First Inter-American Electoral Training Seminar Organisers: GS/OAS, Mexican Federal Electoral Institute (IFE), International Institute for Democracy and Electoral Assistance (International IDEA), Latin American School of Social Sciences (FLACSO

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First Inter-American Electoral Training
Seminar Organisers GS/OAS, Mexican Federal
Electoral Institute (IFE), International
Institute for Democracy and Electoral Assistance
(International IDEA), Latin American School of
Social Sciences (FLACSO

• Presented by
• Cynthia T. J. Barrow-Giles
• November 18, 2008

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Issues involved

• quantity
• origin
• the distribution equity

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Political Corruption Association with Political
Money

• the receipt of monies in violation of existing
  rules
• use of illicit money for political parties and
  election campaign purposes
• using money to engage in vote buying
• participation in and facilitating illicit
  business dealings
• use of public resources for political party
  purposes or proselytising,
• Bribery
• acceptance of money from questionable sources
• selling of influence
• (Griner and Zovatto)

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Alternatives for the Regulation of Political
Party and Electoral Campaign Financing

• Classification of Global Regulatory Regimes
• for Party Financing
• The Autonomy Option Defined by minimum
  regulation
• The Transparency Option Disclosure - Public
  access to information
• the Advocacy Option
• The Diversified regulation Option Mixed System

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Options Available Vis a Vis Political Money

• Unchecked
• Regulated

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Regime of Political Party Financing in Latin
AmericanDominant Tendencies

• A combined of public and private funds
• Three methods are used to allocate public
  financing
• In proportion to the votes cast (53)
• Equal distribution, proportionality (votes)
• proportion of votes cast and parliamentary
  representation
• Legal barrier or standard for eligibility for
  public funding. Percentage of votes cast

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Regime of Political Party Financing in Latin
AmericanDominant Tendencies Cont

• Disbursement
• - a combination of prior to the elections, and
  rest after
• - funds following the elections,
• Maintenance of a system of sanctions usually
  monetary and administrative but also criminal
  sanctions.
• Oversight agency.
• Free access to the State media, private media or
  both.
• Restrictions on the origin of private
  contributions.

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Public Financing Benefits and Disadvantages

• Benefits
• Avoid, reduce or curtail the influence of private
  interest groups.
• Offers more equitable conditions
• Encourages a greater degree of transparency
• to maintain the viability of political parties
• Disadvantages
• May encourage alienation of parties from
  membership
• Over reliance on the state especially of a
  financial nature which can
• lead to convergence
• Reduction in density of political parties as
  parties lose incentive to increase membership

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Private Financing Risks and Benefits

• Benefits
• promotes greater constituency focus
• a multiple social base of support
• encourages the creation of networks of supporters
  
• reduced the dependency on the State
• Risks
• penetration of the system
• disproportionate influence
• Unknown intentions of donors

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Primary Dilemmas for the Regulation of Political
Parties and Electoral Campaign Finance

• candidate centered politics versus political
  party politics.
• Imposition of sanctions candidates or political
  parties
• Enhance democratic selection.
• Lack of culture of political accountability
• dependency on the state versus independence
• private versus public financing.
• when to disburse funds
• full disclosure vs. right of privacy

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Strengths and Weaknesses of Regulated Vs
Unregulated Systems

• Objectives of regulatory Reform Strengths
• ensures that parties have adequate funding
• ensures fairer competition between parties
• protection of parties and the system from
• corruption and influence peddling
• affords greater transparency

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Guidelines for the Design, Review, or
Implementation of Legal Regulations in the Field

• Why an Effective Legal Framework
• To avoid abuse and influence peddling
• creates a level playing field for inter party
  competition
• empower voters through rules on disclosure
• the strengthening of political parties
• to ensure a minimum of responsibility
• Griner and Zovatto

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Priorities of Political Party Finance Regulatory
Regime

• Regulatory Frameworks need to answer the
  following
• How to maintain the autonomy of political
  parties,
• How to enforce relevant regulations
• transparency in the sourcing and use of parties
  financial resources
• effective electoral competition and promote
  political equality
• limit the influence of money on elections

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Best Practice Ensuring that Electoral contest
are Fair and Promote Political Equity

• The constitutionalisation of political parties
• Access to public financing, whether direct or
  indirect adjustable depending on the state of
  the economy
• A mixed regime of public finance
• Access to the media
• Prohibitions and restrictions on private funds
• Accountability of political parties and
  candidates reporting in a timely manner
• Full disclosure
• Sanctions against violations
• Independent oversight agency

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More Aspects Best Practice Political Equity and
Fairness

• Limits on private financing
• Adequate sources of finance and resources for
  regulatory bodies.
• attention to timing of disbursement to ensure
  equity
• Provisions directly targeting access to the media
• Gender equity considerations
• Thresholds established to receive government
  funding
• Fluidity in public funding based on state of the
  economy
• Avoid over regulation

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Types and Methods for Public Financing (Types,
amounts, Distribution Formulas)

• General Pillars of Public Financing
• direct subsidies for electoral expenditure
• subventions whether direct or indirect

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Types and Methods for Public Financing (Types,
amounts, Distribution Formulas)

• Direct Funding Direct Subsidies
• Money
• bonds
• loans

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Types and Methods for Public Financing (Types,
amounts, Distribution Formulas)Cont

• Modalities
• funding exclusively for the day to day operations
  of the political parties none
• funding for elections only Bolivia, El
  Salvador, Honduras, Nicaragua, Uruguay
• a combination of the two Argentina, Brazil,
  Colombia, Costa Rica, Dominican Republic,
  Ecuador, Guatemala, Mexico, Panama and Paraguay.

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Types and Methods for Public Financing (Types,
amounts, Distribution Formulas)Cont

• Indirect Funding Indirect subsidies
• infrastructure,
• tax exemptions
• access to the media especially television
• institutional support
• assistance with transportation
• assistance to parliamentary groups

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Types and Methods for Public Financing (Types,
amounts, Distribution Formulas)Cont

• Distribution Public Monies
• Four modalities
• Equal Shares
• Proportional to the number of votes cast -
  Bolivia, Brazil, Colombia, Costa Rica, El
  Salvador, Guatemala, Honduras, Nicaragua, Uruguay
• Proportional to the number of votes cast and
  parliamentary representation Paraguay
• Proportional to the number of votes cast and
  equally - Argentina, Dominican Republic, Panama,
  Mexico, Ecuador

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Status in Selected Countries
Country Legal Barrier
Argentina participation in preceding elections
Bolivia participation in preceding elections
Brazil participation in previous elections
Uruguay at least 500 votes, participation in internal and primary elections
Honduras None
Paraguay None
El Salvador None
Panama 5 of valid votes cast
Costa Rica 4 of votes cast or 1 parliamentary representative
Mexico 2 of votes cast
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Disbursements

• Three Time Lines for Disbursements
• Full disbursement before the elections
• Disbursement after the elections
• A mixed system embracing elements of the two
  above systems dominant tendency

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Disbursement of FundsSelected Countries
Country Timing
Argentina Before Elections
Bolivia Before and After
Dominican Republic Ditto
El Salvador Ditto
Guatemala Ditto
Honduras Ditto
Brazil After
Nicaragua After
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Regulatory Dilemmas for Private Financing
Restrictions on Sources and Spending Limits

• Prohibitions and Restrictions
• Most countries provide for prohibitions on
  private contributions
• from sources such as
• - foreign governments - Colombia and Nicaragua
  no such restriction
• - institutions or individuals
• - Government contractors all but Bolivia,
  Chile, Colombia, Costa Rica
• - anonymous donations all but Chile, Dominican
  Republic, Paraguay
• - social organisations such as trade unions,
  special interest groups, religious groups etc.-
• only Argentina, Bolivia, Brazil, Paraguay
• limitations on individual contributions.
  Argentina, Brazil, Chile etc.

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Modalities of Private Funding

• membership dues
• donations from special interests groups
• individual donations
• credit/loans
• party fund-raising activities

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Dilemmas

• Establishing a realistic limit
• Numerous restrictions may encourage creative
  accounting

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Perspectives of and Particular Challenges for the
Commonwealth Caribbean in Terms of Adopting a
Regulatory Framework

• Aspects of the Regulatory Framework in the
  Caribbean
• Indirect Subsidies
• access to the State run media
• subsidies to parliamentarians, St. Lucia,
  Barbados
• Direct public subsidy in Barbados only.

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Aspects of the Regulatory Framework in Antigua
and Barbuda Post 2001

• disclosure of contributions exceeding
  EC25,000.00
• prohibits anonymous contributions exceeding
  EC5,000.00
• authorised audits by the EC
• sanctions for non compliance including
• - Penalty of EC2,000.00 a day

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Status of Regulatory Regime in the Commonwealth
Caribbean
Country Disclosure By Party By Candidate Contribution Limits Spending Limits
Antigua Barbuda Yes No Yes No No
Bahamas No No No No No
Barbados Yes No Yes No Yes
Belize No No No No No
Dominica No No No No No
Grenada No No No No No
Guyana Yes No Yes Yes Yes
Jamaica Yes No Yes No Yes
St. Kitts/Nevis No No No No No
St. Lucia No No No No No
St. Vincent The Grenadines No No No No No
Trinidad Tobago Yes No Yes No No
Total 47.67/52.33 100.00 47.67/52.33 8.33/91.67 25.00/75.00
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Anticipated Difficulties of Adopting an Effective
Regulatory Framework

• Small population sizes, ranging from 2.5 million
  in Jamaica, to 50,000 in
• St. Kitts-Nevis
• Reluctance on the part of donors to have their
  names published for fear of victimisation
• A political culture of clientelism and patronage
• Small size of party membership
• Small GDPs, financial and economic
• difficulties make public funding difficult
• Constitutional amendment is required
• Lack of a critical mass
• Resistance by politicians

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• Thank You For Listening to
• The Presentation
• and Do Enjoy
• The Training Seminar!