The political finance law should mandate a government regulator to enforce the relevant laws, or authorize an existing government body to perform this function. The identity and structure of the political finance regulator (PFR) will vary in different jurisdictions, and the responsibility for enforcement can be assigned to a single body or shared by a number of bodies. In many countries, the PFR is a department within the electoral management body. Other countries may authorize government agencies with more general jurisdiction to administer or enforce the political finance laws—for instance, the interior or finance ministry, government auditor or comptroller, or tax authorities. The PFR may also be a separate executive institution, such as an independent administrative agency.[1]

To perform their oversight and enforcement functions, PFRs must have independence, impartiality and operational integrity:

Independence

An independent PFR is better protected from attempts by the executive or legislative branches to misuse the regulator’s enforcement powers for political ends. Independence is fostered by a fair and transparent appointment process, with members selected by the executive and/or legislature through open deliberation. To promote continuity and stability, the institution should have a strong chair or chief commissioner, and staggered terms of office for members. Public monitoring by the media and public interest groups can serve to check interference by the legislature.

The PFR should have an independent budget; otherwise it could face budget cuts as retaliation for enforcing the laws against elected officials or the party in power. Ideally, the need to protect the PFR from threats to its budget should be balanced with the justifiable need for government oversight of the PFR’s expenditures, salaries and other costs.[2]

Impartiality

The appointment process is central to ensuring impartiality. There is no single appointment method that guarantees impartiality and accountability. In some countries the president or executive makes all appointments, although this method may yield a PFR lacking independence. For greater balance, the appointments responsibility can be divided between the executive and the legislature. Another approach is to give the lead responsibility to the judiciary or a designated civil service commission. In the U.K., a group of senior civil servants are mandated to review applications for appointments to the (largely advisory) U.K. Electoral Commission, and political parties are consulted only later in the process.[3]

Some enforcement bodies are non-partisan, while others are “multi-partisan”, having participation by all major political parties. A non-partisan PFR may be effective only in jurisdictions with a strong and independent civil service and political culture that fosters the genuine neutrality of members. Multi-party representation may appear to be fair but has been criticized as leading to gridlock and inactivity within the PFR.[4] This is certainly true in the U.S., where the balanced bipartisan composition of the FEC has prevented meaningful responses to a range of financial and related reporting issues.

Finally, impartiality is enhanced when the PFR itself is subject to monitoring. Like any government body, the PFR may become enmeshed in partisan politics, or internally corrupt or wasteful. Biased enforcement of political finance laws is a problem particularly in transitional democracies or countries under one-party rule; elected officials and parties in power may attempt to use the PFR to harass or eliminate opposition candidates and parties. For example, in Ukraine during the 1999 presidential elections, the government reportedly used the police, fire and tax inspection services to harass the opposition.[5]

Several steps can enhance the PFR’s impartiality:

• The PFR should develop internal guidelines setting forth objective, neutral criteria for discretionary decisions, such as whether to commence an investigation or an administrative penalty proceeding.
• If political finance laws are administered and enforced with full transparency, the media and civil society organizations can monitor the impartiality of the PFR and raise public confidence in its integrity. Some aspects of the audit and penalty decision-making process may need to remain confidential, but much of the PFR’s internal policy can be made public. (For instance, on its Web site the New York City Campaign Finance Board [NYCCFB] posts disclosure statement deadlines and administrative penalty schedules, as well as a plain-language candidates’ handbook explaining the general structure of the electoral law and the disclosure/audit process.)
• Regular audits of the PFR can provide assurance that the PFR is using its budget legitimately and efficiently to achieve the purposes for which the funds were allocated.
• A written code of ethics can clarify the PFR’s internal policies on public employment, confidentiality and conflicts of interest.

Operational Integrity

The PFR must have the authority to plan its own program for political finance administration and enforcement, along with the financial and human resources to implement this program. Even if the PFR’s budget is protected from political pressure, it may be insufficient for effective enforcement if the country itself has limited resources or because political finance simply is not a legislative priority. In fact, in many countries political finance laws have become more far-reaching and complex in recent years, but PFRs’ budgets have not necessarily increased commensurately.[6] Without sufficient resources, the PFR cannot maintain operational integrity. If it has to depend on another agency or the legislature for resources or personnel, vigorous enforcement could be at risk.

PFR staff may lack expertise or experience, a deficiency that particularly weakens the audit function. For instance, although the Election Commission of India has powers of oversight, investigation, prosecution and sentencing, it has had little success in enforcing the political finance law because of staffing shortages.[7] To maintain operational integrity and independence, the PFR should also have control over—or at least some involvement in—the recruitment, organization and retention of its own staff.

The Role of Technology

A PFR with limited resources can increase its operational efficiency through the proactive and innovative use of technology. If it has competent technical staff, the PFR can computerize much of the disclosure information it receives as well as its analysis of that information, publishing relevant material in a timely manner on the Internet.

Australia, Bosnia and Herzegovina, Bolivia, Britain, Georgia, Peru, the United States and other countries currently have databases for collecting and storing political finance information, most of which are made publicly available over the Internet. Both the Central Election Commission in Lithuania and the NYCCFB (see above) in the United States have developed comprehensive electronic campaign finance reporting programs. Both regulators provide software to candidates so that they can file disclosure statements electronically or on electronic media. The information is uploaded to the PFR’s public Web site, allowing users to undertake on-line searches for a wide range of campaign finance information. In addition, the NYCCFB maintains a public computer terminal that anyone can use to study current political contribution data.