Monitoring the Funding of Political Parties & Electoral Campaigns

1. Monitoring the Funding of Political Parties & Electoral Campaigns Peter Wardle United Kingdom Electoral Commission 10th European Conference of Electoral Management Bodies, Chişinău, Republic of Moldova 26 June 2013

2. Venice Commission • Code of Good Practice in Electoral Matters • Code of Good Practice in Electoral Matters – Explanatory Report • Guidelines & Report on the Financing of Political Parties (CDL-INF (2001) 8)

3. 5 Key Components • Registration – needs to be simple; benefits as well as obligations • Reporting & Publication – sufficient and timely, but also straightforward. Use technology. • Limits on donations/spending – realistic levels, clear definitions • Public support – direct or indirect; NB equality of opportunity • Compliance & enforcement – support compliance (‘prevention is better than cure’); make checks; distinguish between administrative & penal sanctions. Regulator must be impartial

4. Registration • Political parties and others that exist only in the context of elections (eg ‘third parties’) • Access to benefits • Acceptance of obligations • Obligations should not impost excessive burdens – public interest in a diverse democracy

5. Transparency‘First of all, funding must be transparent’ • Funding – from public and private sources - of political parties, candidates and election campaigns must be transparent • Campaign spending (parties and candidates) should be accounted for; checked by the regulator; and published • Each party should record & publish annual accounts, including a list of all donations; candidates should also record & publish their donations • All donations (to parties and candidates) should be recorded and published if they exceed an amount fixed by the legislature

6. Limits • To ensure equality of opportunity, election campaign spending should be limited – any ceiling should take account of the national situation, and the number of voters concerned • May have some limits on donations (Who can donate? How much?)

7. Public Funding • State authorities should be neutral – any public funding of parties and campaigns must be ‘equal’ • strict; or • proportional (according to representation or electoral support) • Public funding to parties helps to ensure equality of opportunity • Public funding given to parties must be supervised and audited • Public funding to political parties should be on condition that parties accept checks, and embrace a policy of financial transparency

8. Private Funding • Private funding in general should not be prohibited • But funding from foreign states or enterprises should be prohibited • Other prohibitions on private funding may be appropriate, eg: • limit donations from a single source • ban donations from enterprises, or from religious organisations

9. Compliance & Enforcement • Active or passive - simple reporting, or intervention and active checks? • Who - the EMB or another public body/courts? • Tools - investigation powers and resources? • Sanctions – civil (eg fines, withdrawal of public funding) or criminal (eg imprisonment)?

10. UK Political Finance Requirements • Report donations and loans to the Electoral Commission; donations and loans must come from permitted sources • Send annual accounts to the Electoral Commission • Stay within spending limits during election and referendum campaigns, and report spending to the Electoral Commission • Commission checks and publishes

11. UK Electoral Commission approach to regulating political finance We want people to be confident that: • there is transparency – people know where money comes from and how it is spent • parties, candidates and campaigners can easily find out how to comply with the rules • the rules are followed, and those who do not follow them are dealt with appropriately • parties, candidates and campaigners can participate in elections without unnecessary barriers

12. UK Electoral Commission Sanctions • Advice • Fixed monetary penalties (GBP 200) – first offence • Variable monetary penalties (GBP 250-20,000) – more serious, or repeat offences • Compliance notice • Stop notice • Forfeiture (court order) • Criminal sanctions (public prosecutor and court)

13. Prevention is better than cure…. “The aim of the Commission… is to regulate in a way that is effective, proportionate and fair.” “Wherever possible, it will use advice and guidance proactively in order to secure compliance.” “We will take enforcement action where it is necessary and proportionate to do so.” UK Electoral Commission: Enforcement Policy (2010)

14. Challenges & Questions • What is a political party? What about other actors? • What counts as campaign spending? • Who decides the limits – and on what principles? (Freedom of expression?) • Public confidence…prevention or cure? • Impartiality and independence of the regulator

15. Thank You pwardle@electoralcommission.org.uk www.electoralcommission.org.uk

16. Regulatory Approach

17. Tools for regulating political finance