Election financing : Need for greater transparency

Funding for election campaigns is a major issue both in democratic and non-democratic countries. Foreign contributions to political parties or candidates are normal in election time, though such funds are officially banned. During the First World War, Germany provided clandestine funds to Bolsheviks in its bid to weaken its enemy, the Russian Czars. During the Cold War, secret services of certain countries bribed client politicians, parties, interest groups, journalists and newspapers to win their favour. Religious groups and foreign corporations were also involved. However, it is difficult to regulate the inflow of political money coming from abroad, particularly when it enters the country for the purpose of “training,” “technical assistance,” “voters and civil education” or “opinion poll survey.”

But this does not mean that funding for election is a necessary evil. Electoral campaign is not possible without the candidates being able to convey their messages to the voters. If the political parties (an integral part of modern democracies) lack funds for election campaigns, they cannot help people make judicious choices. The democratic process grows only when political contributions are raised and spent in a proper manner.

Each political party or candidate wants to outwit and overtake the other. There is maximum misuse of the government manpower and resources during election time. Even the administrative machinery, educational institutions, policy and other security agencies are misused. It gives leverage to the haves over the have-nots. The haves, for instance, can pay for media coverage in catching the public’s eye.

In Nepal, all districts have been divided into four categories for electoral purposes. A candidate can only spend below the stipulated ceiling fixed by the EC. For districts in “Ka” category, a candidate cannot exceed Rs 275,000; in districts in “Kha” category, a candidate can spend up to Rs 235,000. In “Ga,” the limit is Rs 165,000, while in category “Gha,” it is Rs 135,000. The EC fixed the limits to control illegal flow of money into campaigns. But the EC could not receive election expenses reports from all the 2,238 candidates who contested 1,999 general elections. The candidates not submitting reports could well have exceeded the spending limits.

For EC’s part, there was virtually no effort to verify election expenses submitted by candidates. Maybe the ceiling prescribed by the EC was unrealistic. In fact, the ceiling fixed by EC with regard to election expenses has become a subject of mockery. Until there is complete transparency, the ceiling has no meaning. The Election Commission Act, 2063, has a provision to fine a candidate who does not submit the details of election expenditure within the prescribed time. But it is too early to comment on the effectiveness of the Act. Also, many of the candidates lack faith in the election code of conduct and by large, the whole election system. As a result, they are least bothered about producing an accurate account of expenses. This is one of the reasons for the growth in number of dummy candidates.

In every country, the business community makes donations to political parties and candidates during elections. But these donations are mostly murky. Therefore, the money often ends up in the hands of wrong persons. The political parties, for their part, are also not interested in receiving donations openly. In Nepal, there is a provision whereby political parties are expected to submit the list of persons or organisations making donations over Rs 20,000, but this provision is hardly enforced.

Only a strong EC can reduce election expenses. The EC should be empowered to supervise and monitor funding of parties and campaigns. During each election, EC needs to review the expense limit so as to adjust it to the market price. But care should be taken that such a ceiling does not only serve the interests of the rich, but also those of resource-deficient candidates.

Transparency has to be ensured in election expenses. After the election is over, the EC should not only make its own expenses on elections public, but also make public expenses made by each candidate. The government should effectively regulate or restrict political payments by business corporations, trade unions, foreign organisations and foreign citizens. The name of the person or business donating sums over Rs 25,000 to a candidate/party should be made public.

A candidate not adhering to the rules of Election Code of Conduct should be debarred from contesting elections for at least two times. Code of conduct is essential not only for the political parties, but equally for the business sector. EC should have power to investigate political parties or candidates with regard to Code of Conduct so that the candidates are well aware of severity of penalties. The provision of such penalties should be akin to possessing a nuclear weapon, which is hardly ever used but nevertheless a potent deterrent.

Dr. Jha is a professor of Economics