Transparency should be the central theme of any legislation governing political financing because voters must know who is paying and supporting the candidates or their parties during an election campaign, said an expert in electoral assistance programmes.

Indonesia-based Kevin Evans, who designs and manages electoral assistance programmes and writes about elections and wider political laws, said it's very important for the voters to know who the key supporters of the candidates and their parties are.

"One legitimate concern is that any individual or organisation who funds the campaigns of certain (political) parties may obtain special privileges, simply because they have 'paid for it'.

"The concern is that, at worst, this kind of behaviour may lead to corruption," Evans told Bernama on the sidelines of the International Conference on Political Integrity: Reinforcing Transparency in Political Financing, which was held in Kuala Lumpur recently.

Organised by the Malaysian Institute of Integrity, the two-day conference saw political management experts from Mexico, South Korea, Indonesia and Taiwan sharing their countries’ experiences in managing their respective political financing systems.

Evans, an Australian who has worked for the Agency for the Rehabilitation and Reconstruction of Acheh and Nias, as well as the Partnership for Governance Reform in Indonesia, participated in one of the panel discussions during the conference and had shared his thoughts on Indonesia's experiences in campaign and party funding.

Return on investment

He said when the law required political parties to reveal the identity of their contributors to the public, they were more likely to say "No" to funders who expected a "return on their investment".

"If nobody knows about the financial link (between a candidate/party and donor), decisions can be made and people will not know that there had been a 'vested interest' behind those decisions," he said.

On how a specific law governing political financing could address corruption issues and enhance the integrity of political parties, Evans said the establishment of a proper authority to regulate the behaviour of political parties, especially with regard to money movements, would help to provide better protection and certainty.

Stressing the importance of enacting an Act of Parliament, and not just government or ministerial regulations to oversee political financing, he said merely requiring parties to reveal the identities of their donors was not enough to ensure transparency.

"There must also be ways to verify (their claims) and also to punish those who violate the principles of transparency," he said.

Evens added that all established, and almost all consolidating democracies, have specific regulations, usually as an Act or part of a related Act, like an Election Act or Parties Act, to regulate issues of political financing, whether for party management or election campaigns.

No infinite donations

Meanwhile, Associate Research Fellow at the Election Study Centre at National Chengchi University in Taiwan, Eric Yu Chen-hua, said in Taiwan, all political donations must be deposited into a dedicated account in a financial institution.

Under Article 10 of its Political Donations Act (PDA) 2004, it is mandatory for each candidate to open a special account for political donations before he or she can accept funds from others, he said, adding, "The money cannot be deposited into a personal account."

Those convicted of depositing political funds into their personal accounts face a jail term of up to five years, detention and may also be fined a sum not exceeding NT$100 million (RM12.7 million).

In his working paper presented at the conference, titled "The Institution of Political Donations and Campaign Funds in Taiwan", Yu said under Article 13 of PDA, political parties and persons planning to participate in an election campaign may not collect political donations by "issuing period or indeterminate, interest-bearing or interest-free bonds or other securities to uncertain persons".

On a yearly basis, he said, each political party can only accept contributions of up to NT$300,000 (RM38,014) from individuals; NT$3 million (RM380,139) from profit-seeking businesses; and NT$2 million (RM253,426) from civil associations.

Donations by an individual, profit-seeking business or civil association to various political parties should not exceed NT$600,000 (RM76,127), NT$6 million (RM760,802) and NT$4 million (RM507,201), respectively per year.

Control and audit system

National Electoral Institute of Mexico (INE) official Carlos Navarro, in his working paper titled "Regulation and Oversight of Parties and Campaign Financing: The Mexican Experience", said INE was responsible for exercising oversight and auditing all the financial incomes and expenses of political parties and candidates nationwide, for all types of elections.

And, during non-election years, political parties are required to submit their quarterly financial reports and a consolidated yearly report, which have to be certified by an external auditor, he said.

During election or campaign periods, the party must register any campaign income or expense for each candidate within three days in a dedicated online system built and operated by INE, following which it must submit monthly consolidated reports for each candidate, and a final consolidated report three days after the conclusion of the electoral campaign period.

"If in a close race the winning candidate's campaign expense ceiling exceeds by more than five per cent, the election can be nullified by the Electoral Tribunal and this has to happen before the oath for office is taken," said Navarro.

He explained that a comprehensive and permanent oversight and audit system has four components, namely online report system, monitoring system, verification visits and exchange or cross-checking of information with others.

In Mexico, the law governing political financing recognises and regulates private funding from four sources: party members, party supporters (subject to individual and global limits), self-financing (for promotional activities), and financial yields.

Among those barred from making contributions to its political parties are foreign political parties, individuals and legal entities; churches or associations of any religion; and Mexicans living or working abroad.

Integrity and democracy

Navarro also acknowledged that the regulation, control and oversight of parties and campaign financing was a highly complex and elusive issue that did not admit simple nor universal solutions.

He said while the design of any legal device was higly contextual, it was nevertheless essential to clearly identify the problems that have to be tackled.

"Regulations are an expression of political will, but their effective enforcement requires power, capabilities and resources. If the regulations are not followed by an appropriate system of control and oversight to enable the relevant authority to review the reports, investigate breaches and impose sanctions, they will easily end up being ineffective and useless.

"No system is immune to irregularities and breaches, but it has to be able to investigate, sanction and avoid perceptions of impunity. Often, what is at stake is not only the integrity and credibility of the election and its results, but also the legitimacy of the democratic institutions and processes," Navarro added.

- Bernama