http://doi.org/10.1111/j.1468-2230.1984.tb01637.x |
COMPANY POLITICAL DONATIONS AND
THE
ULTRA
VIRES
RULE
I
THE
financing of political parties and the political process generally has
caused great concern in both the United States and Canada since at
least the mid-1970s.’ In both countries major efforts have been made
to cleanse the political system of corporate influence, albeit with only
limited success in the United States. In Britain,
this
general issue is
also beginning to attract some interest. The Green Paper,
Democracy
in
Trade
Unions,*
questioned indirectly the role of trade union money
in
the political process, and more recently the Prime Minister claimed
that what would please her immensely “would be if.
.
.
the trade
unions were
nor
a part
of
the Labour Party.”3 The general election
campaign fuelled interest in the source
of
party funds when it was
revealed that the Conservatives were poised to spend some
f2h
on
their attempt to secure re-election. This compared with approximately
f5m which it was anticipated would be spent by the Labour Party and
the Alliance combined.
It is thought that corporations provide much of the finance which
is available to the
conservative^.^
But it is unclear just how much
money does come from this source. The Conservative Party is
understandably coy about the matter and there is
no
legal obli ation
to compel it to reveal any unpleasant odours to the public! It is
true, as will be shown, that companies are required to disclose
donations to political parties in their annual reports.6 But this is not
very satisfactory. In order to build up a complete picture of corporate
finance of the Conservative Party, interested individuals are required
to trawl the annual reports of each and every company. There is
no
official record which documents the donations of all companies in an
easily accessible form.’ Nor is there any policing
of
the legislation to
ensure that companies comply with their legal duty. It is true that
For Canadian developments, see L. Seidle and K.
V.
Paltiel, “Party Finance, the
Election Expenses Act, and Campaign Spending in 1979 and 1980” in
H.
R. Penniman,
Canada at the Pollr,
1979
and
1980 (1981). p.226. For the U.S.A., see J. Skelly Wright,
“Politics and the Constitution:
Is
Money Speech?” (1976) 85 Yale L.J. 1001.
*
Cmnd. 8788. For comment, see K. D. Ewing and
W.
M. Rees, “Democracy in Trade
Unions-I: The Political
Levy”
(1983) 133 New L.J. 100. At the time of writing a Trade
Union Bill is before Parliament. This will give effect to some
of
the ideas floated in the
Green Paper.
‘
One investigator has suggested that between 1950 and 1978, something in the order of
56-67 per cent.
of
Conservative Party funds came from business. See M. Pinto-Duschinsky,
British Political Finance
1830-1980
(1981), p.139.
It
was recommended by Labour members at a Speaker’s Conference
as
long ago as
1930 that parties should disclose their accounts. See D. E. Butler,
The Electoral System
in
Britain since
19Z8
(2nd ed., 1963), pp.59-61.
But
the second Labour Government failed to
deal with this question in its unsuccessful Representation
of
the People Bill 1931 for fear
that it might embarrass Liberal leaders. See Butler,
ibid.,
p.69.
’
Contrast the position with trade unions, where the Annual Report of the Certification
The Observer,
May 1, 1983. Interview with Kenneth Hams.
Companies Act 1967, s.19.
57
58
THE MODERN LAW REVIEW
[Vol.
47
these defects are mitigated in part by the valuable work undertaken
by the Labour Research Department which publishes annually a
detailed list of political contributions by corporations. Yet even
these publications do not provide a complete picture, being based
on a small percentage of all United Kingdom company reports.
Nevertheless, some idea of company donations during the year of
the
1979
general election can be gleaned from Tables
1
and
2.
Table
1
Total Donations to the Conservative Party and Other Political
Organisations
1979-80
Organisation
No.
of
companies Amount
making donations
f
Conservative Party
370 1,936,660
British United Indus.
46 444,254
Industrialist Councils
59 185,330
Economic League
84 117,386
Aims
35 36,494
Centre for Policy Studies
21
26,500
Others
36 16,189
651 2,762,813
Source:
Labour Party Information Paper
11:
Company Donations
to the Tory Party and other Political Organsations, Septem-
ber
1980.
-
Table
2
The
10
Largest Corporate Donors to Conservative Party Funds
Organisation Amount
f
Aliied Breweries
62,000
Taylor Woodrow
61,692
Consolidated Gold
53,000
Rank Organisation
50,000
GEC
50,000
Plessey
47,000
Sedgwick Forbes Bland and Payne
41,000
Trafalgar House
40,000
British and Commonwealth Shipping
39,071
C.
T.
Bowring
36,280
Source:
As Table
1.
Officer
contains a useful appendix with details
of
the political fund income and expenditure
of
the main
unions,
together with details
of
the number
of
members who contribute to the
political funds
of
their respective unions. Fewer unions than companies make political
donations,
so
that it would in any event be much easier to monitor trade union activity in
this field.
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