Financing democracy
published: Monday | March 31, 2003
The Carter Centre recently convened the conference 'Financing democracy:
Political parties, campaigns, and elections' in collaboration with the Organisation
of American States' Inter-American Forum on Political Parties. A group of Government
and political party leaders, prominent scholars, policy experts, private sector
representatives, civil society leaders, media professionals and international
organisations from the western hemisphere met for two-and-half days in plenary
sessions and working groups to discuss the dilemmas of political financing.
They offered their advice to The Carter Centre's Council of Presidents and Prime
Ministers of the Americas, a group of 35 leaders, 10 of whom participated in
the conference and another one of whom sent a representative. Based on the group's
findings, the Council now offers the following conclusions and recommendations.
THE CARTER CENTRE, Atlanta Georgia:
POLITICS MATTERS for improving the lives of all of our citizens. Political parties are a vital component of our democratic politics, and they need money to function. Largely because of many improper practices in financing campaigns and corruption scandals, politics unfortunately has become a discredited activity to many people. Confidence in democratic institutions is falling. We need to reverse this perception. We need to be investing in the capacity of our political parties to inform and inspire citizens, not spending millions on negative campaign ads. We need to be encouraging participation of all citizens, not just the richest or those looking for special favours. We need to find ways to restore confidence in democratic institutions by ensuring clean, fair, and competitive elections and governance.
The hemisphere is making progress, but not with the necessary pace and energy. Mandates from the Quebec Summit of the Americas led to the creation of an Inter-American Forum on Political Parties to address these issues, and through that forum the OAS has begun an effort to catalogue existing legislation and practice. Citizen watchdog groups are monitoring campaign expenditures in an attempt to hold their leaders accountable. We are ready to address the next stage of regularising, monitoring and enforcing standards of political financing to reduce corruption, promote citizen participation, and enhance political legitimacy of our democratic institutions.
There is no single formula on political financing that will solve the problems permanently and for all countries. Indeed, the struggle to improve the democratic process is a continuous one requiring the active involvement of all of civil society. Based on work done by the OAS Inter-American Forum on Political Parties, International IDEA, Transparency International, USAID and others, we have identified a set of principles for political finance. We urge our governments to endorse these principles, and our citizens to watch carefully to ensure that they are implemented.
We strongly encourage the development of a democratic political culture, moral commitment and ethical standards that will provide an atmosphere conducive to the implementation of these measures.
PRINCIPLES FOR POLITICAL FINANCING
Rules on financing of political parties and campaigns will differ for each national context, but they should all promote the following basic principles:
PRINCIPLES
Fostering stronger representative and accountable political parties:
In their representation and participation functions, political parties need
access to adequate resources to function effectively and ethically.
Ensuring effective electoral competition: Parties and candidates must
have a fair chance to campaign for their ideas; access to the media and adequate
resources are crucial. Unfair incumbency advantages should be addressed and
the use of state resources for campaigns strictly prohibited.
Promoting political equality and citizen participation. Citizens,
rich or poor, must have equal opportunity to participate in the political
process and to support candidates or parties of their choice. Financial contributions
are a legitimate form of support. Inequalities related to gender, race, ethnicity
or marginalised populations should be compensated. The principle of one-person,
one-vote must be preserved.
Preserving the integrity of the electoral process through transparency:
Voters need to be empowered to choose as autonomous and informed citizens,
free from pressures, intimidation or seduction through economic benefits,
and informed about the resources and support for candidates and parties.
Enhancing accountability and eliminating corruption: Elected officeholders
should represent their constituents as a whole and be free from financial
dependence on a few. Donations should not be used to buy access to politicians
or civil servants, personal favours (contracts, tax breaks, etc.) or policy
favours.
Strengthening rule of law and enforcement capacity: There must be
assurances of timely justice and an end to impunity in abuses of political
financing. The enforcement of political finance laws and regulations requires
the existence of independent oversight authorities and an effective system
of sanctions to end impunity.
We recognise that each country has a different starting point, but all countries should move at an appropriate pace to achieve the following objectives and tools, derived from the principles.
OBJECTIVES AND TOOLS
Invest in the democratic character of parties rather than long or
negative campaigns. The pressures of fundraising should be reduced by controlling
the factors that escalate campaign costs. Measures could include limiting
spending; shortening campaigns; providing equitable access to the media, including
free media time to the candidates during prime time; banning or capping paid
political advertising; promoting public financing, eliminating inflammatory
ads; adopting and enforcing prohibitions against vote-buying.
Improve transparency and reduce the influence of money by requiring
disclosure of donations and expenditures. Parties and candidates should be
required to publicly disclose itemised donations above certain amounts and
their sources, including in-kind contributions, before and after the elections
so that future undue influence by the donor could be assessed. Parties and
candidates should make public auditable reports of itemised expenditures on
a regular basis, including in-kind expenses, with all funds flowing through
identified bank accounts managed by specified individuals who can be held
accountable. Media should be required to disclose standard advertising rates
and to report discounts as political donations, and maintain advertising rates
that do not exceed the commercial rates used between campaigns. Campaign contributions
from foreign sources should be prohibited, with the exception of citizens
living abroad, if allowed by national law. Campaigns and candidates should
refuse donations from organised crime or drug trafficking.
Promote equity, participation and competition. Mixed funding systems
with a substantial public component are recommended. Public funds should be
provided as a substitute for or a complement to private donations at all phases
of the political and electoral process. Public funding for ongoing party activities
and campaigns should be allocated by a mix of proportional rules and flat
subsidies to all parties that meet reasonable thresholds. Large individual
donations should be limited; small donations that the average citizen can
afford should be encouraged, perhaps by offering tax credits; and voluntary
media standards for balanced media coverage should be developed.
The institutions responsible for enforcement should provide both incentives
and sanctions. Oversight entities, whether electoral management bodies or
judicial organs, should be independent, nonpartisan, and equipped with sufficient
human and financial resources and authority to enforce the country's law.
Without this, none of the other measures suggested here will be effective.
Enforcement capacity should be developed for effective monitoring, investigating,
and prosecuting, and include subpoena powers, whistle-blower protection, and
access to bank accounts. Sanctions should include remedial actions, fines,
criminal prosecution, and denial of office and/or future access to public
funding.
