Transparency of Political Party Financing - An International Perspective
Transparency of Political Party Financing
An International Perspective
On 12 August, 2013, the Government of India tabled a Bill in Parliament to amend the Right to Information Act, 2005 (RTI Act) to keep political parties out of its ambit. The amendment Bill seeks to nullify the order of the Central Information Commission declaring six political parties as public authorities having a duty to give information about their affairs to people directly. Most political parties have opposed this order and would like to see the transparency law amended at the earliest. They argue that being private and voluntary associations of persons, they do not have any obligation to disclose information about their working and finances to people. They contend that the aid and support they receive from the Government is a small fraction of their finances as most of their funds come from public donations. They also expect citizens to seek information about their finances from public authorities that regulate their affairs, such as the Election Commission of India and the Department of Income Tax, amongst others. Citizen’s experience shows that obtaining this information under the RTI Act is a time-consuming and unpredictable process.
In order to build a strong public argument for making political parties in India more transparent, we have compiled examples of international best practice standards on the subject. Political parties in about 40 countries are required by law to voluntarily disclose to the people, information about their sources of income, donations, assets and liabilities, expenditure and campaign expenditure, through the print and electronic media. In countries like Sweden and Turkey, political parties have a voluntary arrangement to open up their records to the people. Parties in some of these countries depend solely on State funding while in a majority of others their counterparts receive both public funding and private contributions.
If countries where the respective election monitoring bodies (EMB) are mandated to publicise financial information about political parties are taken into consideration, the number of countries on the list given below would more than double. Countries like the USA, UK, Belgium, Canada, Australia, New Zealand, and South Africa, amongst others, have adopted this model of disclosure of details of political party and election campaign financing. However in India the regulatory bodies are not obliged to proactively disclose any financial information that political parties submit to them.
Part I of this compilation lists 34 countries where political parties are required to periodically volunteer information about their finances through their websites, print and electronic media or the Official Gazette. Part II lists Fiji separately for its uniqueness. Fiji amended its electoral law earlier this year to empower citizens to seek information from political parties directly. Fiji does not have a democratically elected government or an equivalent of India’s RTI Act. Yet electoral reform has taken major strides in this island country where a large segment of the population is comprised of descendants of immigrants from India. Part III lists 5 countries where information about political parties’ finances can be accessed from their respective Parliaments or public bodies other than EMBs.
The principle of transparency of political financing is increasingly gaining international recognition. Instead of bucking this trend by amending the RTI Act, political parties in India must act on civil society’s demand for greater transparency in their affairs. This change of mindset is more than likely to restore people’s confidence in the political establishment.
- Proactive Disclosure of Financial Information
- Armenia: Law of the Republic of Armenia on Political Parties, 2002 requires every registered political party to publish through the print media an annual report of its income and assets and their manner of use. Parties are State funded.
- Austria: Political Parties Act requires all registered political parties to publish their annual statement of accounts in the Official Gazette. Parties receive both public and unlimited private funding.
- Bhutan: Public Election Fund Act of Bhutan, 2008 requires political parties to make available details of their bank accounts and campaign finance records for public inspection in the manner and at a place specified by the Election Commission.
- Brazil: Electoral Law, 2010 requires all political parties, coalitions and candidates to disclose on the Internet website created by the Electoral Court, their income and finance and campaign expenses along with names of donors and amounts contributed.
- Bulgaria: Political Parties Act, 2009 requires political parties to keep a public register of and display through their own website names of donors and types of donations received in cash (amount must be disclosed) and kind; annual statement of accounts; ownership of and transactions in immovable property and the names of agencies hired for the purpose of managing public relations.
- Côte d'Ivoire: Act in the Financing of Public Funds for Political Parties, and Groups and Candidates in the Presidential Election, 2004 requires political parties receiving State funding to publish their statement of accounts and expenditure annually.
- Croatia: Political Activity and Electoral Campaign Financing Act, 2011 requires political parties to disclose on their websites all documents submitted relating to campaign finance submitted to the Minister of Finance. Every six months they must also display details of donations received by them and their members elected to Parliament.
- Cyprus: Law on Political Parties, 2011 requires all political parties to publish a summary of their financial accounts through newspapers (dailies).
- Estonia: Political Parties Act, 1994, requires all political parties to publish their annual reports (including financial report) in the Official Gazette (Riigi Teataja Lisa). Political Parties are State funded.
- France: Law No. 88-227, 1988 requires the National Commission for Campaign Accounts and Political Funding (CNCCFP) to publish the consolidated balance sheet and profit and loss accounts of political parties in the Official Gazette annually. Candidates’ election expenditure is also published in condensed form in the Official Gazette. The Official Gazette is available in printed and electronic form through the Internet. Political parties are funded by the State and private donors subject to limitations.
- Georgia: Organic Law of Georgia on Political Unions of Citizens, 1997 requires political parties to publish their audited financial accounts along with the auditors’ comments in the press. Political parties are funded by the State and private donors subject to limitations.
- Ghana: The Constitution requires every political party to publish their audited statement of accounts every year [Art. 55(14)]
- Greece: Law No. 3023 of June 2002 on the public funding of political parties, requires political parties receiving regular public funding to publish their yearly balance sheet in at least two daily newspapers published out of Athens. Citizens can access the reports of campaign expenditure filed by candidates from the Control Committee of the Ministry of the Interior. Political parties receive private funding also, subject to limitations.
- Guinea-Bissau: The Framework Law on Political Parties, 1991 requires all political parties to publish their financial accounts in the Official Gazette. Political parties receive both State funding and private donations subject to limitations.
- Hungary: Act C of 1997 on Electoral Procedure requires all political parties and independent candidates to publish in the Official Gazette the amounts, sources and manner of utilization of state subsidies and other funds received. Political parties receive private funding also, subject to limitations.
- Italy: Law 659/1981 requires political parties to publish their financial statements along with attached notes, and a summary of their operations in two newspapers every year. One of these newspapers must have national circulation. Political parties receive public and private funding subject to limitations.
- Kazakhstan: The Law on Political Parties, 2002 requires all political parties to ensure that every citizen has access to all documents, resolutions and sources of information affecting their rights and interests.
- Kenya: Political Parties Act, 2011 requires all political parties to publish their sources of funding including amounts received, income and expenditure and assets and liabilities every year in two newspapers having nation-wide circulation. Failure to publish may invite a fine of up to one million shillings and or imprisonment for a period not less than two years. Political parties receive State and private funding subject to limitations.
- Kyrgystan: Law on Political Parties, 1999 requires all political parties to publish annual income and expenditure reports including donations received and amounts through the mass media. Political parties do not receive State funding.
- Luxembourg: Act of 21 December 2007 regulating the financing of political parties, requires all political parties to publish their accounts statements and balance sheets in the Official Gazette. Political parties receive State and private funding subject to limitations.
- Macedonia: Law on Financing Political Parties, 2004 requires political parties to upload their financial statements every year on their respective websites. The statements include information about donations, gifts, contributions, material assets, equipment, services, personal incomes, membership fees collected and the total expenditure incurred.
- Mongolia: Law on Political Parties, 2005 requires all political parties to publish donations received and their audited annual statement of accounts.
- Nepal: Political Party Act, 2002 requires political parties to publish their annual reports and statement of accounts and expenditure. The identity of donors contributing more than NRs 25,000 must be disclosed. The Election Commission may impose a penalty of NRs 100 on a political party that fails to publish this information. Political parties are also covered by the Right to Information Act, B.S. 2064 (2007).
- Nicaragua: Electoral Law No. 331 of 2000 requires all political parties to publish their financial records every year and send a copy to the Supreme Electoral Council. Private contributions to political parties must also be publicised.
- Poland: Act on Access to Public Information, 2001 covers political parties. Under this law any citizen may access information from political parties subject to exemptions listed in the laws.
- Romania: Law No. 334/2006 on the financing of the activity of political parties and election campaigns requires political parties to publish, in the Official Gazette, the list of donors who contribute more than 10 times the minimum monthly wage to their coffers every year. Names, contact details and amounts of donations received from individuals and organisations must also be disclosed in the same manner.
- Slovenia: Political Parties Act, 2007 requires political parties to publish, in the Official Gazette, a summary of their annual reports including financial accounts. Political parties receive State and private funding subject to limitations.
- Suriname: The Constitution requires all political parties to publish their sources of income and statement of accounts in the Official Gazette and at least one newspaper.
- Sweden: The Joint Agreement adopted by political parties represented in Parliament requires them to publicise contributions from legal persons mentioning names and the amounts received. Contributions received from individuals are disclosed as a total amount and the total number of contributors only. Any person may inspect the audited statement of accounts and expenditure of such political parties at their offices.
- Tajikistan: Law on Political Parties 1998 requires political parties to publish annually their financial reports indicating source of funds, amounts and expenditure and the extent of property owned along with information on taxes paid.
- Tunisia: Decree No. 87 for the year 2011 requires all political parties to publish their audited financial statements on their websites and also in one national newspaper.
- Turkey: Some political parties voluntarily publish a summary of their financial statements on their websites. There is no statutory requirement to do so.
- Ukraine: Law on Political Parties, 2011 requires all political parties to publish in the Official Gazette details of income, expenditure and property, owned every month.
- Uzbekistan: Law on Financing of Political Parties, 2004 requires all political parties to publish their annual budgets and accounts statements.
- Direct Access to Information by Request:
- Fiji: Political Parties (Registration, Conduct, Funding and Disclosures) Decree, 2013 requires all political parties to permit any person on payment of a prescribed fee, to inspect, and obtain copies the following records maintained by the offices of political parties:
Party constitution, membership register, policies and plans, details of contributions received in cash and kind, estimates of expenditure, particulars of property owned and latest audited books of accounts.
- Access through Parliament, Ministries and other Regulatory Bodies:
- Czech Republic: Law on Political Parties and Movements, 1991 treats all financial records submitted by political parties to Parliament as public records. Any citizen can access them from the Library of the Chamber of Deputies (Parliament) including names and addresses of donors and amounts contributed. Parties are funded by the State and private donors, subject to limitations.
- Denmark: Private Contribution to Political Parties and Publication of the Accounts of Political Parties Act, 1990 requires political parties to submit their annual balance sheets with names of donors (without mentioning amounts contributed) to Parliament. Any citizen can access this information from Parliament. Parties are funded by the State and private donors, subject to limitations.
- Germany: The Basic Law (Constitution) and the Political Parties Act, 1967 require political parties to publicly account for the sources of their funding. Political parties receiving donations from natural and legal persons must submit a statement of accounts to the German Bundestag (Parliament) every year. The President of the Bundestag causes publication of the statement of accounts in the Bundestag paper (official website) available in hard copy and on its Internet website. Any citizen may access these publications.
- Japan: The Political Fund Control Act, 1948 requires political parties to submit statement of accounts to the Ministry of General Affairs and Local Elections Management Council (depending on whether elections are to Parliament or local bodies). These organizations permit free inspection of these records for any person. The information is also made publicised through the Official Gazette and the websites of these organizations.
- Portugal: Law No. 19/2003 relating to financing of political parties requires all political parties to submit their party accounts campaign accounts and to the Constitutional Court. Some of this information is published on the Court’s website. Unpublished information may be accessed from the Court on request.
Commonwealth Human Rights Initiative
Political Finance Database published by International-IDEA, accessible on its website at: http://www.idea.int/political-finance/question.cfm?id=291;
Country Evaluation Reports on Transparency of Political Funding published by the Group of States against Corruption of the Council of Europe (GRECO) accessible on the website of the Council of Europe at: www.coe.int/t/dghl/monitoring/greco/evaluations/ and
National laws accessed on the respective government websites or online law databases (accessed on 30 August, 2013).