123rd Report

Possible failure by a senator to comply with the Senate’s resolution relating to registration of interests

5 October 2005

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Members of the Committee

Senator the Hon. John Faulkner (Chair) (New South Wales)
Senator the Hon. Michael Ronaldson (Deputy Chair) (Victoria)
Senator Gary Humphries (Australian Capital Territory)
Senator Steve Hutchins ((New South Wales) (appointed 7 September 2005)
Senator David Johnston (Western Australia)
Senator Marise Payne (New South Wales)
Senator Robert Ray (Victoria) (discharged 7 September 2005)
Senator the Hon. Nick Sherry (Tasmania)

The Senate
Parliament House
CANBERRA ACT 2600

Telephone: (02) 6277 3360
Facsimile: (02) 6277 3199
E-mail: Priv.sen @aph.gov.au
Internet: https://www.aph.gov.au/senate_privileges

Possible failure by a senator to comply with the Senate’s resolution relating to registration of interests

Introduction

1.1 On 16 June 2005, on the motion of Senator George Campbell, at the request of the Leader of the Opposition in the Senate (Senator Evans), the Senate referred the following matter to the Committee of Privileges for inquiry and report:

Whether there have been any failures by Senator Lightfoot to comply with the Senate’s resolution of 17 March 1994 relating to registration of interests, and, if so, whether any contempt was committed in that regard.[1]

Background

1.2 In March and May 2005 Senator Lightfoot was the subject of publicity relating to a trip he took to Iraq in 2004. Whether he had properly disclosed sponsored travel in relation to the trip was the subject of a proposed reference to this committee in May 2005. The President had given the notice of motion precedence, but it was subsequently withdrawn following an apology from Senator Lightfoot.[2] The Leader of the Opposition in the Senate (Senator Evans) then raised a further matter of privilege with the President under standing order 81, relating to Senator Lightfoot’s share trading activities and whether he had properly disclosed details of his registrable interests in accordance with the resolutions of the Senate relating to the registration of interests. It is this second matter that is the subject of this inquiry.[3]

Senators’ interests

1.3 This is the first time that the committee has been required to exercise its jurisdiction arising under the resolution relating to the registration of senators’ interests. The resolution establishes a regime for all senators to provide statements to the Registrar of Senators’ Interests of a range of registrable interests, within 28 days of the meeting of a new Senate after 1 July following an election, and in certain other circumstances. Senators are also required to notify the Registrar within 28 days of any alteration to their registered interests.

1.4 Registrable interests include shareholdings in public and private companies, interests in family or other beneficial trusts, real estate, certain other investments, significant assets or other sources of income, liabilities, gifts, sponsored travel and hospitality, and holding office, or making financial contributions over a certain amount to, any organisation. There is also a catch-all requirement to declare “any other interests where a conflict of interest with a senator’s public duties could forseeably arise or be seen to arise”.[4]

1.5 Senators must also declare the registrable interests, of which they are aware, of their spouse, partner or dependent children. Statements are lodged with the Registrar of Senators’ Interests, who is an officer of the Department of the Senate appointed to that role by the President at the commencement of each Parliament.

1.6 A Committee of Senators’ Interests, established under standing order 22A determines and supervises the procedures for maintaining the register which is tabled in the Senate at regular intervals, and made available for inspection under certain conditions.

1.7 The Committee of Senators’ Interests has published explanatory notes to assist senators to fulfil their obligations under the resolution. The notes contain a number of points about which types of shareholdings are covered by the resolution, preceded by a note to the effect that it is not necessary to declare the actual number or value of shares.[5] As well as setting out the requirements for the registration of interests, the resolution relating to senators’ interests, agreed to by the Senate on 17 March 1994, creates contempts as follows:

Any senator who:
1. knowingly fails to provide a statement of registrable interests to the Registrar of Senators’ Interests by the due date;
2. knowingly fails to notify any alteration of those interests to the Registrar of Senators’ Interests within 28 days of the change occurring; or;
3. knowingly provides false or misleading information to the Registrar of Senators’ Interests;

shall be guilty of a serious contempt of the Senate and shall be dealt with by the Senate accordingly, but the question whether any senator has committed such a serious contempt shall first be referred to the Privileges Committee for inquiry and report and may not be considered by any other committee.[6]

1.8 Each of these serious contempts under the resolution involves a question of intention. Before finding a senator guilty of a serious contempt, the committee is required to be satisfied that the senator knowingly failed to provide information, or knowingly provided false or misleading information, to the Registrar of Senators’ Interests. The contempt of failing to register an interest or providing false or misleading information is therefore, in theory, more difficult to establish than other contempts that are specified in the resolutions of the Senate of 28 February 1988 relating to parliamentary privilege. Whereas resolution 3 of the latter resolutions[7] requires the committee to take into account whether a person who committed any act which may be held to be a contempt, knowingly committed that act (or had any reasonable excuse for the commission of that act), such knowledge is a mandatory element of the contempt established under the senators’ interests resolution. In practice, however, there is little difference between a contempt under the privilege resolutions and a contempt under the interests resolution, as the committee has always taken a person’s intention into account in making its findings.

Conduct of inquiry

1.9 Having considered the terms of the senators’ interests resolution, the committee approached this inquiry with the view that the need to establish an intention on the part of Senator Lightfoot to contravene the registration requirements was essential to any possible finding of contempt.

1.10 On receiving the reference from the Senate, the committee wrote both to Senator Lightfoot and Senator Evans seeking a response, and providing each with a copy of the terms of reference, the President’s statement to the Senate on the matter, Senator Evans’ letter to the President raising the matter, and material from the register of senators’ interests.

1.11 The specific allegations made against Senator Lightfoot were that he had:

failed to declare the purchase of shares in certain companies
failed to declare the sale of shares in other companies
declared the purchase of shares after the 28 day deadline for notifying alterations of interest had passed
disclosed the sale of certain shares, but company records indicated that he still held a number of shares in that company.[8]

1.12 Material from the Register of Senators’ Interests indicated that Senator Lightfoot had become aware of these anomalies in his statements relating to shareholdings on 23 May 2005. He lodged a fresh notification of alterations of interests with the Registrar on 9 June 2005 correcting the anomalies.[9]

1.13 Senator Lightfoot provided the committee with a response on 2 August 2005 in which he denied knowingly failing to make the required declarations. He attributed anomalies in the register to minor oversights and the practical difficulties of complying with the strict requirements of the resolution:

Whilst I do not resile from the fact that I erred in failing to report a very small proportion of my dealings, and, on occasions, within the appropriate time frame, I would submit that these omissions were minor oversights as opposed to “knowingly” failing to comply.

At no stage did I knowingly fail to advise of my dealings ...[10]

1.14 Senator Lightfoot illustrated the difficulties of complying with the requirements with a hypothetical scenario involving his sale of shares on the first of the month, just before undertaking extensive travel on parliamentary committee business. In Canberra at the end of the month, he obtains information from his broker about the sale, and lodges a notification of alteration of interests a couple of days after the 28 day deadline and, separated from his trading records by the width of the continent, is unaware that he still retains some shares in that company and that he has therefore made a misleading declaration.

1.15 Senator Lightfoot also alleged that inspection of the Register of Senators’ Interests revealed similar anomalies in the statements of other, unnamed, senators and claimed that the allegations may have been made against him maliciously because of legal action he had contemplated against certain newspapers for defamation in articles about his Iraq trip, details of which he attached to his response. He concluded his response with an apology and reiterated that it was never his intention knowingly to mislead or misrepresent his registrable interests to the Senate.

1.16 Senator Evans provided the committee with a response on 10 August 2005. He reiterated the allegations made in correspondence to the President when raising a matter of privilege under standing order 81 which are set out in paragraph 1.11 above. Senator Evans then wrote that he did not propose to assert that Senator Lightfoot knowingly failed to make the required declarations:

In my view, Senator Lightfoot’s failures to properly comply with the Senate’s requirements on disclosure of interests offend all three of the criteria set out in the Senate’s Resolution, at least on a prima facie basis. Given that it is extremely difficult to prove the mens rea component, I do not propose to assert that he knowingly failed to act in accordance with the Senate’s requirements on its members. However, I have also included details of one example where Senator Lightfoot demonstrates he was aware of the disclosure requirements and willing to comply with those requirements, both in an accurate and timely fashion.[11]

1.17 He suggested that a higher standard of compliance applied to Senator Lightfoot because of his position as Deputy Chair of the Senators’ Interests Committee. A new allegation was then made against Senator Lightfoot in that he declared that a particular company directorship held by him had been re-activated, a concept which Senator Evans submitted was not possible under Australian law, and which therefore represented another instance of Senator Lightfoot providing misleading information to the Registrar of Senators’ Interests and further reason for finding Senator Lightfoot guilty of a serious contempt of the Senate.

1.18 In accordance with the committee’s usual practice (and in accordance with paragraphs 12 to 14 of Resolution 1 of the resolutions relating to parliamentary privilege),[12] where parties to an inquiry make further allegations or adverse comment, the committee provided each party with a copy of the other’s response and sought any further comment.

1.19 Senator Lightfoot’s second response, provided to the committee on 16 August 2005, noted that Senator Evans was now not asserting an intentional failure on Senator Lightfoot’s part to comply with the resolution, and argued that the details of share trading declarations put forward by Senator Evans as evidence of Senator Lightfoot’s offences against the resolution in fact supported Senator Lightfoot’s intention to comply with it.[13] The list of anomalies showed that Senator Lightfoot had disclosed either the sale or the purchase of all the shares in question, which he would not have done had he intended to conceal his holdings in those companies or to provide misleading information to the Registrar. Senator Evans’ submission of an example of accurate and timely disclosures by Senator Lightfoot was, according to Senator Lightfoot, evidence only of Senator Lightfoot’s willingness and desire to comply with the resolution.

1.20 Furthermore, Senator Lightfoot argued that his position as Deputy Chair of the Senators’ Interests Committee was also evidence of his motivation and desire to comply with the resolution. Senator Lightfoot then provided an explanation of what he had meant by his reference to the re-activation of a company directorship and his attempt to correct an earlier error.

1.21 The committee received a second response from Senator Evans on 6 September 2005 in which he noted that Senator Lightfoot had not disputed any of the information presented by Senator Evans and reiterated his belief that the Deputy Chair of the supervisory committee should set a better example. He also made further comments about the company directorship issue, raised in his first response to the committee.[14]

1.22 In accordance with the usual practice of this committee to publish all correspondence relevant to an inquiry, copies of all responses are included at the end of this report in the appendix. While the further responses provided by Senators Lightfoot and Evans did not add to the committee’s understanding of the issues, the committee considered that it was essential to provide both Senator Lightfoot and Senator Evans with the opportunity to respond to new allegations raised by each senator in his initial response. The committee has frequently operated by this method in the past and has found it an efficient way to comply with the requirements of natural justice and, at the same time, to obviate the need for public hearings in many cases by gathering sufficient material to make findings on the papers. Such was the case with this inquiry.

Consideration of issues

1.23 Cases involving allegations of contempt by one senator against another are unusual territory for this committee, and may raise the difficult prospect for the committee of having to prefer one senator’s account over another’s. In this case, however, none of the facts are in dispute. There is no requirement for the committee to assess different versions of events. Senator Evans has put certain facts before the committee and Senator Lightfoot has not disputed them. Any differences between the two parties concern the interpretation of those facts and what should follow from those interpretations. For the committee, the only issue is whether there is any evidence that Senator Lightfoot knowingly failed to notify any alteration of interests within 28 days or knowingly provided false or misleading information to the Registrar.

1.24 All of the material before the committee suggests that there is no basis for the committee to conclude that Senator Lightfoot knowingly failed to comply with the resolution:

In declining to assert that Senator Lightfoot knowingly failed to comply with the resolution, Senator Evans has not put forward any evidence of Senator Lightfoot’s guilty intention. Nor has the committee been otherwise able to find any such evidence.
Senator Lightfoot has denied that he knowingly failed to comply and, instead, has asserted that he erred in making faulty declarations, as other senators have apparently done.
When made aware of anomalies in the register on 23 May 2005, Senator Lightfoot sought advice from his financial advisers and lodged a notification of alteration of interests on 9 June 2005 correcting the anomalies.
The fact that Senator Lightfoot had declared either the purchase or sale of the shares in question does suggest a lack of intention to conceal shareholdings in those particular companies.
Senator Lightfoot has provided explanations for late notifications and for declaring that he had disposed of his shareholding in a particular company when he in fact still owned a parcel of shares in that company.

It appears to this committee that Senator Lightfoot’s failures to comply with the requirements of the resolution were a result of unfortunate errors and some administrative inefficiencies on his part.

Conclusion and finding

1.25 The committee concludes that while there were failures by Senator Lightfoot to comply with the Senate’s resolution of 17 March 1994 relating to registration of interests (which Senator Lightfoot has admitted, corrected, and apologised for), there is no evidence that Senator Lightfoot intended not to comply with those requirements and, therefore, no contempt should be found.

Other matters

Additional allegations

1.26 In the course of the inquiry, both Senator Lightfoot and Senator Evans raised new allegations with the committee. Senator Lightfoot alleged that there was a malicious basis to the raising of the matter of privilege, related to preliminary steps for legal action for defamation that he had initiated against certain newspapers. He also alleged that inspection of the Register of Senators’ Interests revealed failures to comply with the resolution by other (unnamed) senators.[15] Senator Evans alleged a further offence by Senator Lightfoot in the provision of misleading information to the Registrar in relation to a re-activated company directorship, a concept not apparently valid under Australian law.[16]

1.27 The committee has not investigated these additional allegations because they are clearly outside the terms of reference given to it by the Senate. By providing each party with the opportunity to respond to the new allegations raised by the other, and by publishing those responses at the end of this report, the committee believes it has fulfilled the requirements of the Privilege Resolutions in relation to such matters, and of natural justice generally, and has no further comment to make on any of the matters raised.

Possible deficiencies in the registration of interests regime

1.28 In both of his responses to the committee, Senator Lightfoot suggested that the regime for registering interests is flawed by a lack of discretion, especially in relation to the 28 day deadline.

1.29 The committee notes that the functions of determining and supervising arrangements for the maintenance of the Register of Senators’ Interests are the responsibility of the Committee of Senators’ Interests, established under standing order 22A. Additionally, the committee notes that the Senate referred the following matter to the Procedure Committee on 20 June 2005, for inquiry and report:

The adequacy and appropriateness of the Register of Senators’ Interests in relation to the issue of share market activity by senators, their spouses or partners and dependants having regard to:

whether the requirements under Resolution 1 of the resolutions relating to the registration and declaration of interests, agreed to on 17 March 1994, adequately reflect changing practices in the nature of Australian shareholdings and the growth of share trading;
the appropriateness of the advice requirements in Resolution 1 in relating to changes in the nature of shareholding interests where share trading occurs on a frequent basis; and
any related matters.

That the Procedure Committee may seek advice from, and take into account the views of, the Standing Committee of Senators’ Interests.[17]

1.30 With the Procedure Committee examining a specific reference on the mechanisms for registering shareholdings and the Senators’ Interests Committee having a supervisory function in relation to the interests regime, this committee is of the view that these existing avenues are sufficient to deal with Senator Lightfoot’s concerns and therefore makes no further comment on this matter.

Was Senator Lightfoot required to observe a higher standard of compliance because of his position as Deputy Chair of the Senators’ Interests Committee?

1.31 In both of his responses to the committee, Senator Evans suggested that a higher standard of compliance should apply to Senator Lightfoot because of his position as Deputy Chair of the Committee of Senators’ Interests. While having an initial, superficial attraction, this suggestion must be dismissed. All senators are equal under the Constitution and, in most respects,[18] under the standing and other orders of the Senate. The obligation to register their interests applies equally to all senators and none should be required to meet a higher standard of compliance than any other. Accordingly, the committee makes no further comment on this matter.

John Faulkner
Chair

The Appendicies for this report are available in the PDF version of this report - (PDF 2266KB)

Footnotes

[1] Journals of the Senate, 16 June 2005, p. 706.

[2] Journals of the Senate, 10 May 2005, p. 574 and 11 May 2005, p. 610.

[3] See statement of the President granting precedence to a notice of motion to refer the matter to the committee, Appendix, p. 11.

[4] Standing Orders and other orders of the Senate, November 2004, pp. 144-45.

[5] Explanatory Notes for Statement of Registrable Interests, agreed by Committee of Senators' Interests on 19 June 2002; amended 18 June 2003 and 13 October 2003.

[6] Standing Orders and other orders of the Senate, November 2004, p. 143.

[7] Standing Orders and other orders of the Senate, November 2004, pp. 106-107.

[8] Letter, dated 26 May 2005, from the Leader of the Opposition in the Senate (Senator Evans) to the President of the Senate, Appendix, p. 12.

[9] Appendix, pp. 15-17.

[10] Letter, dated 2 August 2005, from Senator Lightfoot to the Chair of the Committee of Privileges, Appendix, p. 20.

[11] Letter, dated 10 August 2005, from the Leader of the Opposition in the Senate (Senator Evans) to the Committee of Privileges, Appendix, p. 38.

[12] Standing Orders and other orders of the Senate, November 2004, p. 104.

[13] Letter, dated 16 August 2005, from Senator Lightfoot to the Chair of the Committee of Privileges, Appendix, pp. 41-42.

[14] Letter, dated 6 September 2005, from the Leader of the Opposition in the Senate (Senator Evans) to the Chair of the Committee of Privileges, Appendix, pp. 47-48.

[15] Letter, dated 2 August 2005, from Senator Lightfoot to the Chair of the Committee of Privileges, Appendix, pp. 21-23.

[16] Letter, dated 10 August 2005, from the Leader of the Opposition in the Senate (Senator Evans) to the Chair of the Committee of Privileges, Appendix, pp. 38-39.

[17] Journals of the Senate, 20 June 2005, p. 740.

[18] Presiding Officers and ministers have some additional responsibilities, powers and functions under the standing orders.