This question is posted by ACE on behalf of Practitioners' Network member Lesley Richards. 

What should one consider when researching legal frameworks and enforcement mechanisms in a country about to draft a new law on campaign finance? 

More specifically, this research will assist drafting a new campaign finance law requiring political parties to submit statements on financial disclosure.

PN members are also welcome to suggest information and resources that may assist this research.

Summary of Responses

PN members mentioned a range of factors for consideration when drafting campaign finance laws. Members also shared recommendations and examples of implementation in several countries. A summary of the responses follows:

1) Factors to consider when drafting a new campaign finance law requiring political parties to submit statements on financial disclosure:

• Defining the objectives of the law, and the extent to which the legislation achieves these objectives.
• The extent to which the intended legislation is enforceable.
• Whether the intended law imposes an undue burden on the regulated community, in this case the parties.
• The political culture and awareness, status of social transformation and status of economic composition of society.
• Whether financial reports must reveal the identity of the donor, and if they must be made public.
• The frequency and timing of reporting: regular reports or campaign reports, or both, how long after an election, etc.
• Whether electronic submission should be required, and the threshold of reporting details of individual donations.
• Structure of the law should ensure an independent audit of the finances allocated to parties.
• The scope or limits of disclosure by political parties and or candidates, as well as the structure and effectiveness of enforcement mechanisms, such as the sanctions regime for breach of the legislative provisions.

2) Recommendations for drafting a new campaign finance law requiring political parties to submit statements on financial disclosure:

• Make sure that the legislation is created in dialogue with those who will be bound by it, and by those who will use the data. 
• It is good to establish a mixed financing system where the state provides a portion that may be in advertising slots, or time in the media including prime-time, and some provide the parties through their own resources. 
• If a mixed financing scheme is used: public and private, then it must be very precise in specifying limits quantities both reception and spending, as well as mechanisms to account for and report the funding that may be in cash or in kind. 
• The reporting requirements must not be too demanding, political parties will fail to submit reports or submit reports that are inaccurate, and they will blame the legislation for these failings.
• Establish rules for donors or contributors. It is suggested not to allow contributions from abroad. Simple protocols and formats in which information is reported can be implemented. 
• In some cases increased transparency may harm political pluralism, if donors abstain from giving funds to opposition parties to avoid harassment from the authorities. 

3) Examples of finance laws mentioned by members:

• France has put in place 5 successive laws to legislate financing of electoral campaigns in 1988, 1990, 1993, 1995 and 1996 , which are now to be added to the dealing of specific cases by justice (jurisprudence, case laws, precedent). These laws are quite generally accepted by the experts as well as by the population.
• Ecuador the state funds the campaign of candidates in the written press, radio, TV and billboards, while for other activities and electoral expenditure spending limits for each candidate are set according to the number of electors in the constituency.
• To establish a finance formula which will allow indicators to be updated as the country's economy, Mexico, considered a percentage of the minimum wage, multiplied by the number of registered voters. To ensure fairness factor in the race, the total purse of funding, a percentage is equally divided (30%) and the remaining (70%) as the percentage of votes obtained in the last federal election held.
• Some countries require the collection of a large and representative firms nationally and representation to access national party registration number, obtaining public funding if they obtain a percentage of seats in Congress / National Parliament and / or a percentage of elected offices at the subnational level. This may create competition between parties and their program offerings.

Suggested Resources:

• Colombian Political Parties finance Law 1475/2011
• Comparative report published by the Swiss Federal Department of Justice and Police (available in French)
• Code of Democracy in Ecuador
• Disclosure requirements , donation and spending limits in the direct democracy                 
• “Dimensions of political finance” chapter in Electoral Essays and Discourses book by Carl Dundas
• French Laws on Campaign Finance
• Financing Politics, Middle East and North Africa               
• Financing political parties and Elections Campaigns – Guidelines
• Funding of Political Parties and Election Campaigns
• Gilland Lutz/Hug (ed.): Financing Referendum Campaigns, 2010
•  Guidelines on political party regulations by OSCE/ODIHR and Venice Commission      
• IDEA's Electoral Justice database
• International IDEA database
• IFES Political Finance Newsletter
• IFES “Political Finance Oversight Handbook”
• Political finance regulation: The global experience
• Political finance regulation around the world

Contributing Members:

• Deyanira Galindo
• Francisco Barrera
• Jean-Claude Heyraud
• Magnus Ohman
• Carl Dundas                
• Nadja Braun Binder
• Abdurashid Solijonov
• Abdoulaye Kourouma
• Yuba Raj Guragain
• Zaida Abdalla                       
• Sam Jones                 
• Víctor Hugo Ajila

This response is posted by ACE on behalf of Practitioners' Network member Francisco Barrera. 

En Colombia se tiene una ultima ley que rige la conformacion y regulacion de partidos, componentes, aportes, contabilidad etc. Es la Ley 1475 del año 2011 la cual le adjunto.

Algo importante a considerar en una legislación sobre prerrogativas (financiamiento y acceso a medios) para partidos políticos, son factores que garanticen tres hechos: 1) la posibilidad de constante revisión y actualización; y 2) que fomente la equidad de la contienda pero que también promueva la competencia entre partidos políticos; 3) Evitar que los recursos y apoyo del Estado o de sectores privados, contribuya a un enriquecimiento o que los partidos políticos se conviertan en un negocio.

Para el primer factor se sugiere establecer una fórmula cuyos indicadores permitan que se vaya actualizando conforme la economía del país. En el caso particular de México, los indicadores de la fórmula consideran un porcentaje del salario mínimo vigente, multiplicado por el número de electores registrados. Para el factor de garantizar la equidad en la contienda, en el caso mexicano, se ha recurrido a que de la bolsa total del financiamiento, un porcentaje se reparte igualitariamente (30%) y el restante (70%) conforme el porcentaje de votación obtenido en la última elección federal realizada.

En muchos países han establecido diferentes fórmulas para este rubro. Por ejemplo, países que condicionan con diferentes porcentajes el acceso al financiamiento público. Por ejemplo, algunos países obligan a la recopilación de un número importante y representativo de firmas a nivel nacional y representatividad para acceder al registro como partido nacional; obtención de financiamiento público si obtienen porcentaje de asientos en el congreso/parlamento nacional y/o un porcentaje de puestos de elección a nivel subnacional. De esta forma se puede generar una competencia entre partidos y sus ofertas de programas.

Un esquema de financiamiento mixto: público y privado, debe ser muy preciso en especificar cantidades límites tanto de recepción como de gasto, así como mecanismos para contabilizar y reportar este financiamiento que puede ser en dinero o en especie. Asimismo, un mecanismo de control de la procedencia del financiamiento.

Finalmente, para que los partidos políticos puedan desarrollar una función de interés público, cual su objetivo de organización política por obtener puestos públicos de elección popular, el financiamiento debe ser seguido por una legislación específica sobre mecanismos de transparencia, rendición de cuentas, sanciones y mecanismos de cumplimiento y verificación de las sanciones impuestas.

Un elemento muy importante a considerar es que cada partido tenga registrado un contador que sea el encargado de llevar los reportes y la legislación debe ser clara sobre topes de gastos para candidatos, camapñas, coaliciones, etc.

Algo importante a considerar en una legislación sobre prerrogativas (financiamiento y acceso a medios) para partidos políticos, son factores que garanticen tres hechos: 1) la posibilidad de constante revisión y actualización; y 2) que fomente la equidad de la contienda pero que también promueva la competencia entre partidos políticos; 3) Evitar que los recursos y apoyo del Estado o de sectores privados, contribuya a un enriquecimiento o que los partidos políticos se conviertan en un negocio.

Para el primer factor se sugiere establecer una fórmula cuyos indicadores permitan que se vaya actualizando conforme la economía del país. En el caso particular de México, los indicadores de la fórmula consideran un porcentaje del salario mínimo vigente, multiplicado por el número de electores registrados. Para el factor de garantizar la equidad en la contienda, en el caso mexicano, se ha recurrido a que de la bolsa total del financiamiento, un porcentaje se reparte igualitariamente (30%) y el restante (70%) conforme el porcentaje de votación obtenido en la última elección federal realizada.

En muchos países han establecido diferentes fórmulas para este rubro. Por ejemplo, países que condicionan con diferentes porcentajes el acceso al financiamiento público. Por ejemplo, algunos países obligan a la recopilación de un número importante y representativo de firmas a nivel nacional y representatividad para acceder al registro como partido nacional; obtención de financiamiento público si obtienen porcentaje de asientos en el congreso/parlamento nacional y/o un porcentaje de puestos de elección a nivel subnacional. De esta forma se puede generar una competencia entre partidos y sus ofertas de programas.

Un esquema de financiamiento mixto: público y privado, debe ser muy preciso en especificar cantidades límites tanto de recepción como de gasto, así como mecanismos para contabilizar y reportar este financiamiento que puede ser en dinero o en especie. Asimismo, un mecanismo de control de la procedencia del financiamiento.

Finalmente, para que los partidos políticos puedan desarrollar una función de interés público, cual su objetivo de organización política por obtener puestos públicos de elección popular, el financiamiento debe ser seguido por una legislación específica sobre mecanismos de transparencia, rendición de cuentas, sanciones y mecanismos de cumplimiento y verificación de las sanciones impuestas.

Un elemento muy importante a considerar es que cada partido tenga registrado un contador que sea el encargado de llevar los reportes y la legislación debe ser clara sobre topes de gastos para candidatos, camapñas, coaliciones, etc.

Following a number of problems especially false invoicing for the financing of electoral campaigns and financing of parties, France has put in place 5 successive laws to legislate financing of electoral campaigns in 1988, 1990, 1993, 1995 and 1996 to which are now to be added the dealing of specific cases by justice (jurisprudence, case laws, precedent). These laws are quite generally accepted by the experts as well as by the population. To know more about it:

http://www.vie-publique.fr/decouverte-institutions/institutions/approfondissements/lois-financement-campagnes.html

Unfortunately these texts are in french but a summary of it could be found or made if necessary.

Good work,

Jean-Claude Heyraud

[email protected]

A natural starting point is the international obligations in this field. Unfortunately there are very few beyond the general call for transparency in Article 7(3) of UNCAC (which supports the notion of the campaign finance law you are discussing). There are few regional legal documents in most parts of the world, with the exception of Europe. The Council of Europe published recommendation 2003(4) which has some recommendations on disclosure, and the OSCE expanded on this in their 2010 guidelines on political party regulation (both attached, note that the latter is about to be updated). There is a chapter on regional legal guidance in the IFES publication “Financing Politics, Middle East and North Africa” (please see ), this also discusses European and African obligations.

You may also find some guidance in the chapter on disclosure in the IFES publication “Political Finance Regulation: the Global Experience” (see http://www.ifes.org/files/Political_Finance_Regulation_The_Global_Experience.pdf)

Apart from the legal guidance, it is useful to consider how these issues are regulated in other countries. I advise you to look at the International IDEA database on www.idea.int/political-finance, which has information about the regulations in 180 countries. There are a number of questions about political finance disclosure. The main findings are summarized in “Political Finance Regulations Around the World” (attached).

Finally, I would recommend the conclusions by leading expert Lisa Klein (former Director of party and election finance at the UK Electoral Commission). She highlights four questions that should be taken into account when creating political finance legislation; 1) what is the goal of the intended legislation, 2) does the intended legislation give life to these goals, 3) is the intended legislation enforceable, and 4) does the intended law impose an undue burden on the regulated community (in this case the parties). She elaborated upon these issues in the last IFES Political Finance Newsletter (attached).

In the case of disclosure regulations, the first question can be connected to whether the reporting requirements are intended to increase transparency, enhance political pluralism or something else. It should be noted that in some cases increased transparency may harm political pluralism, if donors abstain from giving funds to opposition parties to avoid harassment from the authorities. Regarding the second goal, it is crucially important that the regulations are targeted towards the stated goals. In relation to the third goal, it must be considered exactly what the parties are supposed to do, and what happens if they do not. I recommend that you review the IFES “Political Finance Oversight Handbook” (attached), which focuses specifically on the enforcement of regulations, including reporting requirements. The fourth question is also essential – if the reporting requirements are too demanding, political parties will fail to submit reports or submit reports that are inaccurate, and they will (successfully) blame the legislation for these failings. There is also a risk of damaging political pluralism by making the demands too difficult for small parties. Some issues concerned are if electronic submission should be required, the frequency of reporting and the threshold of reporting details of individual donations.

My main advice is this; make sure that the legislation is created in dialogue with those who will be bound by it, and by those who will use the data. Developing the law in dialogue with the political parties will increase the chances of it being suitable to the particular context, and you will significantly enhance the chances of compliance.

Some parties may be negative to the entire idea of financial reporting, so I am not suggesting that the legislation should be exclusively based on their input. Civil society groups and media are often the main users of published financial reports, and their input is highly valuable. These groups may sometimes have overly ambitious ideas of what can and should be reported however, so the legislator needs to find the right balance.

Good luck!

Many valuable points have been made in the comments above. However, there are many areas of focus that you might wish to consider, such as the scope or limits of disclosure by political parties and or candidates, structure and effectiveness of enforcement mechanisms, the sanctions regime for breach of the legislative provisions and the measures to mitigate or eliminate the role of the culture of impunity from prosecution for breaches of the finance provisions which are so prevalent in emerging democracies. You might wish to read my discourse on "dimensions of political finance" in my recent book on Electoral Essays and Discourses.  

One additional point that you might want to (have to) consider (depending of course on the availability of direct democratic procedures in the country you are looking at): the (need of) regulation of financing of referendum campaigns.

Resources: 

Braun Binder/Heußner/Schiller: "Offenlegungsbestimmungen, Spenden- und Ausgabenbegrenzungen in der direkten Demokratie" (on Germany, the US and Switzerland); http://library.fes.de/pdf-files/dialog/10793.pdf

Gilland Lutz/Hug (ed.): Financing Referendum Campaigns, 2010 (various countries)

Furthermore, this comparative report published by the Swiss Federal Departement of Justice and Police (available in French) may be of interest:

Le financement des partis politiques et des campagnes électorales, Rapport de droit comparé, Eidgenössisches Justiz- und Polizeidepartement, 10. Juni 2011, http://www.ejpd.admin.ch/content/dam/data/pressemitteilung/2011/2011-07-14/studie-parteifinanzierung-f.pdf

International IDEA's new Electoral Justice database provides global comparative data on institutional oversight of campaign finance and the procedures of handling infractions related to breaches of regulations. http://www.idea.int/elections/ej/

Les partis politiques restent un element determinant et essentiel pour toute democratie moderne. La realisation de leurs activites plurielles ( formation, campagnes, organisation, administration, communication, etc…) exige necessairement de l’argent. Dans plusieurs cas les seules contributions des membres ne suffisent pas aux besoins des partis politiques. Nous observons generallement dans l’exercise des elections une grande influence des moyens financiers sur les decisions politiques. Sur le long terme, une forte dose de corruption et un manque de legitimite accompagnent les activites des partis politiques en ce qui concerne l’utilisation des fonds publics et prives. Pour la bonne sante de la democratie, l’Etat doit adopter a tout prix, des regles et des procedures sures pour le financement des partis politiques, des candidats et des campagnes electorales en ce qui concerne les contributions des finances publiques et prives. Une structure independante doit assurer l’audit des finances allouees aux partis . Toutes les regles et procedures doivent etre l’objet d’une loi qui devra contenir aussi suffisamment de provisions importantes sur les conduites a tenir et les sanctions en cas de manquement aux droits et devoirs. La loi doit etre claire sans aucune ambiguite et publiee partout ou besoin s’impose. La loi doit aussi avoir une forte reference sur l’utlisation des moyens et des fonds de l’Etat par le Parti au Pouvoir. Au Mozambique le financement des partis politiques est determinee par une Loi organique.

Document de reference:

“Financing political parties and Elections Campaigns – Guidelines” prepared by the council of Europe’s integrated project.

Campaign finance, in general, is the use of money for the promotional activities of the political parties and the candidates and the key assumption for a healthy democratic practice from this perspective is that money needs to be a facilitator for fair competition; it should not be a master to determine the result of competition particularly in elections. For this, depending on the three factors - political culture and awareness, status of social transformation and status of economic composition of society - appropriate measures are to be taken.

The campaign finance has close relation with the political culture of the country ie how the leaders behave with the voters and the people; they listen and learn or just tell and sell etc. It is also the political awareness of the people how they think about the leaders, their trust and efficacy. Actually de-facto power resides in the people while de-jure power is provided to the concerned election management body. Thus, what people actually do has a great significance in campaign financing. Second is the status of social transformation ie if the society is modern based on the competitive culture and scientific thoughts, money becomes less significant while if the society is traditional  with low economic activities, money plays a great role. Similarly, economic strata of the society also leaves an impact because most usually the higher is the gap between the rich and the poor, the higher is the role of money likely to be in campaigning.

So, while thinking of campaign financing, we need to think of the then society, economic structure of the society and the political culture.

This response is posted by ACE on behalf of PN member Zaida Abdala.

On legal frameworks and enforcement mechanisms in a country to draft a new law on campaign finance, I think it should be considered in three aspects listed below:

1. Electoral Law

• The law should have clarity with regard to the relationship between electoral bodies and political parties;

• The law shall specify the mechanisms of implementation and monitoring of election campaigns;

• Clarity on the role of the state in relation to policy in relation to their role and involvement/funding to parties parties;

• They must contain legal aspects of the law governing the conduct of parties in the electoral process.

2. Law on Political Parties

• Should be considered aspects about to the rights and duties of political parties;

• Conditions to be considered a political party and legal procedures for their establishment;

• Conduct of political parties in elections;

• Representativeness inherent in party matters;

• Programs and statutes of the parties;

• Mergers, Acquisitions and Extinction of Political Parties.

3. Politics of Funding of Political Parties

• you should beware on Legitimate sources of financing of election campaigns;

• Criteria for allocation of funds;

• Basis for fixing the limits to be allocated to parties;

• Conditions for the acquisition or not of private and foreign funds;

• Procedures for accountability;

• Responsibilities for monitoring and evaluation of campaigns.

Best regards

Zaida Abdala - Mozambique

In addition to what has already been said, another issue to consider is whether reports must reveal the identity of the donor. A compromise measure that is quite common is that the identity must only be disclosed when the donation is above a certain amount, thus protecting the privacy of small donors while helping to limit the potential undue influence of large donations. 

Another consideration is whether reports must be made public. In the interests of transparency, there is a strong case to be made for this – and also that the entirety of reports to be made public; not just summaries.

Who is required to report is another important element. If candidates are not covered in reporting requirements, this can open loopholes that reduce transparency and allow for the circumvention of bans and limits. Whether third parties should also report is another angle.

The frequency and timing of reporting is also of significance: regular reports or campaign reports, or both, how long after an election, etc.

As Magnus has mentioned, comparative information from 180 different countries can be found on the International IDEA Political Finance Database. See http://www.idea.int/political-finance/reporting-oversight-sanctions.cfm for data specifically on reporting, oversight and sanctions. Also, next month IDEA will be publishing a handbook on political finance entitled, ‘Funding of Political Parties and Election Campaigns’. An introductory chapter deals looks specifically at what should be considered when designing or reforming a regulatory framework, including reporting.

Are you able to share which country this relates to?

I wish you all the best in this endeavour,

Sam

Para elaborar una ley sobre financiamiento de campañas electorales se sugiere tener presente algunas consideraciones: i) Definir los objetivos de la ley, qué metas se busca lograr. ii) La ley debe incentivar la participación equitativa en la política para todos los partidos. Por tanto, los recursos económicos no deben ser una limitante para intervenir en la campaña electoral. iii) Es positivo establecer un sistema mixto de financiamiento, donde el Estado aporta una parte que puede ser en franjas publicitarias, o tiempo en los medios de comunicación en horario estelar inclusive, y otra parte aportan los partidos mediante recursos propios. Este sistema mixto de financiamiento permite crear oportunidades de acceso equitativo para partidos grandes y pequeños, y comparte la responsabilidad para el ejercicio de los derechos políticos. iv) Delimitar los tiempos de duración de la campaña electoral, si existe período de precampaña, o si se sanciona la campaña anticipada. En Ecuador la campaña electoral dura 45 días máximo, que es un lapso prudente para que las candidaturas informen sobre sus propuestas de trabajo.  v) Establecer reglas para los donantes o aportantes; se sugiere no permitir aportes del extranjero, ni aquellos cuyo origen de recursos se pueda determinar. Para este objetivo se puede implementar protocolos y formatos sencillos en donde se reporte la información. vi) Establecer la obligación de que los candidatos y los partidos reporten sus ingresos y gastos de campaña, con fuertes sanciones en caso de no hacerlo.

En este sentido, el caso ecuatoriano representa un progreso interesante en el control del gasto electoral. Por una parte, el estado financia la campaña de las candidaturas en prensa escrita, radio, tv y vallas publicitarias, mientras que para otros gastos y actividades electorales se establecen límites de gasto para cada candidato según el número de electores de la circunscripción.

Sugiero revisar los artículos 202, 208, 219 y siguientes, 354, 355, 358 del Código de la Democracia de Ecuador.

Quedo a la orden para cualquier inquietud.

Atentamente,

Víctor Hugo Ajila

[email protected]