We must stop big money corrupting our democracy
Elon Musk: Instead of addressing the risk that the world’s richest man could help buy future British elections, the UK government has instead committed itself to loosening financial regulations in the City of London. Picture: AP /Jose Luis Magana
It’s only recently that I understood that the apocryphal Chinese blessing, ‘May you live in interesting times’ was meant to be a curse. If by ‘interesting’ we mean a time when the rule of international law is breaking down, the world’s most powerful democracy slides towards authoritarianism and its president is abandoning and even threatening to annex its allies, it would be easy to imagine we’ve done something to stir some supernatural grudge.
We are about to write another particularly bleak chapter of world history as kleptocrats and their ethno-nationalist collaborators take a wrecking ball to democratic norms and institutions around the world. They are doing this with the financial support and acquiescence of some of the wealthiest people on the planet and their enablers across the corporate sector.
As the enemies of liberal democracy use ‘shock and awe’ to overwhelm any opposition or constitutional checks and balances, politicians and governments entrusted with defending democratic norms appear frozen like a deer in headlights.
Instead of addressing the risk that the world’s richest man could help buy future British elections, the UK government has instead committed itself to loosening financial regulations in the City of London. In response to the corruption illustrated by Qatargate, the European Commission is proposing limits on funding to advocacy groups instead of further promoting transparency inside EU institutions.
For all the bluster about protecting our borders from migrants, too little is being done to address the root causes of mass migration, including corruption that fuels conflict and instability.
For all the justifiable rhetoric around the threat of Russian expansionism, too little is being done to protect democracies against the role of money in politics and the flow of dirty money through corporate vehicles and financial services.
Public trust in democratic government is waning, not merely due to isolated scandals, but because of a pervasive belief that elected officials are beholden to private interests. This cynicism leads to public apathy, lower voter turnout, and a fertile ground for grifters to peddle authoritarian solutions as antidotes to corrupt and ineffective government.
To counter this, it's essential that our leaders address the root causes of corruption and implement long-overdue reforms aimed at cleaning up politics and business.
This is no less true than for Ireland. We have appeared in the top 10 of Transparency International’s Corruption Perceptions Index (CPI) since 2022 and the latest findings might suggest the nation is relatively untroubled by corruption.
While this reflects a relative absence of major scandals in recent years, it would be a grave mistake to consider we are free of corruption. Even if we don’t suffer from the kind of corruption we associate with failed states and totalitarian regimes, Ireland is far from immune to scandal and the lasting damage it can do to public trust in government and democratic norms.
While Ireland has tighter controls on electoral donations and financial interests than many of its counterparts, risks still persist. The country’s State ethics watchdog, the Standards in Public Office Commission (Sipo) has neither the powers nor resources to effectively audit and investigate party and candidate returns.
Political parties and candidates also continue to use online crowdfunding and fundraising events to bundle donations, which make it possible to flout electoral law without the risk of detection. Indeed, the source of just 8% of donations to Irish political parties between 2019 and 2022 was revealed to the public.
Our current ethics framework is woefully outdated. The Mahon Tribunal's 2012 report concluded that corruption in Irish political life was both endemic and systemic, and offered detailed recommendations for reform.
Many of these suggestions were captured in the Public Sector Standards Bill 2015, which aimed to modernise the disclosure of financial interests, mandate the reporting of significant loans and liabilities by TDs and office holders, and strengthen Sipo. Shamefully, the Oireachtas allowed this bill to lapse in 2020, and despite subsequent promises of reform, they appear a long way off.
As the authors of noted in this week’s Irish Examiner, Ireland also plays a prominent role in facilitating global corruption. Our financial systems are being exploited with the willing support of professional enablers who help launder the proceeds from corruption and organised crime.
Special Purpose Vehicles, including those benefiting from Section 110 tax-neutral status, offer opaque and complex ownership structures, posing significant money-laundering risks. Limited Partnerships are currently not required to register their beneficial owners or maintain an address in Ireland, with many general partners based in offshore locations notorious for financial secrecy.
Moreover, a 2023 statutory instrument has curtailed media and civil society access to information on the real owners of companies, further obscuring transparency around their ultimate beneficiaries.
Research tools such as the CPI are helpful in assessing perceptions of public sector corruption, but will never capture the full spectrum of corruption threats on their own. This is especially the case for those that transcend national borders or that are not strictly prohibited by law.
No country’s position in the CPI should breed complacency, either. Liberal democrats must recognise that those determined to accumulate more power and wealth, while setting fire to our democratic institutions in the process, are relying on us to comfort ourselves with the self-soothing refrain that ‘it couldn’t happen here’.
If we are serious about protecting our borders and hard-won democratic freedoms, our governments must reaffirm their commitment to open and ethical government and move quickly to mitigate the risk of corruption in politics, government, and business.
This will mean more than just transposing a forthcoming EU Directive on Corruption. It will involve making our institutions more open and accountable, weaning political parties off untraceable private donations, resourcing and empowering oversight bodies, enacting comprehensive legislation to manage conflicts of interest, and closing loopholes that allow illicit financial activities.
Only then will we begin to see an end to what promises to be an ‘interesting’ period in history.
