Laws that regulate financing
for election campaigns, candidates and political parties are usually intended
to achieve some or all of the following policy purposes:
- Deter corruption, undue
influence of great wealth and/or special interests, misuse of state
resources, vote buying, and other forms of electoral fraud;
- Ensure equity and
fairness in the financial resources available to candidates and parties (i.e., a “level playing field”);
- Promote fair competition
between parties and candidates;
- Limit overall spending on
election campaigns and political activity; and
- Encourage transparency
and public access to information about campaign financing by setting
financial reporting requirements, so that valuable information reaches
voters and campaign financing laws/regulations can be effectively enforced.
These policy purposes serve a
larger goal: encouraging respect for the election process and political
institutions, and fostering public confidence.
The need to deter corruption
is the justification most commonly given for regulating political finance. A
society may view the political process as vulnerable to the improper, excessive
or secret influence of money and other resources. Accordingly, it may prohibit
political funding from some sources (e.g. foreign donors) and limit
contributions from legal sources in terms of the amount any donor is allowed to
give to a political party or candidate.
A society may be concerned
that a few large donors or special interests could become overly dominant or
gain excessive influence over political parties, candidates, other electoral
participants and office holders. Its
concern may be that those wielding influence might have the power to distort
public policy, divert public resources, threaten the integrity of elections and
undermine democracy.
Even without overt or
perceived corruption, a society may find the sheer amount of money
being spent on political activity and electoral campaigns excessive and regard
fundraising as too distracting for parties, candidates and other electoral
participants. In the United States, where vast sums flow to
politicians during elections, regulating political financing has been limited
by interpretations of free expression (“First Amendment”) and disagreement at the
regulatory level (Federal Elections Commission, the membership of which is
equally divided between the two major political parties).
In addition, under the US
Supreme Court’s decision in Buckley v.
Valeo[1]
contributions for political finance have in effect been interpreted as a form
of free political expression, not only by individuals and civil society but
also commercial interests. This approach
was strengthened substantively in the more recent case of Citizens United v. Federal Election Commission[2]
Procedurally, it has been noted that the opinions of the Justices in the
latter case offer scope for improved accountability of political finance,
including through publication of the identities of donors, including commercial
entities, and the extent of their contributions.
Every democracy thus faces
important policy decisions about regulating political finance and especially
about restricting the sources of funds as well as how political parties and
candidates may spend funds. In making those decisions, each country may find
guidance in a range of models. It should choose what is appropriate to its
political culture and circumstances. It should adopt policies that can be
implemented effectively by its administrative and law enforcement bodies. It
should also recognize that imposing restrictions on free speech and placing
regulatory burdens on electoral participants—even when well intended—could
dampen vigorous competition in the political marketplace of ideas.
Establishing
the Legal Framework
A key election integrity
issue, and one of the first needing to be addressed, is the process for
adopting political finance laws. Ideally, such laws are drafted and passed by a
legitimately elected legislative body. An executive power may provide input into
the legislative process and often must give final approval. The entire process
occurs in full view of the public via the news media, and an informed and
organized civil society has the opportunity to contribute. This ideal is more
likely to find expression in established democracies than in countries making
the transition from authoritarian regimes or conflicts.
In Russia
in 1993, for example, a presidential decree established the legal framework for
post-Socialist parliamentary elections,
including campaign financing rules. In Mozambique
in 1993 and 1994, a National Assembly run by the ruling party (FRELIMO) enacted
electoral provisions regarding public subsidies for political parties. The
legislation followed extensive post-conflict negotiations with the main
competing political force (an offshoot of the former RENAMO rebels) and other
parties, and these negotiations continued right up to the election. In Indonesia
in 1999, after the collapse of the 32-year reign of President Suharto, an
election law was passed by members of a legislature who had been chosen in
elections controlled by the Suharto regime.
In each of these instances, adoption process of the legal framework for campaign finance was imperfect.
However, because newly formed competitive political elements were able to exert
sufficient influence, the electoral laws were largely accepted. And as a
result, it was possible to hold successful elections. Laws passed under such
circumstances often contain only rudimentary political finance provisions, but
these can be a starting point for reflecting the key policy concerns of the
country. In subsequent elections, the countries mentioned introduced additions
and refinements to the legal framework for political finance regulation
(although with mixed results in terms of efficacy and enforcement). Even well-established
democracies need to review and revise their political finance laws periodically
in a fair and open legislative process.
The
Political Finance Regulator
Once there is a legitimate
process by which to develop the legal framework for elections, the next
critical issue is conferring legal authority on a body that will implement and
enforce the political finance laws. Known as the political finance regulator
(PFR), this body may be responsible for:
- drafting and implementing
regulations that further clarify and define the policy goals of the
political finance laws;
- administering policies
for public subsidies to electoral participants and for political finance
reporting requirements; and
- enforcing legal funding
restrictions and reporting obligations through administrative or
quasi-judicial processes.
These responsibilities are often
assigned to the general election authority (e.g. a national election
commission), but some or all of them may be given to other permanent or special
government bodies. For political finance
regulators as for election management bodies in general, independence,
impartiality and institutional capacity are essential. In appointing members of
PFRs, fairness and transparency are as crucial as in appointing election
administrators.
