ALP funds from pokie clubs 'legal'

The territory's electoral authorities have responded to a complaint by the Liberal Party over the transfers, telling the opposition that Labor has no case to answer over more than $4 million transferred from the clubs to the party last year.

Canberra Liberals Deputy Leader Brendan Smyth lodged his complaint in January after The Canberra Times revealed that Labor had been working to secure an income base that was not reliant on pokies and had established a fund, the 1973 Foundation, to purchase property investments. In his letter to ACT Electoral Commissioner Phillip Green, Mr Smyth asked the commissioner to investigate whether the clubs' ''financial manoeuvrings'' had contravened any laws.

Mr Smyth's letter went on to accuse the Labor Clubs' directors of ''contemptuous behaviour''.

But Mr Green, after taking advice from the ACT Government Solicitor, found that neither the clubs nor the party had contravened any laws or regulations.

''With regard to the matters raised in your letter, insofar as they can be construed as a complaint alleging a contravention of the Electoral Act, I am not satisfied that there has been a contravention of the Act,'' Mr Green wrote.

''Accordingly I do not intend to take these matters further at this time.''

Mr Green also defined the Labor Clubs as an ''associated entity'' of the party, meaning that any of the transactions between the clubs and ACT Labor, although subject to disclosure laws, would not be considered a gift.

Mr Smyth has a bill before the Assembly that would make it a criminal offence to donate any more than $50,000 to a political party in once financial year, with the laws to operate retrospectively to July last year. But the Liberal frontbencher's proposal is likely to be superseded by a long-awaited government bill, negotiated with the Liberals and the Greens, that would cap election spending and tighten up rules around donation disclosure.