Variations in what is Subject to Regulation
As with other categories of violation, breaches of political finance regulations vary from country to country, according to the regulations themselves. The tighter and more extensive the system of regulation, the more types of violation become possible.
For example, according to the existing system in Britain, neither parties nor candidates are required to list the names of contributors. There is thus no possibility of violations from a failure to follow disclosure laws relating to such contributions. In contrast, a core enforcement task of the Federal Election Commission in the United States is to police detailed rules about the names and addresses of contributors to political campaigns, and regulations about the time within which such information must be submitted.
To give another example, political parties in Germany are required to submit accounts according to set categories and accountancy rules. However, they are not required to distinguish between routine spending of the party organization and spending specifically for election campaigns. However, in Canada, the existence of a limit on permitted campaign spending by national party organizations carries with it a need for returns of such campaign spending, as well as penalties for violations of the rules.
Countries vary also according to whether there are penalties for specific types of violation, or whether there is a common schedule of penalties for whole groups of violations. For example, in Britain, there is a special penalty for failure by a candidate to produce a return of expenses on time, but the penalty for producing a false return is part of the broader system of penalties for corrupt practices.
Regulations and Penalties outside Electoral Laws
In most countries, there is a core electoral statute where political financing laws are mainly found. However, it is a mistake to assume that the electoral law contains all the relevant provisions. In the United States, beside the Federal Election Campaign Acts, relevant materials are included in the Internal Revenue Code (title 26), as well as other parts of the United States Code dealing with Crimes and Criminal Procedure (title 18), and telecommunications (title 47).94
In Britain, not only are the successive Representation of the People Acts relevant to political financing, but also certain companies acts, trade union acts, and broadcasting acts.95
Examples
The following are examples of penalties for violations relating to political financing rules:
Australia
See Fines and imprisonment
Britain
Failure by parliamentary candidates to make a return of expenses on time. The agent of every candidate is required to deliver to the official responsible for administering the election (the returning officer) a return of election expenses within thirty-five days of the declaration of the result of an election. The return of expenses must include a number of specific categories of information. If the return is not delivered by the deadline, the candidate may not sit or vote in the House of Commons until it is delivered or an authorized excuse allowed. A candidate is liable to forfeit £100 for every day on which he sits and votes.96
Canada
The Canada Elections Act creates dozens of possible violations relating to campaign financing. With a few exceptions, those tried in summary proceedings are carry a maximum penalty of one year in prison, and a fine of up to CAN $1,000; for offences tried on indictment, the penalties are up to five years in prison and up to CAN $5,000.
Germany
If funds are unlawfully received, improperly used, or unreported by political parties, the penalty is twice the amount involved in the breach. This is deducted from the party's direct public subsidy. If a party fails to submit accounts, its public subsidy is held back until it does so.97
United States
There is a profusion of possible violations. They include:
- violation of limits on individual contributions
- political contributions by banks, corporations or labour unions
- foreign contributions
- contributions of over U.S.$100 given in currency
- violations of laws about record-keeping
- violations of reporting requirements
- overcharging by newspapers, television, or magazines for space for political advertisements
- violations of expenditure limits for presidential nominating campaigns
- violations of confidentiality provisions concerning pending investigations of breaches by the Federal Election Commission
- failure by political fundraisers to disclose to donors that contributions are nondeductible for income tax purposes
Most penalties fall into a number of general categories depending, first, on whether or not the breach has been 'knowing and willful'; second on the sum involved in the alleged offence; third on the method of prosecution.
For offences which are the subject of a conciliation agreement with the Federal Election Commission, or which are the subject of a civil court action initiated by the Commission, the maximum penalties are the greater of (a) U.S.$5,500 or (b) the amount involved in the violation. Where the offence is determined to have been 'knowing and willful', each of these penalties be doubled.
For serious offences which are referred by the Commission to the Attorney General, and which are then subject to criminal prosecution, the maximum penalties are one year in prison and a fine up to a maximum of the greater of (a) U.S.$25,000 or (b) three times the amount of any contribution or expenditure involved in the violation.
Apart from these penalties, particular offences are subject to special penalties. For example, penalties for false accounting, kickbacks, and illegal payments are up to U.S.$10,000 and five years in prison. There is the same penalty for offences relating to limits on spending in presidential nominating campaigns.
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