Political finance laws are technical and complex, and have historically proven vulnerable to evasion, distortion and abuse. For enforcement efforts to be effective, the law must be clear, unambiguous and comprehensive. It must 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 legal counsel to argue that certain financial activities are not encompassed by the definitions of regulated political activities and are thus not subject to the law. For instance, if the definition of “contributions” does not mention in-kind contributions (i.e. of goods and services), the law will apply only to monetary donations, allowing potentially valuable in-kind gifts to be unregulated and unreported.
Political finance laws are ineffective if they fail to include all relevant financial activity in their scope, or to set forth a comprehensive and consistent enforcement mechanism. [2] For effective enforcement of disclosure requirements, for instance, the law must list every type of financial transaction that electoral participants are required to report, including monetary donations, in-kind contributions, loans, 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 investigation process, the procedure and evidentiary requirements of the 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 intent of any particular 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. Depending on the nature of the electoral offices involved or the violations concerned, either federal or state law might apply and 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 when drafting it. Since electoral statutes are rarely perfect, however, it is vital to conduct periodic reviews of the law, and to be proactive in amending the law and instituting new programs. 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 evasion efforts, and to maintain full and effective enforcement.
NOTES
[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.
[2] Ibid.