The Commons Committee on Standards and Privileges said in a report to MPs that new rules on the registration of sponsorship deals, covering individual payments of up to a quarter of a candidate's election expenses, were too easily evaded or misunderstood.
Following the first Nolan report on standards in public life, published two years ago, the Commons introduced a ban on paid advocacy - which meant, for example, that sponsored Labour MPs would have been barred from advocating their unions' cause.
Sir Gordon Downey, the Parliamentary Commissioner for Standards, told the committee: "An arrangement was therefore made with the unions by the Labour and Co-operative Parties under which election contributions would, in future, be made into a central pool.
"This broke the link between the donor and the candidate and the donations were, under the rules, no longer registrable."
Sir Gordon complained that in some cases, constituencies were raising money through ongoing "fighting funds", which made it impossible to identify individual contributions, and their scale, to election campaigns. "This clearly drives a cart and horses through the rule," he said.
Citing another device used to get around the rules, he said: "It is being claimed that expenditure incurred before the election period commences, and contributions received after the election, can be disregarded.
"Thus, some constituencies order all their stationery and printing ahead of time, and defer receiving contributions as a way of making the rule virtually inoperable."
It was also being argued by some MPs that since registration was only required if the 25 per cent threshold was exceeded "to the Member's knowledge", there was no obligation to register "if he or she leaves the collection of donations and the calculation of expenses to the constituency party". Sir Gordon comments: "This was obviously not the intention."
Yesterday's report offered MPs a number of options to tighten up the rules again, so that paid advocacy could be barred.
In two other reports, the Standards and Privileges Committee yesterday dismissed a complaint against George Galloway, Labour MP for Glasgow Kelvin, on the non-registration of an alleged interest; and a complaint that Kenneth Clarke, the former Chancellor of the Exchequer, had not registered free accommodation at a 1993 conference was regarded as such a minor breach of the rules that no further action was called for.Reuse content