Carreras donated part of $11m to 2007 elections

Published: Wednesdaay August 13, 2008

Cigarette distributor Carreras contributed a portion of J$11.9 million to the September 2007 general elections in a move two investors see as an attempt to appease policymakers.

The amount represented political donations from Carreras and its sister company in Australia, reported by their parent company British America Tobacco (BAT). But there was no further breakdown of how the £85,183 or $11.9 million was apportioned.

"No donation was made to any political party registered in the UK under the Political Parties, Elections and Referendums Act 2000. Subsidiaries of the company in Australia and Jamaica made contributions to non-EU political parties in their respective countries of incorporation totalling £85,183 (2006: £87,570)," said BAT in its most recent annual report. Of all of BAT's subsidiaries, the Jamaica and Australia operations were the only companies listed as having made political contributions last year.

"I am sure there is some level of influence that goes with making a donation, but it is hard to pin it down," said noted leading independent investor Chris Boroughs. "But [I'm] not sure it did have any influence on policy."

After the change of government last year, new taxes were slapped on Carreras' products. It is already one of the most taxed companies in Jamaica, and was also targeted by previous finance minister Dr Omar Davies to close budgetary shortfalls.

Last week, Neilson Rose, equity asset manager at Mayberry Investments, said that it was not uncommon for big firms to contribute to political parties, and that both the party and the company benefits.

"If political parties are limited from assessing foreign funding, they are going to seek funding from the local private sector," he said. "And the private sector is always trying to stay close to the seat of power."

Carreras, he said, probably supported both parties. "It is purely a business decision."

Carreras managing director did not return calls, despite numerous attempts to clarify the donation. Internationally, political contributions by tobacco companies have always been contentious; and there are even calls to outlaw such funding. The argument from the politicians' perspective is that cigarettes potentially have negative goodwill which may hurt campaigns.

Last Tuesday, Political Ombudsman Bishop Herro Blair noted that although Carreras' donations may have been irreligious, they are not unlawful.

"No political party is going to refuse financing from any company in Jamaica," said Blair. "From my religious perspective it may be wrong, but from a political perspective, until there is law to prevent such activity, then they can do it."

The Electoral Commission of Jamaica is currently overseeing the drafting of rules governing campaign financing.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080812T180000-0500_138963_OBS_CARRERAS_DONATED_PART_OF____M_TO______ELECTIONS.asp