Laws that regulate financing for election campaigns, candidates and political parties are usually intended to achieve some or all of the following policy purposes:
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:
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.
