20.04.22

Declaring Political Contributions

Gavin Goffe
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Declaring Political Contributions

If you or your company made a private donation or a gift to a politician or a political party since August 2020, it might not be as private as you think, all because of the COVID-19 pandemic.

Under our political campaign financing law and regulations, all gifts, sponsorships, goods, services or money donated (hereafter called “contributions” or “donations”) to a political party or a candidate during the reporting period must be disclosed to the Electoral Commission of Jamaica (ECJ).  

Usually, the reporting period is relatively short, starting on the day that an election is announced and ending 6 months after the election is held.  What is unusual is that local government elections have not been held since November 28, 2016, having been postponed twice because of the COVID-19 pandemic.  Where an election date has not been announced (for whatever reason), the reporting period commences once the parish council or municipal corporation has been in office for 45 months and ends 6 months after the election is held.  Thus, the reporting period for local government elections commenced on August 28, 2020, and continues to this day. 

Under our law there is no material distinction between the reporting period for a local government election versus a general election. Therefore, all legal obligations that flow from being inside a reporting period are now operative and donations made to political parties, for any reason, are liable to be declared.

Outside of the reporting period, there is no obligation to disclose a contribution or donation.  For donations made during the reporting period, however, if the donor entered into a government contract worth $500,000 or more either 2 years before or after the donation, they must declare the contribution to the ECJ within 14 days of making the contribution or entering into the contract, whichever occurs later.

Once the donor is a party to a government contract, there is no minimum value of the contribution or donation for the duty to declare to be triggered.  The donation could be ‘chicken-feed’; if not reported to the ECJ, the donor could face criminal prosecution and a fine of up to $1,000,000.  If the donor does not have a government contract, they are only required to submit a declaration to the candidate or the political party if the value of the donation exceeds $250,000.

Outside of the reporting period, a political party may accept donations from entities that they could not accept from during the reporting period, including any foreign government, public body or someone who donates through an intermediary. Any donation from those entities during the reporting period must be returned within 30 days.  

In addition to the donor’s duty to report to the ECJ where they have a government contract above $500,000, the political party and candidates also have a duty to supply the ECJ with a detailed report of all contributions and donations received with a value of $250,000 or more.  That report must include the donor’s name and address, the amount or value of the donation, the date it was received and a description of the nature of the donation or contribution.  Failure to submit the report carries a fine of up to $1 million, whereas knowingly making a false statement or declaration carries a fine of up to $3 million or in default of payment, to imprisonment for up to 1 year.

Determining what constitutes a donation or contribution and its appropriate value is prescribed by law.  For example, a company that supplies décor, lighting or generators for a political conference, whether for free or at a special discount, may be deemed to have made a political contribution.  The value of that contribution is the difference between the actual cost paid by the political party and the cost that would have been incurred had the transaction been on arm’s-length commercial terms.  Similarly, a bakery that donates Easter bun to a councillor to distribute in their division may be required by law to report that donation to the ECJ based on the retail value of the bun.  Further, if an individual or a company pays an expense that was incurred, directly or indirectly, by a political party or a candidate in an election, that constitutes a donation to that party or candidate, irrespective of whether there is an agreement for repayment of the sum.

If a donation or contribution was inadvertently not reported to the ECJ when and as required by law, owing to this extended reporting period, the donor should seek legal advice to avoid becoming a candidate for a fine.

Gavin Goffe is a Partner at Myers, Fletcher and Gordon and the Head of the firm's Litigation Department. He may be contacted at gavin.goffe@mfg.com.jm or through the firm's website www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice