To ensure the effectiveness of a political finance system, the political finance regulator (PFR) often has authority to take enforcement action at the administrative level. Without independent authority to negotiate settlements or impose sanctions, the PFR is entirely dependent on other government agencies and the courts to give force to the political finance laws.
Enforcement does not necessarily require the imposition of administrative penalties, or recourse to civil or criminal courts. Where appropriate, non-legal approaches—such as training, conciliation or public exposure (“shaming”)—can often resolve non-compliance issues more quickly and inexpensively.
Education and Training
One method of encouraging compliance is to provide education and training to regulated electoral participants. The PFR may hold training seminars, and/or issue plain-language handbooks or summaries of the applicable laws and regulations. Not only can training help promote a culture of compliance, it can also empower parties and candidates themselves to monitor their own reporting and financial activities, and to correct inadvertent mistakes. The system should also encourage self-monitoring by reducing penalties for errors or violations that are self-reported, or by treating self-correction as a mitigating factor.
Negotiation
Non-compliance may also be resolved by informal negotiations, such as conferences, conciliation and alternative dispute resolution.[1] Generally, negotiations result in a compliance or conciliation agreement: the reporting entity acknowledges a violation, and agrees to take certain actions, pay a civil penalty or offer other remedies. The best practice is to make all settlements a matter of public record.
Particularly if the PFR has no direct authority to impose administrative penalties or take legal action against offenders, negotiation and conciliation may also be valuable tools for increasing compliance with the political finance laws. Alternative dispute resolution mechanisms offer several advantages:
“Shaming” Sanctions
Since publicity is the lifeblood of politics, one of the most effective non-legal enforcement techniques is public exposure (“shaming”). An example is public release of the final audit reports of political parties/candidates, through print publication or posting on the PFR Web site. This promotes public awareness, information and education . It may also persuade reporting entities to correct reporting problems during the audit process, lest their violations become common knowledge. Another shaming sanction is Web posting of a blacklist of political parties/candidates found to be in violation of the law.
Press coverage is key to the shaming process. The PFR press department may promote compliance by informing the media about enforcement actions as they are taken, and by hosting periodic background briefings for journalists about the political finance requirements to be met by electoral participants.
Administrative Penalties
Non-legal sanctions ultimately depend on the good faith of the regulated electoral participants, and civil or criminal sanctions on the good will of the regulatory or law enforcement agency. Hence the need for authority to impose administrative penalties. In many countries, the PFR itself can impose sanctions or monetary penalties against political parties, candidates or other electoral participants. Often, it establishes a quasi-judicial process to adjudicate violations of the political finance law.
The process for determining violations and/or assessing penalties should vary according to the seriousness of the potential offence/penalty. The best way of handling minor violations (e.g. late or incomplete filing of disclosure statements) may be under a “strict liability” standard, with a minimum of formal procedures to impose minor fines. For instance, PFRs in Canada and the United States administer a system of lesser fines to punish minor infringements and encourage voluntary compliance.[2] A trial-type hearing is usually unnecessary in these circumstances, and due process standards can normally be met simply by providing adequate notice to the offending entity as well as an opportunity to respond. This system resembles the issuing of tickets for illegal parking in many cities; the great advantage is that it is easy and inexpensive to administer. Any monetary penalty should be proportionate to the offence but serious enough to have a deterrent effect.
For a more complex violation or one involving specific intent or even civil responsibility, the PFR may establish a quasi-judicial hearing process to ensure that the case is adjudicated properly and to afford the offending electoral participant a meaningful opportunity to be heard. The process generally begins with the serving of notice that charges have been laid and that the electoral participant has the right to appear to challenge them. The administrative adjudication may take place before a commission appointed by the PFR, or it may be assigned to an administrative law judge in the general administrative tribunal system. Whoever acts as adjudicator, the accused is entitled to an impartial, politically neutral proceeding. Further, due process requires that the electoral participant, whether in person or in writing, have the opportunity to mount a defence by presenting evidence and to test evidence presented by officials.
