‘Dark Money’ Suddenly Dominates Australia’s Election

SYDNEY, Australia — When Dr. Ken Coghill served in the Victoria state legislature in the early 1980s, he joined a movement to reform Australia’s campaign finance system, which allowed donations to slosh through politics, with donors mostly able to hide their identities and contributions.

Dr. Coghill, a Labor leader at the time, said he was outraged because the so-called dark money undermined the principle of all voters being equal, giving unidentified donors and their chosen candidates or parties “a very considerable advantage.”

Nearly 40 years later, Dr. Coghill is still outraged, because little has changed. But now, that culture of cashed-up secrecy is suddenly defining the start of the federal election campaign that will determine whether the current conservative prime minister remains in power.

With an election due by the end of May, Australians are not being treated to policy debates but rather accusations of shadowy Chinese financing, failures to report large donations, and payouts to climate-change warriors from coal barons.

“The flow of money is increasing, but also the political culture is becoming eroded,” said Han Aulby, executive director of the Center for Public Integrity. “There’s a sense that if you can get away with things, you do it.”

Compared with the United States, Australia’s campaign season is shorter and less costly, as is the case for many countries with parliamentary democracies. But even among its peers, such as Canada and New Zealand, Australia is a laggard on campaign finance regulation. Research from the Center for Public Integrity shows that over the past two decades, the source of nearly $1 billion in party income has been hidden.

Some scholars argue that Australia’s opacity reflects a distinct set of cultural idiosyncrasies: a belief that transparency is not an obvious social good and a sense that those in power should decide what the public needs to know.

“The prevailing view in Australia is still that the government owns the information — it is not held on behalf of the citizens — and if people want it, it should not be automatically available,” said Johan Lidberg, a media professor at Monash University. “That sits at the very core here. We haven’t shifted away from that yet.”

The money fight this time follows a period of increased public concern about corruption.

In a country far wealthier than it used to be, where infrastructure money has been known to flow toward political friends, and where government secrecy keeps expanding, polls show overwhelming support for an anti-corruption body at the federal level. A majority of Australians now believe corruption is a common occurrence.

The center-right Liberal Party of Prime Minister Scott Morrison had promised to do something about that after winning the last election, in 2019, but never followed through. Now, with support for his government’s pandemic management in decline, he has begun using dark money as a theme on which to attack his political opponents.

The effort started with accusations of money and support from China.

This month, Mike Burgess, head of the Australian Security Intelligence Organization, the country’s main domestic intelligence agency, warned in his annual threat assessment that the authorities had foiled a foreign interference plot involving a wealthy individual who “maintained direct and deep connections with a foreign government and its intelligence agencies.”

The “puppeteer,” he said, had hired someone in Australia and set the person up with hundreds of thousands of dollars procured from an offshore bank account.

Speculation immediately turned to Beijing. The next day, in Parliament, Australia’s defense minister, Peter Dutton, said the Chinese Communist Party had chosen to support Anthony Albanese, the Labor party leader, “as their pick.” Mr. Morrison followed up by calling Labor Party leaders “Manchurian candidates.”

Critics called the remarks scaremongering. The Labor Party has said it did nothing wrong, and Mr. Burgess has pushed back against the partisan attacks.

“Attempts at political interference are not confined to one side of politics,” he said last week.

Nor are accusations about hidden money.

Zali Steggall, a political independent who entered Parliament in 2019 after defeating Tony Abbott, a former prime minister, with a campaign focused on fighting climate change, has run into her own problems. An Australian Electoral Commission review found that she did not correctly report a $100,000 donation in 2019 from the family trust of a former coal company executive.

The commission’s review found that the gift — the largest single donation she received — was not reported because after the check had been received, the money was split into eight separate contributions that were under the $13,800 disclosure threshold.

Ms. Steggall called it “a rookie mistake.” She argued that previous investments in coal should not prevent someone from donating to candidates supporting a greener future, and insisted that she did not know the donation had been misreported. Corrected last year, it has come to light now as several independent candidates are threatening to unseat Liberal incumbents in part with money from centralized issue-oriented organizations.

The Steggall campaign’s financial controller is now a director of one such group, Climate 200.

“What this highlights is there are a lot of people who are happy to throw stones, but they’re often in glass houses,” Mr. Morrison said.

What it actually shows, according to advocates for a more transparent approach, is how the current system has been encouraging a spiral of misbehavior.

Disclosures of donations for federal elections are still released just once a year, in unsearchable scans of documents riddled with errors and omissions. Supporters of reform have called for real-time reporting and lower thresholds for reporting donations.

“This is an issue that has bubbled along since the early 1970s,” said Dr. Coghill, who is a professor of government at Swinburne University of Technology, as well as a veterinarian.

“In a way, that’s a reflection of Australia’s relative isolation,” he added. “We don’t have frequent contact with people in other countries that do have more rigorous regimes in place.”

But Ms. Aulby, who founded the Center for Public Integrity in 2016, said that many Australians were starting to question what happens in the shadows where favors and financing intertwine.

She said one of the most blatant tactics to hide money involved “associated entities” — essentially shell companies that distribute donations.

Both major parties rely on them. Labor, for example, received 33 percent of its income from 1998 to 2021 from associated entities, for a total of more than $120 million.

The Liberals brought in even more from their associated entities — about $140 million in the same period, according to the center, amounting to 42 percent of all the party’s reported income.

“They do a lot of business, but I don’t know who their directors are or if they and their money are from the resource or banking industry,” Ms. Aulby said.

The consequences of that approach, however, are becoming more visible. Last month, Transparency International recorded a drop for Australia in its annual corruption index, giving the country its lowest score since the organization adopted its current measurements in 2012.

Polls in Australia also show growing alarm. That has become especially true after the current government assigned public funds to sports infrastructure projects in districts that it needed to win in the last election, even when no one applied for the grant money.

In those cases, the Morrison government stonewalled and refused to release its final internal report on what happened with more than $70 million in grants. The minister in charge of them was demoted only temporarily.

“Scandal after scandal is happening without any consequence,” Ms. Aulby said.

But once the accusations begin, the cycle can be hard to stop. Last week, Mr. Morrison was busy attacking opponents and their supposed financiers; this week his own coalition partner was being dragged through the media for failing to disclose a payment of 1 million Australian dollars ($721,000) from an influential property owner in the capital, Canberra.

“There needs to be some consequences — electoral consequences, because there aren’t other consequences happening,” Ms. Aulby said. “I hope that voters have that in mind in the upcoming election.”