The movie mogul owners of Palace Cinemas breached the state’s campaign finance rules when they donated almost $20,000 to the Victorian Liberal Party – only for the High Court to effectively legalise the contributions by ripping up the laws.
asserted
Court → breach → laws
Four companies owned by Palace Cinemas founder Antonio Zeccola and wife Karen in March each handed over $4970, the maximum allowed by a single donor or organisation.
asserted
companies → own → donor
Corporate records show two of the firms share a parent company, meaning one of those contributions exceeded the cap on donations.
asserted
one → show → donations
But the Victorian Electoral Commission (VEC) is unable to take action because the High Court invalidated almost 80 pages of the state’s Electoral Act, and the replacement laws rushed through the parliament in June were only backdated to the date of that shock decision in April, which left no rules in place for earlier donations.
asserted
which → take → donations
The revelation marks the latest loophole in Victoria’s donation laws exposed by The Age in the lead-up to November’s state election.
asserted
revelation → mark → election
This masthead reported last week that three wealthy property developers donated $44,100 to the Liberal Party in a single week through a network of jointly owned companies, a move which did not breach electoral laws because each payment came from a separate legal entity.
asserted
payment → report → entity
The Age can now reveal a family of Melbourne lawyers have similarly used that loophole to legitimately donate nearly $30,000 to the Labor Party through a collection of businesses and trusts.
asserted
family → reveal → businesses
Integrity experts say the technicality means wealthy individuals can use multiple businesses to donate up to the cap repeatedly and funnel large sums to political parties and independent candidates, and effectively undermine the legislation’s aim of limiting the influence of big money in politics.
asserted
individuals → say → politics
On March 20, the Liberal Party received a total of $19,880 from four companies owned by Zeccola and his wife.
asserted
Party → receive → Zeccola
Zeccola founded the Palace Cinemas chain in Melbourne in the 1960s, and it operates 25 locations nationally including Northcote, South Yarra, Brighton, Balwyn.
asserted
it → found → Northcote
The four donations of $4970 were made by Palace Cinema Nominees, Palace Cinema Pty Ltd, Palace Investments and Palace Enterprises, electoral commission disclosure logs show.
asserted
logs → make → Nominees
At the time, donations were capped at $4970 by a single donor or organisation over the four-year parliamentary term.
asserted
donations → cap → term
The cap applies to businesses that are “related”, meaning those which share a parent company, or are subsidiaries or holdings companies of another.
asserted
which → apply → another
Corporate records show two of the companies – Palace Cinema Nominees and Palace Cinema Pty Ltd – are owned by the same parent company, Palace Company 7 - AKZ Pty Ltd, which makes the two former companies related corporate entities and which means one of the donations exceeded the cap.
asserted
one → show → cap
Neither the Liberal Party nor the VEC flagged the donation as breaching the cap at the time, or after the 21-day disclosure period allowed for donations.
asserted
Party → flag → donations
Political parties and independent candidates are required to disclose and forfeit donations over the cap to the VEC.
asserted
parties → require → VEC
Palace Cinemas did not respond to repeated requests for comment.
asserted
Cinemas → respond → comment
A spokesperson for the Liberal Party said the party “operates within the requirements of the Electoral Act”.
asserted
party → say → Act
On April 15, the High Court upheld a challenge to the state’s campaign finance laws brought by Paul Hopper and Melissa Lowe, independent candidates at the 2022 state election, who argued the rules unfairly advantaged major parties.
asserted
rules → uphold → parties
The court’s decision temporarily left Victoria without any laws governing political donations.
asserted
decision → leave → donations
In June, the state government rushed to pass new laws, which reintroduced donation caps, but its legislation was only made retrospective to the date of the High Court ruling.
asserted
legislation → rush → ruling
This means the March 20 Palace Cinemas donation, requires no repayment and is not in breach of the law.
asserted
donation → mean → law
Kiera Peacock, the principal lawyer at Ripple Legal and the solicitor who represented Hopper and Lowe at the High Court, said the Palace Cinemas donations warranted scrutiny when they were made.
asserted
they → represent → scrutiny
“The Liberal Party should have reasonably looked into the donations at the time to see if they were related and then returned the amount which exceeded the cap,” Peacock said.
asserted
Peacock → look → cap
“The VEC has a standing obligation to investigate breaches, but they had little opportunity to do so before the laws were invalidated.”
asserted
laws → have → opportunity
During this parliamentary term, the Zaparas family, which runs a law firm in Oakleigh, has donated almost $30,000 to the Labor Party through six jointly owned businesses and property trusts.
asserted
which → run → businesses
Although ownership varies among four members of the family across the six entities, they are not considered to be related under the Corporations Act, and each business is legally permitted to donate to the cap.
asserted
business → vary → cap
The Zaparas family has long supported Labor, and has donated almost $300,000 to the federal party since 2014, including $109,000 in 2018-19.
asserted
family → support → 2018
Commonwealth political donations have been uncapped, and the Zaparas family made all its donations at the federal level through one company.
asserted
family → make → company
But at a state level, where caps are in place, the family has used a network of companies to donate.
“We’ve been very careful to ensure that we’ve donated in accordance with Victorian electoral law and that’s a paramount consideration for us,” said Paul Zaparas, a lawyer and shareholder on six of the family’s companies that donated.
asserted
that → use → companies
Zaparas said the family felt it owed Labor a great debt of gratitude because his father Peter, a Greek migrant who arrived in Australia aged 15, was able to access free university under Gough Whitlam’s prime ministership and built a successful business in Melbourne.
asserted
who → say → Melbourne
“We are great believers in the Australian Labor Party and its values and what it stands for today,” Paul Zaparas said.
asserted
Zaparas → stand → what
Asked if he felt the current electoral laws regarding donations from businesses were suitable, he said: “That’s a matter for the Victorian parliament to turn its mind to and make any changes to the law that it deems appropriate.
asserted
it → ask → law
We will always operate absolutely within the confines of the law.”
asserted
We → operate → law
Lowe and Hopper, the candidates who successfully challenged the state’s laws in the High Court, said the legislation passed by Labor following the court’s ruling was not strong enough.
asserted
legislation → challenge → ruling
Both said they would have launched another legal challenge if there was more time before the November election.
asserted
they → say → election
“A cap you can multiply by donating through more companies isn’t a cap,” said Lowe, who is running as an independent in the Southern Metropolitan Region in the upper house.
asserted
who → multiply → house
“The real fix is for the next parliament to close these gaps properly, with an open, independent review, so every donor and every candidate is treated the same.”
asserted
donor → close → review
Hopper, who is running as a candidate for The West Party in the lower house seat of Werribee, said: “All we want [is] no workarounds, no loopholes, a level playing field.”
asserted
we → run → Werribee
Clancy Moore, the chief executive at integrity advocacy group Transparency International Australia, said stronger laws and regulation to prevent donations unfairly influencing the electoral process would be welcome.
asserted
donations → say → process
…and 14 more, not listed.
The Aporia
