Memorandum submitted by the Electoral Commission
NOTE TO PUBLIC BILL COMMITTEE:
USE OF INVESTIGATORY POWERS
1 In the light of the Committee's debates on 11 and 13 November on the proportionate use of the Electoral Commission's investigatory powers, it may be helpful to provide the Committee with further information about how the Commission expects to use the proposed new powers.
2 As we noted in the briefing note on clause 2 of the Bill which we sent to Committee members on 10 November, it is important to distinguish clearly between the supervisory powers, set out in paragraph 1 of Schedule 1 to the Bill, and the investigatory powers set out in paragraphs 2 and 3. This note deals primarily with the use of our investigatory powers, where we decide we need to use them to obtain sufficient information to reach a decision on the way forward. We have also briefly summarised in paragraph 11 below how we use our supervisory powers.
3 A Government amendment in Committee has introduced a new requirement for the Commission to prepare, consult on, publish and have regard to guidance on the use of the supervisory and investigatory powers in Schedule 1. We intend to publish a consultation draft of our future enforcement policy, including both this guidance and the guidance on civil sanctions that we are required to produce under Schedule 2 paragraph 25, after the Bill receives Royal Assent and before the new powers come into effect. This note summarises the key elements we would expect that consultation to cover in respect of the use of the investigatory powers, subject to Parliament's further consideration of the Bill and the Commission's further thought and discussion with stakeholders.
4 In response to the concerns raised in the Committee, a key point is that our policy is to investigate where a case meets the following criteria:
· there is evidence or information substantiating a potential breach of political party and election finance legislation - not merely assertion of or speculation about a breach; and
· we consider that it is in the public interest for us to investigate, taking into account the potential impact of the breach on the integrity or transparency of party or election finance, the cost of investigating relative to the impact of the breach, and any other considerations that may be relevant.
These criteria are intended to ensure that we will investigate only where it is reasonable and proportionate to do so. We keep the criteria under review, and will consult on them as part of our wider enforcement policy consultation in 2009.
How issues can become the subject of investigation and enforcement action
5 There are three ways in which an issue may become the subject of our investigation and enforcement activity:
· Regulated entities are required to send the Commission a range of statutory returns, including statements of accounts, quarterly returns for donations and loans, and campaign spending returns. We monitor the timing and content of these returns to ensure their accuracy and compliance with statutory requirements, taking enforcement action where appropriate.
· We receive allegations about breaches of the law. Since 2007 we have used a formal process, which is published on our website, to consider allegations and establish whether there are grounds for investigation of a potential breach of the law on party and election finance.
· We also begin enquiries into a matter on our own initiative, for instance if information that becomes known to us, but is not a formal allegation, suggests a potential breach of the law.
How we decide whether to launch an investigation
6 The policy criteria determining whether we will investigate an issue are set out in paragraph 4 above. Our action is likely to include an investigation in cases where we decide that we need more information before we can reach a decision on whether to impose a civil sanction or determine that a case should be considered for criminal sanction. Our criteria are intended to ensure that we only use our investigatory and enforcement powers where it is reasonable and proportionate to do so.
7 Each case is considered on its particular facts. Specific factors which we may take into account in considering a potential breach of the law against the 'public interest' criterion include:
· the seriousness of the breach and therefore the extent to which it may undermine the integrity and transparency of party and election finance;
· the quality and quantity of information indicating a potential breach;
· the level of intent or recklessness involved;
· whether attempts have been made to rectify the breach; and
· whether the matter can be resolved by means other than enforcement action.
How we use our current powers
8 The Commission aims to promote compliance with the law through advice and guidance. Where there are issues of non-compliance that justify an investigation, we seek to obtain information voluntarily where possible. The existence of statutory powers to require information is an important backstop where individuals and organisations do not co-operate, but at present our powers to require information under s.146 of the 2000 Act are limited, since they apply only to regulated entities. This means that we can rely only on voluntary cooperation from individuals and organisations that are not regulated under the 2000 Act, including donors and lenders.
How we will use our investigation powers in future
9 The wider investigative powers and additional civil sanctions in the PPE Bill will give us additional capacity to investigate non-compliance with the 2000 Act, in cases where we have reasonable grounds to suspect a breach of the law, and to secure compliance in more proportionate ways. We would expect to go through each of the following steps when seeking information as part of an investigation into a potential breach, unless there is good reason to do otherwise:
1) we will seek information on a voluntary basis in the first instance;
2) if the individual or body does not co-operate, we will use our statutory powers under the Bill (Schedule 1 para 2) to require information by notice and/or to require persons to attend before an investigator;
3) finally, if necessary and appropriate, we will consider whether to use the power to seek a warrant (Schedule 1 para 3). There are a number of factors that we will take into consideration, including the importance of the information to the investigation, the seriousness of the matters under investigation, and whether the information could be obtained from another source. We will also consider whether the thresholds set out in the Bill are met, and any other relevant considerations.
The reference above to 'good reason to do otherwise' reflects the fact that on occasion, it could be necessary in the public interest for the Commission to act without prior notice in order to discharge its functions under s.145 of the 2000 Act effectively. This may for instance be required if crucial evidence is at risk of being destroyed or removed.
10 The Committee's debate has touched on the timescales of Commission investigations into potential breaches. The time taken to complete an investigation depends on the nature and facts of the case. Where there is a great deal of evidence to collect and assess, or where the potential breach relates to a particularly complex or untested area of the law, the investigation is likely to take longer. We recognise that it is important to conclude investigations as quickly as possible, in the public interest and in the interests of natural justice for those involved. However, our first priority must be to conduct a fair and thorough investigation.
Use of supervisory powers to require information and enter premises
11 As with investigations, we seek to carry out our supervisory role in a way that relies on the co-operation and consent of our regulated entities. We routinely ask political parties, regulated donees and other regulated entities for information as part of our monitoring role, and have a good record of obtaining this information on a voluntary basis. We use our statutory information-seeking powers under section 146 of the 2000 Act as a backstop, e.g. when authorising our staff to visit party premises to audit the use of statutory policy development grants.