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EUROPEAN COMMISSION FOR DEMOCRACY THROUGH LAW
(VENICE COMMISSION)
in co-operation with
The Legal Policy Research Centre
(LPRC) in Kazakhstan
conference
on
“international
standards of financing of political parties and election campaigns”
Okan Intercontinental Hotel, Astana, Kazakhstan
1 December 2008
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REPORTS
TABLE OF CONTENTS
Opening remarks
Mr Gianni Buquicchio 3
Opening
remarks
Mr Alessandro Liamine 6
European Standards on Funding of
Political Parties and Election Campaigns Mr James
Hamilton 8
Financing of political parties and
electoral campaigns in France - The role of the French National Commission on
campaign accounts and Political Party Financing Ms
Barbara Jouan. 15
Financing of Election Campaigns in
the New European Union Member States (mostly countries of Central and Eastern
Europe)
Mr Evgeni Tanchev. 22
The legislative framework on the
financing of political processes: Some aspects of Ukrainian
experience
Mr Sergei Kalchenko. 50
“Mechanisms to Ensure that New
Parties Enter the Political Arena and Compete under Fair Conditions with the
Better-established Parties” – A Case Study of Poland Mr
Sergush Tzhechiak. 61
Programme of the conference. 66
Mr Gianni Buquicchio
Secretary of the Venice Commission
Dear President, ladies and
gentlemen,
It is a pleasure for me to welcome
you on the occasion of this Conference on international standards on financing
of political parties and election campaigns.
The European Commission for
Democracy through Law – Venice Commission – has been co-operating with Kazakhstan for more than a decade. Kazakhstan is an observer State of the Venice
Commission. Our co-operation has been developing constantly and I am
particularly glad that we moved from general exchanges of views to a more focussed
co-operation on concrete issues. I am sure that this positive example will be
very useful and inspire neighbouring countries who wish to establish good co-operation
with the Venice Commission and other European Institutions.
From our side, we believe that Kazakhstan is a reliable partner open to a frank and sincere dialogue and we are looking forward to Kazakhstan’s chairmanship of the OSCE in 2010. Kazakhstan has conducted a number of
reforms, however, there are still many issues to be dealt with and I hope that
we will co-operate in these areas in the future. I also think that civil
society has an important role to play in the process.
Today we will have an opportunity to
discuss the complex issue of financing of political parties and election campaigns,
which is challenging for any democratic country. It includes a number of
problems, such as sources of financing of political parties and electoral
campaigns, respecting the principle of equality when distributing
public funding, fighting against corruption and many other issues.
It is true that in many
countries the main legislation governing the funding of political parties was
passed only very recently. As a result, there is still fairly little case-law –
in particular from constitutional authorities – in this field, and public
authorities rarely take initiatives to clarify what may not be clearly
regulated by existing legislation.
The Venice Commission
has been working on legal questions concerning political parties for over a
decade. At the outset, this work was part of the general assistance activities
that included drafting constitutions, constitutional laws and other
legislation, provided by the Commission to emerging democracies in Eastern Europe.
Since the end of 90s this
work became focused on more specific problems of legislation on political
parties below the level of constitutions. In 1998 the Commission adopted its
first comprehensive report on the prohibition of political parties and
analogous measures. This report was followed up with guidelines and an
explanatory report in 1999.
Since then the
Commission has adopted a number of texts on political parties, notably:
1) Guidelines and Report on the Financing
of Political Parties;
2) Guidelines and Explanatory Report on Legislation on Political
Parties: some specific issues;
3) Report on the Participation of Political
Parties in Elections.
The
Venice Commission has also adopted a number of opinions on legislation on
political parties in countries such as Armenia (CDL-AD(2003)005), Azerbaijan (CDL-AD(2004)025), Moldova (CDL-AD(2003)008), and Ukraine (CDL-AD(2002)017).
Although
these texts are not binding, they provide a comprehensive list of standards and
possible best practices that exist in Europe, such as:
1) The right of an individual or a
group of individuals to create an association with the aim of participating in the
political life of the country, is an integral part of the human rights list
protected by the European Convention on Human Rights (ECHR), the UN Convenant
on Civil and Political Rights of 1966 and other international instruments;
2)
Any
activity requirements for political parties, as a prerequisite for maintaining
the status as a political party and their control and supervision, have to be
assessed by the same yardstick of what is ‘necessary in a democratic society’;
3)
Any
interference of public authorities with the activities of political parties,
such as, for example, denial of registration, loss of the status of a political
party if a given party has not succeeded in obtaining representation in the
legislative bodies (where applied), should be motivated, and legislation should
provide for an opportunity for the party to challenge such decision or action
in a court of law;
4)
In
order to ensure equality of opportunities for the different political forces,
electoral campaign expenses shall be limited to a ceiling, appropriate to the
situation in the country and fixed in proportion to the number of voters
concerned, etc.
The constant aim is to
meet the requirements inherent in the inevitable cost of democracy. If the
democratic process is to function well, it is necessary both to limit, as far
as possible, and eventually even to reduce expenditure by political parties. If
there is no reasonable ceiling for expenditure, there is a risk of corruption
and other related undemocratic practices. At the same time, equality between
parties has to be safeguarded, but this principle often appears to be
jeopardised in favour of mainstream parties, which – because they obtain the
highest scores and the largest number of seats – are allocated considerable
public subsidies.
I would also briefly like
to address the issue of financing of electoral campaigns. Free elections and
freedom to associate in political parties are closely linked in any democracy,
since political parties exist for the purpose of winning political power
through free and fair elections. In a number of its opinions and research
projects, the Venice Commission has examined the role of political parties in a
democratic society and their participation in the electoral process of specific
countries.
A number of guidelines that
are useful in the financing of election campaigns form a part of the Code of
Good Practice in Electoral Matters, which was adopted by the Venice Commission
in October 2002.
It is usually accepted that
electoral systems, and party systems, greatly depend on specific – historical,
cultural, political, social - national factors. In this context we should not forget the essential role played by civil
society. I am pleased that an important number of representatives of the Kazakh
non-governmental organisations are taking part in this Conference today.
We are glad that our discussions
are taking place at the moment when possible amendments to the Kazakh
legislation on financing of political parties and election campaigns are being
discussed by Parliament and civil society. I am sure that our exchange of views
here today will not only concentrate on different national experiences, but
will also help the drafters of the law in identifying best examples and best
practices in other countries, to take note of the proposals made by the participants
and to include those in their final draft.
Let me remind you that the
Venice Commission is at the full disposal of the Kazakh authorities for any co-operation
on the proposed amendments to the legislation on financing of political parties
and election campaigns.
Ladies and gentlemen,
Before concluding, I
would like to introduce the members of the Venice Commission delegation who
will be participating in this conference:
1) Mr Evgeny
Tanchev, Judge at the Constitutional Court of Bulgaria, Member of the Venice Commission;
2) Mr James
Hamilton, Director of Public Prosecutions, Substitute Member of the Venice Commission, Ireland;
3) Ms Barbara
Jouan, Project manager within the Legal department of the National Commission
on financing of election campaigns and general political financing (CCFP), France;
4) Mr Sergii
Kalchenko, Senior Attorney, Moor & Krosondovych Law Firm, Ukraine.
I would like to thank the Legal Policy Research Centre
and Mrs Tkachenko in particular for co-organising this activity.
Thank you for your
attention.
Mr Alessandro LIAMINE
Regional
political affairs adviser for Central Asia, European Union
European
Commission for Kazakhstan, Kyrgyzstan and Tajikistan
Dear Ladies and Gentlemen,
I would like to warmly thank the organisers for inviting me
at this event and give me the opportunity to say a couple of words on behalf of
the Delegation of the European Commission to the Republic of Kazakhstan.
In my relatively long experience in Kazakhstan, this is the first time that I attend an event aimed at discussing an issue, which is
proper to advanced democracies and which is still a matter of dispute in
national legislations of many countries. Without doubts, this shows to what
extent Kazakhstan is making progress in its transition process towards
democracy and market economy.
It could be argued that a discussion of financing of
political parties is premature in a country that still has to fully develop
democratic institutions, including a truthful freedom of association and a
genuine multi-party system. However, sometimes, in order to achieve greater
reforms, we have to start from some practical issues that affect the daily life
of a building democracy.
Last year, the Constitution of Kazakhstan was amended.
Amongst other changes, the prohibition of State financing of political parties
was lifted. This year, a few weeks ago, the Government of Kazakhstan presented
a package of amendments, amongst other things, to improve the election
legislation and the legislation on political parties. In this context,
discussions on State financing of political parties have appeared. That is why
I consider this conference particularly timely and well placed to meet the
necessity to study international standards in financing political parties and
define the best option suitable for Kazakhstan, taking into account its
peculiarities.
It must be noted that the issue of funding of political
parties is a relatively recent phenomenon and that in many countries of
advanced democracy the specific legislation was passed only a few years ago.
Therefore, there are not established international standards able to be simply
transposed into the national legislation. There are many aspects open to
discussion: whether parties should be helped only during the election period or
on a permanent basis; whether the funding should be distributed on the basis of
the sits won in the Parliament or on the basis of percentage of votes gathered;
whether the public funding should exclude private funding or allow some mixed
systems; and, last but not least, how to determine the ceiling of political
parties' funding as well as the mechanisms to control the accounts of political
parties.
There are different approaches and many nuances. However,
these are all aimed at reaching the same goals, which are:
- The establishment of an equitable political competition;
- The independence from private capitals that can distort
political competition;
- And transparency of financial reports of political parties
and of their activities.
In conclusion, I would like to particularly praise the
existing cooperation between the Venice Commission of the Council of Europe and
the Republic of Kazakhstan. During these last two years much has been done,
including the release of an official Opinion of the Venice Commission on how to
improve the Ombudsman Institution of Kazakhstan. The presence today of a
numerous delegation of the Venice Commission headed by its Secretary General
Gianni Buquicchio shows to what high extent Europe wants to be engaged with Kazakhstan. The European Commission stands ready to further support this cooperation.
However, to this end, it would be much appreciated to have more often tangible
signs from the Kazakhstan side of its will to strengthen this cooperation. That
is why I take this opportunity to call on behalf of the Delegation of the
European Commission on the Constitutional Council, the Ombudsman, the
Government and its single Ministries, the Parliament and the Presidential
Administration of the Republic of Kazakhstan – all able to individually seize
the mechanisms of the Venice Commission – to take advantage of the outstanding
legal expertise of the Venice Commission and use it to develop national
legislation taking full account of existing practice and open a new era of
closer cooperation with the Council of Europe.
I trust that today's conference will enable Kazakhstan to take a step forward in this direction.
I thank you very much for your attention and wish to all of
you fruitful discussion.
Mr James Hamilton
Director of Public Prosecutions, Ireland
Introduction
Regulations on political parties and elections vary greatly
from one country to another. They are, of course, varied because of the
different historical experiences of different countries as well as the
differences in social conditions within them. National history and political
traditions in this field tend to be matters of national pride and to be
resistant to outside change.
In many of the old democracies of Europe regulations
concerning political funding are a recent phenomenon. Indeed, in some countries
such as Switzerland the matter remains unregulated. Traditionally, the funding
of political parties was left to private initiative. However, in recent years,
as a result of scandals in a number of western democracies, classically
involving a trade off between large donations to political parties in return
for the corrupt awarding of contracts, there has been an increased tendency
towards the provision of state funding for political activities together with
limitations on the amount of private donations which may be made and
requirements for transparency and publication concerning such donations. It is,
of course, the case that modern methods of communication have made elections a
much more expensive process in recent times.
Despite the fact that political parties are the lifeblood of
democracy, it is also remarkable how frequently constitutions make no express
mention of political parties. Of course, their activity is regulated by
provisions relating to freedom of expression and assembly and the right to
participate in democratic life.
Because regulation of the activities of political parties
and questions concerning their financing is a relatively new phenomenon, there
is very little case law in the international tribunals such as the European
Court of Human Rights as well as in national courts.
The European Convention on Human
Rights
The starting point for any consideration of standards must
be Articles 10 and 11 of the European Convention of Human Rights which deal
with freedom of expression and freedom of assembly and association as well as
Article 3 of the (First) Additional Protocol to the Convention which guarantees
the right to free elections. In the context of Article 11 the European Court of
Human Rights has often referred to the essential role played by political
parties in ensuring pluralism and democracy. As the court pointed out in The
United Macedonian Organization Ilinden & Others v Bulgaria (application no 59491/00) (at paragraphs 60-61):
“60. Freedom of
expression constitutes one of the essential foundations of a democratic society
and one of the basic conditions for its progress and for each individual’s
self-fulfillment. Subject to paragraph 2 of Article 10, it is applicable to not
only “ information” or “ideas” that are favourably received or regarded as
inoffensive or as a matter of indifference, but also to those that offend,
shock or disturb. Such are the demands of pluralism, tolerance and
broadmindedness without which there is no “democratic society” ….
61.
Consequently,
the exceptions set out in Article 11 are to be construed strictly; only
convincing and compelling reasons can justify restrictions on freedom of
association. In determining whether a necessity within the meaning of Article
11 paragraph 2 exists, the states have only a limited margin of appreciation,
which goes hand in hand with rigorous European supervision embracing both the
law and the decisions applying it, including those given by independent courts
….”
Consequently, any limitations on the rights of political
parties to raise funds must be prescribed by law and must be such as are
necessary in democratic society and any limitations are to be strictly
construed. Such limitations must be proportionate.
Standard Setting Instruments
Despite the variety of systems and practices in different
states, there have been a number of attempts to set common standards in the
area of financing of political parties and elections. Firstly, there is the
Council of Europe’s Recommendation Rec (2003) 4 of the Committee of Ministers
on Common Rules against corruption in the funding of Political Parties and
Electoral Campaigns of 8 April 2003.
Secondly, the European Commission for Democracy through Law
(the Venice Commission) has been working on legal questions concerning
political parties for more than a decade and has adopted a series of
guidelines. The first of these dealt with the prohibition of political parties
and analogous measures. The
second set of guidelines, adopted in 2001, dealt with the financing of
political parties. A third
set of guidelines was issued under the title of the Code of Good Practice in
Electoral Matters which was adopted in October 2002.
A fourth set of guidelines adopted in March 2004 dealt with a number of
specific issues including registration of political parties, activity
requirements for political parties, the involvement of public authorities with
the activities of political parties, and the membership in political parties of
foreign citizens and stateless persons.
Two other publications of the Venice Commission are worth
mentioning: in March 2006 the Commission adopted a report on the participation
of political parties in elections and at the same session it adopted an opinion
on the prohibition of financial contributions to political parties from foreign
sources.
In addition the Venice Commission has written numerous
opinions on specific regulations concerning political parties and elections in
various member states of the Council of Europe.
The European Union has also addressed the issue of the
funding of political parties at the level of a regulation governing political
parties at the level of the European Parliament and the rules regulating their
funding.
The NGO Transparency International has published Standards
on Political Funding and Favours adopted in 2005.
Finally, the United Nations Convention against Corruption
calls on states “to enhance transparency in the funding of candidates for
elected public office and, where applicable, the funding of political parties.
Issues concerning the funding of
political parties and election campaigns
I propose to summarize some of the principal issues which
arise in relation to the funding of political parties and election campaigns
and refer to the approach adopted in the various instruments already referred
to.
Limitations on Private Funding
The first question is to what extent limitations on private
funding of political parties are permissible.
The Council of Europe recommendation begins by stating that
citizens are entitled to support political parties. However, it goes on to
provide that states should ensure that any support from citizens does not
interfere with the independence of political parties. It provides that measures
taken by state’s governing donations should provide specific rules to avoid
conflict of interests, to ensure the transparency of donations and avoid secret
donations, to avoid prejudice to the activities of political parties and to
ensure their independence. It adds that states should provide that donations to
political parties are made public, in particular, donations exceeding a fixed
ceiling, that states should consider the possibility of introducing rules
limiting the value of donations to political parties and adopt measures to
prevent established ceilings from being circumvented.
The Venice Commission guidelines on the financing of
political parties contain similar provisions. The right of political parties to
receive private financial donations is asserted, but the guidelines also
provide that limitations may be envisaged, including a maximum level for each
contribution, a prohibition of contributions from enterprises of an industrial,
or commercial nature or from religious organizations, and prior control of
contributions by members of parties who wish to stand as candidates in
elections by public organs specialized in electoral matters. Again, it requires
that the transparency of private financing should be guaranteed and that to
achieve this aim each political party should make public the annual accounts of
the previous year, which should incorporate a list of all donations other than
membership fees. It proposes the recording and making public of all donations
exceeding an amount fixed by the legislature.
Transparency International’s Standards contain similar
provisions. They provide as follows:
“political parties,
candidates and politicians should disclose assets, income and expenditure to an
independent agency. Such information should be presented in a timely fashion,
on an annual basis, but particularly before and after elections. It should list
donors and the amount of their donations, including in kind contributions and
loans, and should also list destinations of expenditure. The information should
be made publicly available in a timely manner so that the public can take
account of it prior to elections.”
Despite this, the Transparency International policy position
notes that surprisingly few countries have good disclosure laws. It refers to a
study by USAID which finds that of 118 countries studied, 28 had no disclosure
laws and only 15 required parties and candidates to disclose income and
expenditure accounts and disclose the identity of donors to political parties.
Public Funding
A corollary of placing limitations of private funding is
that in order to enable political parties to carry out their activities some
public funding would be required. The Council of Europe Guidelines speak of the
state’s entitlement to support political parties, and goes on to provide that
the state “should” provide support to political parties. This support should be
limited to reasonable contributions and may be financial. Objective, fair and
reasonable criteria should be applied regarding the distribution of state
support. As with private support any state support should not interfere with
the independence of political parties and the same principles on donations
which apply to private donations should also apply to public donations
concerning avoiding conflict of interests, ensuring transparency and avoiding
prejudice to the activities of political parties.
The Venice Commission guidelines on the financing of
political parties require public financing to be aimed at each party
represented in parliament. The guidelines also provide that in order to ensure
the equality of opportunities for the different political forces, public
financing could be extended to political bodies representing a significant
section of the electoral body and presenting candidates for election. The
criteria for the level of financing should be objective. The financing of
political parties through public funds should be on condition that the accounts
of political parties are subject to control by specific public organs (for
example by a court of audit). States are to promote a policy of financial
transparency of political parties that benefit from public funding.
The European Union set certain minimum levels of support as
a condition of the recognition of political parties at European Parliament
level. These require parties to be represented in at least one quarter of
member states by members of the European Parliament or the national parliaments
or regional parliaments, and to have received in at least one quarter of the
member states at least three per cent of the votes cast at the most recent
European Parliament election. They must observe in their programme and
activities the principles on which the European Union is founded, namely the
principles of liberty, democracy, respect for human rights and fundamental
freedoms and the rule of law. Fifteen per cent of funding is to be distributed
in equal shares between political parties and 85 per cent is to be distributed
among those who have elected members of the European Parliament in proportion
to the number of such elected members. It is a condition of the receipt of
funding that political parties must publish their revenue and expenditure and a
statement of its assets and liabilities annually, must declare their sources of
funding by providing a list specifying the donors and donations which exceed
€500, must not accept anonymous donations, donations from the budgets of
political groups in the European Parliament or donations from any undertaking
over which the public authorities may exercise directly or indirectly a
dominant influence by virtue of their ownership of it, their financial
participation therein, or the rules which govern it, and may not accept
donations exceeding €12,000 in any year from any one donor.
Transparency International proposes that careful
consideration should be given to the benefits of state funding of parties of
candidates and to the encouragement of citizens participation through small
donations and membership fees.
Funding for elections only or for
political parties in general?
The question arises whether parties should be assisted with
public funding solely during election periods, to enable them to face the high
costs involved in an election campaign, or whether some form of regular
permanent funding of political parties should be introduced. The matter is
discussed in the report by M. Jacques Robert which is annexed to the Venice
Commission’s Guidelines on the Financing of Political Parties. He points out
that the option of funding only election campaigns merely aims to avoid
emptying the party’s coffers every time an election takes place but the
thinking behind it is to regard political parties as private organizations
which have a free hand in raising the funds necessary for their day-to-day
functioning but which require assistance during the holding of elections. Under
the second approach, which funds political parties at all times, parties are
regarded as officially recognized bodies, since they contribute to the state’s
ongoing democratic function, and it is therefore reasonable that the state
should help to support their existence. Both models are found in democratic
states although M. Robert notes that most of the major European democracies
follow the second approach.
Limitation of Election Expenditure
The Council of Europe’s Recommendation Rec (2003)4 provides
that states should consider adopting measures to prevent excessive funding
needs of political parties, such as establishing limits on expenditure on
electoral campaigns. The Venice Commission Guidelines on the Financing of
Political Parties provide that electoral campaign expenses should be limited to
a ceiling, appropriate to the situation in the country and fixed in proportion
to the number of voters concerned. They also propose that the total amount of
private contributions should not exceed the stated ceiling. There should be a
possibility of prohibition of contributions from enterprises of an industrial
or commercial nature or religious organizations.
Prohibition of Foreign Funding
Many states, though not all, prohibit financial
contributions to political parties from foreign sources. There are historic
reasons for this. In the period between the two world wars both Nazi Germany
and the Soviet Union financed political parties in other countries which
supported fascism or communism respectively. During the Cold War both the USSR and the United States frequently gave financial support to organizations which they saw as
supporting their particular view of the world. In addition, some states which
had ethnic minorities were frequently concerned about the possibility of
foreign donations being used to undermine their national position. In other
states, there are no prohibitions presumably because the issue simply never
arose.
On 17-18 March 2006 the Venice Commission adopted an opinion
on the Prohibition of Financial Contributions to Political Parties from Foreign
Sources. An analysis of the Member States of the Council of Europe showed that
28 of them had a ban on such contributions whereas 16 did not. The Guidelines
on the Financing of Political Parties adopted by the Venice Commission in 2001
stated that donations from foreign states or enterprises must be prohibited. However,
the Venice Commission does not consider that this should prevent financial
donations from nationals living abroad.
The Council of Europe Recommendation (2003)4 provides that
states should specifically limit, prohibit or otherwise regulate donations from
foreign donors.
Transparency International has also proposed that “
consideration should also be given to limiting corporate and foreign support,
as well as large individual donations”.
In its opinion on the Prohibition of Financial Contributions
to Political Parties from Foreign Sources, with regard to the question as to
whether such a prohibition can be considered “necessary in a democratic
society”, the Venice Commission concluded that each individual case had to be
considered separately in the context of the general legislation on financing of
parties as well as the international obligations of the state concerned and
among these the obligations emanating from membership of the European Union. While
it pointed out the historical situation which had existed between the two world
wars and during the Cold War, it also pointed to the argument for a much less
restrictive approach in modern Europe given the cooperation of political
parties within the many supranational organizations and institutions of Europe
today, such cooperation being “necessary in a democratic society”. They
commented that it was not obvious that the same could be said about the raising
of obstacles to cooperation by restricting or prohibiting reasonable financial
relations between political parties in different countries or at the national
level on the one hand and at the European or regional level on the other. However,
the Commission pointed to the reasons which could be used to justify such
prohibition, such as financing used to pursue aims not compatible with the
constitution and the laws of the country, or which undermined the fairness or
integrity of political competition or could lead to distortions of the
electoral process or posed a threat to national territorial integrity.
The Keeping of Accounts and
Monitoring of Compliance with Financial Standards
Recommendation Rec (2003)4 requires the keeping of records
of all expenditure on all electoral campaigns and of the keeping of proper
books and accounts of political parties. All donations should be recorded and
if over a certain value identified in the records. These accounts should be
presented regularly and at least annually to an independent authority which
should monitor them. This should include supervision over the accounts of
political parties and the expenses involved in election campaigns as well as
their presentation and publication. Infringement of rules should be subject to
effective, proportionate and dissuasive sanctions.
The Venice Commission’s Guidelines are to a similar effect. In
particular they regard proportionate sanctions as being the loss of all or part
of public financing for the following year. They also envisage the possible
reimbursement of the public contribution, the payment of a fine or another
financial sanction or the annulment of an election. Transparency International
recommends that:
“Public oversight bodies must
effectively supervise the observance of regulatory laws and measures. To this
end, they must be endowed with the necessary resources, skills, independence
and powers of investigation. Together with independent courts, they must ensure
that offenders be held accountable and that they be duly sanctioned. The
funding of political parties with illegal sources should be criminalized.”
Corruption
One should not lose sight of the fact that regulations
concerning the public and private financing of political parties and elections
do not exist in a vacuum for their benefit alone, but exist largely to prevent
corruption by enabling private interests to purchase influence within the
political system. It should be borne in mind that regulations concerning
financing are only a part of the solution to this problem and in themselves may
not be effective to achieve the necessary aim. Transparency International
Standards on Political Funding and Favours draws attention to this fact and
provides that donations to political parties, candidates and elected officials
should not be a means to gain personal or policy favours or buy access to
politicians or civil servants. They draw attention to the need for adequate conflict
of interest laws that regulate the circumstances under which an elected
official may hold a position in the private sector or a state owned company,
the need for periodic declarations of assets held by parliamentarians and party
officials and their families, the need for time bars against elected
politicians moving into corporate positions, and clear immunity rules all of
which are described as “necessary to limit the influence of business on
government.”
(CNCCFP)
Mrs Barbara Jouan
Legal service – Project Manager
CNCCFP
Mr President, Ladies, and Gentlemen,
It’s a great pleasure for me to be
with you today.
To start with, I would like to
thank, on behalf of the President of the National commission on Campaign
Accounts and Political Party Financing, the Venice Commission and the Legal
Policy Research Centre in Kazakhstan for having organized this conference and
invited a member of my commission.
I’m going to try to explain the
financing of political parties and electoral campaigns in France through my experience of the electoral issues at the Commission in charge of
controlling the financing of French political life.
After two decades of
political-financing scandals involving French political parties and
politicians, the Government decided to react and to undertake a reform of the
political life financing.
Thus, at the end of the nineteen eighties,
the Legislature sought to make the mode of political financing more transparent
and to end the endemic corruption which was inherent in French political life.
One organism is at the heart of the system that has been established: the
Commission nationale des comptes de campagnes et des financements politiques
(the National Commission on Campaign Accounts and Political Financing or
CNCCFP), created by a law dated 15 January 1990.
The Commission comprises 9 members:
-
three
from the Council of State (Conseil d’État)
-
three
from the Final Court of Appeal (Cour de Cassation)
-
three
from the Audit Court.(Cour des comptes).
They are appointed by a decree of
the Prime Minister on recommendation of their respective Vice-Chairman or First
Chairman.
The President of the Commission is
elected by the members and he names the Vice-President.
The 9 members are appointed for 5
years and cannot be replaced during that period.
The Commission is an independent
administrative body which has a budget fluctuating between €3and €5 million
depending on the year.
Its services together have 33
permanent agents including a legal service in charge of the electoral
complaints.
The decisions of the commission have
been subject to litigation since 2004 and can be appealed to the electoral
judge, which is different in function of the election.
The Commission is charged with two
major responsibilities:
-
Monitoring
the campaign accounts of candidates elected by direct universal suffrage –
which excludes the Senatorial elections - within constituencies of at least
9,000 inhabitants;
-
Verifying
that political parties respect the regulations relative to their financing.
Financing of electoral campaigns
The control of the campaign accounts
is the main part of the Commission’s activity.
I. The legislative origins and
evolution.
A. Origins
The Law of 11 March 1988 established
rules applicable to the verification of electoral campaign finances for the
first time. Many have seen this first Law as a pilot.
After which, the Law of 15 January
1990 organized the three basic rules of the financial control of political
life:
-
the
limitation of candidates’ expenses
-
the
reimbursement of candidates’ campaign expenses
-
the
public subsidy to the political parties which meet the financial requirements.
These provisions have been
incorporated in the Electoral Code, which is the reference for the Commission.
The Commission has been created by
this law at the same time.
B. Evolution
After these two decisive Laws, the
French legislator has passed different Laws which are come to improve the
electoral architecture.
The Law of 19 January 1995 banned
donations by legal persons.
The Law of 11 June 2000 instituted
the gender principle in the composition of candidates’ lists. Since then, the
non-respect of this obligation has generated the reduction of the Public Funds
for the political parties which didn’t fulfil this obligation.
Since the Law of 3 December 2003,
the Commission has been an Independent Administrative Body. That means that its
decisions can now be appealed to the electoral judge – which is different in
regard of the elections – and that the Commission is financially independent.
Obviously, there’s a check on this
financial independence: the budget of the Commission is voted by the
parliamentarians and included in the Interior Ministry’s budget.
Finally, the Law of 5 April 2006 has
transferred the financial control of the Presidential Election from the
Constitutional Council to the Commission.
We can sum up the spirit of those
laws by three main points:
-
Money
shouldn’t determine the outcome of the battle and favour the richest candidate,
that’s why the expenses are limited;
-
A
candidate mustn’t be dependent on a generous donor, that’s why the donations
from natural persons can’t exceed a certain limit and donations from legal
persons are forbidden;
-
The
State reimburses the electoral expenses to counterbalance the obligations put
on candidates.
II. The necessity of the financial
proxy
Since 2003, each candidate must have
appointed a financial proxy who must be registered with the relevant prefecture
and who must open a unique bank account in which all the final transactions for
the election are to be recorded.
All the incomes must go through this
special account and all the expenses must be paid by the financial proxy.
The non respect of this obligation
can generate the rejection of the candidate’s campaign account.
The financial proxy is in charge of:
-
Opening
a special bank account;
-
paying
all the expenses;
-
collecting
all the incomes;
-
delivering
a receipt to the donors and ensuring that a single natural person didn’t give
more than €4,600 and that there are no donations from legal persons;
-
choosing
a chartered accountant who has to certify the campaign account;
-
ensuring
that there are no incompatibilities between the status of financial proxy,
candidate and chartered accountant;
-
Sending
the campaign account to the commission by the end of a period of 2 months after
the election.
III. The supervision of revenue
A candidate can finance his/her
electoral campaign in different ways:
-
He
can finance by himself his campaign, either by his personal funds or by a loan.
In any case, this income will be considered by the Commission as personal funds
and as the base of the public reimbursement;
-
He
can get a donation from his political party – if he is endorsed by one, knowing
that candidacy is free in France in accordance with international commitments,
meaning that you don’t have to be presented by a political party to be
candidate – and in that case the donation is not eligible for public
reimbursement;
-
Finally,
he can have donations from natural persons – here also, the source of financing
is not eligible for public financing.
IV. The limitation of expenses
For each constituency, there’s a
ceiling on expenses which differs with the kind of election and the population
of the constituency.
This ceiling is readjusted each 2 or
3 years by a coefficient which takes into account inflation. For instance, the
ceiling of expenses for the last Presidential election was for:
-
the 1st
round: more than €16 million
-
the 2nd
round: almost €22 million
Exceeding the ceiling generates automatically the rejection of the campaign account by the Commission.
It’s important to underline that the
official campaign – which includes the ballot papers and the posters displayed
on designated boards – is not taken into account in the ceiling on expenses.
V. The control of the campaign
accounts by the Commission
The Commission applies the principle
of equal treatment of candidates whatever the candidates’ results.
The monitoring of the campaign
accounts by the commission is divided in three distinct parts:
-
the
Commission assesses the electoral character of the expenses of the candidates;
-
the
Commission assesses the refundable character of the expenses of the candidates;
-
the
Commission delivers a decision for each candidate;
The definition of an electoral
expense has been given by the Council of State as the expenses which have as
their aim obtaining votes.
Moreover, the expense must have been
engaged by the candidate or with his agreement.
Since then, the Commission and the
electoral judges have elaborated a complex and important jurisprudence based on
that definition.
Thus, the Commission and the
electoral judges can estimate that some expenses are personal rather than
electoral, such as the Constitutional Council did in 2002 with Francois
Bayrou’s suits.
The Council decided that out of
€42,000 of expenses for suits, only €5,000 presented an electoral character.
It’s obvious that the Commission and
the electoral judges have a broad margin of appreciation.
The Commission also controls the
refundable character of the electoral expense.
It’s the way the Commission found
not to reimburse gifts to the voters, which used to be a widespread and usual
practice in France. Indeed, the Commission refused the reimbursement of the
expenses that are considered as vote buying.
It’s a position which can easily be
criticized because there’s no solid jurisprudence about that. But so far none
of the candidates whose campaign account has been reviewed by the Commission
has lodged a complaint with the electoral judge. The options are open though.
The Commission works with almost 200
reporters who have to undertake the first control of the campaign accounts.
Then, the accounts are sent back to
the legal service of the Commission and there almost 20 lawyers are in charge
of the 2nd control and the harmonisation of the decisions that the
Commission has to deliver.
Once campaign accounts have been
analyzed, the Commission may come to one of the following decisions:
-
The Commission
approves the campaign accounts;
-
The Commission
grants approval subject to adjustments, notably when expenses undertaken by the
candidate are not related to the electoral process;
-
The commission
rejects the accounts due to non-conformity with legislative regulations (no audit by chartered accountant, account in deficit, spending limit exceeded, or a donation from a
legal person...).
The Commission may also penalize a
candidate for the non-submission or late submission of accounts.
In the case where an election has
been contested – by another candidate, a voter or the State representative in
the department/region - the Commission has 2 months from the deadline for
submitting the campaign accounts to deliver decisions about all the candidates’
campaign accounts in this constituency.
In the other cases, the Commission
can deliver its decisions within a period of 6 months.
The decisions of the Commission have
some consequences.
-
Rejected
accounts, accounts that have not been submitted or have been submitted late
will cancel the candidate’s right to reimbursement for campaign expenses, and,
except in the case of Presidential elections, will result in the Commission automatically bringing the matter before the Election judge (Constitutional Council, the Council
of State or the Administrative Tribunal), who may pronounce the candidate
ineligible.
-
Decisions
concerning adjustments may reduce the total reimbursement due to the Candidate.
The Candidate may contest the
Commission’s decision through an automatic right of appeal before the
Commission itself or through a judicial appeal before the Council of State.
-
Candidates in
Presidential elections may appeal the Commission’s decisions to the Constitutional Court within one month of receiving notification of the decision. The
sanction on ineligibility is not applicable to a presidential Candidate whose
account has been rejected.
VI. The reimbursement of candidates’
campaign expenses.
In order to be
reimbursed, a Candidate must meet a certain number of criteria:
-
Must
have respected obligations: appointment of a financial proxy, respect of the
electoral rules, and certification of the campaign account by a chartered
accountant and submission of the campaign account in the legal time;
-
His/her
account must not have been rejected by the commission;
-
Expenses
for which reimbursement is demanded must be relevant to the electoral process;
-
Must
have obtained at least 5% of votes cast, with the exception of Presidential
elections.
Once these criteria have
been met, then the amount reimbursed by the State cannot exceed one of the
three limits set out below:
-
The
amount of electoral expenses reimbursable as stipulated by the Commission;
-
The
amount contributed by the Candidate personally, with any adjustments taken into
account;
-
The
maximum amount allowed by law, equal to half of the upper limit defined by each
constituency;
In the special case of a
Presidential election, the maximum amount is equal to:
-
One
twentieth of the upper limit of electoral expenses applicable to Candidates
during the first round of voting, for those who have received less that 5% of
votes cast;
-
Half
of the upper limit of electoral expenses applicable to Candidates during the
first round of voting, for those who have received at least 5% of votes cast;
-
Half
of the upper limit of electoral expenses applicable to Candidates during the
second round of voting.
Democracy costs money.
Thus, in 2002, the French State paid almost €415 million for the organization
of the presidential and the legislative elections, including €44 million for
campaign expenses.
Financing of political parties
The Commission is also responsible for the control of
political party financing.
There is not a special definition of a political party in France.
Article 4 of the
Constitution of 1958 states that political parties and groupings contest votes
in expressions of universal suffrage. “They are formed, and act, freely.” This
text confers a total freedom of formation and management.
In 1988, for the first
time the Legislature addressed the issue of finance with regard to political
parties, without defining the concept of a political party.
The international
definition of a political party is given by the treaty on the
European Union “Political
parties at European level are important as a factor for integration within the Union. They contribute to forming a European awareness and to expressing the political will
of the citizens of the Union.”
In the absence of a
legal definition of what a political party is, a double jurisprudential
definition has been provided by the Council of State and of the Constitutional
Council regarding the legislation of 1988.
Indeed, the Law of 1988
gave a financial approach of the political parties.
Thus, the electoral
judges have been brought to define the conditions in which a political party
can finance an electoral campaign or another political party, which is,
according to the French understanding of the matter, the main role.
A political party which
is allowed to finance an electoral campaign or another political party is one
which:
-
Benefits from
public aid
-
Or has appointed
a financial proxy (an individual registered at the Prefecture or a financing
company approved by the Commission)
-
And that submits
its accounts to the Commission each year by 30 June, at the latest, of the year
following the financial year under review.
The political party which meets at
least two of these three conditions can thus finance an electoral campaign or
another political party.
The political party or grouping must
respect criteria pertaining to the structure of accounts, which must be closed
each year, audited by two chartered accountants (who must verify their
consistency and the absence of financial contributions by legal bodies).
The control of the commission
regarding political parties’ financial obligations is much less broad than the
one concerning campaign accounts.
Thus, the Commission:
-
Verifies that
parties respect their accounting and financial obligations;
-
Ensures that a
summary of parties’ accounts is published yearly in the Journal Officiel;
-
Sanctions or
vetoes financing companies selected by parties;
-
Issues receipts
for donations for tax purposes and verifies that the relevant conditions are
not violated relative to the Law of 1988;
-
Verifies that
specific obligations are adhered to by the financial consultants (individuals
or financing companies) and if necessary, refuses to issue receipts for
donations;
-
Brings any
matters presenting possible penal violations before the Public Prosecutor.
There are two types of financing:
-
private
financing
-
public financing
The private financing includes:
-
contributions
from the members and elected officials of the political party;
-
donations from
individuals. The amount of a donation can not exceed €7500 per person and per
year. The donation allows the donor to reduce his tax revenue up to 66% of its
amount.
The public financing represents the main part of
political party financing.
There are around 500 political
parties in France. Out of this number, only 250 political parties have to
submit an account to the Commission.
Out of these 250 political parties,
only 50 ones are eligible for public financing.
This direct public financing – which
represents roughly €80 million a year – is divided in half:
-
The first half
is based on the performance of the political parties in the general elections
and represents €40 million of the total. Candidates must have obtained at least
1% of votes cast in at least 50 constituencies in mainland France or at least 1% of votes cast in the constituencies of Overseas Territories. The distribution
of this first half is proportional to the number of votes obtained by each
political party. One vote corresponds to €1.6 and the political parties which
do not respect the gender principle have to pay a fine. For 2008, the political
parties paid almost €5 million in fines for this reason.
o
The presidential
party has received around €35 million and paid a fine of €4 million
o
The main opposition
party has received almost €23 million and paid a fine of €500,000.
-
The second half
of direct public financing is based on the number of the parliamentarians who
assign their support to one of the political party which benefit from the first
half. The reattachment of a parliamentarian corresponds to €45,000.
The public financing is established
for 5 years and each year, the parliamentarians must assign their support one
of the political parties.
Professor E. Tanchev
Judge at the
Constitutional Court of Republic of Bulgaria,
Jean Monnet
Chair in EU Law at New Bulgarian University
Introduction - Elections, Representative Government and
International Standards
Contemporary representative government
evolved from three ideas and social processes - limitation of absolutism,
legitimation of government by popular sovereignty and delegation of power for a
limited period of time by the people to legislative assemblies to be checked by
regular, free, fair and democratic elections.
Today not a single politician or
scholar would contest that any democratic representative government should be
founded on elections.
The triumph of democracy made elected representation as undeniable and
irreversible constellation as the axiom that there can be no taxation without
representation which laid foundations of parliaments and posed limitation on
monarchial sovereignty and raison d'état during the middle ages.
It took centuries in human
civilization to arrive to these axiomatic constitutional principles and by
filling them with democratic content to transform the elections into
cornerstone of procedural legitimation of democratic government.
Democracy, human rights and the rule
of law
have been treated as the three main pillars of European constitutional
heritage.
Introduction of international
standards in the elections is an important democratic safeguard aimed at
preserving the genuine democratic character of representative government.
Enforcing the standards will rule out partisan temptation to distort the
popular vote, which has been present since earliest and most primitive forms of
franchise and electoral procedures.
Ever since antiquity rulers were tempted to take advantage
by electoral abuse to distort the true reflection of voters preferences in
order to ascend to or to prolong their stay in government.
Although deformations went hand in hand even with the most primitive modes of
magistrates selection, the rules that determine the vote cannot in principle
decide the outcome of the election alone and should not be over-exagerrated.
Moreover, the adequate reflection of popular will in the outcome of elections,
exclusion of subversion of majority preferences to minority of representation
in the composition of parliament or in presidential elections should become an
exponent in the history of governmental institutions museum.
Elections have been treated as an
instrument constituting political institutions, particularly, the Parliament
and the Presidents when they are elected by the people and/or as direct
participation of the people in government. If the first – instrumental meaning
is overexposed - the elections are interpreted in pure technical way. The principal merit of
this approach is the emphasis of the linkage between the nature of elections
and the essence of the institutions brought in existence by the elections. The
composition of representative assemblies has depended to some extent to the
type of the electoral system. Political parties in power have been tempted to
adopt an electoral system which might increase their representation in the
political institutions. However, one should not rely on the electoral system to
shape the electoral preferences and translate them into parliamentary seats.
For the mechanism of the elections might distort the measuring of public
preferences and bring a partisan bias to the allocation of parliamentary seats,
but no electoral law based on democratic principles can make a party running
low in the public opinion polls winner of the elections.
Casting the ballots or standing in
elections has been treated as modes of direct participation in government by
the people’s voting rights. Free, democratic, pluralistic and competitive
elections are foundation of modern constitutional regime where government is
legitimated by the consent of the majority of governed. In this train of
thought elections channel people’s preferences like the other modes of direct
democracy - imperative referendum, consultative referendum, popular initiative,
plebiscite, recall, popular veto or ratificatory referendum.
Under the instrumental approach voting
rights have been labeled as a public function or a duty performed by the voters
in order to establish the representative government. Within the context of the
second approach voters are holders of their sovereign rights in the elections
and they are free in the way they might exercise them or abstain from
exercising.
In political theory and legislative
practice the active voting (casting of a ballot) and passive franchise
(standing in elections) has been interpreted as:
-
fundamental political right channeling citizens direct participation in
government,
-
public function founding mode of constituting representative government
on the public good and by being a duty citizens should not refrain from,
-
sui generis political right combining the freedom to take part in
government and the obligation to form the representative institutions.
In the international community efforts to propose coherent
system of standards of democratic elections at supranational level began during
the second half of the 20 century. The importance of free, fair and competitive
elections to sustainable democratic government and human rights in the World
and on the European continent has been firmly acknowledged. However, the
process of consensus building on drafting, proposing and implementing
instruments on International and European standards in the area of elections
has not been fast and easy for they are related to the constitutional framework
and institution building traditionally considered to be among the core issues
of the nation state sovereignty.
The International and European standards have been drafted
by different actors in the international lawmaking arena – universal, regional
and non-governmental organizations. They have proposed and some of them have
adopted provisions in the international treaties or soft law relating to the
supranational standards of elections which are different in scope, parties
which are members of the relevant organization and their legal binding effect.
The short list of International and European acting
instruments, draft treaties and soft law containing provisions on supranational
standards on the principles of democratic elections belong to several groups
according to the legal binding effect they have.
Hard Core International rules
The hard core of International rules consists of provisions
of International treaties adopted by UN, First Protocol to the European
Convention on Human Rights and the relevant jurisprudence of ECHR.
Universal international standards concerning the principles
of democratic elections consist in the UN treaty law provisions:
1. Art.21 of 1948 Universal
Declaration of Human Rights
2. Art.25 (b) of 1966 International
Covenant on Civil and Political Rights
3. Art.1 of 1952 Convention on the
Political Rights of Women
4. Art.5 of 1965 (c), (d) Convention
on the Elimination of All Forms of Racial Discrimination 5.Art.7 of 1979
Convention on Elimination of All Forms of Discrimination against Women.
Hardcore European rules
1. European Convention on Human
Rights, Protocol I, art. 3 stating that “ The High contracting Parties
undertake to hold free elections at reasonable intervals by secret ballot under
conditions which will ensure the free expression of opinion of the people in
the choice of legislature”.
2. Convention on the Participation
of Foreigners in Public Life at Local Level, (art. 6 in relation to the right
to vote in municipal elections).
3. Jurisprudence of ECHR on European
Convention on Human Rights, Protocol 1, art. 3.
In December 2002 a Draft Convention on the Election
Standards, Electoral Rights and Freedoms has been prepared and submitted by
IFES to be debated and adopted by the Council of Europe with the aim to
summarize the legally binding international law instrument. The Draft
Convention is based on the experience of legal regulation and administration of
democratic elections accumulated by the Council of Europe and member states.
The ambition of the drafters has been to codify various rules and if adopted to
convert European standards into binding hard law for the countries which are
members of the Council of Europe.
Soft Law International and European rules
1.
2002 Guidelines
on Elections adopted by Venice Commission
2.
2003 Existing
Commitments for Democratic Elections in OSCE Participating States
3.
1994 Declaration
on Criteria for Free and Fair Elections adopted by the Inter-Parliamentary
Council at its 154th session ( Paris, 26 March 1994 ).
European Union law on Elections
Within the EU a body of community law has evolved since the
treaty of Maastricht has established citizenship and voting rights of EU
citizens in local and EU parliament elections.
Beyond any doubt implementation of the international and
European legal standards in the area of elections bears no similarity with the
supranational and, direct, immediate and horizontal effect of community law,
with countries like Netherlands that have opted the pure monistic system of
transplanting international provisions in the municipal law, being an
exception. Any comparison between these two phenomena is might relative and might
be valid only for the 25 EU member states which are simultaneously with no
exception members of the Council of Europe.
The list of EU law relating to elections consists of primary
law - art. 8 b (1) of TEU,
Council directive 93/109/EC, Council
directive 94/80/EC, Order of the Court of 10 June 1993, The Liberal Democrats v
European Parliament,
Case C-41/92. These provisions and the relevant amendments in the national
constitutions and electoral legislation introduced of the rights of voting and
standing in the municipal elections and in the elections for European
parliament of EU citizens having member state of residence different from their
home member state. Participation of EU citizens in the local and European
parliament elections in the EU member states of residence has broadened the
principles of universal and equal franchise bringing to solidarity and has been
an important step in the process of creating ever closer union among the
peoples of Europe. The draft Constitution of EU has reaffirmed the passive and
active voting rights of EU citizens in municipal and European parliament
elections went their EU member state of residence is different from their home
EU member state.
The brief survey of supranational and European
instruments containing international legal standards on elections stimulates
several speculations which need further discussion and analysis.
Proliferation of international standards is
indicative to the progress in the peaceful cooperation, democratization and
rule of law building in the international community. It is instrumental to the
harmonization, unification, convergence and transplantation of the best values,
principles, practices and techniques in the democratic elections legitimizing
constitutional government. At the same time proliferation of the international
standards on elections has been in compliance with the need to respect the
national tradition. International treaties and soft law have been carefully
creating unity by protecting diversity. No doubt that the process of increasing
of the international standards should be preferred to the lack of international
instruments on elections.
However, proliferation of international and
European standards on elections has side effects that need to be solved.
Under the assumptions that a nation state is
simultaneously a member of several international organizations and all of them
have adopted different instruments in the area of elections the issue of
compatibility between the provisions of the international organizations from
one side and the multiple international instruments and domestic legislation
arises. The ideal situation is when ambiguities can be resolved through the
existing clear hierarchy of sources between and within the standards proposed
by the international organizations.
Difference in the scope, in the detail of the
standards and of the countries which they address is normal and will not raise
any serious problems during the process of implementation of international
obligations. EU law has stronger binding effect for the EU member states. Based
on the community method however EU law has not the same intensively binding
effect as the federal law. The conflicts between some of the treaty and soft
law arrangements will not be contra productive, since hard law always prevails.
However conflicting provisions from one and the same legal order might be an
obstacle to the implementation of different standards in the municipal legal
system.
Successful solution of ambiguity between
provisions of EU law, hard and soft European law by applying the hierarchy in
the area of supranational law to be transplanted in the municipal legal order
might be illustrated by the new election act of Grand Duchy of Luxembourg. Adopted
in February 2004 the act entitles non-Luxembourg nationals that have residency
in the Luxembourg to vote and stand as candidates in the local elections taking
place in 2005, regardless of whether they are EU citizens or not, without
losing their voting rights in their country of origin. Non-Luxembourg nationals entitled to
active and passive voting rights in the local elections must be at least 18
years old on the date of elections, having their civil rights and must have
been domiciled in the Grand Duchy of Luxembourg and have lived there for a period
of 5 years when applying to be included on the roll. Under the Council directive 93/109/EC there
the period of living of the EU citizens in the country of residence different
from their home country has not been limited. According to the Convention on the Participation of Foreigners in
Public Life at Local Level, art. 6 relating to the right to vote in municipal
elections foreign residents are granted the right to vote and to stand in local
authority elections, provided they fulfill the same legal requirements as apply
to nationals and furthermore have been lawful and habitual resident in the
state for the 5 years preceding the elections. Art. I on the Universal suffrage
from the Guidelines on elections pointing the exceptions provide that
nationality of the state is a requirement, but it would be advisable for
foreigners to be allowed to vote in local elections after a certain period of
residence. While not specifying the length of this period for foreigners the
Guidelines have set the time limit of the residence requirement for nationals
not to exceed six months before the local or regional elections take place. Though
Duchy of Luxembourg has not ratified the Convention
on the Participation of Foreigners in Public Life at Local Level in order to
protect the national’s interests in the local elections
and to comply with of art. 8 b (1) of TEU and
the Council directive 93/109/EC as EU member state it has opted for
foreigner’s residence requirement of five years.
In conclusion looking at the system of the emerging
supranational standards in the area of elections it seems International
organizations, Council of Europe and European Commission have been
concentrating on promoting the macro conditions as values, principles
safeguarding the genuine democratic content of free and fair elections. Only
the most fundamental of micro conditions were treated by the European soft law.
Detailed regulation of the election organization and choice of the electoral
system have remained traditional competence of the nation states. Concrete
techniques of election monitoring have also been developed and successfully
applied within OSCE.
However, adopting Convention on the Election Standards, Electoral Rights and
Freedoms by the Council of Europe will convert substantial part of the soft law
in the Guidelines on Elections into treaty hard law and will be important stage
in the harmonization process of the European standards in the area of
democratic elections.
Financing Elections – Brief History
and Facts of Abuse
Going back to antiquity an expression
attributed to Ceaser was widely used “ we will buy people with money and people
will bring back money to us ”. Distortion of the election results by bribing
the majority of voters has been among the most primitive forms of financial abuse
in the elections in Rome especially when the open voting was established. In
regard of Senate it has been picturesquely depicted by the younger Plinius.
Contemporary
electoral campaigns are impossible without spending significant amount of finance.
With the expansion of mass democracy and the gradual introduction of universal
suffrage electoral campaigns include the activity practically of all persons
willing to exercise their voting rights. While in the 19th century
US in political slang the phrase “buying a new roof” was widely used at the
second half of the 20 century it was replaced by the expression “buying an
election”. Money
provides access to the basic tools of a modern democracy - for example,
advertising, running political parties, selecting candidates, mobilizing voters
and polling - and for this reason, political finance affects almost every
aspect of democratic politics in constitutional democracies. Thus, the reform
of political finance regimes is very high on the agenda in all democratic
countries, as greater transparency in political finance and accountability on
the part of party leaders are essential for democracy. For this reason, it is
crucial to discuss the standards that every system of political finance should
try to meet, and that will encourage parties to undertake more transparent and
accountable financial operations. Spending of money on banned purposes such as
vote-buying, has been another of most primitive forms of abusing money in
elections and distorting political representation. This costly set of
campaigning methods has a long history. Vivid depictions may be found in the
novels of nineteenth-century British prime minister Benjamin Disraeli. Today it
seems to occur most frequently in relatively poor countries, although it is
found residually in some large U.S. cities as well. Candidates are expected to
treat ordinary voters to gifts of various kinds, often including food and
especially free drinks (in colonial British North America, this was known as
“swilling the planters with bumbo”). Significant vote buying in countries
ranging from Cambodia, Malaysia, and Taiwan in Asia, to Cameroon, Kenya, Uganda, and Zimbabwe in Africa, to Antigua and Barbuda, Costa Rica, Mexico, and Suriname in the Americas, and even in Samoa in the Pacific occurred. In the last local
and municipal elections various disputes were triggered on vote and other
election finance abuses in Bulgaria.
Classical liberalism and contemporary
conservative outcry for deregulation have proved totally inadequate to the
issues of modern political parties and electoral campaign financing. In order
to preserve constitutional democracy, the rule of law, political pluralism, the
common democratic constitutional European heritage and combat political
corruption. As
it was brought by political scientists James Kerr Pollock wrote in 1932 that
“the relation between money and politics has come to be one of the great
problems of democratic government. Healthy political life is not possible as
long as the use of money is unrestrained.”
Regulation of
party and election finances in contemporary constitutional democracies has been
shaped within the range of options where on the both ends as diametrically
opposing opposites stood the two antipodes Libertarianism and Egalitarianism.
While Libertarianism prevailed in the US the dominant pan European method was Egalitarianism.
The classical
‘libertarian’ approach to the issue considers parties to be civil society
organizations immune from state intervention in their activities. This approach
would suggest that parties have the right to regulate their internal affairs,
including funding matters, without limitations and restrictions imposed by the
state. Yet because of the danger of corruption, purist versions of this
approach have fallen out of favor even in ‘libertarian’ models. Libertarians
generally believe that the social status quo should be taken as a given and
that the state should not attempt to equalize the chances of actors possessing
unequal initial resources. If a particular actor has superior financial
resources that have been legitimately acquired, he or she can bring these
resources to bear in political competition, and in electoral campaigns in
particular. In the USA, this libertarian logic is constitutionally entrenched
in the principle that ‘money is speech’; this gives unlimited electoral
expenditure protection under the First Amendment, as a form of political
expression. Therefore, limits on expenditure are prohibited in the USA, and limits on private contributions are acceptable only to the extent that they serve anti-corruption
purposes. Within
the libertarian approach election financing has been perceived as a means of
democratic participation in almost the same way as money contributions have
been treated in Buckley v. Valeo as a free speech defended by the First
amendment of the US constitution. Egalitarianism considers that the differences
of wealth and financial resources, should be neutralized in the context of
political competition. In terms of political finance, this neutralization is
done through a variety of instruments, which fall into two major categories:
state aid to help equalize the resources of the major political actors and the
introduction of expenditure and contribution limitations designed to decrease
the influence of wealthy political donors. The German model of political
finance relies mainly on the provision of generous state aid for purposes of
equalization; the UK model, after the reforms of 2000, relies on expenditure
limits with the same aim. Most West European models could be described as
‘egalitarian’ (although to different degrees) insofar they consider state
intervention directly affecting the resources of political actors to be
legitimate. East European states generally follow this pan-European trend, and
also tend to opt for egalitarian regulation of political finance.
Depending on the type of the
electoral system introduced two varying models of party finance have been
established. In principle majority voting systems opt for candidate centered
model, while the proportional representation prefers party centered model where
not the individuals running for office but political parties are recipients of
resources.
In multiparty pluralistic elections the availability of
credible alternative choices depends on the political parties having secure
opportunities for financing election campaigns and routine operations.
The legal framework of parties and candidates campaign financing consists of
constitutional principles, laws relating to the financing of parties and
candidates, normative complexes in the electoral legislation or the
parliamentary statutes on political parties in separate laws.
In contemporary political systems basically there are two
forms of funding of parties and candidates: public funding and private
funding, with contributions coming from national but sometimes also from foreign
sources.
The legal framework may provide for electoral campaign
financing on the basis of the following internationally-recognized standards:
-
That there
should be a transparent system of disclosure of the funding received by any
party or candidate;
-
That there
should be no discrimination with regard to access to public funds for any party
or candidate;
-
That public
funding should be made available to parties on an equitable basis; and
-
That there
should be a level playing field among the parties or candidates.
Public funding
Payment of direct financial subsidies to candidates or to
political parties from public funds is gradually becoming the norm.
The main forms of indirect public funding could be one or
more of the following:
-
Free
broadcasting time;
-
Various types of
state payments and facilities made available to members of the legislature;
-
Use of
government facilities and public personnel;
-
State grants to
party foundations; and
-
Tax relief, tax
credits and matching grants.
The distribution of direct public funds for political
parties or candidates may be based on several criteria. Some of the main
criteria are:
-
The grant may be
a proportion of actual expenditure where the receipt of public money is
conditional on the party or candidate also raising money from private sources.
-
The grant to
parties may be proportional to their votes in the previous general election.
-
The grant may be
proportional to the number of each party's seats in the legislature.
If the legal framework for elections provides for public
funding, it should be provided on the basis of equity. This does not mean that
all political parties and candidates are to receive an equal amount of campaign
funds. Provisions for public funding should be clearly stated in the law and
based on objective criteria that are not open to subjective interpretation by
government authorities.
Additionally, the legal framework should ensure that state
resources are not used or misused for campaign purposes by the party in power.
The legal framework should specifically provide that all State resources used
for campaign purposes, such as state media, buildings, property and other
resources, are also made available to all electoral participants on an
equitable basis.
Private funding contributions consist of the following main sources :
-
Membership
subscriptions;
-
Donations to
political parties or candidates by individuals;
-
Funding by
institutions such as large business corporations, trade unions etc; and
-
Contributions in
kind by supporters.
Where there are provisions in the legal framework for
elections relating to private contributions to campaign expenses incurred on
behalf of parties and candidates, these should be so designed as to ensure
equality of freedom to raise private funds. Furthermore, these provisions may
include limits on contributions in order to "level the campaign playing
field" to a reasonable degree, taking into account geographic, demographic
and material costs. However, the enforceability of such provisions must be kept
in mind while framing or assessing such provisions.
Expenditure control
The legal framework may control the election expenditure of
the parties and candidates in order to bring about some semblance of an equal
chance of success. Certain financial limits may be prescribed for varying
levels of elections: presidential, legislative and local. Parties and
candidates are then periodically required to file statements and reports of
election expenditure to the monitoring organization, which in most
jurisdictions is the EMB. However, some jurisdictions do not restrict election
expenditure (as is the case in the USA), regarding it as an unconstitutional
curtailment of the fundamental right to freedom of speech and expression.
Reporting and disclosure requirements
Limitations on contributions or campaign expenditure are
meaningless without transparent reporting and disclosure requirements. The
legal framework should require periodic reporting at reasonable intervals of
all contributions received and expenditure incurred by an electoral contestant.
Penalties for failing to file reports or filing erroneous reports also should
be clearly stated in the legal framework and should be proportional to the
gravity of the offence. For example, candidates should not be disqualified from
contesting elections or taking their seats, if elected, due to minor reporting
irregularities. The legal framework should specifically identify the agency responsible
for receiving, compiling and holding campaign contribution and expenditure
reports. The legal framework should clearly specify where and when such reports
are available for public inspection. The law should also permit the public
access to campaign contribution and expenditure reports so that the contents
will be available to other interested parties, candidates and voters. Often
there are too many laws and too little enforcement. As an experienced authority
in this field Michael Pinto-Duschinsky has keenly observed that it is dangerous
to assume that the problems of political financing are amenable to simple
legislative remedies. There should be more stress on the enforcement of a few
key laws such as those on disclosure, and less on the creation of an ever-expanding
universe of dead-letter rules. Fourth,
there is an urgent need for investigation into the facts of For political
financing to be effective, the legal framework should provide mechanisms for monitoring
and enforcing compliance with political finance laws.
Corrupt political
financing usually refer to one of the following:
Political
contributions that contravene existing laws on political financing.
Illegal donations are
often regarded as scandalous, even if there is no suggestion that the donors
obtained any improper benefit in return for their contributions.
The use for campaign or party
objectives of money that a political officeholder has received from a corrupt
transaction. In such a case, all that differentiates corrupt political
funding from other forms of political corruption is the use to which the bribe
is put by the bribe-taker.
Unauthorized use of state resources for
partisan political purposes. This is a commonly noted feature of ruling
parties’ campaigns in established and developing democracies alike. Invitations
to White House coffee receptions and sleepovers in the Lincoln bedroom were among
the more innocent ways in which U.S. president Bill Clinton used a public
resource to raise funds for his 1996 reelection campaign.
Acceptance of money in
return for an unauthorized favor or the promise
of a favor in the event of election to
an office.
Contributions from disreputable
sources.
Spending of money on banned purposes
such as vote-buying.
How the Principles of Financing the Elections Have Been
Functioning in Central and East European EU Member States
Legal frameworks of election and party financing consisting
of constitutional principles (rule of law, popular sovereignty, separation of
powers, political pluralism), parliamentary statutes on elections and political
parties, judicial decisions and rules established by the bodies managing the
elections were shaped to the large extent of 3 normative sources :
-
comparative
standards and good practices established in the western constitutional
democracies and established in the common constitutional heritage of Europe ;
-
soft law of the
Council of Europe;
-
political
criteria of the full EU membership and monitoring process from the EU on the
progress achieved by the candidate countries to full EU membership.
These sources fuelled the development of the legal
regulation of the election financing systems acted not in a simultaneous but
rather on consecutive way. Initially after the abolishing of Communist party
leadership role declared in the constitutions and defacto monopoly of
political, economic and cultural life and by introducing political pluralism
legal transplants were carried in 1990 by reception from the 1968 German
pateigezets and the Austrian law on political parties. Financial regulations
were also drafted with the adoption of the first electoral laws. In the first
wave of the regulation of party and election finances on the enthusiasm of the
emerging democracy libertarianism model was embraced and was predominant in
political life of the emerging democracies in Central and Eastern Europe. Of
course this model was adapted to the realities in the post communist societies
where privatization was to start, the state run economy was in collapse and
there was no private banking sector. Electoral
campaign context or landscape in CEE was completely different from that in the
Western Europe and the US constitutional democracies.
Contributions from private funding was scarce and it was
supplemented by public sources like borrowing of interest free loans.
In the area of party funding and
campaign finance, the constitutions have been virtually silent, and left the
regulation of this issue to the national legislatures.
During the early 1990s legislators
in most of the post-communist countries were not able to regulate the
institutions of political parties on a specific or long-term basis, in particular
the institution of political finances. The inadequacies of the early funding regime
led to the growing dissatisfaction with the systems and their future reforms, before
even a decade of democracy in post-communist Europe had past. The lack of complete
regulations on political party financing had a significant influence on
lowering standards in public life, and in the growth of political corruption.
All the substantial issues related to the system of party funding were deferred
to a much later date.
Regulations and Sources of Funding
In CEE, the regulatory frameworks
have attempted, with varying degree of success, to: (1) prohibit certain
sources; (2) limit individual or group donations to candidates or parties; (3)
introduce direct and indirect state subsidies5.
Foreign donations
Due to their recent history, most of
the post-communist countries were sensitive to external political influences.
For this reason funding of politics from foreign sources was disliked by the
legislators. Generally speaking, Political parties were, banned from receiving
foreign donations in all Central European countries except Croatia, Bosnia and Herzegovina and the Czech Republic. Regulations concerning foreign contributions
are mostly restrictive and negative, i.e. they limit foreign donations in both
quantitative and qualitative ways. The most common limitation imposed is one of
funding prohibitions on foreign governments. In Lithuania, Poland, Russia and Ukraine, political donations cannot be accepted even from companies with foreign
investments. In Bulgaria, political parties may receive donations from foreign
citizens up to $500 (donations from single individuals), and up to 2000 $
(donations from a group of people). However, no more than one donation may be
received from the same person or the same group of people within a calendar
year. In Lithuania, political parties and political organizations may be funded
by Lithuanian citizens residing abroad, and political party organization
divisions established in locations inhabited by Lithuanian communities.
Finally, some countries, including Russia, ban political contributions from any
stateless person.
Anonymous donations and contribution
limits
In Central Eastern European
countries, the regulatory frameworks have also attempted, with a varying degree
of success, to prohibit certain sources and limit the amount of permitted
contributions. Firstly, the two most common prohibitions on sources concern state
enterprises and anonymous donations. Lithuania, Russia and Ukraine have also prohibited corporations with shares belonging to the State or Local
Government from making political contributions. Moreover, in Lithuania, political parties and political organisations also cannot receive any donations
from trade unions, charities, foundations and religious organisations.
Secondly, of the CEE countries, almost half, including Bosnia and Herzegovina, Bulgaria, Latvia, Macedonia, Poland, Romania, Russia and Ukraine, have introduced limits on contributions to parties and/or individual candidates in
the elections.
Most post-communist countries have
opted to prohibit anonymous donations. However, Bulgaria, and Lithuania have taken the view that reasonable amounts of anonymous donations cannot
undermine the democratic process. The Polish legislation makes an exception for
the presidential elections - anonymous donations are to be deposited in bank
accounts as separate from the rest of campaign funding. Bulgarian laws
stipulate that anonymous donations must not exceed 25% of the total party
income. In Lithuania, a single anonymous donation cannot exceed USD 25, but the
total of these donations is not limited.
Setting limits on campaign
expenditure is not an ideal legal mechanism that all regimes in the process of
democratisation should utilize in attempting to regulate campaign finance. The
regulation of political expenditure generally involves restrictions concerning direct
vote buying or limitations on the expenditures of political parties or
individual candidates (both parliamentary and presidential). Particularly in
authoritarian regimes, imposing own and strict limits on campaign expenditure
might marginalize opposition and as a result aid the non-democratic regimes.
Furthermore, in some CEE countries the artificially low legal limits on
permitted campaign spending makes the reporting of political party expenditure
irrelevant. Limits on the permissible amount of campaign expenditure are a
common feature in nearly two-thirds of the post-communist countries ; such limits
are applied either by determining a ceiling or by applying a formula (for
instance, a multiple of the average monthly wage).
In terms of regulating campaign
spending, only 18% of the Central Eastern European countries have prohibited
parties or candidates from purchasing advertising time on television. Only
Bosnia-Herzegovina, and Slovakia have introduced a ban on paid political
advertising, while Poland has introduced limits to such expenditures the
opponents of the paid advertising ban claim that such regulations on the coverage
of the campaign not only clearly limit the possibilities for media to inform comprehensively
and objectively on elections but might marginalize opposition and as a result
aid the non-democratic government by allowing it to take advantage of state
controlled TV. They argue that in countries where there is a problem of
interference with the election process and the use of public media for the
advantage of particular electoral contestants, allowing limited paid
advertising can contribute to more open and lively political discussion.
Public Funding
Public subsidies for political
parties have already become a dominating feature of most democracies, being
used in 78 per cent of Central Eastern European countries.12 However, the
debate on direct subsidies continues to this day, in spite of the fact that their
various forms have been in operation for decades.13For most of the post communist
countries, public funding of parties and candidates (either in the form of reimbursement
of electoral expenditures, or annual subventions) has been the only effort to
diversify the sources of political money, and decrease the plutocratic
influence in politics. Generally, two major types of model have emerged in the
region – one with significant public funding, and one with predominantly
private funding coming mainly from corporate sources, or wealthy individual
donors. It should be noted, however, that both of these models exhibit
sustained legislative efforts to equalise the chances of political contestants
in financial terms: the countries without public funding, as a rule, feature various
contribution and expenditure restrictions, free air-time on electronic media,
and some forms of in-kind support for parties and candidates.
Formally, only Latvia, Moldova and Ukraine have not envisaged forms of public funding during the transition in
19910ies. Yet, countries such as Bulgaria and Russia provide only nominal
financial support, covering a tiny fraction of political expenditures. In other
countries, such as Albania, public funding has been introduced very recently,
and any conclusions about the actual characteristics of the model will be
premature. In the case of Belarus, where public funding of candidates in
elections has been fully within the discretion of the president of the country
– whether public funding in this case is an element of democratic government or
an instrument to suppress and control the opposition is an open question. One
possible explanation for refraining from giving direct state support to
political contenders is a lack of state resources at the time of adoption of
the relevant legislation, which led to a lesser involvement of the state.
However, the absence of state subsidies may be related to an existence of one
or two major parties that have access to rich corporate funding and try to
frame political competition in a particular way.
Of course, it could be argued that
public funding has disadvantages of its own and that it is an unsatisfactory
solution - even if it may be seen as a necessary one - to the fundamental
problem – the lack of popular participation in political life. One problem with
the introduction of significant public funding, for instance, is the “étatisation”
of the political parties, which become dependent on state subsidies, and
progressively alienated from their voters.
On the other hand, in certain cases,
the choice of a model without significant public funding has been dictated by
the desire of the governing parties or politicians to preserve their
advantages.
Disclosure and Enforcement
There are two ways of controlling
political finance: (1) disclosure, and (2) legal enforcement; these are not
exclusive of each other. Legal enforcement involves creating a system through
which cash flow in politics is directly controlled. The system generally operates
in a restrictive and negative way, i.e. it limits political donations in both quantitative
and qualitative ways. Disclosure of political donors and reporting on political
funds provides the necessary information to allow control over political money
to be regulated by public opinion. The recent study by Pinto-Duschinsky has
demonstrated that, in comparative terms, the Central and Eastern European
countries have introduced more regulation in the area of public disclosure than
Western Europe and the Americas. Different Central and Eastern European
countries exercise dissimilar strategies in order to enforce public control of
political money. In the first stage of democratic transition most of the
post-communist countries adopted a more laissez-faire stand towards the
control of political finance. Liberal regulations were a natural response to
the former communist system, and represented a rejection of its restrictions.
The extent of regulations varied considerably between different countries, as
did their enforcement. The reporting of political expenditures is a common
feature in almost all the countries reviewed in this study. The only two
countries where political parties need not reveal their income and expenditure
accounts are Albania and Belarus. However, there are different approaches to
the control of political finance in Central Eastern Europe. In Bulgaria, Croatia and Macedonia political parties must disclose their overall accounts but need not
identify individual donors. In the twelve or fifteen other countries covered by
this article, both accounts and lists of donors must be revealed. Moreover, Lithuania has gone to the length of making financial records of parties and individual
candidates available to a wider public on its Internet website. The Central and
Eastern European experience confirms a general point – ‘Too many rules. Too
little enforcement.’ First, theoretically well-intentioned regulations
requiring the production of financial statements are not necessarily effective
if they fail to cover all aspects of party funding. It is of little value to
demand disclosure only of particular categories of political financing. This
will merely encourage the use of sources of money not subject to disclosure.
Second, the lack of an independent enforcement agency is a most serious
weakness that undermines the working of a successful system. Moreover, penal
codes of several countries simply lack sanctions for violations of party
finance rules, or they are rather symbolic.
The distinctive feature and most
serious problem of Central and Eastern European countries is that elected
officials frequently use government resources for their personal campaigns and
for their political parties. So-called ‘administrative resources’ are based on
special treatment by local administration, state-owned media, and directors of state
owned enterprises and state-funded organizations. despite the pro-governmental
bias leading to a growing gap in the funding of the governmental and opposition
parties, electoral ‘surprises’ do happen in Eastern Europe on a regular basis.
Instructive is the case in Bulgaria, where the financial might of the Socialist
in 1997, and the UDF in 2001 did not save them from bitter electoral defeats.
Meciar’s party in Slovakia, and Tudjman’s supporters in Croatia also lost key elections despite their long stay in power and the opportunity to accumulate huge
resources. In some extreme cases, like the last parliamentary elections in Poland and Romania, the ruling parties could not enter the legislature at all. What is more, new major
parties do appear all around the region, and in some extravagant cases they
even manage to win parliamentary elections – King Simeon II’s movement in Bulgaria is an interesting, although probably aberrant example. This evidence speaks
against attributing too much influence to the mechanisms and abuse of party
funding rules on the political process in the countries of Central and Eastern Europe.
Sparse laws
In most of the Central and Eastern
European countries the party and election-related political finance legislation
is fragmented across a number of legislative acts. Such regulations are not
only confusing but, in most cases, contradictory and creating gaps. One
possible option would be to integrate the various election laws and procedures
into a single election code.
Unrealistically low
spending limits
The examples of regulations in many
post-communist countries show that spending limits have proved in practice to
be a fiction, having been introduced at an unrealistically low level. Not only
have they failed to curb a political finance “arms race”, but their failure has
also undermined confidence in the whole system of political finance
regulations. Such regulations limiting the scope of a campaign might
marginalize opposition and aid the government. Interference with the election
process throughout low spending limits can contribute to political censorship.
In addition, the unrealistic spending limits corrupt the whole reporting system
and make it difficult to assess the true levels of expenditure. Finally, when
introduced, the limits should be index-linked. In order to discourage any of the
parties to manipulate this figure, the limit should not be raised or lowered
except on the specific recommendation of the independent enforcement agency.
Independent expenditure
Another problem in controlling
expenditure is independent political campaign spending. Most of the countries
did not apply direct limits on independent groups spending money on behalf of a
political party or presidential candidate during a campaign. The unrealistically
low limits on campaign spending and funding restrictions on certain sources
encourage parties to create a large number of small front organizations, so-called
‘third-parties’ through which campaign fundraising and expenditure can be channeled.
Access to media
For post-communist countries, free
access to the news media and fair coverage of the election are serious
problems. There are many indications that opposition forces have limited access
to the media and also, that independent media are harassed. These practices
include: media outlets, critical of the government are subjected to harassment,
including financial investigations; the state-controlled media demonstrate a
serious pro-government bias. Such regulations on the coverage of the campaign
not only clearly limit the possibilities for the media to inform
comprehensively and objectively on elections, but might also marginalize
opposition and aid the government by allowing it to take advantage of
state-controlled TV. Interference with the election process and the use of public
media for the advantage of particular electoral contestants should be
investigated expeditiously and authorities should be forced to impose
disciplinary action.
Conclusions
A decade after the collapse of
communism, the time is ripe for a re-examination of the ways in which the right
to vote and political representation in Eastern Europe have been institutionalised.
Who are the actual beneficiaries of the competitive elections, which have been
established in the region? Is the political process open to a plurality of interests?
Are there systematically excluded minorities? Few of these questions can be answered
meaningfully without a careful study of the regulations and practices of party funding
and campaign finance, which have been developed in Eastern Europe. Without such
an examination, one cannot be sure that the right to vote and political
participation have a different fate from that of the quickly forgotten
constitutional social commitments. From this perspective, the first troubling
tendency in the region is that little attention is being paid to the issue of
party funding and campaign finance as a constitutional matter affecting the
very fundamentals of the democratic order. A clear demonstration of this is the
fact that the CEE's constitutional courts, although being very active in other
areas, have, with a very few exceptions, avoided the ‘political' questions of
party and campaign finance. Legislatures have enjoyed broad policy discretion
in the adoption of rules on political finance, with no serious input or
oversight either by civil society, or a judicial body. Not surprisingly, this
situation has led to the production of legislation, which contains many
provisions:
-
Aiming mainly to
express a certain ideology;
-
Attempting to
establish the dominance of the pro-governmental parties, and oppress the
opposition;
-
Creating
loopholes and lack of transparency to maximise the advantages of the major
parties or political actors.
The ideology expressed by the
predominant majority of the political parties and campaign finance laws in the
region contains a bias towards egalitarianism and regulation. The review of
such laws has found that all of the countries covered provide for free airtime during
campaigns, most have schemes of public funding and require some public disclosure
of political funds. Contribution limits, and spending limits are common, though
by no means universal. All these measures and techniques are traditionally
employed to equalise the chances of different contestants in the political
process in financial terms, and to reduce the impact of personal and corporate
wealth on politics. In comparative terms, Central and Eastern European
countries have introduced more regulation in the area of public disclosure than
Western Europe and the Americas. Finally, the American-style libertarian
argument of ‘money is speech’ has been entirely absent from the Eastern
European political scene – radical libertarian principles of legitimation have
not been used in the area of party funding and campaign finance, despite the prominence
of neo-liberalism in parts of the region. The demonstrable ideological bias in
favour of egalitarianism and regulation probably has a historical explanation:
the combined effect of the communist legacy and the influence of political and
legal ideas from Germany, Austria, and France. Yet, if one looks beneath the
common ideological surface of the developing models, one finds different
patterns of funding of politics.
Eastern European countries have
failed to develop a diversified system of funding sources. In most CEE
countries, money for politics comes principally from corporations or large
individual contributors. Small donations are as a rule not encouraged in the
CEE by forms of tax credit, by matching grants (which make state subsidies
dependent upon parallel private fundraising), or by targeted tax relief on
small political donations. Despite the low levels of income from membership
subscriptions, there are no legislative efforts to encourage the parties to
extend their membership base – state subsidies are as a rule tied only to
electoral performance and parliamentary representation.
The egalitarian expectations for a well egulated system of
political finance reflecting just social principles, which the majority of
Eastern European party funding models create, lead the public to bitter
disappointment in the cases of irregularities, and to all-too quick conclusions
that the ‘system is rotten as hole’. The series of unending 'reforms' in a number
of post-communist countries illustrate the complexity of such attempts. Success
of any political finance reform requires the creation of a comprehensive and
efficient regime consisting of three basic elements: 1) system of public
financing, 2) adequate transparency, 3) an enforcing agency backed by legal
sanctions.
Yet, it is hard to develop a
satisfactory system of political finance for the inadequate enforcement. Laws
on funding of parties and campaigns require effective supervision and implementation.
Experience from Central and Eastern Europe shows contrast between very
ambitious laws and absence of any enforcement of them. However, laws are more likely
to be enforced if they are realistic. According to Paltiel: “Enforcement
demands a strong authority endowed with sufficient legal powers to supervise,
verify, investigate and if necessary institute legal proceedings. Anything less
is a formula for failure.” However, strong enforcement mechanisms (including
tax inspection and police) can be used by the non-democratic regime to deprive
the opposition of the right to participate effectively in the electoral
process. The creation of an oppressive political finance system that is not
controlled by a non-partisan enforcement agency might undermine the whole idea
of free and fair elections, as harassment is an inherent feature of such
political conditions. It is strongly recommended that an entirely independent
body responsible for overseeing party finance be created.
Independent enforcement demands an
agency endowed with sufficient resources to supervise, verify and investigate.
Yet, in some post-communist countries politicians prefer public money with as
little public control as possible. The newly created political finance systems
should not be left without a strong enforcing agency, if no additional
financial resources are provided to meet new responsibilities. The agency’s
budget should preserve its impartiality, independence and professional conduct.
One of the fundamentals of the independence of the agency would be the
stability of its financial situation. A mechanism should be developed which
stresses its autonomy while at the same time retaining a degree of
accountability to Parliament for the proper use of public funds.
Proposals for Reform
Most of the proposed reform measures have
already been summarized in several groups.
Policy Recommendations Related to
the Lack of Transparency Standard Measures
In order to tackle the problems
associated with lack of transparency, there are standard sets of measures
recommended to the Eastern European countries by international donors and EU
and Council of Europe structures. These typically include some combination of
the following:
-
stricter
sanctions for violation of disclosure, contribution and expenditure rules;
-
more detailed
disclosure requirements;
-
contribution and
expenditure limits to cut the cost of politics; a ban on anonymous donations;
-
sufficient
public funding in order to alleviate financial pressure on parties;
-
the creation of
administrative watchdogs;
-
the introduction
of lobbying rules and registers;
-
tighter
regulation of party-related foundations and NGOs;
-
conflict-of-interest
legislation;
-
registration of
individuals and bodies exhibiting electoral expenditure above a certain limit;
-
the involvement
of civil society monitoring groups; and sponsorship of investigative
journalists.
The problem with this set of
measures is that it relies on an efficient state apparatus, as well as on a
vigilant civil society and on professional, respected media. None of these
really exist in Eastern Europe, in parts of it anyway. So-called ‘weak states’ could
hardly afford the efficient enforcement of complex party-funding rules. In countries
with huge gray economies, it is especially unrealistic to expect the introduction
and enforcement of heavy sanctions and detailed rules. The countries of Central Europe, the accession countries in particular, are in a better position in this
regard. In the rest of the region, it would probably be vain to seek
ever-greater transparency of political finance. As far as civil society is
concerned, one problem for the region at large is low mobilization and lack of
trust in NGOs, particularly in the countries most affected by corruption and
lack of transparency. For this reason, entrusting civil society with the
monitoring of party funding may not be fruitful after all.
Policy Recommendations against Forms
of Structural Bias and Governmental Favoritism (in particular, Russia, Ukraine, Macedonia, Serbia, Bulgaria, Albania, Slovakia, and Croatia)
a) Elimination of patronage
appointments of directors in the economic sphere (public enterprises). Introduction
of open competitions for managers;
b) Reduction of patronage practices
in the public administration, and the introduction of genuine competitions for
administrative posts;
c) Elimination of significant
governmental involvement in judicial appointments;
d) C lose monitoring for abuses of
administrative resources for partisan purposes;
e) R reduction of the number of
licensing regimes in the economy;
f) Revision of the rules of public
finance in order to avoid problems of ‘authorized banking’;
g) Parity between government and the
opposition parties in the public electronic media, especially in cases where
these public media control large sections of the electronic market;
h) Parity between government and the
opposition in the bodies conferring licenses for private electronic channels;
i) A ban on economic activities by
political parties, except for the running of publishing houses;
j) Public funding for opposition
parties in order to reduce incumbency bias. The logic underlying these
recommendations is to loosen the grip of the government over those areas of
public life that should be relatively independent of government interference,
such as the economy, the judiciary and the public media. The trouble with these
recommendations is that they may require significant, sometimes even constitutional,
changes. Another problem is that they do not impact merely on the issue of
political finance; they would also affect the operation of the political regime
as a whole.
Policy Recommendations related to
the Lack of Representation
a) Public funding (up to at least
half of the income of the parties), but;
b) Public funding given to parties
through the matching of funds, by which small donations and membership dues are
matched by the state;
c) Tax benefits (credits)
encouraging small donors;
d) T targeted state support for
developing ‘direct mail’ and other popular funding schemes;
e) A ban on corporate donations?
The rationale of these
recommendations, most of which are formulated on the basis of the German
political finance model, is to stimulate democratic participation. Public
funding should be used as a stimulus for greater popular participation, and not
only as a means of strengthening the political parties. Of special interest is
the proposed ban of corporate donations. This would undoubtedly be unpopular in
Europe, although is an established principle in the US. An already-mentioned
difficulty for this suggestion in the eastern part of the continent is that it
would necessitate a large pool of small donors in many countries, a problem on
account of widespread poverty and low standards of living. However, it will be
difficult to implement fund matching, tax benefits and direct mail solutions as
well.
Non-orthodox Measures
If the observations in the previous
section are accurate, there is a general sense of dissatisfaction with the
impact of ‘traditional measures’. Their potential already seems exhausted in
the case of Eastern Europe, and some alternative measures to improve the
transparency of political finance practices are called for. Here, some possibilities
are suggested.
First of all, along with the
comprehensive, holistic approaches of the party funding models in East European
countries (those required by the Council of Europe recommendations, for
instance), it may be productive also to adopt a number of ad hoc measures
targeting particular pressing problems. Thus, when there is a massive privatization
campaign, there should be special measures to prevent the giving of kickbacks
from that privatization to government parties. For example, all firms applying
to purchase state assets should, as a necessary precondition for the launch of
the procedure, be obliged to disclose any political donations they may have
made. In this way, the cost of enforcing the transparency measures would be
divided between state bodies and the participants in the privatization
auctions; these participants would also have an incentive to find out whether
their competitors had complied with the rules. Such procedures could be
envisaged for procurement tenders as well: if a competitor is shown to have
violated the rules, he or she could be disqualified from the tender, and even
banned from additional procurement tenders for a period of time. In the same
vein, if the government adopts a decree that makes changes to important
economic regulations (e.g. customs regulations), it should be obliged to
provide a list of the companies affected that have made donations to governing
parties over the previous two years. If the government fails to list some of
the companies, the decree should be subject to invalidation by the relevant
(administrative) court or courts. Furthermore, if a majority in parliament adopts
legislation with a bearing on the interests of corporations, a list of affected
corporate sponsors of the majority party or parties should be disclosed and
appended to the bill at the committee stage. If the parties fail to mention
some of the donors, the opposition should be able to seek the suspension of any
state subsidy for the majority party or parties for a period of time. Another
possibility is for the opposition to be able to block the bill at the committee
stage should a complete list of donors be lacking. Of course, these are general
suggestions that need creative adaptation to the specificity of concrete
constitutional models. But their main advantage is that they divide the costs
of enforcing transparency regulation between the state and other interested
parties. An additional, crucial, advantage of this approach is that it targets
real problems (such as the purchase of government favors) rather than pursuing
transparency for its own sake.
Secondly, the increasing of
accountability within the political parties (internal democratization) should
be considered. This is a problematic measure because it requires intervention
in the internal affairs of political parties. Yet the problem is serious,
because in Eastern Europe only a very narrow circle of people knows the real
situation with regard to a political party’s funding. Often, even members of
the leadership have no idea of the actual funding practices. The pan-European party
organizations of the social democrats, liberals and Christian democrats should introduce
precise internal rules concerning transparency, as well as strict conditions for
the acceptance and membership of East European partners. Especially in countries
with severe problems with organized crime, such as the Balkan and former Soviet
republics, West European partners should require the keeping and punctilious observance
of blacklists of potential donors widely suspected of links with organized crime.
In general, political parties should be obliged to devote serious internal attention
to the problems of political finance; the initiatives for greater transparency should
come from them, and not simply under pressure from the public (which in Eastern Europe has been very lenient to them anyhow).
Thirdly, it has been argued that the
choice of electoral system has an impact on the level of corruption.
Majoritarian systems, and systems of proportional representation with open
lists, seem to create a greater degree of transparency. If this is so, it could
be argued that ‘candidate-centered’ models of campaign finance increase
immunity to corruption. This is also plausible intuitively, since
candidate-based systems make individual candidates responsible to their voters,
and transparent campaigning is an electoral asset in an age concerned with the
issue of corruption. Even so, one should be careful not to exaggerate the
advantages of this option, or to overlook its drawbacks. In candidate-based
systems, campaigning tends to concern local issues, those affecting the narrow
interests of the voters of a particular district. Also, in these systems
campaigning may focus excessively on the personal integrity of candidates, at
the expense of the public good. So although in candidate-based models there may
be some benefit in terms of transparency and the occurrence of corruption, it comes
at the cost of restructuring the problems of political competition. Since such
a restructuring would seem to be detrimental to the public good, the promotion
of such models should be approached with great caution. Proposed political
finance standards in the area of disclosure include:
i. Any political finance system
should require comprehensive disclosure of all financial transactions.
ii. Receipts: the party or candidate
should disclose the amount and nature of each contribution (i.e. whether
cheque, cash or non-monetary [“in kind”]), and the identity, address and
employer/business of each contributor.
iii. Expenditures: the law should
require disclosure of all spending, including the date and amount of
expenditure and its recipient, and all debts and liabilities incurred by the
committee.
iv. Loans/advances: the law should
also require the disclosure of loans and advances received by the party,
including the lender’s identity and business/employment, the date and amount of
the original loan or advance, and the date when the loan or advance was repaid.
v. Timing: ideally, election reports
should be submitted and published from one week to 10 days before an election,
and following an election (usually 30 days after the election).
B. Internal (political party)
Control
i. Political parties should be
encouraged to adopt their own procedures to eliminate dishonest politicians and
prevent their financial misconduct. Detailed and persistent internal control
mechanisms can provide a crucial foundation for efforts to contain the abuses
that are always liable to occur, regardless of the sophistication of legal
frameworks.
ii. Political Finance Regulators
should encourage political parties to comply with requirements for professional
and accurate bookkeeping.
iii. Political parties (or even
candidates) should consider appointing specific officials — “financial
officers” — who might: 1) keep complete and accurate records of financial
activities, 2) submit reports about financial activity to the relevant bodies,
3) approve all contributions for compliance with legal restrictions; and 4)
follow accepted accounting procedures in performing record-keeping and
reporting duties.
iv. The law should require each party
or candidate to authorize one particular committee, and designate one specific
individual, serving as the financial agent (“treasurer”), to be responsible for
all receipts and expenditures of that political entity.
v. Any political party or its
committee should use only one bank account, which is fully reported and
disclosed to the PFR, for all financial transactions. By permitting only one
conduit for all financial activity, the law thus enables the PFR to effectively
“follow the money” and track political finance activity.
C. Enforcement / Regulatory Regimes
i. An ideal enforcement mechanism
should not only include a controlling body but might require a comprehensive
system consisting of all the components found in a system of justice, namely:
investigation, Challenging the Norms and Standards of Election Administration
91 prosecution, adjudication, and sanctions.
ii. The status of the body entrusted
with overseeing a political finance system clearly has an impact on the
effectiveness of control of the political finance system, as well as on public
confidence in it. There is also an important factor of independence which
should always be taken into consideration.
iii. The effectiveness of any system
will also depend on the cooperation of the various stakeholders, and relies on
the monitoring mechanisms provided by parties’ financial agents, auditors,
banking institutions, government bodies, anti-corruption watch-dog
organizations, and the media.
iv. An effective political finance
regulatory system also incorporates four other elements that aid the
enforcement function: Auditing; External Complaints; Investigation; and
Sanctions.
v. In order to function properly,
the enforcement agency must also remain independent and possess adequate
resources to monitor and investigate party/candidate finances. Its autonomy and
independence must be supported by its budget, but it, too, should be
accountable to Parliament for the proper use of public funds.
vi. An accountable system of
political finance presupposes that other democratic institutions are
sufficiently organized to discipline political actors, and may need to be
reconsidered where such conditions do not exist. In countries where a strong
and independent PFR is feasible, the following recommendations could enhance
enforcement:
1. Obligations, offences and
penalties must be clearly identified in law. The PFR should outline clearly who
is to be held accountable for which infringement of the law.
2. Lawmakers must anticipate that
parties and candidates will seek ways to get around limits and disclosure
requirements. Therefore violations and the corresponding penalties should be
clearly provided for in the law. At the same time, it should be recognized that
penalties such as fines or imprisonment are not the only response, or even the
best response, to some types of infractions. Other avenues, particularly
administrative sanctions, can often be more effective.
3. The system should encourage
political parties and candidates to monitor their own financial activities, prevent
financial misconduct, and comply with the requirements of professional bookkeeping
and reporting.
4. Sufficient resources - in the
form of training, consultations, and professional personnel offered to the
regulated community – are also necessary to enable timely and effective reviews
and audits.
5. Enforcement requires that an
enforcement agency has the capacity to monitor for compliance, review and audit
financial reports, investigate alleged infractions, negotiate and, where necessary,
apply the appropriate penalties.
6. Public trust and participation
are fundamental to any effective enforcement regime. External complaints should
be encouraged and treated seriously. Political Finance
D. Engaging External Stakeholders
i. An effective political finance
regulatory strategy must also engage external stakeholders in the process of
monitoring political finance. External complaints of suspected wrongdoing are
essential to detect violations. In an ideal system, civil society
organizations, journalists, and even individuals who believe that a violation
has occurred, or is going to occur, should be able to file a complaint to the
regulatory agency.
ii. The complaints process can
require a formal, written document satisfying specific criteria for a proper
complaint, or can have a more liberal character, with the enforcement agency
taking action based on press articles or informal allegations. In transition
regimes, and particularly in post-conflict societies, voters who are in the
best position to observe questionable campaign practices may be the most reluctant
to come forward with a formal complaint, since they often fear reprisals.
Therefore, in order to encourage individuals to share information some
political finance systems even give the enforcement agency the discretion to
act on information it receives anonymously.
iii. It is essential that countries
invest in public awareness campaigns, media training, and other forms of
educating external stakeholders on political finance regulations and on the
process for filing complaints.
Appendixes: International Standards
While the general issues of voting rights and elections have
been provided in the international hard law financing of the electoral
campaigns and political parties is treated in the soft law provisions.
I. Recommendation Rec(2003)4 of the Committee of
Ministers to member states on common rules against corruption in the
funding of political parties and electoral campaigns (Adopted by the
Committee of Ministers on 8 April 2003 at the 835th meeting of the Ministers'
Deputies)
The Committee of Ministers, under the terms of
Article 15.b of the Statute of the Council of Europe,
Considering that the aim of the Council of
Europe is to achieve a greater unity between its members;
Considering that political parties are a
fundamental element of the democratic systems of states and are an essential
tool of expression of the political will of citizens;
Considering that political parties and electoral
campaigns funding in all states should be subject to standards in order to
prevent and fight against the phenomenon of corruption;
Convinced that corruption represents a serious
threat to the rule of law, democracy, human rights, equity and social justice,
that it hinders economic development, endangers the stability of democratic
institutions and undermines the moral foundations of society;
Having regard to the recommendations adopted at
the 19th and 21st Conferences of European Ministers of Justice
(Valetta, 1994 and Prague, 1997 respectively);
Having regard to the Programme of Action against
Corruption adopted by the Committee of Ministers in 1996;
In accordance with the Final Declaration and the
Plan of Action adopted by the Heads of State and Government of the Council of
Europe at their Second Summit, held in Strasbourg on 10 and 11 October 1997;
Having regard to Resolution (97) 24 on the
twenty guiding principles for the fight against corruption, adopted by the
Committee of Ministers on 6 November 1997 and in particular Principle 15, which
promotes rules for the financing of political parties and election campaigns
which deter corruption;
Having regard to Recommendation 1516 (2001) on
the financing of political parties, adopted on 22 May 2001 by the Council of
Europe's Parliamentary Assembly;
In the light of the conclusions of the 3rd European
Conference of Specialised Services in the Fight against Corruption on the
subject of Trading in Influence and Illegal Financing of Political
Parties held in Madrid from 28 to 30 October 1998;
Recalling in this respect the importance of the
participation of non-member states in the Council of Europe's activities
against corruption and welcoming their valuable contribution to the
implementation of the Programme of Action against Corruption;
Having regard to Resolution (98) 7 authorising
the Partial and Enlarged Agreement establishing the Group of States against
Corruption (GRECO) and Resolution (99) 5 establishing the Group of States
against Corruption (GRECO), which aims at improving the capacity of its members
to fight corruption by following up compliance with their undertakings in this
field;
Convinced that raising public awareness on the
issues of prevention and fight against corruption in the field of funding of
political parties is essential to the good functioning of democratic
institutions,
Recommends that the governments of member states
adopt, in their national legal systems, rules against corruption in the funding
of political parties and electoral campaigns which are inspired by the common
rules reproduced in the appendix to this recommendation, – in so far as states
do not already have particular laws, procedures or systems that provide
effective and well-functioning alternatives, and instructs the "Group of
States against Corruption – GRECO" to monitor the implementation of this
recommendation.
Common rules against corruption in the funding
of political parties and electoral campaigns
I. External sources of funding of
political parties
Article 1Public and private support to political
parties
The state and its citizens are both entitled to
support political parties.
The state should provide support to political
parties. State support should be limited to reasonable contributions. State
support may be financial.
Objective, fair and reasonable criteria should
be applied regarding the distribution of state support.
States should ensure that any support from the
state and/or citizens does not interfere with the independence of political
parties.
Article 2 Definition of donation to a political
party
Donation means any deliberate act to bestow
advantage, economic or otherwise, on a political party.
Article 3 General principles on donations
a. Measures taken by states governing donations to
political parties should provide specific rules to:
– avoid conflicts of interests;
– ensure transparency of donations and avoid
secret donations;
– avoid prejudice to the activities of political
parties;
– ensure the independence of political parties.
b. States should:
i. provide that donations to political parties
are made public, in particular, donations exceeding a fixed ceiling;
ii. consider the possibility of introducing
rules limiting the value of donations to political parties;
iii. adopt measures to prevent established ceilings
from being circumvented.
Article 4 Tax deductibility of donations
Fiscal legislation may allow tax deductibility
of donations to political parties. Such tax deductibility should be limited.
Article 5 Donations by legal entities
a. In addition to the general principles on
donations, states should provide:
i. that donations from legal entities to
political parties are registered in the books and accounts of the legal
entities; and
ii. that shareholders or any other individual
member of the legal entity be informed of donations.
b. States should take measures aimed at limiting,
prohibiting or otherwise strictly regulating donations from legal entities
which provide goods or services for any public administration.
c. States should prohibit legal entities under the
control of the state or of other public authorities from making
donations to political parties.
Article 6 Donations to entities connected with a
political party
Rules concerning donations to political parties,
with the exception of those concerning tax deductibility referred to in Article
4, should also apply, as appropriate, to all entities which are related,
directly or indirectly, to a political party or are otherwise under the control
of a political party.
Article 7 Donations from foreign donors
States should specifically limit, prohibit or
otherwise regulate donations from foreign donors.
II. Sources of funding of candidates for
elections and elected officials
Article 8 Application of funding rules to
candidates for elections and elected representatives
The rules regarding funding of political parties
should apply mutatis mutandis to:
– the funding of electoral campaigns of
candidates for elections;
– the funding of political activities of elected
representatives.
III. Electoral campaign expenditure
Article 9 Limits on expenditure
States should consider adopting measures to
prevent excessive funding needs of political parties, such as, establishing
limits on expenditure on electoral campaigns.
Article 10 Records of expenditure
States should require particular records to be
kept of all expenditure, direct and indirect, on electoral campaigns in respect
of each political party, each list of candidates and each candidate.
IV. Transparency
Article 11 Accounts
States should require political parties and the
entities connected with political parties mentioned in Article 6 to keep proper
books and accounts. The accounts of political parties should be consolidated to
include, as appropriate, the accounts of the entities mentioned in Article 6.
Article 12 Records of donations
a. States should require the accounts of a
political party to specify all donations received by the party, including the
nature and value of each donation.
b. In case of donations over a certain value,
donors should be identified in the records.
Article 13 Obligation to present and make public
accounts
a. States should require political parties to
present the accounts referred to in Article 11 regularly, and at least
annually, to the independent authority referred to in Article 14.
b. States should require political parties
regularly, and at least annually, to make public the accounts referred to in
Article 11 or as a minimum a summary of those accounts, including the
information required in Article 10, as appropriate, and in Article 12.
V. Supervision
Article 14 Independent monitoring
a. States should provide for independent monitoring
in respect of the funding of political parties and electoral campaigns.
b. The independent monitoring should include
supervision over the accounts of political parties and the expenses involved in
election campaigns as well as their presentation and publication.
Article 15 Specialised personnel
States should promote the specialisation of the
judiciary, police or other personnel in the fight against illegal funding of
political parties and electoral campaigns.
VI. Sanctions
Article 16 Sanctions
States should require the infringement of rules
concerning the funding of political parties and electoral campaigns to be
subject to effective, proportionate and dissuasive sanctions
II. International Electoral Standards Guidelines for
reviewing the legal framework of elections
Guidelines Series
http://aceproject.org/ero-en/topics/election-integrity/UNPAN016077.pdf/view
11. Campaign finance and expenditure
The legal framework should ensure that all political parties
and candidates are equitably treated by legal provisions governing campaign
finances and expenditures. One of the main characteristics of a democracy is
the holding of multiparty elections. The availability of credible alternative
choices depends on the existence of robust political parties. In turn,
political parties require a secure base for financing their election campaigns
and their routine operations. Thus it is an acceptable practice for a legal
framework to provide for the campaign financing of parties and candidates. Laws
relating to the financing of parties and candidates are sometimes found not in
the electoral legislation but in separate laws. Basically there are two forms
of funding of parties and candidates: public funding and private funding, with
contributions sometimes coming from foreign sources.
The legal framework may provide for electoral campaign
financing on the basis of the following internationally-recognized standards:
-
That there
should be a transparent system of disclosure of the funding received by any
party or candidate; guidelines_original_korr 4 02-08-27 11.09 Sida 65
-
That there
should be no discrimination with regard to access to public funds for any party
or candidate;
-
That public
funding should be made available to parties on an equitable basis; and
-
That there should
be a level playing field among the parties or candidates.
Public funding
Payment of direct financial subsidies to candidates or to
political parties from public funds is gradually becoming the norm. The main
forms of indirect public funding could be one or more of the following:
-
Free
broadcasting time;
-
Various types of
state payments and facilities made available to members of the legislature;
-
Use of
government facilities and public personnel;
-
State grants to
party foundations; and
-
Tax relief, tax
credits and matching grants.
The distribution of direct public funds for political
parties or candidates may be based on several criteria. Some of the main
criteria are:
-
The grant may be
a proportion of actual expenditure where the receipt of public money is
conditional on the party or candidate also raising money from private sources.
-
The grant to
parties may be proportional to their votes in the previous general election.
-
The grant may be
proportional to the number of each party's seats in the legislature. If the
legal framework for elections provides for public funding, it should be
provided on the basis of equity. This does not mean that all political parties and
candidates are to receive an equal amount of campaign funds. Provisions for
public funding should be clearly stated in the law and based on objective criteria
that are not open to subjective interpretation by government authorities. Additionally,
the legal framework should ensure that state resources are not used or misused
for campaign purposes by the party in power. The legal framework should
specifically provide that all State resources used for campaign purposes, such
as state media, buildings, property and other resources, are also made
available to all electoral participants on an equitable basis.
Private funding contributions
The main forms of private funding are:
-
Membership
subscriptions;
-
Donations to
political parties or candidates by individuals;
-
Funding by
institutions such as large business corporations, trade unions etc; and
-
Contributions in
kind by supporters.
Where there are provisions in the legal framework for
elections relating to private contributions to campaign expenses incurred on
behalf of parties and candidates, these should be so designed as to ensure
equality of freedom to raise private funds. Furthermore, these provisions may
include limits on contributions in order to "level the campaign playing
field" to a reasonable degree, taking into account geographic, demographic
and material costs. However, the enforceability of such provisions must be kept
in mind while framing or assessing such provisions.
Expenditure control
The legal framework may control the election expenditure of
the parties and candidates in order to bring about some semblance of an equal
chance of success. Certain financial limits may be prescribed for varying
levels of elections: presidential, legislative and local. Parties and
candidates are then periodically required to file statements and reports of
election expenditure to the monitoring organization, which in most
jurisdictions is the EMB. However, some jurisdictions do not restrict election
expenditure (as is the case in the USA), regarding it as an unconstitutional
curtailment of the fundamental right to freedom of speech and expression.
Reporting and disclosure
requirements:
Limitations on contributions or campaign expenditure are
meaningless without transparent reporting and disclosure requirements. The
legal framework should require periodic reporting at reasonable intervals of
all contributions received and expenditure incurred by an electoral contestant.
Penalties for failing to file reports or filing erroneous reports also should
be clearly stated in the legal framework and should be proportional to the
gravity of the offence. For example, candidates should not be disqualified from
contesting elections or taking their seats, if elected, due to minor reporting
irregularities. The legal framework should specifically identify the agency
responsible for receiving, compiling and holding campaign contribution and
expenditure reports. The legal framework should clearly specify where and when
such reports are available for public inspection. The law should also permit
the public access to campaign contribution and expenditure reports so that the contents
will be available to other interested parties, candidates and voters.
Monitoring and enforcing compliance
Often there are too many laws and too little enforcement.
For political financing to be effective, the legal framework should provide
mechanisms for monitoring and enforcing compliance with political finance laws.
Campaign finance and expenditure
Checklist
-
Does the legal
framework ensure that all political parties and candidates are treated
equitably through provisions governing campaign contributions and expenditures?
-
If the legal
framework for elections allows public funding or the use of state resources for
campaigns, does it regulate such use on the basis of equitable treatment for
all political parties and candidates?
-
Are limitations
on funding of campaigns reasonable, clear and capable of objective application?
-
Does the legal
framework for elections require periodic reporting on campaign contributions
and expenditure?
-
Does the legal
framework for elections provide for public access to reports on campaign
contributions and expenditure?
-
Does the legal
framework for elections provide for adequate and effective enforcement of the
political finance laws?
-
Does the legal
framework for elections provide for equality of freedom to raise private funds without
unreasonable limitations?
Mr.
Serhii KALCHENKO
Member
of Working Group on Drafting Electoral Code of Ukraine
Senior
Attorney, Moor & Krosondovych Law Firm
Kyiv, Ukraine
This
report basically pertains to two major aspects
related to a whole scope of issues on the financing of political processes in
Ukraine, namely the legal framework on the financing of activity of political
parties during the between-elections
periods, and the special features of legal regulations on the financing of
activity of political parties, electoral blocks, and individual candidates
during the electoral processes. At the same time the issue of practical
implementation of relevant provisions of the electoral laws of Ukraine in a light of the case law of the Ukrainian courts is discusses as
well.
1. Current state of legislative regulation on the financing
of political party
1.1. State financing
As
regards the issue of current Ukrainian legislation and practise, some historical
events should be recalled first.
1.1.1. Historical Overview
It
has to be noted that the
state financing of activity of political parties in Ukraine was introduced
by adoption of the Law of Ukraine “On Amending Relevant Legislative Acts of
Ukraine in Relation to Introduction of the State Financing of Political Parties
in Ukraine” (hereinafter – Law on State Financing) on November 27, 2003.
Correspondingly, the Law of Ukraine “On Political Parties in Ukraine” (hereinafter – Law on Parties), Budget Code of Ukraine, and other laws were changed and
amended too. In particular, Article 1 of the Closing and Transitional
Provisions of the Law on State Financing envisaged that this Law should enter a
legal force starting from January 01, 2005. At the same time,
Article 3 of the Closing and Transitional Provisions provided that the state
financing would commence starting from January 01 of a year that follows a
year when the next regular parliamentary election
is held. Also, it stated that a reimbursement of political parties (parties
that formed electoral blocks) for their expenses related to pre-electoral
campaigning in the course of electoral process, would be arranged in accordance
with results of the next regular election.
Taking into consideration that since adoption of the Law on
State Financing the next regular election was scheduled for March 26, 2006, it
was expected that a reimbursement of parties for relevant expenses would
commence starting from January 01, 2007. Moreover a procedure of
reimbursement was anticipated by Article 98 of the Law of Ukraine
“On Election of People’s Deputies of Ukraine”
(hereinafter – Law on Parliamentary Election). For instance, Article 98.1 envisaged
that parties and blocks which obtained 3% and more
of the number of voters who participated in voting are eligible
to be reimbursed for their factual expenses for pre-electoral
campaigning events, but with no more than 100,000
amounts of minimal wages for each party (or, block).
Also, Article 98.2 authorized the Central Election Commission (hereinafter –
CEC) to adopt a decision regarding a reimbursement for political parties for
their expenses based on relevant financial reports to be submitted by parties
(electoral blocks of political parties).
It is worth to mention that subsequent to results of a
regular parliamentary election held on March 26, 2006 the CEC adopted the
resolution and determined the particular amount of the following costs
that would be transferred to the winners of the election:
ü Party of Regions – 35,000,000.00
UAH.
ü Block of Yulia Tymoshenko –
13,500,885.00 UAH.
ü Our Ukraine Block – 35,000,000.00
UAH.
ü Socialist Party - 35,000,000.00 UAH.
ü Communist Party – 8,352,358.00
UAH.
A further development of a whole story was not less
interesting. On May 22, 2008 the Constitutional Court of Ukraine ruled out that
amendments to the Law on Parties and the Law on Parliamentary
Election introduced by the Law “On the State Budget for the Year of 2008” were unconstitutional. Meanwhile, neither the parliamentarians
while discussing and adopting the laws concerned, not the
Constitutional Court’ judges while ruling the said decision dated May 22, 2008,
questioned a legal nature of the state financing of political
parties, as well as the grounds and reasons for the introduction of a system of
the state financing. Some experts believe that a ground why the parliament
first suspended a legal force of the relevant provisions for the year of 2007,
and further terminated them, was just a subjective point of view
of some politicians, including the Minister of Finance. At the same time, the Constitutional Court, taking into consideration a legal character of a law on the state
budget ruled out, that due to its specific purpose and sphere of legal
regulation, a law on the state budget may not implement the
changes to other laws, suspend a legal force or terminate other laws. In order
to amend or to suspend the current laws, the Parliament should adopt separate
laws instead of including relevant norms into a law on the state budget.
As a result of the decision of the Constitutional Court a controversial
situation was created for a whole legal framework indeed. On the one hand, the
relevant provisions of the Law “On the State Budget for the Year of 2008” which used to terminate norms of the Law on Parties and the Law on Parliamentary
Election lost their legal force, since they were
found as unconstitutional. On the other hand, a legal force of those norms of
the Law on Parties and the Law on Parliamentary Election on the state financing
was not recommenced, since the Constitutional Court is not a
body of the legislative power. Unfortunately, so far the
Verkhovna Rada has not adopted any relevant laws on the matter afterwards to replace
the norms which lost their legal force, and failed to establish a proper
mechanism of legal regulation of the relevant relations.
Taking into consideration the above mentioned circumstances,
for the purposes of this report we will later on
discuss the relevant norms of the Ukrainian laws on Parties as of
the period when those norms were in a legal
force, namely before adoption of the Law of Ukraine “On
the State Budget for the Year of 2007” on December 19, 2006.
1.1.2. Legal framework on the state financing
Article 17.2 of the Law on Parties anticipates
that each political party which received the state financing of
activity, envisaged by a party’ charter (or,
so-called “charter’s activity”) shall publish an annual report
for the amount and areas of spending the costs allocated by the State Budget of
Ukraine, as well as for the property of political party. At the same time
Article 171.1 of this Law envisages the forms of the state
financing. Particularly, it states that the following two areas
of activity are financed by the state costs:
ü Party charter’s activity that is not
related to participation in electoral processes.
ü Reimbursement of the political party for the
expenses related to financing of pre-electoral campaigning during
the regular or extraordinary elections.
It is to be noted that Article 173 anticipates criteria
of eligibility for receiving the state financing for performing a charter’s
activity. For instance Article 173.1 states that party has the right
to receive the state financing of its charter’s activity
provided that electoral list of candidates of this party obtained 3 %
and more of the number of voters who participated in voting. At
the same time, Article 173.2 anticipates that party which formed
electoral block with other political parties has the right
for the state financing in accordance with the terms and conditions envisaged
by this law. As like as Article 173 Article 174 establishes
the same rules for determining those parties which have the right
to be reimbursed for their expenses for pre-electoral campaigning
in compliance with the terms and conditions established by the Law on
Parliamentary Election.
The norms of Article 175 relate to procedures of allocation
and distribution of costs for the financing of the charter’s
activity of political parties (blocks). For example Article 175.1
states that the costs allocated by the State Budget for the financing of the
charter’s activity are distributed by the Ministry of Justice among political
parties, including those parties that formed electoral blocks with other
parties, proportionally to a number of voters
who voted for electoral list of particular parties and blocks.
Correspondingly, a procedure for distribution of costs allocated by the State
Budget for the financing of charter’s activity amongst the parties within
electoral block shall be defined by congress of relevant
parties.
1.2 Private financing
Correspondent provisions of the Law on Parties provide the
normative regulation of so-called “private” financing of
political parties. For instance, Article 14.2 states that political parties are
non-profit institutions. Article 15.1 envisages a list of
restrictions on the financing of political parties. In particular, it
anticipates that the following entities and persons
are prohibited to finance the party’s related
activity:
ü Bodies of the state power and local
self-governance.
ü State-owned and communal-owned
enterprises, institutions and agencies, as well as enterprises, institutions
and agencies, whose shares are partly owned by the state or the territorial
communities, as well as by non-residents.
ü Foreign states, citizens,
enterprises, institutions, and agencies.
ü Charitable and religious associations and organizations.
ü Political parties that are not
members of relevant electoral block of political parties.
Experts believe that the purpose of Article 17
of the Law on Parties is to make the relations devoted to financial issues as transparent.
Specifically this norm provides that political party shall publicize
its annual financial report for the party’s incomes, expenses,
and property.
2. Specifics of legal regulation on the financing of
electoral processes
The relevant norms are anticipated by three
electoral laws, namely the Law on Parliamentary Election), the Law of Ukraine
“On Election of President of Ukraine” (hereinafter – Law on Presidential
Election), and the Law of Ukraine “On Election of Deputies of Verkhovna Rada of
Autonomous Republic of Crimea, local councils, and mayor of cities,
settlements, and villages” (hereinafter – Law on Local Election). It should be
noted that a part of relevant norms provides for the same or, at least, a
similar legal regulation of similar relations for different type of elections.
However, several relations for different type of elections are regulated by the
electoral laws on completely different manner. It is worth to provide a brief
overview of the correspondent norms in force.
2.1 Parliamentary Election
Provisions of articles 48, 51, 52, and 53 of the Law on
Parliamentary Election prescribe the rules for the financial support of
activity of parties and electoral blocks in the course of electoral process.
For example, according to Article 48.1 only the costs allocated
by the State Budget of Ukraine and costs of the electoral funds of parties
(blocks) may be disbursed for preparation and conduct of election. Meanwhile the
said requirement has been recently taken upon by the current political
opponents, namely supporters of Prime Minister of Ukraine, in their fighting
against the intention of the President to hold the extraordinary parliamentary
election this year. The major argument was that the State Budget for this year
does not allocate the expenses for this particular purpose,
and disbursement of any other costs would be de-jure a violation
of the budgetary discipline.
Article 48.2 provides for the obligation of
political party or electoral block to set up an electoral fund.
In addition to that it is prohibited by Article 48.3 to pay for
production of the campaigning (agitation related) materials or
events out of other financial sources than corresponding
electoral fund of party or block.
It is important to remark that relevant rules for setting up
an electoral fund by opening the account, as well as transfers on and out of
such account are provided by the Law on Parliamentary Election too. For example,
Article 51.9 precludes that information about opening the account of relevant
electoral funds shall be published by the CEC at the official editions
of the Ukrainian Parliament and the Cabinet of Ministers. Article 51.10
anticipates that disbursement of finances out of the account of electoral fund
may be performed via cashless payments only. At the same time a deadline
for disbursement is at 3 p.m. on the last day before the day of
voting. Articles 52.1, 52.2, and 52.3 provide for requirement that political
party (electoral block) shall nominate a person authorized to manage a relevant
electoral fund and to report to the CEC for all disbursements (hereinafter –
manager of electoral fund). Article 53.10 precludes that the CEC is the
authorized state institution to monitor the receipts, recording,
and expenditures out of the account of electoral funds.
Also, the norms of Article 53 anticipate a scope of
legislative requirements for the sources of creation and spending
costs out of the account of electoral fund. Namely, Article 53.1 states that
party’s or block’s fund is replenished by party’s own financial
sources, as well as by a voluntary donation of natural
persons. Notably, the amount of voluntary contribution may not
exceed 400 minimal wages. The amount and quantity
of party’s or block’s donations are not limited. Article 53.3
provides that it is prohibited to foreign citizens and stateless
persons, as well as to anonymous contributors to donate to electoral funds.
Besides that it is worth to underline that a manager of electoral fund has the right
to deny acceptance of donation from a natural person, as
anticipated by Article 53.6. At the same time according to Article 53.8 a manager of electoral fund shall deny acceptance of contribution in case if such
donation is prohibited by the Law. As stated in Article 53.12 when the
electoral process is finished, the unspent costs shall be wired to a permanent
bank account of political party or parties that formed a relevant electoral
block.
It is worth to mention that several other norms of the Law
on Parliamentary Election also regulate a financial “discipline” of party (or,
block) during the course of electoral process. For instance, Article 66.4
states that financial support of conducting the campaigning
events by party (block) or candidate may be arranged at the expense of a
relevant electoral fund of party (block) only. At the same time
Article 66.6 envisages a ban on a usage of own
costs of candidates or costs out of other sources (including, on
the voters’ initiative) for conducting a campaigning related
activities.
2.2 Presidential Election
As regards the
legal framework on regulating the relevant relations during the presidential
election, it should be marked that basically norms of articles 37, 41, 42, and
43 of the Law on Presidential Election provide for a similar
rules as the Law on Parliamentary Election. For example, Article 37.2 states
that candidate for President shall form his/her electoral fund.
Also, Article 41.6 anticipates the requirement to disburse expenditures by cashless payments
only. However, taking into account that the Law on Presidential Election
precludes the electoral system of two rounds of voting, Article
4.11 states that in case of holding a second round of voting the disbursement
of funds from the relevant electoral accounts is recommenced
starting from the day when the CEC adopts a resolution regarding the particular
two candidates who entered a second round of voting.
Article 43.1 anticipates that candidate for presidency,
party (or parties that formed electoral block) which nominated a candidate has
the right to make their contributions to relevant electoral fund,
as well as natural persons who are eligible to donate their voluntary
contributions. However, in distinction from the Law on Parliamentary Election,
Article 43.2 of the Law on Presidential Election sets up a maximum
amount for the electoral fund of candidate at the level of 50,000
minimal wages. Correspondingly, for two candidates who entered a second round
of voting, a maximum amount is to be increased on 15,000 minimal
wages. Also, it is anticipated by Article 43.3 that the amount of voluntary
contribution from a natural person to electoral fund of one candidate
may not exceed the level of 25 minimal wages.
It is important to note that the same category
of persons are prohibited by Article 43.4 to donate moneys to
electoral funds as it is precluded by Article 53.3 of the Law on Parliamentary
election. However, it is worth to mention that Article 43.12 of the Law on
Presidential Election provides that in case of termination of
candidacy, the rest of moneys shall be wired out of electoral account to the
State Budget. Also, according to Article 43.14 the information regarding amount
of electoral fund of candidates, as well as the reports for relevant
disbursements shall be published by the CEC at the official
bulletins of the Parliament and the Cabinet of Ministers.
2.3 Local Election
Unlike the laws on Presidential and Parliamentary elections,
the Law on Local Election does not anticipate the normative obligation
for candidates, branch of political parties and blocks to necessarily open
their accounts of relevant electoral funds. For example, Article 82.2 of the
Law on Local Election states that local branch of political party (electoral
block of local party branches), and candidates running for deputy seats at
single mandate constituencies have the right to set up
the electoral funds for financing their electoral campaign (agitation). Also,
it is interesting to mark that Article 84.8 provides for a deadline for
disbursement of moneys out of account of electoral funds that differs from the
correspondent rules established for the Presidential and Parliamentary
elections. Specifically, the said norm states that all expenditures shall be
completed one day prior to the voting day, meaning not later than
on the last Friday’s midnight.
Even thought Article 86.1 provides for the same list
of persons who are eligible to make their contributions and
voluntary donations to the relevant electoral funds, and Article
86.6 establishes the same list of persons who are prohibited
to donate moneys to the electoral funds as like as other two election laws
discussed above, Article 86.2 anticipates the relevant limits of
expenditures out of the electoral funds of local branch of political party
and electoral block depending on particular number of
voters belonging to a territorial community, or an administrative
and territorial unit. In particular, it states that the maximum amount of the
spending may not exceed:
ü 20,000 UAH for the territorial
communities with up to 20,000 voters;
ü 50,000 UAH for the territorial
communities, raions, and raion within the cities with up to 50,000 voters;
ü 100,000 UAH for the territorial
communities, raions, and raion within the cities with up to 100,000 voters;
ü 250,000 UAH for the territorial
communities, raions, raion within the cities, and oblasts with up to 500,000
voters;
ü 500,000 UAH for the territorial
communities, raions, oblasts with up to 1 million voters;
ü 1,000,000 UAH for the territorial
communities, oblasts with more than 1 million voters, and for the Autonomous
Republic of Crimea.
The maximum amount of expenditures out of the
electoral fund of candidate running at a single mandate constituency depends on
a particular type of elections. For example Article 86.3 provides
that a maximum sum of expenses of the electoral fund of candidates
for the mayor of village, settlement, and city may not
exceed a half of the sum anticipated by Article
86.2 for a relevant territorial community. Besides, Article 86.4 states that a
maximum amount of spending out of the electoral fund of candidate
for deputy of village or settlement council may not
exceed 50 minimal wages.
It is worth to mention that Law on Local Election provides
for other relevant restrictions and requirements too. Namely, according to
Article 86.5 the voluntary contributions of the natural person
may not exceed 3 amounts of a minimal wage. Also,
as stipulated by articles 86.10 and 86.11 a manager of account of electoral fund shall deny receipt of payment arranged with the violations. A
certain part of voluntary contribution donated by a natural person shall be wired
back to that person provided that a total amount of donation exceeds
the limit established by the Law.
As like as the laws on Parliamentary and Presidential
elections anticipate a scope of the relevant responsibility of the CEC, Article
86.12 of the Law on Local Election provides that a relevant Territorial
Election Commission (hereinafter - TEC) is an authorized body to monitor
receipts, recording, and disbursement of costs out of account of the electoral
funds.
3. Legal liability for violation of legislation on financing
of the electoral processes
The current Ukrainian election laws and other relevant laws
in force anticipate a wide spectrum of legal liability for different form of
violations of the legislative requirements regarding the financing of activity of political parties, including a
liability for violation during the electoral processes. For example so-called
measures of “constitutional legal liability” preclude a warning
and a termination of registration of relevant participant of
election. The CEC and relevant TECs are responsible to apply these measures. At
the same time a criminal and administrative liability may be enforced by the
courts of general jurisdiction in accordance with requirements established by
the Criminal Procedure Code of Ukraine and the Code on Administrative Offences
of Ukraine.
3.1. Financial Sanctions
As it has been already mentioned
above, the Law on Parties as of December 19, 2006, anticipated the relevant sanctions for
violation of financial discipline regarding the state financing committed by
political party. For instance, Article 177 provides for grounds and
procedure for termination or reduction of amount of
the state financing of charter’s activity. For instance Article 177.1
anticipates the following grounds for termination of the said
amount:
ü Reorganization (except merger and
accession to other party), liquidation of political party, ban of political party,
annulling a certificate on registration of political party.
ü Establishment of fact by court per
reference of the Ministry of Justice that the costs allocated by the State
Budget for financing of the charter’s activity were spent by political party for
financial support of election related activity of party, or for the purposes
not related to the charter’s activities of party.
It is worth
to mention that Article 178 of the Law on Parties relates to the
issue of the state control of spending of costs allocated by the State Budget
for financing of charter’s activity of political party. For example, Article 178.1
provides that the state control of spending is conducted by the Accounting
Chamber and by the Head Department of Control and Revision of Ukraine. Article
178.4 envisages that the Head Department of Control and Revision has
the authority to submit to a court for termination of the state financing of
charter’s activity of political party provided that the Department established
that the allocated costs were spent for the electoral related activities, or
for the other purposes than the charter’s activity.
Under Article 19.1 of the Law on
Parties, if transgressing the Constitution of Ukraine, this and other laws of Ukraine, political party can be warned or banned. At the same
time, Article 19.2 of the edition of the Law on Parties as of December 19, 2006, stated that the
above mentioned sanctions shall not be applied provided that the
state financing of the charter’s activity of political party is terminated.
Also, Article 20 of the Law on Parties envisages that a warning can be issued by the administrative body authorized to control the
parties. According to Article 18.1.1 the Ministry of Justice of Ukraine is responsible to perform a control of activity of political parties.
In addition, Article 21.1 anticipates that a ban of political
party may be imposed by ruling of a court per submission of the Ministry of
Justice or Prosecutor General. As a result of such ruling, Article 21.2 envisages
that a ban entails the termination of the banned party’s
activities, the dissolution of its managerial bodies, local
branches, and the termination of party’ membership.
3.2. Termination of registration of participant of
elections
Some experts consider a termination of
registration of candidate or party as one of the most severe sanction
among others. For example, the relevant procedure is envisaged by the Law on
Parliamentary Election. In particular Articles 64.4.3 of this Law anticipates
that the CEC shall announce a warning to party (block) or
candidate provided that a court while resolving an electoral
dispute found, that candidate or party (block of political parties)
spent for conducting pre-electoral campaigning event the finances not out
of party’s / block’s electoral fund. Correspondingly, according to
Article 64.1.10 the CEC shall terminate the registration of
candidate provided that candidate repeatedly committed a
violation provided that he/she was warned before for committing
the same violation, as stipulated by Article 64.4.3.
It leads to the conclusion that the Law on Parliamentary
Election anticipates the conditions and procedure for termination
of registration of individual candidate only, but not registration
of electoral list of political party or electoral block. The most
severe penalty for party or electoral block is
announcing a warning by the CEC that also should be published at
the national mass-media, as stipulated by Article 64.4 of the Law on
Parliamentary Election.
The relevant provisions are envisaged by the Law on
Presidential Election too. However, in distinction from the Law on
Parliamentary Election, the CEC is not authorized to terminate a
registration of candidate for President of Ukraine. Article 56.1 of the Law on
Presidential Election provides that the CEC has the right to
apply to the High Administrative Court of Ukraine for termination of
registration under certain (so-called “technical”) circumstances, such as: a
personal request of candidate for termination of registration, a failure to
collect the required number of signatures for support of candidacy, a
termination of the Ukrainian citizenship of candidate etc. It means that under
the current legislation, a termination of registration of
candidate for President is not a form of legal liability
for violation. The only form of legal liability for candidate is a warning
that may be announced by the CEC. For example, Article 56.3.3 envisages that
the CEC has the right to announce a warning to candidate or party (block) which
nominated candidate, provided, that a court while resolving an electoral
dispute found, that a candidate conducted a pre-electoral campaigning
event not at the expense of candidate’s electoral fund.
A warning and termination of registration as sanctions
for violations of the election legislation are anticipated by the Law on Local
Election. It is worth to underline that the relevant TECs are empowered
to announce a warning, as well as to terminate a registration. Specifically,
Article 48.1 envisages that relevant TEC terminates a
registration of candidate for mayor of village, settlement, or city, and
candidate for deputy of village or settlement council provided, that a court
while resolving an electoral dispute found, that
candidate spent for conducting a pre-electoral campaigning event the finances not
out of candidate’s electoral fund, or a total amount of expenditures
out of candidate’ electoral fund exceeded the limit established
by this Law. Correspondingly, Article 48.3 of the Law on Local Election
anticipates a termination of registration of entire electoral
list of branch of political party or block (means, termination of
registration of all candidates) provided, that a court while
resolving an electoral dispute found, that branch of political
party or block conducted a pre-electoral campaigning event not at
the expense of party’ (block’) relevant electoral fund, or a total
sum of expenditures out of electoral fund exceeded the
limit established by this Law. At the same time, according to Article 48.5 in case of any other violation of the requirements of this Law by local branch of
political party (electoral block) or candidate, a TEC is empowered to announce
a warning to that participant of electoral process.
3.3. Criminal Liability
The Criminal Code of Ukraine envisages a liability for
considerably wide catalogue of the relevant wrongdoings. For instance Article
1591 of this Code, that entered a legal force on March 25, 2006
(meaning, one day prior to the day of the last
regular parliamentary and local elections held on March 26, 2006) envisages a
penalty for violation of requirements on the financing of
electoral campaign of candidate, political party (electoral block). According
to Article 1591.1, a providing of the financial (material) support
to candidate, party or block with the amount higher than 400 minimal
wages contrary to the established procedure, or rendering
unjustified discount for production of campaigning materials, are punished
with a fine in amount of between 100 and 300
amounts of minimal income of citizen that is not subject
for taxation, or
with a deprivation of freedom for up to 2 years, or
with a limitation of freedom for up to 2 years.
Also, Article 1591.2 provides that intentional spending
of finances of relevant electoral fund of candidate, political party, or block
in the amount higher than 400 minimal wages, and contrary to the
procedure established by law, committed by candidate, proxy, or other
authorized person, is punished with a fine in the amount of between
100 and 300 minimal incomes of citizen that is not
subject for taxation, or with a deprivation of freedom
for up to 2 years, or with a limitation of freedom
for up to 2 years.
3.4. Liability for Administrative Offences
As well as the current Criminal Code, the Code on
Administrative Offence of Ukraine was substantially amended with several
relevant articles on the eve of the last regular parliamentary and local
elections in 2006. For instance, Article 21215 of this Code provides
for so-called “administrative” liability for violation of the legislative
requirements on providing the financial support for electoral processes.
Particularly it states that commitment of such violation entails a fine in
the amount of between 50 and 70 minimal incomes of citizen
that is not subject for taxation in case if a delict committed by ordinary
natural person, or a fine in the amount of between 70
and 100 minimal incomes of citizen that is not subject
for taxation in case if a delict committed by official or officer,
provided that a violation concerned is not a crime
anticipated by the Criminal Code. Also, it is remarkably to underline that
according to Article 255 of the Code on Administrative Offenses, chairmen,
deputy chairmen, secretary, and other members of relevant
election commission are empowered to draw up a report (protocol,
minute) on this particular administrative offence that should be further sent
to a correspondent local court authorized to hear this category of
cases.
4. Practice of election dispute resolution: violation of
legislation on the financing of electoral processes
Taking into consideration that so far it has been no
practical application of the legislative norms regarding the state financing of
political parties in Ukraine, for the purpose of this report
we examined the existed practice of application of the electoral laws only.
Particularly, this section of the report is developed based on a substantial
volume of decision of the Ukrainian courts as a result of resolving the electoral
disputes during a series of parliamentary, presidential, and local
elections between 2002 and 2007. In this regard it is worth to mention that
there were no examples of the relevant violations
during the 2004’s presidential, 2006’s regular and 2007’s extraordinary
parliamentary elections, which were held based on purely
proportional electoral system.
However, several disputes of this category related to the parliamentary
election were resolved by courts in 2002 when a so-called “mixed”, majority-proportional
electoral system, was applied. For instance, in the course of electoral process
at the single mandate constituency # 35 the Court of Appeal of Dnipropetrovsk
Oblast ruled out that candidate Zh. used for financing his campaigning events the
costs not out of his electoral fund. Based on that
court’ ruling the Constituency Election Commission # 35 (hereinafter - CoEC)
announced a warning to candidate Zh. Later on the Court of Appeal
of Dnipropetrovsk Oblast while resolving other electoral dispute found that the
proxy of candidate Zh. paid a hard cash for the rent of premises
for holding a meeting of the candidate with voters. With the reference to the
said court’ decision the CoEC announces the second warning to
candidate Zh. Eventually the CoEC adopted a resolution to terminate
a registration of candidacy of Zh.
A certain number of relevant disputes related to violations
of legislation on local election were resolved by courts during
the processes of regular elections in 2002 and 2006. In particular, the Volchanskyi Raion Court of Kharkiv Oblast established that the candidate for
the city mayor N. spent for the printing of his campaigning materials the
amount of costs that exceeded the limit for the
relevant expenses envisaged by the Law on Local Election. Moreover the court
found that the candidate N. failed to open the account of his electoral fund at
all, which meant that N. conducted his campaign not at the
expense of his electoral fund. As a result, the court found the
fact of violations, and laid the relevant TEC under the obligation
to terminate registration of candidacy of N.
A very interesting for research case was resolved by the
Leninskyi Raion Court of the City Kirovohrad in the course of simultaneous
processes of two types of elections in 2002: local and
parliamentary. The story was that Mr. K. participated in both elections as
candidate for Deputy of Parliament and candidate for the city mayor. The court
ruled that K. failed to open his electoral fund as candidate for mayor, and
financed his mayor’s related campaigning events at the expense of
the opened electoral fund of candidate for Deputy. As a result of
the case hearing, the court found the fact of usage the costs for financing
electoral campaign not out of the electoral fund of the candidate
for mayor.
The relevant disputes were resolved by the courts during the
2006’ local election too. For instance, the Court of Appeal of Donetsk Oblast
squashed the decision of the Voroshylovskyi Raion Court of the City Donetsk,
and established that the candidate for the city mayor B. used other sources
for financing a service for printing out his campaigning materials than costs
of his electoral fund. Particularly the court found that a public
association “Y.V.”, chaired by the candidate’s proxy, paid for printing work
for that candidate.
In other case the Court of Appeal of Volyn Oblast upheld the
decision of the Starovyzhivskyi Raion Court. The court of the first instance
established that a local branch of the “P.” Party formed the electoral block
“B.L.” with the branch of other parties. Upon that the block did not open its
electoral fund, and the local branch of the “P.” Party financed a printing of
campaigning materials on support of the block. As a result the court ruled that
it was a violation of the restriction to conduct all payments out of the
account of electoral fund only.
5. General Conclusions
Analyzing a whole complex of legislative provisions
regarding the financing of political processes in Ukraine and existed practice
of application of these laws, the following conclusions could be drawn:
ü In general, a substantial part of
the relevant provisions on the state (or, public) financing of
political parties as of December 19, 2006, comply with the
recommendations provided by the Guidelines and Report on the Financing of
Political Parties adopted by the Venice Commission on March 9-10, 2001. This
statement especially relates to the right of parties / blocks represented by
deputies at the Parliament to receive the state financing of their charter’s
activities, as well as for a reimbursement of party’ / block’ expenses for the
campaigning related activities during the preceding electoral process. It also
relates to the state control of spending the costs allocated by the State
Budget that is performed by the relevant state authorities and agencies.
Envisaged status of political parties in Ukraine as non-profit institutions corresponds
with recommendations of the Venice Commission too.
ü Unfortunately, even thought the
state financing of political parties was introduced in Ukraine five years ago, the relevant provisions were not applied in practice so far due to
the reasons discussed above. With regard to the last point, conclusion could be
made that the Ukrainian political forces presented at the Parliament failed to
take the decision of the Constitutional Court into account, and to bring the
relevant norms in compliance with requirements of the Constitution. Experts
believe that it was partly caused by the ongoing political crises in Ukraine.
ü The current requirements of the Law
on Parties regarding a private financing, including a list of persons and
entities banned to support the political parties in Ukraine financially,
basically comply with above mentioned recommendations of the
Venice Commission as well.
ü Regarding the current state of
legislative regulation of the financing of election related activity of the
political parties (blocks), some Ukrainian experts believe that the legislation
is a sensible, justified, and quite simple for acknowledging by participants of
electoral processes. The relevant norms are rather of a preventive
character than of a punitive one. However, the relevant norms of election
legislation correspond with recommendations of the Venice
Commission only partly. For example, the Law on
Parliamentary Election does not envisage a limit (ceiling) of a total amount of
all contributions which may not be exceeded.
ü A negligence or intentional
ignorance of the established legislative requirements committed by party,
block, or individual candidate could entail for them an enforcement of
different forms of legal liability. Such form of liability for violation of the
electoral legislation, as a warning or termination of registration of candidacy
could be initiated by their competitors via suing party or candidate-opponent
with the court.
Mr Sergiusz Trzeciak
Chairman of the Politics Funds,
Political Consultant
Expert of the OSCE Office for
Democratic Institutions and Human Rights (OSCE/ODIHR)
Ensuring fair competition in the
political market by a due financing model constitutes a problem not only for
post-communist countries but also those that have a firm democratic system.
There is no single, universal model guaranteeing proper financing and fair
competition of political parties. Each financing model should take into account
a country’s constitutional traditions, legal frames, social conditioning, and
cultural norms.
The objective of this brief case
study is to depict how the system of financing of political parties in Poland has influenced the shape of the political arena, and, after the analysis, to suggest
solutions that could enable fair competition between the already-established
and the incoming political parties. Without undermining Poland’s achievements in achieving democracy, one should notice that it has not avoided mistakes. It
is common knowledge that one learns most from mistakes, preferably the mistakes
of others.
In order to comprehend fully the
case of Poland, however, let us go back to the turn of the decade (eighties –
nineties). At that time, Poland introduced a liberal free-market reform, the
Act on Freedom of Economic Activity, which paradoxically was legislated by the
last communist government. It was a genuine revolution instigating practically
absolute economic freedom that had been beyond the dreams of even the most
economically liberal Western countries.
The communists chose such daring
reforms so they could grant themselves property rights over the national
estate. The new regulations enabled founding of the nomenclature companies
whose main task was to parasitise on the national estate. This successfully
hindered fair financial competition between the post-Solidarity, right wing
groups, the liberal centre, and the post-communist parties that had taken over
part of the income of the collapsing Communist Party and had the extra
financial backup in the nomenclature companies.
The situation made the
post-Solidarity parties face the dilemma of how to guarantee financing, which
finally was found in the sphere of big business. Financing of the political
parties by business was present equally on the local and national level, where
the term “political capitalism” was coined. It may seem paradoxical, but such a
system fostered considerable competition in the political arena. On one hand,
the parties were vulnerable, but on the other hand, they strived to stay in the
political market by means of competitive programmes. As a result, the parties
kept appearing, only to disintegrate and finally to vanish from the political
scene. With respect to that, although the Polish parties diverged from the
Western models, the new political groupings could compete.
In 2001, the situation changed
completely, due to moderations in the acts on political parties and the
elections statute. These acts introduced financing of the parties from the
national budget in the form of subsidies for political parties and grant-aids
for electoral campaigns. The ratio legis of the legislature was to curb the
existing political capitalism.
According to the current
regulations, a subsidy may be granted to groups that have obtained a minimum of
3 percent of the votes nationwide, as well as to party coalitions that have
obtained 6 percent of votes. Thus, the subsidies for the parties are not connected
directly with crossing the electoral threshold, which is higher and equals 5
percent for the parties and 8 percent for electoral coalitions. Crossing the
electoral threshold is relevant, however, in the case of the grant-aids on the
electoral campaigns, which are offered to the parties for every parliament
member.
In order to show the scale of the
subsidies, it is worth adding that in the scale of last year, it amounts to
more than 100 million PLN. Regardless of the subsidies, the parties receive grant-aids
in the form of reimbursement of the expenditure on the electoral campaigns for
every new parliament member, so that in the scale of all the parties during the
2007 elections, the total sum of grant-aids amounted to approximately 40
million PLN.
Budgetary financing of the parties
was accompanied by rigorous limitations concerning financing of the political
parties from outside sources and the obligation to present financial
statements, which could be dismissed in the following cases:
- Running business activity by a
party;
- Acquiring financial means form
public collections;
- Accumulating financial means
beyond the bank account;
- Accepting financial means from
the banned sources (including foreigners or legal persons);
- Financing the electoral
campaign with the omission of the Electoral Fund and accumulating funds
from the Electoral Fund beyond the indicated bank account.
What have been the results of the
new regulations and have they really prevented corruption? The parties have
received a huge injection of capital; however, it was invested mostly in the
professional image campaigns of their leaders. Instead of the poor-quality
leaflets and crooked posters, the streets of the cities started to fill with
billboards and city lights. The political parties advertised in the press and
fought wars using paid TV spots. They started to be obsessed with the image
wars waged for the taxpayers’ money. On the organizational level, they became
more professional as they finally had the means to employ full-time workers.
The idea of introducing an expert
fund and devoting from 5–15 percent of the subsidies to the Expert Fund seemed
to be the least successful. According to the law, the financial means
accumulated within the Expert Fund can cover the costs of legal, political,
sociological, and socioeconomic expertise, and finance the editorial and
educational activities related to statutory activity of a political party. The
authors of this article hoped that due to such regulations, the parties would
create their own intellectual backup and closely cooperating think tanks.
Unfortunately, none of the parties succeeded in doing so; they easily found
ways to bypass these regulations and instead of financing the expertise and
think tanks, they pumped the money into electoral campaigns.
As a result, the corruption was
limited partly – on the central level in particular – but the money often was
used by the party leaders and consequently got blocked at the central level,
without reaching the local candidates who not only failed to obtain support but
were forced to contribute to common campaigns in the regions. Thus, some of the
parties, de facto, introduced a scale of charges depending on their position on
the electoral register. What is worth underlining here is the fact that in Poland, as in many other post-communist countries, there is a proportional system in which
it is theoretically the elector’s will that counts, not the position on the
register. However, it is well known that in reality the names on the top of the
list are more likely to be marked, so that in the political parties, the
candidates compete for the top places on the list.
While the system hampered the
corruption to some extent, from the democratic angle, it also blocked
opportunities for new parties to form. The new mechanism of financing
stabilized the political system, creating two strongly polarized groups of
post-Solidarity origins: the liberal Civic Platform
(PO) and the conservative Law and Justice Party (PiS), along with two
less influential groups, the left wing parties of post-communist background and
an agrarian party.
The basic result of financing the
parties directly from the national budget is creation of an oligopoly. In such
circumstances, it hardly is possible for the new parties to enter the political
market as they cannot have other significant financial sources, and without
money they cannot cross the 3 percent threshold for the parties to obtain funds
from the budget. The legal regulations have created a vicious circle that hinders
fair competition between newly-established parties.
The only chance for a change lies in
pressure from public opinion and in the parties’ activities that make use of
the aversion of public opinion towards the idea of financing the parties from
the budget. Such initiative has been demonstrated by the currently ruling Civic
Platform, which twice within one year has threatened to cease financing the
parties from the national budget and suggested that the citizens grant 1
percent of their taxes to a party chosen individually. Additionally, it
proposed statutory limitation of expenses on electoral campaigns (mainly of the
most costly billboards and TV spots).
The proposal, however, encountered
strong opposition on behalf of the other three parliamentary fractions, because
the sole party that might profit from the changes is the very Civic Platform,
already enjoying popularity that, according to a recent survey, amounts to
approximately 40 percent. Moreover, the electors of the Platform constitute a
group of definitely higher income than the electors of other parties, which
translates into higher receipts from the 1 percent of the tax. Not
surprisingly, none of the other groups was interested in the Civic Platform’s
proposals, so the idea collapsed.
The example of Poland proves that financing the parties from the national budget does not by itself eliminate the
issue of corruption and exerts negative leverage on such elements as the
competitiveness of the groups – instigating oligopoly of the already-established
parties and ossification of the existent system. Instead of democratizing the
mechanism of financing from the budget, it strengthens the power of leaders who
virtually have the budgetary grants and subsidies at their disposal. As a
result, the money is spent on the leaders’ expensive professional image
campaigns, instead of on the development of the parties’ local structures or on
the construction of political programmes. This, in turn, results in shallow
entrenchment of the parties in the social soil. The parties no longer are
interested in expanding the membership base as the contributions comprise an
insignificant percentage of the party’s income, and a bigger party is more
problematic to manage.
The lack of real competition in the
political market and the existent oligopoly eventually bring about the
disintegration of a system, which does not motivate the parties to compete with
their programmes, but let them focus on their leaders’ expensive image
campaigns. The mechanism of complete financing from the budget does not
encourage competition, either. New players are prevented from entering the
market: on one hand, they are deprived of grant-aids and subsidies, and on the
other hand, they cannot obtain funds from outside sources.
The main elements guaranteeing fair
competition and the access of the new parties to the market are as follows:
1) Transparency and openness
The transparency and openness of
both financing sources and the party’s expenditures are essential. Even though
the parties are obliged to present financial statements, the state does not
always possesses tools to supervise them properly. The transparency also should
apply to expenditures, particularly to the structure of financing the electoral
campaign. One cannot induce rigorous rules of financing if there are no tools
for their enforcement.
2) Diversification of the sources of
financing
A situation in which parties are
financed almost 100 percent with budgetary subsidies is not reasonable. Parties
miss motivation to attract new members and supporters, who could make small
contributions to the parties’ accounts or their electoral funds. Barack Obama’s
presidential campaign in the United States proved, however, how considerable
financial means may be gained from insignificant contributions of supporters.
During Obama’s campaign hundreds of thousands of people – perhaps more than a
million - contributed small amounts to his electoral fund. While it is true
that such a result will be hard to obtain in post-communist countries, it is the
healthiest model of financing parties. The parties should be financed, above
all, by their members and supporters, and only then might reach for budget
subsidies.
3) Fair and clear game rules for old
and new players
If we choose budget financing, the state
that should provide an opportunity for feasible competition by new parties by
lowering a financial threshold, hence providing an opportunity to create new
parties. One solution to this is to lower the financial threshold for parties
that obtained 1–2 percent of the votes or to allow for financing from other
sources. Otherwise, there will be no actual competition and the existing
parties will degenerate further and will have no stimuli to provide their
electors with a valuable programme, focusing instead on negative PR and image
campaigns. If we choose budget financing, it also would be worth restricting
campaign methods of the existing parties, e.g., by introducing a ban on
financing a media campaign with the money of taxpayers.
4) Active role of the public
opinion, non-governmental organizations and the media
Ensuring competition on the
political market will not be possible with a passive attitude of public
opinion, nongovernmental organizations, or the media. The media exert a real
influence – they can, e.g., censure the phenomenon of political corruption and
hypocrisy of the existing political groups, which actually do their best to
defend against the competition of new parties. Every disclosed breach of rules
on financing parties triggers their public condemnation. It is worth ensuring
that budget funds are not spent only on image campaigns, but also on creating
parties' programmes in such a way that the campaign would be more about the
competition of the programmes rather than that of the leaders’ images. Here, an
active role can be in the hands of the think tanks that create the expert
background for politics.
The four elements mentioned earlier
may have a positive impact on fair competition between the existing parties.
Financing parties from the state
budget could be justified if we agreed that parties are political institutions
that have to come under state monitoringIf taxpayers are to finance them almost
100 percent, then the parties should be monitored by state organs rather than
be private tools of party leaders.
The key question left unanswered is
the one about the philosophy of political parties’ functioning. Should they be
private or public institutionsAnd this is influenced significantly by the
financing system.
The Conference is organised within
limits of the program of the European Commission in Kyrgyzstan and Kazakhstan and Venice Commission in Europe with cooperation of Legal Research Policy Centre (Kazakhstan)
9.30 – 10.00 Registration of Participants
10.00 – 10.30 Introduction
Dulat KUSTAVLETOV, Vice Minister of Justice of the Republic of Kazakhstan
Giovanni BUQUICCHIO, Secretary of the European Commission
Alessandro LIAMINE, Regional political affairs adviser for
Central Asia, European Union, European Commisssion for Kazakhstan, Kyrgyzstan and Tajikistan
Vera TKACHENKO, Director of the Legal Policy Research
Centre
Session 1 FINANCING POLITICAL PARTIES: CONTEMPORARY APPROACHES AND
PRACTICES
Moderator: Alessandro LIAMINE, Regional political
affairs adviser for Central Asia, European Union, European Commission for Kazakhstan, Kyrgyzstan and Tajikistan
10.30 – 10.50 Sources
of Funding of Political Parties – Prof. Galina Polunina, Finance Academy, the Government of the Russian Federation
10.50 –
11.10 “European standards of financing political parties and election
campaigns”, - James HAMILTON, Director of Public Prosecutions, Ireland, Barrister-at-Law, Full Professor in Law, Member of the Venice Commission
11.10 – 11.30 Discussion of
Reports
11.30 – 12.00 Coffee Break
Moderator: Vera TKACHENKO,
Director of the Legal Policy Research Centre
12.00 – 12.20 “Legislative
framework for financing political parties and election campaigns in France”, - Barbara JOUAN, Legal Advisor, Commission nationale des comptes de campagne et
des financements politiques (CCFP), France.
12.20 –
12.40 “Financing of election campaigns in new member countries of the
European Union”,- Evgueni TANTCHEV, Judge of the Constitutional Court of
Bulgaria, PhD Law, Full Professor in Law, Member o the Venice Commission
12.40 – 13.00 “Legislative
regulation of financing political processes: some aspects of Ukrainian
experience”, - Sergei KALCHENKO, Senior Attorney of the “Moor &
Krosondovich” Law firm, Ukraine
13.00 – 13.30 Discussion of Reports
13.30 – 14.30 Lunch
Session 2 DEVELOPMENT TRENDS OF
THE LEGISLATION ON FINANCING POLITICAL PARTIES AND ELECTION CAMPAIGNS IN KAZAKHSTAN
Moderator: Asylbek KOZHAKHMETOV, Chairman of the
Republican NGO “Shanyrak”
14.30 –
14.50 “Implementing amendments entered in the Constitution of the Republic
of Kazakhstan regarding the questions of government financing of
non-governmental organizations, and some aspects of improving the election
legislation”, - Dulat KUSTAVLETOV, Vice Minister of Justice of the Republic of
Kazakhstan
14.50 – 15.10 “Kazakhstan legislation on financing political parties and election campaigns: main
positions and trends”, - Yevgeniy ZHOVTIS, Director of the Kazakhstani
International Bureau for Human Rights and Rule of Law, NDI expert
15.10 – 16.00 STATEMENTS OF REPRESENTATIVES OF
POLITICAL PARTIES
16.00 – 16.30 Coffee
Break
Session 3 LIMITING GOVERNMENT
FINANCING AS ASSURANCE OF DYNAMIC POLITICAL PROCESS AND NEXUS BETWEEN THE
PARTIES AND THE ELECTORATE
Moderator: Yevgeniy ZHOVTIS, Director of the Kazakhstani International
Bureau for Human Rights and Rule of Law, NDI expert
16.30 – 16.50 “Existing models
and criteria for distribution of government subsidies to parties. The role of
indirect financing of political parties and election campaigns.”,- Barbara
JOUAN, Legal Advisor, Commission nationale des comptes de campagne et des
financements politques (CCFP), France
16.50 –
17.10 “The mechanics of providing new parties the access to the political
arena and competition within fair conditions and with progressively more stable
parties.”- Sergush TZHECHIAK, Chairman of the Politicos Fund, Political
consultant, Expert of the OSCE Office for Democratic Institutions and Human
Rights (OSCE ODIHR)
17.10 – 18.00 Conclusive Discussion
The more primitive the
electoral systems, the more primitive the distortions were. Maybe the most
amusing story from the antiquity of the election malpractice is described by
Herodotus when the Persian king was to be selected among seven of the nobility
members. They decided to ride on their horses through the city and to consider
elected the rider of the horse that will neigh after dawn when reaching a
certain place. Darius groom was a sly (cunning) person. He hid the Darius horse
favorite mare near the place where race was to be decided. The only horse that
neighed when the seven nobles were passing the place was Darius' one, Herodotus,
The Histories, New York, 1977, Book III, 240-241.
The elections are but
another technique like the appointment, drawing a lot, competition etc. in the
democratic constitutional systems and usurpation, heredity or inheritance of
power in a despotic regime. If we start speculating on a value neutral ground
all these methods of forming the institutions have something in common and
diferentio specifica as well. Using one of them one could reformulate the
others by the chosen one using it as a matrix and adding differentio specifica.
Official Journal of the
European Communities C 325/5 24.12.2002.
According to art. 8, 2,
2 of EU draft Constitution citizens of the Union shall enjoy the right to vote
and to stand as candidates in elections to the European Parliament and in
municipal elections in their Member State of residence, under the same
conditions as nationals of that State, Treaty establishing a Constitution for
Europe, Adopted by consensus by the European Convention on 13 June and
10 July 2003, submitted to the President of the European Council in Rome
18 July 2003, 2003/C 169/01) Official Journal of the European
Union EN 18.7.2003 C 169/3.
Marcin Walecki in
Challenging the Norms and Standards of Election Administration (IFES, 2007), pp.
75-93.
D. Smilov, Party
Funding, Campaign Finance and Corruption in Eastern Europe, in Political
Finance and Corruption in Eastern Europe, ed. D. Smilov and J. Toplak,
Ashgate, 2007, www.ashgate.com, 4.
Michael
Pinto-Duschinsky, Financing Politics: Global View, Journal of Democracy, vol.
13, No. 4, October 2002, at 85.
This Part of the present
report relies mostly and draws from several sources CAMPAIGN FINANCE IN CENTRAL
AND EASTERN EUROPE Lessons Learned and Challenges
Ahead IFES Reports Janis Ikstens, Ph. D. Daniel Smilov, Ph. D. Central
European University Marcin Walecki, M.A.St. Antony’s College, Oxford
University2002 IFES
www.ifes.org/publicationscfinst.org/Community/files/folders/organization_reports_studies
Political Finance and Corruption in
Eastern Europe, the transition Period, ed. D. Smilov and J.Toplak,Ashgate,2007,
www.ashgate.com; M. Walecki, Money and
Politics in Central and Eastern Europe, M. Walecki, The Europeanization of
Political Parties: Influencing the Regulations on Political Finance, EUI, Working
Paper Max Weber Programme, N 2007/29; This part of the report is influenced by
my practical experience and observation as an legal expert to the National
Round Table, The Grand National Assembly Constitutional Committee, Parliamentary
council on Legislation, Chairman of the Legal Council of the President of the
Republic of Bulgaria and a constitutional justice. I am also indepted to the
lessons I learned from being advised by foreign leading authorities in the area
of constitutional law and as well from my own practice of constitutional and
legal advising for Tajikistan, Kirgizstan, Albania and Baltic states on CEELI
ABA, UNDP,OSCE and IFES, requests.
The regulations related
to the financing of political parties, presidential candidates and
parliamentary campaigns may be conveniently listed under following categories,
ranked by the frequency with which they occur in the post-communist countries:
(1) free radio and/or television
broadcasting (for candidates and parties) 100%
(2) subsidies-in-kind (grants to party groups in the
legislature, free postage for election literature, free use of public
buildings, etc.) 94%
(3) disclosure regulations (requirements to submit for
official scrutiny and to publish financial accounts) 88%
(4) complete or partial bans against foreign donations 82%
(5) direct public funding of parties and/or candidates 76%
(6) spending limits (on parties and/or candidates) 59%
(7) contribution limits (restrictions on the amounts
permitted as donations to election campaigns or to parties) 47%
(8) tax relieves (income tax relieves, tax credits, matching
grants on political donations) 24%
(9) bans on paid political advertising 18%
The statistics indicate that, in
general, political money is a subject to greater regulation in post-communist
countries than in established democracies. However, when it comes to
regulations and subsidy systems in Central and Eastern Europe the issue of
enforcement is the main weakness.
D. Smilov, Party
Funding, Campaign Finance and Corruption in Eastern Europe, Political
Finance and Corruption in Eastern Europe, the transition Period, ed. D. Smilov
and J. Toplak, Ashgate, 2007, www.ashgate.com.
Beginning from
September 02, 1996, a minimal income of citizen that is not
subject for taxation, amounts to 17 UAH.
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