Political finance regulators (PFRs) must manage an increasing flow of political finance information from electoral participants, and at the same time they must often comply with new legislative provisions requiring the information to be made available to the public. This is a major challenge, and it is heightened by demands from an active and aware civil society and media. If a PFR fails to manage and share the information effectively as required by the law and regulations, it can face a serious credibility gap.
If political finance information is widely available to political parties, civil society organizations, the media, reform-minded politicians, academics and ultimately well-informed voters, the result is more external scrutiny and a stronger impetus for self-policing. In Buckley v. Valeo, a landmark 1976 decision, the United States Supreme Court ruled:
Disclosure provides the electorate with information as to where political campaign money comes from and how it is spent by the candidate in order to aid the voters in evaluating those who seek federal office. It allows the voters to place each candidate in the political spectrum more precisely than is often possible solely on the basis of party labels and campaign speeches. The sources of a candidate’s financial support also alert the voter to the interests to which a candidate is more likely to be responsive and thus facilitate predictions of future performance in office. [1]
In political finance, access to information involves the full disclosure of political finance information and its availability for inspection and analysis by the public. Access to information is essential for fundamental transparency in political finance regulation. As an unpublished study on IFES Money and Politics projects states:
Political finance transparency, achieved through the availability (and accessibility) of political disclosure information, can help to illuminate and mitigate the effects of corrupt and illegal practices, while it simultaneously rewards those who “play by the rules.” As such, the disclosure of political accounts is a necessary—albeit insufficient—condition for holding political actors accountable and reducing political corruption. [2]
Two Steps to Transparency: Legal Framework and Disclosure
The first step in establishing a political finance system based on transparency is a legal framework that requires routine and thorough financial reporting by political parties, candidates and other electoral participants. Creating the framework is complicated; it involves setting clear rules about who needs to report and to whom, what needs to be reported and when, and how the information is to be reported. This first step must be backed up by proper enforcement and auditing.
The next step is what is commonly called “disclosure,” that is, making financial information received by electoral authorities available to the public. Disclosure may take many forms, and may be limited by electoral authorities to general statements about overall compliance with reporting obligations or to summary data. Genuine access to information involves complete public disclosure, sufficient to meet the policy objectives of informing the public and facilitating enforcement of political finance rules and requirements.
The electoral law and regulations should specify the various aspects of full public disclosure of political finance information:
- Who is responsible for disclosure: There should be a single collector and disseminator of disclosed information—generally the political finance regulator—with power to audit and enforce. [3]
- Who must report: Electoral participants subject to political finance reporting obligations should include elected officials, candidates, political parties and political organizations. [4]
- What to report: All relevant financial information must be reported—for example, both monetary and non-monetary (in-kind) contributions. Typical information disclosed would include campaign income and expenditures, regular income and expenditures for political groups, and assets and liabilities. [5]
- When to report: Disclosure should be regular, detailed and timely. [6] Public control is significantly less effective if the information is not published in a timely and comprehensible manner. Ideally, public disclosure should occur before election day so that voting decisions can be based on best available information about the political finance activity of parties or candidates. Information provided after the election has far less political impact and therefore less value as a deterrent to violations of political finance laws and reporting requirements.
PFRs use various mechanisms to collect and store political finance information. Information may be collected in print or electronic format, and stored in files or a database. Consultation will ensure the development of regulations with which the regulated community is able to comply, and of forms that the community can properly use. Once regulations and forms are ready, training and education should follow, explaining how to fulfill regulatory requirements.
Disclosure Methods
Perhaps the most common method by which PFRs publicly disclose political finance information, as widely required in election laws, is release through the print media. This usually involves publication of the information in an official state newspaper or gazette with limited circulation. Publication places the information in the public domain but access to it is limited. Sometimes only a summary of the reported information appears in print.
New technology allows either summaries or scanned financial reports to be posted on government Internet sites. Scanned reports are more widely available than print versions but they do not support information searches. Even so, Web posting of scanned reports may be the best choice for some PFRs since it costs less than entering data into a database.
The most common passive approach to public disclosure is to simply make political finance information available for review at the office of the PFR or another government body. This type of public access to disclosure files puts a burden on those seeking information and the body responsible for controlling it. Rarely are the files allowed to leave the premises, and the viewing process is often closely monitored. Civil society organizations and journalists wishing to examine the files complain of problems such as insufficient time allowed for viewing the materials and poor file organization.
Nevertheless, physical access by the public to the financial reports of political parties, candidates and other electoral participants may be a very valuable means of disclosure if certain needs and standards are met:
- An office of public disclosure should be established with adequate resources to assist public examination of political finance reports. It should have the necessary personnel and equipment to receive, photocopy, organize, file and make available the reports for public scrutiny in a timely manner. It should have suitable facilities to assist public examination of financial reports, and to permit photocopying at a reasonable cost and in a convenient manner.
- Access to the information should be open to all interested persons and groups, including journalists, academics, civil society organizations and electoral participants themselves. [7]
A more confrontational mechanism for gaining access to political finance information is through freedom of information acts. Exercising rights under such legislation may require filing a written request. In Romania, a local civil society organization, Asociatia Pro Democratia, utilized the country’s access to information laws to obtain disclosure information, which it posted on the Internet. Access to information requests are onerous for both applicants and the body responsible for providing information. Further, the information might be provided in a discretionary or arbitrary manner, depending on who is asking for it or whose information is being requested. [8]
Many countries at various levels of development (Australia, Bosnia and Herzegovina, Bolivia, Britain, Georgia, Lithuania, Peru, the United States and others) have established searchable databases that can be accessed over the Internet (or at the office of a PFR or other government body). Web posting in a searchable format has many advantages over print publication:
- It is easily accessible by anyone with an Internet connection—particularly civil society groups and news media, most of which rely on some degree of Web access.
- Organizations and media can monitor and analyze reports, use disclosed account data in their investigative reporting, and make external complaints. [9] These actions increase accountability and encourage the regulated community to report more accurately.
- It eases the burden on the PFR, while facilitating the detection and enforcement process.
As both the PFR and the regulated community increase their ability to use information technology, a best practice is emerging. In Lithuania, the Central Electoral Committee provides political parties and candidates with electronic reporting forms that feed into an Oracle database. Although use of the forms is voluntary, they are popular because they make internal accounting easier and eliminate unnecessary data entry. The database can be accessed by the tax authorities responsible for reviewing political accounts. The public can view and search the database via the Internet.
Safeguards Needed
Full, detailed and timely transparency in political disclosure should be the norm, but reports may contain highly sensitive and personal information—particularly in the case of financial disclosure by political candidates. Further, the information may be abused or, in certain political circumstances, wrongly employed to harass opposition parties and their supporters. [10]
In view of these risks, political finance laws should provide safeguards to ensure that certain clearly defined types of information are not misused and that enforcement is not arbitrarily pursued against opponents of the party in power. [11]
NOTES
[1] Buckley v. Valeo, 424 U.S. 1 (1976), p. 67.
[2] Carlson, Jeffrey and Walecki, Marcin, “Guide to Applying Lessons Learned from IFES Money and Politics (MAP) Projects,” (unpublished).
[3] See Money in Politics Handbook: A Guide to Increasing Transparency in Emerging Democracies, Washington, D.C.: US Agency for International Development, 2003, p. 21–26.
[4] “Guide to Applying Lessons Learned from IFES Money and Politics (MAP) Projects.”
[5] Ibid.
[6] Ibid.
[7] Dahl, Robert, Money and Politics in Indonesia, vol. 4, IFES Project Report, Washington, D.C.: IFES, 2003.
[8] Elena, Sandra, Buruiana, Procop and Autheman, Violaine, Global Best Practices: Income and Assets Disclosure Requirements for Judges, IFES Rule of Law White Paper Series, Washington D.C.: IFES, 2004, p. 16.
[9] “Guide to Applying Lessons Learned from IFES Money and Politics (MAP) Projects.”
[10] Money in Politics Handbook, p. 25.
[11] Global Best Practices: Income and Assets Disclosure Requirements for Judges, p. 19.
