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

1. First Inter-American Electoral Training Seminar Organisers: GS/OAS, Mexican Federal Electoral Institute (IFE), International Institute for Democracy and Electoral Assistance (International IDEA), Latin American School of Social Sciences (FLACSO Presented by: Cynthia T. J. Barrow-Giles November 18, 2008

2. Issues involved • quantity • origin • the distribution – equity

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

4. Alternatives for the Regulation of Political Party and Electoral Campaign Financing Classification of Global Regulatory Regimes for Party Financing • The Autonomy Option – Defined by minimum regulation • The Transparency Option – Disclosure - Public access to information • the Advocacy Option • The Diversified regulation Option – Mixed System

5. Options Available Vis a Vis Political Money • Unchecked • Regulated

6. Regime of Political Party Financing in Latin American:Dominant Tendencies • A combined of public and private funds • Three methods are used to allocate public financing • In proportion to the votes cast (53%) • Equal distribution, proportionality (votes) • proportion of votes cast and parliamentary representation • Legal barrier or standard for eligibility for public funding. Percentage of votes cast

7. Regime of Political Party Financing in Latin American:Dominant Tendencies Con’t • Disbursement - a combination of prior to the elections, and rest after - funds following the elections, • Maintenance of a system of sanctions usually monetary and administrative but also criminal sanctions. • Oversight agency. • Free access to the State media, private media or both. • Restrictions on the origin of private contributions.

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

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

10. Primary Dilemmas for the Regulation of Political Parties and Electoral Campaign Finance • candidate centered politics versus political party politics. • Imposition of sanctions – candidates or political parties • Enhance democratic selection. • Lack of culture of political accountability • dependency on the state versus independence • private versus public financing. • when to disburse funds • full disclosure vs. right of privacy

11. Strengths and Weaknesses of Regulated Vs Unregulated Systems Objectives of regulatory Reform: Strengths • ensures that parties have adequate funding • ensures fairer competition between parties • protection of parties and the system from • corruption and influence peddling • affords greater transparency

12. Guidelines for the Design, Review, or Implementation of Legal Regulations in the Field Why an Effective Legal Framework • To avoid abuse and influence peddling • creates a level playing field for inter party competition • empower voters through rules on disclosure • the strengthening of political parties • to ensure a minimum of responsibility Griner and Zovatto

13. Priorities of Political Party Finance Regulatory Regime Regulatory Frameworks need to answer the following: • How to maintain the autonomy of political parties, • How to enforce relevant regulations – • transparency in the sourcing and use of parties’ financial resources • effective electoral competition and promote political equality • limit the influence of money on elections

14. Best Practice: Ensuring that Electoral contest are Fair and Promote Political Equity • The constitutionalisation of political parties • Access to public financing, whether direct or indirect – adjustable depending on the state of the economy • A mixed regime of public finance • Access to the media • Prohibitions and restrictions on private funds • Accountability of political parties and candidates – reporting in a timely manner • Full disclosure • Sanctions against violations • Independent oversight agency

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

16. Types and Methods for Public Financing (Types, amounts, Distribution Formulas) General Pillars of Public Financing • direct subsidies for electoral expenditure • subventions whether direct or indirect

17. Types and Methods for Public Financing (Types, amounts, Distribution Formulas) Direct Funding: Direct Subsidies • Money • bonds • loans

18. Types and Methods for Public Financing (Types, amounts, Distribution Formulas)Con’t Modalities • funding exclusively for the day to day operations of the political parties – none • funding for elections only – Bolivia, El Salvador, Honduras, Nicaragua, Uruguay • a combination of the two – Argentina, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Mexico, Panama and Paraguay.

19. Types and Methods for Public Financing (Types, amounts, Distribution Formulas)Con’t Indirect Funding : Indirect subsidies • infrastructure, • tax exemptions • access to the media especially television • institutional support • assistance with transportation • assistance to parliamentary groups

20. Types and Methods for Public Financing (Types, amounts, Distribution Formulas)Con’t Distribution: Public Monies Four modalities • Equal Shares • Proportional to the number of votes cast - Bolivia, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Uruguay • Proportional to the number of votes cast and parliamentary representation – Paraguay • Proportional to the number of votes cast and equally - Argentina, Dominican Republic, Panama, Mexico, Ecuador

21. Status in Selected Countries

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

23. Disbursement of FundsSelected Countries

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

25. Modalities of Private Funding • membership dues • donations from special interests groups • individual donations • credit/loans • party fund-raising activities

26. Dilemmas • Establishing a realistic limit • Numerous restrictions may encourage ‘creative’ accounting

27. Perspectives of and Particular Challenges for the Commonwealth Caribbean in Terms of Adopting a Regulatory Framework Aspects of the Regulatory Framework in the Caribbean • Indirect Subsidies • access to the State run media • subsidies to parliamentarians, St. Lucia, Barbados • Direct public subsidy in Barbados only.

28. Aspects of the Regulatory Framework in Antigua and Barbuda Post 2001 • disclosure of contributions exceeding EC$25,000.00 • prohibits anonymous contributions exceeding EC$5,000.00 • authorised audits by the EC • sanctions for non compliance including - Penalty of EC$2,000.00 a day

29. Status of Regulatory Regime in the Commonwealth Caribbean

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

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