Political finance laws are
technical and complex and have often proved vulnerable to evasion, distortion
and abuse. For enforcement efforts to be effective, it is important for the law
to be clear, unambiguous and comprehensive. It should also anticipate how
political parties, candidates or other electoral participants may seek
loopholes to subvert the law.
An effective political finance
law clearly states the scope of its jurisdiction and defines all relevant terms
unambiguously.[1]
Vague terminology allows electoral participants or their representatives to
argue that certain financial activities are not encompassed by the definitions
of regulated political activities and therefore not subject to the law. For
instance, if the definition of “contributions” does not mention “in-kind”
contributions (i.e., donations of
goods and services), the law may apply only to monetary contributions, allowing
potentially valuable in-kind donations to go unregulated and unreported.
Political finance laws are likely
to be ineffective if they fail to include all relevant financial activity in
their scope or set forth a comprehensive and consistent enforcement mechanism.[2] For
effective enforcement of disclosure requirements, for instance, the law should list
every type of financial transaction that electoral participants are required to
report, including monetary donations, in-kind contributions, loans, leases, advances,
liabilities, shared expenditures and joint fundraising. Similarly, if the law
is intended to regulate political advertising, it should list all media and
types of electioneering messages to which it applies.
The law and regulations should
deal clearly with:
- Violations. The provisions should
specify actions that constitute political finance violations, and the
administrative, civil or criminal penalties for such offences. Many
political finance regulators publish a schedule of the offences and/or
penalties, with a graduated scale stipulating the amount and nature of
sanctions according to the gravity of the violation and the degree of
culpability involved.
- Process. The provisions should
specify the process for determining violations of the law and/or imposing
sanctions, including the investigative process, the procedure and
evidentiary requirements for administrative adjudication, and the due
process rights of the alleged violator.
Political finance laws must
specify which persons or entities are liable for which offences—particularly in
the case of “strict liability” violations, where the specific intent of an
individual is not determinative. Electoral laws commonly hold political party
officials, candidates or campaign committee financial officers (treasurers)
liable for political finance violations. If the law does not make high-ranking
officials or candidates personally liable for violations, these persons may
claim ignorance to evade responsibility for acts committed by their agents and
employees. Further, if the law does not make individuals personally liable for
violations and imposes liability only on party or campaign committees, there
may be no one to hold accountable for violations once these committees disband
after an election.
In a federal system, a
complicating factor is overlapping jurisdiction of laws and agencies regulating
political finance at the national, state/provincial or other local level. In a
federal system, depending on the nature of the elective offices involved or the
violations concerned, either federal or state law might determine the
enforcement procedures.
The best way to ensure that a
political finance law is clear and comprehensive is to exercise forethought and
due deliberation in drafting. Since electoral statutes are rarely perfect, it
is vital to conduct periodic reviews of the law, and to be proactive in
amending the law and instituting new programs and procedures. For instance,
after every election some political finance regulators publish a review of the
political finance law, analyzing the efficacy of enforcement efforts and
identifying weaknesses. The political finance system must continually be
refined to counter ongoing efforts to circumvent it, and to maintain broad and
effective enforcement.
[1] See Money in Politics Handbook: A Guide to
Increasing Transparency in Emerging Democracies, Washington, D.C.:
US Agency for International Development, 2003, Appendix G.
