Political finance regulators
(PFRs) must manage an increasing flow of political finance information from
electoral participants. At the same time, they must often comply with new
legislative provisions requiring the information to be made available to the
public. This is a major challenge, and it is heightened by demands from an
active and aware civil society and media. If a PFR fails to manage and share
the information effectively as required by the law and regulations, it can face
a serious credibility gap.
If political finance
information is widely available to political parties, civil society
organizations, the media, reform-minded politicians, academics and ultimately
well-informed voters, the result is more external scrutiny and a stronger
impetus for self-policing. In its decision in Buckley v. Valeo, a
landmark 1976 case, the United States
Supreme Court commented:
“Disclosure provides the electorate with information as to where political
campaign money comes from and how it is spent by the candidate in order to aid
the voters in evaluating those who seek federal office. It allows the voters to
place each candidate in the political spectrum more precisely than is often
possible solely on the basis of party labels and campaign speeches. The sources
of a candidate’s financial support also alert the voter to the interests to
which a candidate is more likely to be responsive and thus facilitate
predictions of future performance in office.”[1]
In political finance, access
to information involves full disclosure of political finance information and
its availability for inspection and analysis by the public. Access to
information is essential for fundamental transparency in political finance
regulation. As a study by the IFES Money and Politics projects stated:
“Political finance transparency, achieved through the availability (and
accessibility) of political disclosure information, can help to illuminate and
mitigate the effects of corrupt and illegal practices, while it simultaneously
rewards those who ‘play by the rules.’ As such, the disclosure of political
accounts is a necessary—albeit insufficient—condition for holding political
actors accountable and reducing political corruption.[2]
Two
Steps to Transparency: Legal Framework and Disclosure
The first step in establishing
a transparent political finance system is a legal framework that requires
routine and thorough financial reporting by political parties,
candidates and other electoral participants. Creating the framework is
complicated; it involves setting clear rules about who needs to report and to
whom, what needs to be reported and when; and how the information is to be
reported. This first step must also be backed up by proper enforcement and
auditing.
The next step is what is
commonly called “disclosure,” that is, making financial information
received by electoral authorities available to the public. Disclosure takes
many forms and may be limited by electoral authorities to general statements
about overall compliance with reporting obligations or to summary data. Genuine
access to information involves full public disclosure, sufficient to meet the
policy objectives of informing the public and facilitating enforcement of
political finance rules and requirements.
The electoral law and
regulations should specify the various aspects of full public disclosure of
political finance information:
- Who is responsible for
disclosure: There should be a single collector and disseminator of
disclosed information—generally the political finance regulator—with power
to audit, publish and enforce.[3]
- Who must report:
Electoral participants subject to political finance reporting obligations
should include elected officials, candidates and political parties.[4] It can also include other individuals or
organizations making significant contributions to electoral participants,
especially if done in coordination with the campaigns of those
participants themselves.
- What to report: All
relevant financial information must be reported—for example, both monetary
and non-monetary (in-kind) contributions. Typical information disclosed
would include campaign income and expenditures, regular income and
expenditures for political groups, and assets and liabilities.[5]
- When to report:
Disclosure should be regular, detailed and timely.[6]
Public control is significantly less effective if the information is not
published in a timely and comprehensible manner. Ideally, public disclosure
should occur before election day so that voting decisions can be based on
best available information about the political finance activity of parties
or candidates. (Information provided after the election has far less
political impact and therefore less value as a deterrent to violations of
political finance laws and reporting requirements.)
PFRs use various mechanisms to
collect and store political finance information: Information may be collected
in print or electronic format, and stored in files or a database. Consultation with
the regulated community will ensure the development of regulations with which they
are able to comply, and of forms that they can readily use. Once regulations
and forms are ready, training and education should follow, explaining how to
fulfill regulatory requirements.
Disclosure
Methods
Perhaps the most common method
by which PFRs publicly disclose political finance information, as widely
required in election laws, is release through the print media. This usually
involves publication of the information in an official gazette or newspaper of
record, often with limited circulation. This type of publication places the
information in the public domain but accessibility may be limited. Sometimes
only a summary of the reported information appears in print form.
New technology allows either
summaries or scanned financial reports to be posted on government or electoral Internet
sites. Scanned reports are more widely available than print versions but they
do not support information searches. Even so, Web posting of scanned reports
may be the best choice for some PFRs since it costs less than entering data
into a database.
The most common passive
approach to public disclosure is to simply make political finance information
available for review at the office of the PFR or another government body. This
type of public access to disclosure files puts a burden on those seeking
information and the body responsible for controlling it. Rarely are the files
allowed to leave the premises, and the viewing process is often closely
monitored. Civil society organizations and journalists wishing to examine the
files complain of problems such as insufficient time allowed for viewing the
materials and poor file organization.
Nevertheless, physical access
by the public to the financial reports of political parties, candidates and
other electoral participants may be a very valuable means of disclosure if
certain needs and standards are met:
- An office of public
disclosure should be established with adequate resources to assist public
examination of political finance reports. It should have the necessary
personnel and equipment to receive, photocopy, organize, file and make
available the reports for public scrutiny in a timely manner. It should
have suitable facilities to assist public examination of financial
reports, and to permit photocopying at a reasonable cost and in a
convenient manner.
- Access to the information
should be open to all interested persons and groups, including
journalists, academics, civil society organizations and electoral
participants themselves.[7]
A more adversarial means for
gaining access to political finance information is through freedom of
information acts. Exercising rights under such legislation normally requires
filing a written request. In Romania,
a national civil society organization, Asociatia
Pro Democratia, utilized the country’s access to information laws to obtain
reported political finance information, which it posted on the Internet. Access
to information based on requests under freedom of information laws are onerous
for both applicants and the body responsible for providing information.
Further, the information might be provided in a discretionary or arbitrary
manner, depending on who is asking for it or whose information is being
requested.[8]
Many countries at various
levels of development (Australia, Bosnia
and Herzegovina, Bolivia, Britain, Georgia, Lithuania, Peru, the United States
and others) have established searchable databases on political financing that
can be accessed over the Internet (or at the office of a PFR or other
government body). Web posting in a searchable format has many advantages over
print publication:
- It is easily accessible
by anyone with an Internet connection—particularly civil society groups
and news media, most of which have some degree of Web access.
- Civil Society and other organizations
and the media can monitor and analyze reports, use disclosed account data
in their investigative reporting, and submit external complaints.[9]
These actions increase accountability and encourage the regulated
community to report more accurately.
- It eases the burden on
the PFR, while facilitating the detection and enforcement process.
As both the PFR and the
regulated community increase their ability to use information technology, a
best practice is emerging. In Lithuania,
the Central Electoral Committee provides political parties and candidates with
electronic reporting forms that feed into an Oracle database. Although use of
the forms is voluntary, they are popular because they make internal accounting
easier and eliminate unnecessary data entry. The database can be accessed by
the tax authorities responsible for reviewing political finance accounts. The
public can also view and search the database via the Internet.
Safeguards
Needed
Full, detailed and timely
transparency in political finance disclosure should be the norm, but reports
may contain highly sensitive and personal information—particularly in the case
of financial disclosure by candidates. Further, the information may be abused
or, in certain political circumstances, wrongly employed to harass opposition
parties and their supporters.[10]
In view of these risks,
political finance laws should provide safeguards to ensure that certain clearly
defined types of information are not misused and that enforcement of political
finance laws is not arbitrarily pursued against opponents of the party in
power.[11]
[1] 424 U.S.
1 (1976), p. 67
[2] Carlson, Jeffrey and Walecki, Marcin, “Guide to
Applying Lessons Learned from IFES Money and Politics (MAP) Projects,”
(unpublished)
[3] See Money in Politics Handbook: A Guide to Increasing
Transparency in Emerging Democracies, Washington,
D.C.: US Agency for International
Development, 2003, p. 21–26.
[4] “Guide
to Applying Lessons Learned from IFES Money and Politics (MAP) Projects”
(unpublished), op. cit.
[7] Dahl, Robert, Money and Politics in Indonesia, vol. 4, IFES Project Report (Washington DC,
2003)
[8] Elena, Sandra; Buruiana, Procop; and Autheman,
Violaine, Global Best Practices: Income and Assets Disclosure Requirements
for Judges, IFES Rule of Law White Paper Series (Washington DC,
2004), p. 16
[9] “Guide to Applying Lessons Learned from IFES Money and
Politics (MAP) Projects” (unpublished), op.
cit.
[10] USAID,
Money in Politics Handbook, op. cit., p. 25
[11]
IFES, Global Best Practices: Income and Assets Disclosure
Requirements for Judges, p. 19
