Political finance regulation requires a balancing of competing rights and freedoms to ensure that the electoral process remains free and fair. The important question is where to draw the line between these rival interests. To assist in this task, it is important to identify the key principles that underpin political finance. The formulation of these principles might vary but is generally accepted that equality, transparency and accountability form the backbone of international standards on political finance. This section provides context and background for these key principles, highlighting relevant regulatory issues associated with them, identifying international standards and providing examples of commonly used approaches to ensure each of them are fully respected.
Integrity in Political Finance in Greece
Chapter 2. Key principles and international standards
Abstract
Political finance regulation starts with the premise that political parties and candidates play a vital role in a democracy and need adequate funding to be effective. It is also essential to recognise that regulation in this sensitive area requires a balancing of fundamental rights and freedoms. On the one hand, international agreements not only establish the right to participate in public affairs and to vote,1 they also recognise the right of association/assembly, the right of privacy and freedom of expression.2 These rights and freedoms are central in the context of political and electoral discourse. On the other hand, some regulation or infringement of these fundamental rights and freedoms are tolerated to ensure that the electoral process remains free and fair. For example, freedom of expression would weigh in favour of not limiting the amount of money an individual can contribute in support of or in opposition to a particular candidate or party. However, to allow unlimited contributions could foster undue influence of wealthy donors and thus undermine the fairness of an election campaign. The important question then is where to draw the line between these competing interests.
To assist in this task, it is important to identify the key principles that underpin political finance. Second, regulation should enhance equality so that parties/candidates without significant financial resources can compete in the electoral process. Third, transparency is of utmost importance, or in the words of one US Supreme Court Justice, “Sunlight is said to be the best of disinfectants.” The fourth principle is accountability, which means that political actors need to be held accountable through effective oversight and sanctions.
The formulation of these principles varies3 and is subject to seemingly endless academic debate, but in general they are universally accepted. Indeed, they form the backbone of international standards on political finance. The following chart provides context and background for these key principles. It highlights relevant regulatory issues associated with each principle, identifies international standards/other documented support and provides examples of commonly used approaches to address those issues.
Table 2.1. Key principles underpinning political finance
|
Principle |
Associated regulatory issue |
Key international/European standards |
Approaches to issue |
|---|---|---|---|
|
Equality Sources of funding |
Public funding |
CoE Committee of Ministers Rec (2003)4, Article 1: “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.” CoE (Venice Commission) Guidelines on the Financing of Political Parties, Paragraph XX: “In order, however, to ensure the equality of opportunities for the different political forces, public financing could also be extended to political bodies representing a significant section of the electoral body. The level of funding could be fixed by a legislator on a periodic basis, according to objective criteria.” |
• Fair criteria for calculating and allocating public funding • Gender equality regulations Minority regulation |
|
Private funding |
CoE Committee of Ministers Rec (2003)4, Articles 3, 5, and 7: “States should ….consider the possibility of introducing rules limiting the value of donations to political parties… take measures aimed at limiting, prohibiting or otherwise strictly regulating donations from legal entities which provide goods or services from any public administration… prohibit legal entities under the control of the state or of other public authorities from making donations to political parties… specifically limit, prohibit or otherwise regulate donations from foreign donors.” |
• Qualitative regulations (ban on anonymous, foreign, corporate donations) • Quantitative regulations (limits on the amount given to candidates/ political parties) |
|
|
Equality Expenditure limitations and bans |
Spending caps and expenditure bans for campaigns |
UN Human Rights Committee, General Comment 25 (1996): “Reasonable limitations on campaign expenditure may be justified where this is necessary to ensure the free choice of voters is not undermined or the democratic process distorted by the disproportionate expenditure on behalf of any candidate or party.” CoE Committee of Ministers Rec (2003)4, Article 9: “States should consider adopting measures to prevent excessive funding needs of political parties, such as establishing limits on expenditure on electoral campaigns.” |
• Specified limit on campaign expenditure by parties, candidates and non-party campaigners • Media spending restrictions Ban on some types of campaign expenditure |
|
Misuse of state resources |
CoE Committee of Ministers Rec (2003)4, Article 2-3: “Equality of opportunity must be guaranteed for parties and candidates alike. This entails a neutral attitude by state authorities, in particular with regard to: the election campaign; coverage by the media, in particular by the publicly owned media; public funding of parties and campaigns.” |
• Prohibition of the use of state/ administrative resources during election campaigns (compelling staff to attend rallies, use of state facilities for campaign purposes, equal time required in news coverage) |
|
|
Transparency |
Recordkeeping and reporting |
Parliamentary Assembly of the Coe Rec 1561(2001): “Financing of political parties must be fully transparent, which requires political parties, in particular, to keep strict accounts of all income and expenditure, which must be submitted, at least once a year, to an independent auditing authority and be made public.” CoE Committee of Ministers Rec (2003)4, Article 12: “States should require political parties and entities connected with [them] to keep proper books and accounts.” CoE Committee of Ministers Rec (2003)4, Article 12: “States should require political parties to present the accounts …. to the independent authority.” |
• Accounting guidance and templates prescribed or made available • Appointment of person responsible for party/candidate finances (opening bank account, maintaining accounts, filing reports, etc.) • Filing deadlines |
|
Disclosure |
UN Convention Against Corruption, Art.7.3.19 “Each State Party shall consider taking appropriate legislative and administrative measures…to enhance transparency in the funding of candidatures for elected public office and, where applicable, the funding of political parties.” OSCE/ODIHR (Venice Commission) Guidelines on the Financing of Political Parties, Paragraph XX: “The transparency of electoral expenses should be achieved through the publication of campaign accounts.” |
• Duty to make information public • Deadlines for publication • Prescribing methods for disclosure |
|
|
Accountability |
Oversight |
CoE Committee of Ministers Rec (2003)4, Articles 14: “States should provide for independent monitoring in respect of funding of political parties and electoral campaigns.” OSCE/ODHIR (Venice Commission) Guidelines on the Financing of Political Parties at Paragraph 212: “[E]ffective measures should be taken…to ensure the body’s independence from political pressure and commitment to impartiality.” |
• Provisions guaranteeing independence of oversight body • Appointment process • Employment qualifications/restrictions • Adequate resources • Powers of oversight body |
|
Sanctions |
CoE Committee of Ministers Rec (2003)4, Articles 16: “States should require the infringement of rules…to be subject to effective, proportionate and dissuasive sanctions.” |
• Suite of sanctions • Sanctioning procedures • Right to appeal sanctioning decisions |
Notes
← 1. See the UN Human Rights Committee General Comment No. 25 and the Copenhagen Document (1990), Article 1.
← 2. See the Copenhagen Agreement (1990) at 9.3, 10.
← 3. For example, some experts/organisations refer to a “level playing field” rather than equality of opportunity. See, e.g. OECD (2016), Financing Democracy: Funding of Political Parties and Election Campaigns and the Risk of Policy Capture, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264249455-en. Others argue that level playing fields in politics are impossible to achieve and opt therefore for “equality of opportunity”. See, e.g. Ewing (2007), The Cost of Democracy Party Funding in Modern British Politics, Hart Publishing.