ENFORCING POLITICAL FINANCE LAWS
Training Handbook ▪ June 2005

TIDE
Training in Detection and Enforcement

Prepared by IFES for the Training in Detection and Enforcement (TIDE) Projectwith funding from the United States Agency for International Development

Table of Contents
Acknowledgements.....................................................................................

vi

Glossary....................................................................................................... vii
Introduction .................................................................................................

1

Part One .......................................................................................................

3

Chapter I - Financing Politics: Definitions, Problems and Laws............

4

Definition of "political finance"............................................................................

4

Political finance: a fundamental problem of democracy......................................

5

Main types of political finance laws .....................................................................

6

Prevalence of political finance laws .....................................................................

7

Chapter II - Enforcement: Basic issues.....................................................

8

Definition of “enforcement” .................................................................................

8

Stages of enforcement ........................................................................................... 10
Enforcement agencies ........................................................................................... 12
Non-enforcement of political finance laws: a serious issue ................................. 14
Blatant disregard versus subtle avoidance ........................................................... 16
Chapter III - Non-Enforcement: The Causes ............................................. 19
Legal loopholes ..................................................................................................... 19
Ambiguous laws .................................................................................................... 19
Ambitious laws ...................................................................................................... 19
Unsuitable penalties or failure to specify penalties.............................................. 20
Collusion between opposing political parties and between opposing
candidates ............................................................................................................. 21
Lack of administrative capacity in a regulatory body .......................................... 22
Lack of capacity in judicial bodies........................................................................ 23
Confusion of roles in different regulatory bodies ................................................. 23
Constraint against prosecuting governmental bodies for legal infringements..... 23
Political constraints and lack of authority in regulatory body ............................. 24
Bad habits ............................................................................................................. 24
Unknown or excessively complex laws ................................................................. 25

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Chapter IV - Political Finance Regulations and Subsidies:
Administration and Enforcement............................................................... 26
Financial conditions governing candidacy for public office ................................ 26
Subsidies................................................................................................................ 27
Prohibitions........................................................................................................... 28
Regulations............................................................................................................ 29
Part Two ....................................................................................................... 32
Chapter V - Strengthening the Political Finance Regulatory Bodies...... 33
Clarifying responsibilities of enforcement bodies ................................................ 33
Consultations with different stakeholders............................................................. 34
Assuring public confidence in the process of making appointments to ............... 35
Ensuring the financial independence of regulatory bodies................................... 37
Chapter VI - Sanctions and Tactical Issues For Regulatory Bodies:
Administrative Penalty Versus Prosecution ............................................. 39
Violations and sanctions ....................................................................................... 39
Financial sanctions and administrative penalties ................................................ 43
Prosecutions.......................................................................................................... 44
Chapter VII - Some Procedures For Detecting Violations andEnforcing the Law ....................................................................................... 47
Prioritization System............................................................................................. 47
Promoting internal control ................................................................................... 48
Disclosure as a necessary condition for effective enforcement ............................ 49
Verifying the accuracy of financial reports ......................................................... 53
Audit ...................................................................................................................... 54
Program ................................................................................................................ 55
Chapter VIII - Investigative Techniques..................................................... 61
Complaints ............................................................................................................ 61
Investigation.......................................................................................................... 62
Chapter IX - Enforcement and Court Rulings ........................................... 66
Chapter X - Dangers of Biased Enforcement ............................................ 75

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Chapter XI - The Role of Civil Society in the Enforcement Process ....... 78
The implementation diary ..................................................................................... 79
Analyzing, interpreting and simplifying information ............................................ 79“Money and Politics” (MAP) program ................................................................ 80
Litigation ............................................................................................................... 81
The role of academic experts ................................................................................ 82
Political finance monitoring by NGOs.................................................................. 83
Dissemination of monitoring results ..................................................................... 85
The role of mass media ......................................................................................... 85
Endnotes...................................................................................................... 87
Sources ........................................................................................................ 91
Bibliography.......................................................................................................... 91
Interviews and Personal Information ................................................................... 98
List of Tables
Table 1 - Political Finance Regulations and Subsidies in 104 Countries ............

7

Table 2 – What Body is Responsible for Administration and Enforcement of
the Regulations ..................................................................................................... 13
Table 3 - Snapshots of the Non-Enforcement of Political Finance Laws ............. 14
Table 4 - Financing a Presidential Election Campaign: Major Candidates’
Official Spending in Russia, Ukraine, and Poland .............................................. 20
Table 5 - Political Finance and Court Cases: Disclosure of Financial
Reports .................................................................................................................. 68
Table 6 - Political Finance and Court Cases: Contributions .............................. 70
Table 7 - Political Finance and Court Cases: Issue Advocacy ........................... 71
Table 8 - Political Finance and Court Cases: Third Party Expenses.................. 73
List of Charts
Chart 1 - Detection and Enforcement Process .....................................................

9

Chart 2 – Political Finance Audit Flowchart ....................................................... 57
List of Case Studies
United States Federal Election Commission and the Department of Justice:
United States ........................................................................................................ 34
Dangers of the Appointment of Electoral Regulators by the Head of theGoverning Regime: Malawi and Niger ................................................................. 35
Sanctions for Non-Compliance with Disclosure Requirements: Poland andEnforcing Political Finance Laws: Training Handbook
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Georgia ................................................................................................................
Core Provisions of the FECA: United States....................................................... 43
Small Parties and Reporting: Is there a need for a two-tier regulatory
framework for political parties?: United Kingdom ............................................. 52
Audit: United Kingdom ........................................................................................ 55
Request for an Investigation: United States......................................................... 63
Investigation "Threshold Test and Standards": Canada ..................................... 65
Non-Enforcement: Canada, Macedonia, Russia, and Ukraine ........................... 77

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Acknowledgements
IFES would like to express its gratitude to a number of institutions and individuals
whose support made this study possible. Our first and profoundest debts are to
Dr. Michael Pinto-Duschinsky and Dr. Marcin Walecki, who supervised theresearch and produced the largest part of this manual. IFES is grateful to Jeff
Fischer for his wise advice and encouragement throughout this project.
IFES would also like to thank Dr. Menachem Hofnung, who made available theresults of his ongoing research into political financing and provided hiscomments; Ellen Weintraub, Laurel Shanks and Joe Stoltz of the Federal
Election Commission of the United States and Nicole Gordon of the New York
City Campaign Finance Board and others from these bodies for their comments
on earlier drafts of this manual; and Jeffrey Carlson, Donna Gold, Maya Serban
and William Covey, who provided invaluable contributions in the form of review orexpert input.
Finally, IFES is grateful to the United States Agency for International
Development, which made this project possible through a generous grant andinvaluable support.

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Glossary
Political finance encompasses formal and informal—both financial and in-kind—political income and expenditures. Further, these transactions may occur withinor outside of the campaign period, or they may not be directly related to a
campaign at all.
Campaign finance refers to transactions that are related to an electoral
campaign. Transactions may include formal financial or in-kind donations or
expenditures. Formal transactions that occur within the scope of the law may be
augmented by public financing of campaigns. Informal transactions occur outside
the scope of the law and range from vote buying, to unaccounted in-kind support
from private and government enterprises, to abuse of public resources.
Political party finance refers to non-campaign financial or in-kind donations topolitical parties, organizations and associations, and expenditures made by thesegroups. Political parties may receive public financing, often as the result ofgarnering a certain percentage of the vote in an election.
Enforcement agency refers to a body overseeing and controlling the operationof a political finance system. It ensures that parties, committees and candidates
comply with the limitations, prohibitions and disclosure and reporting
requirements. The agency has the duty to enforce obligations arising out ofpolitical finance regulations.
Disclosure refers to the reporting of political finance accounts to a government
body. Effective disclosure works when these accounts are detailed and madeavailable for public scrutiny.
Campaign expenditure refers to expenditure incurred by or on behalf of aregistered political party or candidate to promote the party or candidate at anelection or in connection with future elections, including expenditure that has theaim of damaging the prospects of another party or candidate.
Third-party contributions and expenditure refers to goods or services paid for,or expenditure incurred on behalf of, a political party or candidate by a different
entity.

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Introduction
IFES has produced this handbook as part of its Training in Detection and
Enforcement (TIDE) program with funding from the United States Agency forInternational Development (USAID). The program promotes the enforcement ofpolitical finance laws through written and electronic resources, training andfollow-on technical assistance for political finance regulators active in developing
and enforcing laws and regulations.
This training program responds to a need that has become increasingly
acknowledged by political finance enforcement agencies in many transitionalcountries. Weak enforcement in political finance and election campaign finance,in particular, has been a major problem. Over the last few years, IFES has
advocated reforms to enhance enforcement, increase the effectiveness ofenforcement agencies, and reduce opportunities for corruption related to politicalfinance.
The IFES handbook on how to improve political finance enforcement is the
product of extensive research conducted by a team of leading political financeexperts and practitioners. It represents the first comprehensive effort toconsolidate the experience and knowledge that are currently available. The
handbook is a tool that offers options for the enforcement of political financelaws, which enforcement agencies can apply to the challenges they face.
It is not the aim of this handbook to provide a monitoring method that is
applicable in all contexts, nor to answer the question of how to regulate politicalfinance in all countries. Rather, it is a collection of lessons learned and bestpractices in both established and transitional democracies, organized in the formof practical guidelines and discussions of key concepts. IFES hopes that the
handbook will assist enforcement agencies in carrying out effective supervisionof political finance in their own countries.
The handbook corresponds to training provided by IFES and is available with
supplementary materials on a CD-Rom and on the IFES political finance website(www.moneyandpolitics.net).
The handbook is divided into two major parts:
Part One introduces the terminology of political finance enforcement and theinstitutions involved, including interactions among these institutions. Chapter I
presents definitions, problems and laws. Chapter II discusses the basic issues
pertaining to enforcement. Chapter III addresses the causes of non-enforcement,
and Chapter IV explores the challenges of implementing different types ofpolitical finance regulations and subsidies.

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Part Two addresses each step in the enforcement process. Chapter V focuses
on establishing and strengthening political finance bodies; Chapter VI looks at
violations of laws and regulations, dispute resolution, prosecution and sanctions.
Chapter VII discusses various enforcement techniques, with a particular focus on
disclosure, audits and maintaining proper internal controls; Chapter VIII covers
investigative techniques. Chapter IX focuses on the relationship between
enforcement agencies and the courts, while Chapter X warns of the dangers of
biased enforcement. Chapter XI examines the role of civil society organizations,the media and academics in the process of enforcement.
This handbook is not the final word on the subject; its role is to promote serious
discussion on what can or cannot be done in transitional countries to address a
new challenge—“too many regulations, too little enforcement.” Used together
with IFES training and assistance, the handbook and CD-Rom are tools tofacilitate meaningful change that adds credibility to a country’s electoral process
and political finance regulators.
The training offered by IFES is designed to complement each part of thishandbook in a way that encourages political finance regulators to assess theirown enforcement systems by identifying strengths and weaknesses. The training
presents best practices and accepted standards and identifies strategic
approaches to enhancing enforcement.
Assistance efforts seek to build on areas in need of strengthening that are
identified during training. IFES does this by matching up experts and practitioners
specializing in each of those areas with the key personnel from the relevant
enforcement body and by providing useful sample materials from otherenforcement bodies around the world. In short, IFES is here to help you design
and implement the methods, techniques and systems that you choose for yourcountry.
IFES invites all political finance regulators to suggest new lessons and insights
and to continue building knowledge together. This is a global challenge, andthere is no single blueprint on how enforcement should be undertaken. However,there are some best practices and accepted standards that can be shared. It is
our hope that you will be able to use this information as you advance yourcountry’s political finance laws and procedures and implement and enforce them.

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Part One

Chapter I

Financing Politics: Definitions, Problems and Laws
1) Definition of "political finance"
What is “political finance”? The narrowest definition is “money for electioneering.”
This money may be spent by candidates for public office and also by theirpolitical parties or by other individuals or organized groups of supporters. It is
used specifically to compete in an election and to pay the costs of complying withthe applicable laws governing political finance. Money for electioneering is often
known as “campaign finance.”
Since political parties play a crucial part in election campaigns in many parts of
the world, and since it is difficult to draw a distinct line between campaign costsof party organizations and their routine expenses, party funds may reasonably beconsidered “political finance,” as well. Party funding includes not only campaign
expenses, but also the costs of maintaining permanent offices; carrying out policy
research; and engaging in political education, voter registration and other regularfunctions of parties. The term “party finance,” which refers to the financing ofthese activities, is used in two main ways: sometimes it refers to party financing
of both routine and campaign activities, and sometimes—especially in the UnitedStates—it is used to refer more narrowly to the finances involved in routine, noncampaign activities alone. [1]For the purposes of this handbook, “political finance” will be understood to mean
campaign finance and party finance. However, it is important to note that"political finance" actually has even wider meanings.
Other types of “political finance” arguably include the following:
1)

Financing of bodies such as party “foundations” and other organizations
that, though legally distinct from parties, are allied with them andadvance their interests;

2)

The costs of political lobbying;

3)

Expenses of newspapers and other media that are incurred and paid
specifically to promote a partisan line;

4)

The costs of litigation in politically relevant cases; and5)

Third-party or “independent” expenditures. [2]That “political finance” consists not only of campaign and party funding, but alsoof these related types of expenditures poses a problem not merely of definition. It
also creates a problem for those attempting to enforce laws designed to control
the funding of political parties and candidates for public office.
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42) Political finance: a fundamental problem of democracy
Democratic elections and democratic governance involve a mixture of high ideals
and, all too often, dubious or even sordid practices. Election campaigns, politicalparty organizations, and politically active pressure groups all cost money thatmust be found somewhere. The financing of political life is a necessity—and aproblem.
The frequency with which new laws concerning campaign and party finance areenacted is testimony to the failure of many existing systems of regulations andsubsidies. Hardly a month goes by without a new scandal involving politicalmoney surfacing in some part of the globe. These scandals are frequently thesignal that existing political finance regulations are not working properly. Either
the laws are inadequate, or they are not being enforced. [3]When regulations are enacted to control the campaign costs of politicalcandidates and the finances of political parties, the effect is to divert money into
related but uncontrolled forms of political activity. For instance, what happens
when money spent on policy research is subject to disclosure and to other formsof financial control if it is conducted under the aegis of a party organization but
not if it is under the aegis of a party-linked "foundation"? The expected result isthat a "foundation" will be created as a device to escape the legal controls overthe political party.
Drawing a boundary line between "political" and "non-political" finance is not the
only problem, however. It is necessary also to define the meaning of "finance."
This is an issue of definition that also has practical ramifications. A “financial”
payment arguably may not be limited to money alone but may involve resources
with a monetary value. A political donor who gives a gift of US $1,000, andanother individual who donates a computer to a political party, thereby saving theparty the expense of purchasing a computer for US $1,000, have both given an
equal financial advantage to the recipient party. "Political finance," therefore,
includes the financial value of gifts-in-kind. Indeed, such gifts may include thefree provision of professional services to a political party or candidate.
Although it is sensible to include "in-kind" donations and payments which areclearly a substitute for money under the definition of political "finance," not all
forms of political support may be measured in financial terms. A religious leader
who encourages his or her followers to support a political party in a sermon may
bestow a significant advantage on that party. But it would stretch the definition of“political finance” to regard the sermon as equivalent to a gift of a specified
amount of money. [4]Overall, there is no single political finance system that will work in every politicalenvironment. There are many choices for regulating political finance indemocratic systems throughout the world. Ultimately, the country's political,
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economic and social circumstances will determine the successful operation of apolitical finance system.
3) Main types of political finance laws
The main provisions of political finance laws, some of them defined in theglossary, usually include:
1)

Prohibitions against corrupt and illegal practices (such as vote buying);

2)

Financial deposits for candidates for public office;3)

Disclosure rules;

4)

Spending limits;

5)

Contribution limits;

6)

Bans on certain types of contributions (such as foreign contributions,anonymous contributions, or contributions from business corporations);

7)

Bans on certain types of spending;8)

Auditing bodies and their powers;

9)

Public subsidies;

10) Tax relief and subsidies-in-kind;11) Political broadcasting rules;
12) Rules concerning financial representatives and financial discipline;
13) Rules concerning the funding of internal party contests;14) Rules concerning the funding of referendums;
15) Rules concerning the declaration of assets by candidates for public
office;16) Measures to control the use of public resources for campaign purposes;17) Rules concerning the use of government resources by incumbents; and18) Other ethics and conflict-of-interest rules.
Such provisions sometimes are contained in laws dealing specifically with party
finance or election finance. Often they are included in broader laws about
elections, political parties or the prevention of corruption. Media laws and laws
concerning voluntary associations and organizations may also contain provisions
about aspects of political financing. In addition, laws that do not directly regulate
the funding of political parties and election campaigns may also be relevant. It is
important to acknowledge the warning contained in the French submission to theCouncil of Europe’s study on “Trading in Influence and Illegal Financing of
Political Parties”:
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[I]t is impossible to combat illegal financing of political parties purely by means ofregulations on party funding. What matters is to clean up the whole environment
surrounding party funding … This places the illegal financing of political parties in
the wider context of misappropriating procedures relating, for example, to town
planning ventures, commercial development, public procurement, public service
provision, use of local semi-public corporations or semi-public non-profit-making
organizations, etc. [5]Because of the range of provisions concerning aspects of political finance, there
are usually a number of different laws in any one country dealing with the topic.
The existence of a variety of separate laws often complicates the task of theregulatory body or bodies responsible for enforcing the laws.
4) Prevalence of political finance laws
In recent decades, there has been a general trend toward more political financeregulations and more subsidies. The rapidity with which legal changes relating topolitical finance occur in various countries makes it difficult to keep abreast of thechanges. Therefore, the review of political funding laws in the following table issomewhat dated already. However, it provides a good impression of the situationin 104 countries in 2000-2001.
Table 1: Political Finance Regulations and Subsidies in 104 Countries
Regulations
Disclosure rules (any)Disclosure of individual donors (partial or complete)
Ban on foreign donations (partial or complete)
Campaign spending limits (any)Contribution limits (any)Ban on paid election advertising on television
Ban on corporate political donations (partial or complete)
Free political broadcasts
Direct public subsidies
Subsidies in kind (apart from free political broadcasts)
Tax relief for political donations

Percentage
62 %
32 %
49 %
41 %
28 %
22 %
16 %
79 %
59 %
49 %
18 %

Source: Pinto-Duschinsky, 2002, p. 75.

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CHAPTER II

Enforcement: Basic Issues
1) Definition of “enforcement”
Political finance enforcement is the act of giving force to and executing politicalfinance regulations. The narrow definition is “control exerted by an enforcement
agency which gives force and authority to a political finance system.”
However, an ideal enforcement system includes not only a controlling body, butalso all the components found in a comprehensive judicial system, namely:
investigation, prosecution, adjudication and sanctions. Such a system also
depends on the cooperation of various stakeholders and relies on the monitoringmechanisms provided by financial agents, auditors, banking institutions, anticorruption watch-dog organizations and the media.
In a wider context, “enforcement” can be defined as a complex institutionalarrangement that combines a variety of instruments and actors, which may beclassified as follows (see Chart 1 below):

1)

Internal control (doctrine of agency, accounting standards, banking
system);2)

Financial reporting and audit;

3)

Control by anmechanisms;

4)

External monitoring (civil society, the media, competing parties, voters);
and5)

Prosecution and sanctions (administrative,
sanctions).

enforcement

agencysupportedbycriminal

investigation

andpolitical

The enforcement of political finance laws is particularly important, since a
regulatory scheme is only as effective as the consequences for violating it. In
practice, the political finance enforcement agency can detect possible law
violations through three processes:

1)

Monitoring: potential violations are discovered through a review offinancial reports or through an audit.

2)Complaint: an individual or an organization may file a complaint, which
alleges violations and explains the basis for the allegations.

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3)

Referral: possible violations are discovered by other agencies andreferred to the main political finance enforcement agency.

Internally generated cases include those discovered through reviews offinancial reports and audits and those referred to the primary enforcement
agency by other government agencies (e.g., ministry of justice).
Externally generated cases result from complaints made by all interested
participants of the political process.

Chart 1 - Detection and Enforcement Process
Civil Society Scrutiny

Disclosure•Newspaper•Official Gazette•Web site•Public File

• NGOs• Mass Media• Scholars• Opposition groups• Voters
Complaint

Political Entity’s
Internal Control•Doctrine of Agency•AccountingStandards

Financial
Reporting

Enforcement
Agency•Routine Funding•Campaign Finance•National Electoral Management Body
•Specially Created Body
•Government Department•Banking System

Close file

Auditor’s Report
Sanctions

Audit

Investigation

Administrative
Criminal
Other

Other Public Agencies
Courts
Ministry of Finance
Ministry of Justice

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Prosecution

AppealCourt ruling92) Stages of enforcement
Two scholars have described how political finance reform works, as follows:
No campaign finance reform, however attractive, can ever work like a magicbullet. The proposals all have many provisions; the provisions aim at more than
one goal; and the paths to those goals go through many intermediate steps. …
[A] failure at any one of the intermediate steps will mean a breakdown.
Metaphorically, therefore, instead of a magic bullet, we suggest thinking about
links in a chain, any one of which may snap. [1]Similarly, Alonso Lujambio, the Mexican academic and former member of thecountry's electoral commission, IFE, has used the notion of a "chain" tocharacterize political finance enforcement. [2]
It is appropriate to describe enforcement as a process with different stages. It isalso important to note that the different stages of enforcement are likely to be theresponsibility of separate bodies. Thus, a clear specification of responsibilities isvital to enforcement success.
Stage 1: Legislation and implementation planning
Stage 2: Preparation and training
Stage 3: Administration
Stage 4: Assuring complianceStage 5: Administrative fines, criminal investigation and prosecution
Stage 6: Trial and conviction
Stage 7: Appeal process
Stage 8: Review process
Stage 1. Legislation and implementation planning
The effectiveness of enforcement depends greatly on the steps taken even
before a law is enacted. There are several distinct tasks at this stage. First, it isnecessary to consider carefully whether the proposed legislation is clearly written
and whether it is over-ambitious. [3] If the wording of legislation is flawed, this is arecipe for non-enforcement. To the extent possible, research should be
conducted to understand the existence and extent of the political financeproblems and which need to be targeted. Sometimes legislation is enacted
without a meaningful factual basis. Research to discover what other jurisdictions
have done regarding the political finance issues in question can also be
extremely helpful. It is unsatisfactory to wait until after a law comes into force
before making plans for its implementation.
Stage 2. Preparation and training
When a new law is enacted, the authority responsible for implementing it willneed to make some special preparations, including the preparation of forms to besubmitted by parties and candidates, guidance materials, and training. Training
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should be provided for members of the regulatory body and for key officials ofpolitical parties. It is also useful to provide briefings for journalists andrepresentatives of some non-governmental organizations (NGOs).
Stage 3. Administration
This consists of routine tasks to ensure that forms reach the relevant candidates
and party officials, that those with obligations under the laws are aware of them,and so forth. Administration often involves devoting a considerable amount oftime to a large number of very small political parties and to fringe candidates.
Stage 4. ComplianceThis stage of the process involves all the tasks of ensuring that laws are obeyed,
short of initiating criminal investigations and legal proceedings. Typical activities
at this stage include issuing reminders to parties and candidates who have failed
to carry out their legal obligations on time, making spot checks on the accuracyof information received, initiating audits, and imposing administrative fines. The
capacity of regulatory bodies to ensure compliance depends in part on the
powers they possess to examine documents and premises.
Stage 5. Administrative fines, criminal investigation and prosecution
If the regulatory body has reason to believe that there has been a serious breachof the law and that there may be grounds for prosecution, the next stage is toturn over the evidence to the police or to the authority responsible for initiatingprosecutions.
Stage 6. Trial and conviction
In an ideal world, any enforcement agency’s primary goal would be to close files,
settle cases and to conciliate, as it is usually less expensive and time-consuming
than making referrals to the court. However, when it comes to trial andconviction, this may be the responsibility of the ordinary courts or, in somejurisdictions, cases may be assigned to special election courts.
Stage 7. Appeal process
Appeals can be one of the checks and balances on decisions made by an
enforcement agency or administrative review of complaints. Each system
handles its appeals differently, according to its legal and institutional frameworks,
but it is important to have a user-friendly system that can review lower decisions
in a systematic, neutral and timely manner.
Stage 8. Review process
Concerns about political finance enforcement are well expressed by a former
Canadian MP, Flora MacDonald:The history of successful violations of many important features of income tax
legislation, or in the field of industrial relations—and notably by the more powerful
and affluent sections of the population—suggests that the best legal andaccounting minds could be utilized to enable those who can afford them to
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ingeniously evade the intent of this legislation. It is therefore essential, if we arereally serious about this undertaking, that we create at once a mechanism for the
automatic, continuous and free review of the implementation of thesemeasures.[4]Indeed, there should be constant review of the enforcement process to monitor
its effectiveness, to build support for it, and to identify new problems as theyarise. Following an election, the relevant facts of the political finance situation,
statistical a well as anecdotal analysis, should be examined, and any need to
update the laws should be pursued. An enforcement agency should also beinterested in any studies, surveys, research, or other empirical data that might
support changes in its enforcement procedures. Further, there should be aneffective response to these problems to ensure that the underlying goals of theenforcement system continue to be met. Finally, there must be a commitment
and desire to enforce the legislation from all the main players in the electoral
game. Without such a commitment, even the best-designed system can be
obstructed.
3) Enforcement agencies
The status of the body entrusted with overseeing a political finance system
clearly has an impact on effectiveness of control as well as on public confidence
in the procedures. However, there is no easy answer to the question: What typeof political finance enforcement agency should a democracy have? Comparative
research has shown that in over 36 percent (n=40) of the 111 countries studied,
there was no body responsible for administration and enforcement of theregulations. [5]Moreover, the type of political finance enforcement agency will depend greatly on
the primary duties of the agency. In 63 percent of the countries that haveagencies responsible for enforcement of political finance, most of them rely on
National Electoral Management Bodies (See Table 2). An additional 28 percentof the countries employ various government departments such as the ministry of
the interior, the ministry of labor and administration, the ministry of justice, the tax
office, or the attorney general’s office. Other bodies responsible for politicalfinance enforcement might include parliaments, parliamentary speakers,
constitutional courts, tribunals, etc. [6]Enforcing Political Finance Laws: Training Handbook
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Table 2: What Body is Responsible for Administration and Enforcement of theRegulations?
National
Electoral
Management
Body
45 countries (63%)

Regulatory
Body Specially
Created for thisPurpose9 countries (13%)

Government
Department

Other

20 countries (28%)

19 countries (27%)

TOTAL = 71 countries
Source: Reginald Austin and Maja Tjernström, eds., 2003, pp. 185-187

The special tasks exercised by the above agencies can include:
1)

Designing reporting forms and reporting procedures;

2)

Receiving audited or non-audited reports;

3)

Publishing financial reports and auditors’ reports;

4)

Initiating inspection and public inquiries; and5)

Executing sanctions.

The responsibility for administration and enforcement of political financing can be
performed by a single body or can be shared among several bodies. [7] The
effective implementation of political finance legislation is made more difficult
when different bodies are dealing with various aspects of the same subject.
According to Karl-Heinz Nassmacher, evidence from established democracies
indicates that only the approach where “there is one law regulating money inpolitics and only one agency to implement it” is likely to work well. International
IDEA (2003) has reported that of 71 countries studied, 51 have a single
responsible body, while 20 countries have two or more bodies administering andenforcing political finance regulations.
In most cases, financial reports submitted by the parties and auditors will be
subjected to some review by an enforcement agency, although the agency’s
scope of work, specialization and degree of independence will often determine
how comprehensive such a review can be. Recent recommendations made by
the Council of Europe “On common rules against corruption in the funding ofpolitical entities and electoral campaigns” [8] clearly stipulate that monitoring withrespect to the funding of political parties and electoral campaigns should be doneby an independent body. Such independent monitoring should include
supervision over the accounts of political parties and the expenses involved inelection campaigns, as well as their submission and publication. Furthermore,
the Council of Europe recommends that its member-states should promote thespecialization of the judiciary, police or other personnel in the fight against illegal
funding of political parties and electoral campaigns.
Enforcing Political Finance Laws: Training Handbook
IFES Training in Detection and Enforcement (TIDE) Program© IFES 2005134) Non-enforcement of political finance laws: a serious issue
In determining the form of effective enforcement, there are four essential
ingredients:

1)

The laws themselves must be capable of enforcement. Ease of proof isan essential requirement for a workable enforcement scheme.

2)

The controls should be enforced vigorously, without bias or favoritism.

3)

The agency charged with enforcement should be independent and nonpartisan, free from influences of partisan political considerations.

4)

The penalties should be effective, proportionate and dissuasive.

There is broad agreement that the non-enforcement of political finance laws is aserious problem in many countries. All too often, not the slightest effort is madeto ensure that laws on the funding of parties and election campaigns are obeyed.
The following table gives examples from 14 countries.
Table 3: Snapshots of the Non-Enforcement of Political Finance Laws
Country

Description

Cambodia“Indicative of the government's inability to monitor party finances[as required by the Party Law] … a senior government official
stated, 'We do not even have the parties' addresses.” [9]France“…the published statistics of party finances contained in official
accounts—in France like elsewhere—are works of fiction.” [10]Germany

The Flick Affair, revealed in 1981, involved serious violations ofpolitical finance laws by all the main parties. The scandal led to aparliamentary investigation, to a presidential commission on
party funding, to a new parties law and, finally, to a trial. In 1987,
a senior Flick official received a two-year suspended sentence.
Two former economics ministers, who had resigned from office,were fined on minor charges.
They were found not guilty on the main corruption charges,
though the judge announced that “the chamber continues tomaintain considerable suspicion” that some of the allegations
had been justified.
“The judge described the so-called Flick case ... as‘extraordinary’ since ... almost all the 80 witnesses had suffered a"conspicuous loss of memory.” [11]Enforcing Political Finance Laws: Training Handbook
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Table 3: Snapshots of the Non-Enforcement of Political Finance Laws
(Continued)
Ghana

The 1992 Constitution required parties to declare their revenue
and assets and to publish annual accounts. Yet, according to aleading Ghanaian scholar,“Six years into the 4th Republic and after two elections, theinadequacies and imperfections of the provisions of the 1992
Constitution and other laws regulating parties have become
manifest. The provisions in the Constitution...have beenhonoured only in the breach. ... [T]he...requirement to state all
sources and assets of the political party...has simply not been
applied… The picture emerging from newspaper reports andacademic studies on the financing of political parties in Ghana is… that many of the laws covering political financing in Ghana
today are flouted with mock derision.” [12]India

According to the official Wanchoo Committee (1985), “The huge
expenditures incurred by candidates and political parties have no
relationship to the ceiling prescribed under the law.” [13]Indonesia“…most political parties did not have an appropriate bookkeeping
system. Accountants familiar with the audit process described
the [financial] reports [of the political parties] as likely constituting
only a fraction of political financial activity conducted by or
associated with many, if not most, of the parties.” [14]Israel“The legislature is ... the representative of the parties which enjoy
financing under Israeli law. In this capacity, the legislature wasretroactively able to amend the provisions of the law by either
raising the ceiling of expenses allowed which might be spent orby minimizing the sanctions for deviation from the ceiling allowed
by law. In H. C. 141/82, Rubinshtein et al. v Chairman of the
Knesset , the Court criticized such retroactive legislation which
not only removes the deterrence implication of the law but also
nullifies its basic and moral purpose.” [15]Italy“…any private contribution which exceeds the amount of 10
million lire must be reported jointly by the donor and the recipientto the Speaker of the Chamber of Deputies, but ... this hardly
ever happens.” [16]Malaysia“Campaign finance limits … are routinely violated.” [17]Philippines“Philippine law restricts candidate spending to one year's [salary]for the office sought, but the custom of ‘buying’ votes simply
makes the controls [laughable].” [18]“Laws on financial contributions refer specifically to elections …
They are … virtually impossible to implement … these are deadletter laws.” [19]South Korea“The NEC [National Election Committee] compiles the fiscal
reports submitted by party headquarters, district offices andpoliticians, as the Political Funds Act requires them.…[T]here is
widespread skepticism about the validity of the reports.” [20]Enforcing Political Finance Laws: Training Handbook
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Table 3: Snapshots of the Non-Enforcement of Political Finance Laws
(Continued)
Taiwan“…in practice limits on campaign expenditures and contributions
have not been respected.” [21]Tanzania“…the enforcement of the Political Parties Act, S. 14 has been
elusive. S. 14 (1) provides that every political party which has
been fully registered shall maintain proper accounts of the funds
and property of the party and submit to the registrar an annual
declaration of all the property owned by the party. This statutory
requirement is not adhered to and some parties have neveraccounted for their funds for four consequent years without any
measures being taken against them.” [22]Ukraine“Officially documented campaign expenditures may be irrelevant,as they often do not reflect the real cost of the campaign ... Whilethe law stipulates mandatory disclosure of campaign funds, nopenalty is specified for violation of the disclosure provisions.” [23]5) Blatant disregard versus subtle avoidance
The various methods of avoiding political finance regulations call for different
solutions. Violations that involve subtle money laundering schemes, fancy
methods of side-stepping laws, and using the advice of clever lawyers requires
enforcement skills similar to those needed to detect and prosecute serious whitecollar crime and fraud. In contrast, political finance regulations often are
disregarded blatantly and grossly; there is no attempt to conceal the fact that thelaw is being broken.
Blatant disregard of political finance laws is probably the most common problem
in many countries today. The enforcement methods required to deal with this are
fairly simple in themselves, but they require administrative capacity and politicalwill, which frequently is lacking (see Chapter III). Once the more glaring forms oflaw-breaking are tackled, more subtle ways of avoiding laws are likely to bedevised. At this stage, political finance regulators must develop moresophisticated methods of investigation.
The training required to assist regulatory bodies will vary according to whether
they are confronted with blatant or subtle violations. This handbook will deal withboth types, but will focus on the ways to tackle the most common, blatantviolations. Brazen and consistent violations occur in advanced as well as
developing democracies, as demonstrated by various examples in thishandbook. However, it is probably true that such blatant violations are particularlycommon in low-income nations and in unstable, violent political systems.
Here is an example of blatant violation taken from an internal IFES reportconcerning an African country:
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[Less than a quarter of the parties] have submitted audited accounts for [the last
financial year] and/or a statement of election expenses. None of the erring
parties has been sanctioned. Neither has the Commission published the audited
election expense [returns] as required by law. …The problem [the Commission]
faces at the moment is the fear of reprisals. For example, a government
contractor who funds an opposition party might not want to be disclosed as
supporting the opposition for fear of not getting contracts from the government
anymore.
[The official responsible for compliance said] that it is difficult … to monitor theparties because the Commission is yet to put in place an effective mechanism tomonitor [party] finances. And the fact that our economy is a cash economy might
be a hindrance to parties making proper accounts. [The compliance officer has]asked questions that are never answered: What will happen if the defaulting
party is in the government? Have the … major parties spent more than[permitted] in the elections [held over one year ago]? How do you enforce thelaws on such parties and how do you check the books of such parties?

Elections held in the Philippines in 1998 and 2001 presented even clearer
examples of outright disregard for the legal requirements concerning submissionof political party campaign accounts:[T]reasurers from all political parties are required to submit … itemized
statements of all campaign contributions and expenditures within thirty days after
the day of the election … In the 1998 elections, only four political parties
submitted their statements of election contribution and expenditures, and in the2001 election, no party submitted a financial statement ….[ 24]

Two American scholars, Michael J. Malbin and Thomas L. Gais, have reported
on the more subtle forms of avoidance of political finance laws in the UnitedStates. Their book analyzed the enforcement of a series of laws and subsidies
involving disclosure, contribution limits, spending limits and public funding,introduced at the state level starting in the 1970s. (In the United States, federal
election laws are the responsibility of the US Congress, and state elections andtheir financing are subject to laws passed by the 50 separate state legislatures.)
One of the chapters is titled “Slipping and Sliding: How Interest Groups Have
Adapted to Regulation.” In a section of the chapter called “Tactical Responses:
Getting Around the Law,” the authors noted:
We were consistently impressed in our interviews by the remarkable and growing
range of political tactics used by major interest groups in the states that wevisited. Many of our respondents saw this resourcefulness as a direct responseby the groups to the particular restrictions written into the laws of their state. As aparty attorney in Florida said, the state's recent [political finance] reforms have“made people in the fund-raising community get a lot more creative.” [25]The system of “adaptation” to new political finance laws described by the authors
is rather like the "tax planning" industry in some countries. Those with sufficient
wealth to employ economic advisors and corporate lawyers are best able todevise strategies to sidestep tax obligations without actually disobeying the rules.
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Since those with substantial wealth are able to pay for complex advice, and since
the government agencies responsible for tax collection often are understaffed,
these tactics often prove successful.
In the field of political finance law, the meaning of terms such as “political party,”“donation,” “expenditure,” and “campaign” may be ambiguous. Lawyers are able
to exploit such ambiguities to argue that what is in reality a donation to theelection campaign of a political party is neither—technically—a “donation,” norhas it been given to an election “campaign,” nor to a political party. For instance,
the gift may have been in the form of an advertisement in a party journal(supposedly an ordinary business cost of the donor). It may have been given to a“party foundation” (a body legally separate from the political party though, inpractice, closely connected to the party). It may have been given for purposes
which arguably are not directly related to the “campaign.”
A study by Michael Pinto-Duschinsky of the German “party foundations” showed
how these foundations were used at certain periods as devices to side-step laws
relating to the funding of German political parties. [26]

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CHAPTER III

Non-Enforcement: The Causes
Many countries, and especially developing and transitional democracies, havegreat problems in enforcing party finance regulations. This should not be a
surprise since there are so many factors contributing to the failure of enforcing
political finance laws. As early as 1966, the Canadian Barbeau Committee [1]reported that “(1) the established parties have been unwilling to initiate action
against each other; (2) the trouble and cost of contesting an election suit about
election expenses is prohibitive to the private citizen; (3) no organized, nonpolitical group has ever undertaken to bear the cost of a suit; (4) nogovernmental agency has felt itself responsible, or been made responsible, forprosecuting candidates violating the law on election expenses.” [2] This chapter
attempts to explain the failure of some enforcement systems by examining themain causes of non-enforcement.
1) Legal loopholes
Candidates and leaders of political parties are frequently prepared to break thelaw if this enables them to gain votes. Yet, they find it even more attractive tocircumnavigate political finance laws without directly breaking them. Lawmakers
must face up to the reality that any loopholes in the laws they enact will be
discovered and exploited.
2) Ambiguous laws
Terms typically used in political finance laws such as “donation,” “election
campaign,” “political,” and “political party” are sometimes ill-defined or undefined.
For example, if a political finance law requires the disclosure and the limitation of
donations to an election campaign, it will be difficult to enforce the law if there isambiguity about what constitutes a “donation.” (Some laws fail to specify whether
loans count as “donations” or whether in-kind services count as “donations.”)
Equally, the law will prove difficult or impossible to enforce if there is uncertainty
about what constitutes a “campaign” cost as distinct from a routine cost of a party
organization.
3) Ambitious laws
Legislators and their advisors frequently underestimate the inherent difficulties
involved in implementing legislation in the field of political finance. Underconditions where major corruption seems to result from high spending on political
campaigns, it may seem obvious that the remedy is to impose limits oncontributions or on political expenditures and to ban certain undesirable sources

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of funding. As argued below, a number of these supposedly "obvious" legislative
solutions turn out to be laden with problems.
Polish, Russian, and Ukrainian examples (see Table 4) show that spending limits
have proved in practice to be irrelevant, having been introduced at unrealistically
low levels. Not only have they failed to curb the political finance “arms race,” butthis failure undermines confidence in the entire system of political financeregulation. During the 1993 election campaign in Russia, national blocs officiallyspent $3.7 million; two years later, spending limits were imposed, allowing
individual candidates to spend no more than approximately $100,000, andelectoral blocs no more than $2.4 million. The officially reported campaign
spending figures naturally decreased in line with the new regulations. In the 1999
elections to the Russian Duma, individual candidates were allowed to spend only
the equivalent of $65,000 and electoral blocs $1.6 million. Not surprisingly, thepress reported that, in fact, national blocs spent considerably more than theallowed amount, which politicians were unable to declare without opening
themselves to prosecution.
Another indication of the problems involved in political finance regulation in aconsiderable number of countries is the risk of contravening constitutional
guarantees (especially concerning freedom of expression). The task ofcontesting cases on political finance laws before constitutional courts saps theenergies of many regulatory bodies.
Table 4: Financing a Presidential Election Campaign: Major Candidates’ Official
Spending in Russia, Ukraine and Poland
Figures for expenditure are in US$ million
RussiaPresidential
Elections
1996*
Candidate
Lebed
Zhirinovskiy
Yavlinskiy
Yeltsin

Exp.
2.83
2.72
2.72
2.42

Presidential
Elections
2000**
Candidate
Zyuganov
Titow
Yavlinskiy
Putin

Exp.
0.869
0.866
0.840
0.451

UkrainePolandPresidential
Elections
1999***
Candidate
Moroz
Tkachenko
KuchmaVitrenko

Presidential
Elections
1990
Candidate
Mazowiecki
WalesaTyminski
Cimoszewicz

Exp.
0.214
0.195
0.154
0.125

Exp.
0.597
0.581
0.351
0.192

Presidential
Elections
1995
Candidate
Kwasniewski
WalesaPawlak
Kuron

Exp.
1.373
1.121
0.544
0.535

Presidential
Elections
2000****
Candidate
Kwasniewski
Krzaklewski
Olechowski
Kalinowski

Exp.
2.29
2.31
0.42
0.46

Notes:* Official spending limit US$2,850,000.
** Official spending limit US$920,000.
*** Official spending limit US$385,000.
**** Official spending limit for 2000 US$2,600,000. Not applicable for 1990 and 1995.

4) Unsuitable penalties or failure to specify penalties
Surprising as it may seem, laws sometimes set out offenses but fail to specify
any penalties for them. For example, there is little value in specifying that parties
or candidates must disclose donations if no penalty is imposed for the failure todisclose.

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If penalties for relatively minor transgressions are disproportionately severe,regulatory bodies may be reluctant to impose them. For example, Michael Svetlikof IFES has reported the absence of civil penalties in Georgia for failure to obey
the country's laws concerning disclosure of political finances:…[N]o candidate or party has been found guilty of violating existing politicalfinance laws in Georgia…In discussing with our staff lawyer the punitive
measures in place for violators of political finance regulation, we concluded thatthe lack of civil penalties results in candidates and parties viewing the regulations
as flexible …[T]he only penalty for not meeting the existing disclosure
requirements is disqualification from future electoral contests. This penalty,
perhaps due to its draconian nature, has yet to be exercised by judicial
authorities.[3]5) Collusion between opposing political parties and between opposing
candidates
In many countries, the authority responsible for enforcing political financeregulations does not attempt to launch its own investigations into possible
contravention of political finance laws. It is assumed that candidates and politicalparties who have been on the losing side will bring allegations against theirpolitical opponents and that this adversarial system will ensure that the laws areobeyed.
The chairman of the United Kingdom Association of Electoral Administrators,
John Turner, reported in 1998 on the prevailing British practice in his evidence to
the Committee on Standards in Public Life. He was questioned by one of theCommissioners, Professor Anthony King, about campaign spending limits onparliamentary candidates: “[H]ow does the present system work? What
happens? You are the returning officer [that is, the electoral administrator]. Whatdo you do? What are your responsibilities or lack of them?” Mr. Turner replied, inpart:
Certainly they are not onerous, in the sense that we have no statutory duty otherthan to receive the returns as to election expenses at the appropriate time. We
do not even have the burden of having to vet them, in terms of their arithmetic
accuracy. Having received the return, save for a parliamentary election—when
one must also publish a notice—that is about the limit of the duty that falls on areturning officer. Any vetting is left to opponents of, in particular, successful
candidates or to anyone else with an interest in the matter and who takes theopportunity for public inspection. [4]In practice, opposing candidates and parties cannot be relied on to report eachother's wrongdoing. In many countries, the laws are broken by most of the parties
and candidates, and this deters them from making accusations against eachother. In addition, it often costs a great deal of money for candidates and parties
to collect evidence and to bring legal action.

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The British Broadcasting Corporation reported in 1997 that:…the reason for the lack of [prosecutions against parliamentary candidates forcontravening legal limits on campaign spending] is not necessarily that no
malpractice occurs but rather the opposite. In their study of the 1959 [British]
general election, Butler and Rose quoted one senior party figure as saying: ‘If welost a seat by one vote and I could clearly prove illegal practices by the otherside, I wouldn’t try. It would perhaps cost [GBP] 5,000 and they might be able toshow that our man had slipped up in some way. But worse than that, it mightstart tit-for-tat petitions and no party could afford a lot of them. On the whole
we're both law abiding and it's as well to leave each other alone.’ [5]6) Lack of administrative capacity in a regulatory body
In many countries, laws concerning political finance have become far more
extensive and complex in recent years. However, frequently there has been afailure to provide regulatory bodies with the additional financial and humanresources needed to carry out their additional functions.
In their study of state governments in the United States, Malbin and Gais foundthat the financial resources given to bodies responsible for administering
campaign finance laws at the state level usually had not increased to keep pacewith new complex laws and subsidies. Moreover, a short period of enthusiasm forlegal reform was typically followed by a loss of interest and pressure on thebudget of the regulatory body. In the face of such financial pressure, the normal
response of the regulatory body was to cut its expenditure on enforcement. [6]These researchers also reported that:
Agencies typically seem to have two kinds of budget problems. In some states [ofthe United States] we heard stories about agency budgets being slashed after
the agency had investigated a legislator or a legislator's ally. But the morecommon stories we heard were about inattention or neglect.
Administrators in several agencies, for example, described what had happened
to their agencies during the last economic recession, when state and local
budgets were tight. During a recession, tax revenues are down and entitlement
spending [for example on unemployment benefits] is up. Agencies withdiscretionary budgets suffer the consequences … discretionary projects arebound to be cut most heavily. These blows will be felt more strongly in small
agencies than in large ones. One agency's chief counsel described the effects of
a 10 percent budget cut in his … agency. Because [priority was given to routine
administration of the rules concerning disclosure of candidates' accounts], … the
only way to cut the agency's budget by 10 percent was to cut the investigative
staff in half—from two to one. … It took a full decade to restore the lost staff[7]
position.

A principal argument in this training program is that the lack of administrative
capacity of the regulatory body does not occur by accident. It can often result

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from the failure to plan and provide the funds for administration of new laws
during the period when those laws are still under consideration.
7) Lack of capacity in judicial bodies
It is not enough for the bodies responsible for administering political financeregulations to do their work internally. Once they find preliminary evidence ofmalpractice, it usually is necessary for them to turn to law enforcement agencies
to conduct the further detective work (backed by legal powers of subpoena andaccess to documents that political finance regulators do not normally possess). If
police authorities obtain sufficient evidence, the authorities responsible for publicprosecutions must decide whether to bring a case to trial. Finally, the courts
conduct the trial, and higher courts deal with appeals.
In many countries, the court systems are extremely slow-moving. Moreover,there is little enthusiasm to give priority to cases involving leading members of
the governing political party.
8) Confusion of roles in different regulatory bodies
In view of the normal reluctance of political finance regulators to build cases
against prominent politicians for contravening the laws, they will typically try topass the responsibility to some other regulatory body. Thus, if there is any
confusion about the responsibilities of the electoral commission, the anticorruption commission, the income tax authorities, the government auditors, thelegislature, and so forth, the normal result will be that each body will make theexcuse that some other body should be implementing the law.
9) Constraint against
infringements

prosecuting

governmental

bodiesforlegal

In 1979, the Chief Electoral Officer of Canada pointed out that:
Under a departmental policy going back to 1962, the federal Department ofJustice has declined to become involved in investigations or prosecutions under
the Canada Elections Act because of the sensitive political position of the
Attorney General of Canada in whose name any prosecutions would have to be
conducted.[8]In many countries, one of the most significant forms of legal infringement ofpolitical finance laws is that committed by governmental bodies on the orders ofpoliticians of the ruling party. Typically, governmental resources (personnel
employed on the public payroll, publicly owned vehicles, office equipment andtelephones, and public information services) are used for partisan campaign
activities. When this occurs, it is usually impossible for the political financeregulators to take action against the government—for both political and legal
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reasons. Governmental bodies often enjoy legal privileges which render them
immune from prosecution.
The former Electoral Commissioner of Australia has written about this problem:
In addition to natural and [legal] persons who ought to be treated identically,
there are ‘government persons’ who may escape regulation. Where there is a
doctrine of Crown or state privilege, it will be necessary to make provision (if thisis constitutionally possible) to regulate state instrumentalities as well as private
actors. At the very least, internal guidelines for Ministers and their departments
need to be developed to promote ethical, i.e. non-partisan, conduct within theexecutive branch. [9]10) Political constraints and lack of authority in regulatory body
Electoral commissions typically are reluctant to go out of their way to enforce
political finance laws for two reasons. First, electoral commissioners, because of
the methods by which they are appointed, are sometimes political loyalists or areotherwise beholden to the president of the country or to other leading membersof the government. Second, even if the electoral commissioners have a spirit ofindependence, they may be reluctant to challenge the government or thelegislature due to the fear that the commission’s budget will be cut in retaliation
for any prosecutions for political finance offenses.
These two constraints on enforcement are difficult to resolve. There are anumber of alternative methods of appointment of commissioners designed toassure independence and professionalism, but none of them are ideal. With
regard to the financial independence of the electoral commission, a balanceneeds to be struck between independence from political retaliation and lack offinancial accountability.
In some cases, the regulatory body lacks authority to enforce the laws. Important
powers needed for effective enforcement include subpoena power, power toassess penalties, and power to conduct audits.
11) Bad habits
It is reasonable to suggest that the assumptions and habits prevailing in a society
are more important than any of the specific reasons stated above for nonenforcement of political finance laws. Both good and bad habits have a strong
tendency to be accepted as normal when it comes to standards of electioneering.
The history of the United Kingdom during the 19th century illustrates the power ofexisting assumptions about what is or is not acceptable. In the early 19th century,electoral corruption was rampant. Laws were routinely broken. It was standardpractice for the government of the day to use secret-service funds forelectioneering, which usually meant bribery of voters. Vote buying and the
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dispensation of large amounts of liquor made polling a loud, rowdy affair andinvolved candidates in huge expenses. Half a century passed before electoral
habits changed, and the reasons for the change are not altogether clear. New
electoral laws played a part; increase in the size of the electorate also wasimportant. Equally important was the development of a new set ofunderstandings on the part of candidates and the public about what was and was
not acceptable behavior. Many countries, especially developing and transitional
democracies, have great problems in enforcing party finance regulations. But thisis not surprising because their capacity to enforce other kinds of laws andregulations is also weak. Where governance capabilities are limited, theenforcement of party finance regulations is rarely a high priority. [10]Such a shift in perceptions is evident in present-day South Korea and Thailand.
These countries have made a major effort to implement rules about vote buying
and campaign expenses. These official efforts have been accompanied andspurred on by political elites, pressure groups and the press.
12) Unknown or excessively complex laws
Finally, the expectation that the norms of law be obeyed is premised on
knowledge of the law. However, individual candidates cannot comply with laws
and standards if they are not aware of them. Known and understood laws andprocedures are self-executing for the vast majority of actors. Thus, public
education and awareness are particularly critical elements of any serious
enforcement strategy. One should also recognize that detailed financial
regulations can impose disproportionate administrative burdens on politicalplayers and may deter involvement in a political process that relies predominantly
on volunteers. Legislation that is extremely complex can act as a disincentive topolitical participation.

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Chapter IV

Political Finance Regulations and Subsidies: Administrationand Enforcement
Legal provisions concerning political financing may be separated into four maintypes: (1) financial conditions governing candidacy for public office, (2) subsidies,(3) prohibitions and (4) regulations. In general, the easiest provisions toadminister and enforce are those in categories (1) and (2), while the most difficult
to enforce are those in categories (3) and (4).
1)

Financial conditions governing candidacy for public office

In a number of countries, candidates for elections must meet either or both of thefollowing conditions: (1) declaration of assets by candidates and, sometimes, bymembers of their families, and (2) financial deposits for political parties andindividual candidates.
1)

Rules concerning the declaration of assets are easy to enforce
because the electoral authority may simply refuse to accept thenomination of a candidate on the ground that the requirements havenot been met. If the electoral authority rejects the nomination of acandidate on the ground that his or her asset declaration isunsatisfactory, it is then up to the candidate to initiate a legal appeal
against the decision.

2)

A system of financial deposits—found especially in countries withmajoritarian electoral systems—deters frivolous candidates andpolitical parties. Some regimes introduce refundable or non-refundable
application fees for independent candidates and political parties. The
argument against such fees is that they can discriminate against pooror even average-income candidates. Such fees will have virtually noeffect on a wealthy person, but if one wishes to support the right ofpolitical participation in practice, such fees may represent a grossinequality. Non-refundable fees, in fact, introduce a tax on politicalparticipation and impose direct and substantive restraints on the ability
to stand for office. In case of refundable fees (financial deposits), thedeposits are returned to entities that receive a certain percentage ofthe votes cast. In recent years, deposits have been used in a numberof countries for purposes other than deterrence of casual candidates.
The deposit, if high enough, can be an incentive for candidates andpolitical parties to abide by regulations relating to the timely disclosureof campaign accounts. Legal prosecutions of candidates and theiragents for failure to complete their accounting obligations on time
involve paperwork, expense, and a considerable amount of time forelection administrators. By contrast, the incentive of the return of a

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financial deposit as the reward for obeying the laws on disclosure is far
less burdensome for election officials and, arguably, more effective.
2)

Subsidies

Subsidies consist of some or all of the following:1)

Public funding subsidies to political parties and/or candidates;

2)

Free or subsidized media broadcasts by political parties and candidates;
and3)

Tax relief and subsidies-in-kind (apart from political broadcasts).

Once legislation about public funding of parties and candidates has beenenacted, the implementation of a subsidy scheme should be relatively simple.
The same applies to agreements about free political broadcasting. It should beeasy to monitor whether the sums of money allocated by law to each politicalparty are in fact given. It should be equally simple to determine whether parties
and candidates receive their due shares of time for political broadcasts.
Because they are relatively easy to administer, subsidies are sometimes
especially recommended for countries where elections must be held amid
conditions of political instability and violence.
However, several caveats are necessary. First, the relative simplicity ofadministering subsidies may not be a decisive argument in favor of using them.
In all likelihood, there may be several alternative formulas for allocating subsidies
or free broadcast time among different parties and candidates. Each formula may
arguably be determined by a distinct notion of “fairness,” and it may be
impossible to reach a common, objective agreement about what constitutes ajust formula. In practice, rival parties and political interests are likely to advocate
whichever notion of “fairness” produces an outcome that benefits them.
Second, in a number of countries, especially in Africa, laws on financial subsidies
to political parties and candidates merely allow the legislature or the government
to propose such payments but do not oblige them to make the payments. Thus,
the government may decide only shortly before the date of the poll to appropriate
funds for this purpose.
Third, there have been examples of countries in which the government of the day
has failed to give the public subsidies mandated by law at the set time. This
happened recently in Zimbabwe.
Fourth, though the allocation of free broadcasting time to political parties andcandidates is relatively simple to monitor, it is far more difficult to ensure that a
media channel obeys rules concerning “neutrality” and political balance in news
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bulletins and other broadcasts in the period before an election. Responsibility for
enforcing regulations on the reporting of election campaigns in news broadcasts
is normally the responsibility of a specialized broadcasting agency and not of theelectoral authority.
The regulation of broadcasting, especially of publicly owned media, has
important implications for political financing. Though it is normally difficult toestablish the precise financial value of a certain number of minutes of favorable
reporting on a news program, it is clear that such exposure has effects at least as
important as political advertising paid for by parties or by candidates.
3)

Prohibitions

In general, banned activities include corrupt and illegal practices, such as votebuying and abuse of state resources. In addition, some countries forbid certain
sources and types of contributions, for example: foreign contributions,anonymous contributions, contributions made in the name of another person,
contributions from business corporations, and contributions from government
contractors.
Political finance laws that incorporate prohibitions are probably the most difficult
to enforce, although regulations (considered in the next section) also present
serious problems.
Corrupt practices are present both at a high level and at street level. At a highlevel, corruption normally consists of some agreement to give a reward (such asa government contract) in exchange for a political contribution. The problem forthe enforcement agency is to obtain evidence for what is normally a highly secrettransaction. Some of the most celebrated examples of such dirty dealings haveemerged as a result of press investigations and of secret recordings ofconversations between political fundraisers and contributors. An example is the
scandal unearthed in 2001 by the Indian Internet newspaper Tehelka.com. [1]At a lower level, vote buying and similar illegal forms of political spending may be
so widespread that they cannot be kept secret. The problem for the enforcement
agency here is similar to problems involving the detection of other forms of street
crime, e.g., the sale of drugs, illegal gambling, and illegal activities related toprostitution. First, the enforcement agency needs to catch those involved in theillegal transaction. Second, when those involved—normally junior criminals—
have been caught, the enforcement agencies must establish that these "small
fish" were acting under instructions from a group of top people. Finally, the courts
must be prepared to impose penalties sufficiently severe to act as deterrents
rather than merely as irritants.
When it comes to prohibitions against particular types of donor and donation,
there are different, but no less severe, difficulties. These are illustrated by the
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problems of bans on foreign donations and on corporate contributions. Thesebans may simply be ignored or circumvented through various “money laundering”
techniques. Corporations, labor unions and wealthy individuals may engage insuch activity for several reasons: to evade contribution limits, to enhanceeligibility for public funds or to conceal the identity of the actual donor. Illegal,
secret donations are sometimes attractive to the donor because they place thepoliticians in the donor's debt and increase the donor's leverage when it comes todemanding corrupt privileges in return for the clandestine gift. But, if a
corporation or a foreign donor wishes to obey the letter of the prohibition, there
are several ways to achieve this.

4)

1)

If such bans apply to gifts to political parties, they can often be evaded
by setting up "off-shore islands" of political parties—bodies such as"party foundations," think-tanks, or "political education" organizations,which are legally distinct but, in practice, are closely connected to aparticular political party.

2)

Bans on "foreign" donations may sometimes be evaded because theterm "foreign" is not tightly defined in the relevant legislation. For
example, a "foreign" donation may be given through a branch of a foreigncompany located within the relevant country.

3)

Bans on corporate donations may be evaded in a scheme whereby anumber of partners of a company each give a donation to a particularparty or candidate and are rewarded by a salary bonus equivalent to theamount of the political payment.

4)

A business corporation may release employees on paid vacations on theunderstanding that they will work for a party or candidate.

5)

A corporation may employ a politician as a "consultant" in order todisguise what actually is a political gift as a payment-for-service.
Alternatively, a company may provide employment at a generous rate toa member of the politician's family.

Regulations

Regulations about political financing include the following:
1)

Disclosure rules;

2)

Spending limits;

3)

Contribution limits;

4)

Measures to control the use of public resources for campaign purposes;

5)

Rules on personal use of candidate funds;

6)

Political broadcasting rules;

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7)

Rules concerning the funding of internal party contests; and8)

Rules concerning the funding of referendums.

Such rules invite evasion, especially when they are unduly strict. According to aleading American scholar, Herbert E. Alexander,[E]xpenditure limits are illusory in a pluralistic system with numerous openings for
disbursements ... [W]hen freedom of speech and association are guaranteed,
restricting money at any given point in the campaign process results in new
channels being carved through which monied individuals and groups can bring
their influence to bear on campaigns and officeholders. [2]The problems of spending limits are explained further in the following extractfrom the IFES study on political finance in Nigeria:
1)

Since parties and candidates do not wish to be punished for breaking
laws on spending limits, they will often disguise spending above the limit.
Thus spending limits make disclosure provisions harder to enforce.

2)

Spending limits may make life harder for opposition parties andcandidates. But this depends on what the limits are and whether theytend to keep the playing field as level as possible. Ruling parties are able
to take advantage of public resources available to members of thegovernment for partisan purposes. In the period before a generalelection, government information services often produce what is
effectively party propaganda in the guise of "public information."
Government employees may be released from their public duties in orderto perform services for the party instead. Government telephones,
vehicles and the like may be used for political campaigning.

3)

Since spending limits apply only to the "campaign," it becomes tempting
to disguise what are effectively "campaign" expenditures as routine, noncampaign items. For example, if spending is defined as "campaign
spending" only if it is incurred during a set period of time before anelection, it will be possible for a party to prepare campaign broadcasts
and to conduct policy research and the like in advance of the set period.

4)

It is the experience in a number of countries that, where opposing
political parties all flout the laws concerning spending limits, "nonaggression pacts" are likely to occur. No party will bring accusations
against another party for fear of being accused itself of disobeying the
law.

5)

Activities that have the effect of assisting the cause of a particular party
may be conducted by an independent interest group or lobbyingorganization. For instance, in the United Kingdom, an organization that
opposed abortion claimed the right to campaign against particular
candidates whose views on the subject of abortion were in conflict with
their own.

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The only way to ensure that only candidates and political parties participate incampaigning and campaign spending is to restrict the freedom of expression ofinterest groups and lobbying organizations. Constitutional courts in the UnitedStates, Canada and Europe, however, have confirmed to varying degrees therights of such interest groups to participate in public discussions during election
campaigns. In order to provide for freedom of expression, in accord withdecisions of the European Court of Human Rights, the British Parliament
carefully crafted the new electoral legislation of 2000. This legislation for the firsttime introduced a limit on campaign spending by national party organizations. In
order to avoid a challenge against the law in the European Court of Human
Rights, the law permitted a limited but significant amount of election spending by
independent bodies (usually known by the technical term “third parties”). These
activities suggest that, even if a limit on spending by political parties proveseffective, the result may be to re-channel such spending through lobbyingorganizations.
A recent study of political finance in Taiwan refers to the problem of limits
mentioned above: “Taiwan is considering lifting some of the penalties forbreaking limits on campaign spending and donations because it is recognizedthat limits have, in fact, reduced transparency.” [3]In other contexts, transparency need not suffer from the imposition of spending
limits. This is a balancing act in which meaningful audits can probably reduce thedegree to which spending limits are undermined.
With regard to regulations on the disclosure of political donations, these can be
avoided through several common techniques: donations may be disguised ascommercial payments (for example, advertisements in a party publication), asloans (of money or equipment), or as voluntary services (for example, leave
given by a corporation or government agency to employees to enable them tocarry out work for a political party or candidate).
The range of opportunities for evasion, especially of prohibitions and regulations,provides a good reason for legislators to be careful when they are considering
new political finance laws. For political finance regulators, who are obliged todeal with existing statutes, the possibility—indeed likelihood—of such evasionmeans that considerable care and resources need to be devoted to theenforcement process.

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Part Two

Chapter V

Strengthening Political Finance Regulatory Bodies
1) Clarifying responsibilities of enforcement bodies
In the United States, federal campaign finance violations are subject to three
types of enforcement actions:

1)

Civil enforcement proceedings brought by the Federal Election
Commission;2)

Criminal prosecution by the Department of Justice as FECA (Federal
Election Campaign Act) misdemeanors; and3)

Criminal prosecution by the Department of Justice as felonies. [1]In fact, most violations of the Federal Election Campaign Act are handled by theFederal Election Commission (FEC) through civil and administrative enforcement
proceedings. Civil enforcement is clearly appropriate for FECA violations thatinvolve small amounts of money, or that are committed openly and in obvious
ignorance of the law. Civil enforcement can be useful also when proof of criminal
intent is weak.
Shared responsibilities require the effective coordination of enforcement efforts,
which is most likely to occur where there is a cooperative attitude of mutual
respect and support. Numerous and uncoordinated requests for assistance
between the agencies have the potential to jeopardize the willingness tocooperate effectively.

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Case Study – United States Federal Election Commission andthe Department of Justice
United States
In the United States, the Public Integrity Section of the Criminal Division, Department of Justice, hasdeveloped a working relationship with the Federal Election Commission and its staff, and can help
agents and prosecutors quickly obtain the information they need from the FEC. The Public Records
Division of the FEC has also been a resource in developing election crime cases. In fact, most FECA
violations either are not federal crimes, or, if they are, do not warrant criminal prosecution. The
Department of Justice may refer all but the most aggravated campaign finance violations to the FEC.
Early consultation with the Public Integrity Section helps the Department of Justice, the United States
Attorneys’ Offices and the FBI to avoid unnecessary expenditure of departmental resources byencouraging the referral of appropriate matters to the FEC. Such consultations also enable thedepartment to discharge its obligations under its Memorandum of Understanding with the FEC.
Finally, providing the FEC with information on closed criminal FECA matters in a timely manner has
contributed significantly to the Commission’s helpful approach to shared enforcement responsibilities.
Formalizing agreements through memoranda of understanding should be considered a best practice.
There are, however, lessons to be learned from the experience of the United States. The
memorandum of understanding that was adopted in 1977 is currently being revised by both parties.
Two issues stand out. The first is the timely forwarding of cases to the Department of Justice by the
FEC. In the past, some of the cases that would fall under the Department of Justice’s jurisdiction were
forwarded after the statute of limitations had expired. The second concern is the ability of the FEC tocontinue to conduct an investigation while the case is open with the Department of Justice. The
conduct of parallel investigations and the terms under which information is shared should thus beclearly addressed. Finally, the US experience highlights the need to revisit such agreements asrelevant legislation and the enforcement body itself evolve over time.

2) Consultations with different stakeholders
In the course of addressing its obligations, the enforcement agency should
periodically review its programs and examine its enforcement practices andprocedures. It should also give the regulated community and representatives ofthe public an opportunity to bring general enforcement policy concerns before theagency. Those who directly interact with the agency, witnesses, other third
parties, and the general public can provide valuable information on how thepolitical finance system operates in practice. By inviting a constructive dialogue
concerning its enforcement procedures, the enforcement agency can seek
general comments on the effectiveness of the procedures in working throughenforcement cases. The enforcement agency can also benefit from hearing
about practices and procedures used by other law enforcement agencies.
A further important component of the enforcement mechanism relates to thedegree of trust that political parties and candidates feel in their political financeregulator and in each other. Trust is also an important condition in coordinating
the efforts of different enforcement agencies.

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3) Assuring public confidence in the process of making appointments to
independent political finance enforcement bodies
Which procedure is most likely to lead to the choice of political finance regulators
who are well qualified and in whose political neutrality political leaders and the
public will have confidence?
If the head of government or head of state
has the sole dominant influence over theappointment of electoral commissioners(or members of other independent bodies
responsible for administering and policing
political
financeregulations),
appointments may well prove to becontroversial. Recent reports by foreign
election observers and local scholars
frequently criticize members of electoralcommissions as governmental pawns.
Although no judgment is intended about
the accuracy of such reports as cited
below, the purpose of these quotations is
to demonstrate that appointment by thepresident is liable to lead to argument andto lack of trust. A comprehensive study forthe
UnitedNations
Development
Programme on Electoral Management
Bodies as Institutions of Governance cited
Malawi, Niger, Togo and Slovakia as
examples of “movement backwards.”
What is the alternative to a selection
process dominated by the head of theruling party?
1)

Case Study - Dangers of the
Appointment of Electoral Regulators
by the Head of the Governing Regime
Malawi and Niger
In June 1998, President Muluzi of Malawi
appointed a new nine-member Electoral
Commission …He dissolved the former
Commission … four months before theexpiration of its constitutional term, amid
protests from human rights groups andopposition parties. He also moved the new
Commission closer to the executive and awayfrom Parliament, by legislation stating that the
President may appoint an undetermined
number of commissioners at his discretion, tobe confirmed by the Public Appointments
Committee…
Although Parliamentary elections were heldin Niger under a National Independent
Electoral Commission in 1994, the President
dismissed the Commission during the 1996
presidential election while it was counting
ballots on the first day of a two-day vote. A
new Commission was appointed for thecounting on the second day, which was
conducted at the barracks with favorable
results for the incumbent… [2]Political balance. One approach is that of the United States. Here thegoal of political neutrality in the body responsible for administering
political finance laws is viewed as impractical. Instead, the method of
appointment is designed to achieve a political balance. The UnitedStates Federal Election Commission consists of an equal number of
Democratic Party and Republican Party nominees.
Such a bipartisan system has been attacked on the ground that it is arecipe for compromise and inactivity. Also, the system of appointing party
nominees as commissioners is especially suited to a country where
politics is dominated by two major parties.

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However, some scholars have argued that political balance is necessary
in many developing democracies because these countries normally(though not always) lack a tradition of political independence among civil
servants. Politicians, practitioners, analysts and consultants increasingly
state that, especially in transitional politics, party-based electoralcommissions play a key role in consensus-building and good governance.
An electoral authority can be party-based and still operate neutrally andindependently. When there is no other tradition or existing body of widelyrespected and independent civil servants, multi-party composition may
guarantee a balanced approach better than executive or judicial
appointment. Multi-party electoral commissions can effectively contributeto establishing mutual confidence, transparency and neutrality… [3]2)

Non-partisan appointees. A second approach is that of the United
Kingdom. Here, people who have been identified with a political party are
virtually excluded from consideration for appointment as members of theelectoral commission. A senior civil servant heads a group that is given
responsibility for reviewing applications for appointment to the electoralcommission. Leaders of the principal parties are consulted only at a latestage and only to ensure that they do not have strong objections to the
proposed appointees.
Such a system of appointment of “the great and the good”—as they arecalled in the United Kingdom—may work if the neutral civil servants andpublic figures designated to make appointments are genuinely
independent. This system presumes that the civil servants and otherfigures appointed by the current government to make the nominations
will act in a genuinely neutral manner. It relies also on the assumptionthat the "non-political" appointees actually are non-partisan.
Certainly there have been supposedly "independent" commissions in the
United Kingdom that have been independent in name alone. Notorious
for its partisanship was the so-called Independent Commission on the
Voting System of 1998.
A system where the government in power designates senior civil
servants or other esteemed personalities to make nominations or
appointments to the regulatory body will work only in certain politicalcultures. There must be confidence in the genuine neutrality andcapacity of those chosen by the government to be the selectors.

3)

Divided responsibility for appointments. A third approach is to divide
the responsibility for making nominations and/or appointments. For
example, the Central Election Commission of the Russian Federationhas 15 commissioners, a third of them appointed by the president of the

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Federation, a third by the Duma (legislature), and a third by theFederation Council. [4]4)4)The judicial approach. A fourth approach is to attempt to ensure
independence by requiring electoral commissioners to be senior judges
and to appoint them for relatively long terms of office. In Poland, theNational Electoral Commission is composed of three judges of theConstitutional Tribunal (designated by the President of the Constitutional
Tribunal), three judges of the Supreme Court (designated by the
President of the Supreme Court), and three judges of the High
Administrative Court (designated by the President of the High
Administrative Court).

Ensuring the financial independence of regulatory bodies

If political finance regulators do their jobs too diligently and initiate inquiries into
the alleged illegal campaign financing of leading members of the government orof the legislature, they will often find that their operational budgets are threatened
as a means of warning or retaliation. Officials of the US Federal Election
Commission have reported the perception that diligent enforcement of politicalfinance laws invites retaliatory scrutiny of the Federal Election Commission'sbudget by the Congress.
Clearly, it is desirable to protect political finance regulators from threats to theirbudgets by powerful politicians. However, it is also necessary to ensure that thestaffing levels, salaries, and other costs of enforcing political finance rules areadequately controlled to ensure that money is not wasted. Electoral management
bodies have the same tendency as other bureaucracies to seek to increase theirbudgets. As Lopez-Pintor has put the issue,[I]t is important to avoid using the electoral administration as an employment
program. The system should be devised with a view towards sustainability andtherefore should correspond to the limited financial capabilities of the national
government. [5]The ideal solution requires that the political finance regulatory body be subject tosome form of financial discipline and accountability but that the financial stick not
be wielded by the government or by the legislature. These considerations are
similar to those applied to the funding of the judicial system. How to best achieve
this combination of financial independence and accountability will vary according
to the institutions and culture of each country. The 1998 recommendations of theUnited Kingdom Committee on Standards in Public Life recommended that thebudget of the proposed electoral commission (which was set up shortly
afterwards) “should be set in such a way as to preserve its impartiality andindependence.”

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One of the main prerequisites of the independence of the Commission is theindependence of its budget. A body whose budget is determined by agovernment department and which subsequently has to fight for resources
against competing priorities in government could never be perceived as truly
independent. We therefore believe it is essential that a mechanism should be
developed for setting the commission's budget which stresses independence
while at the same time retaining a degree of accountability to parliament for theproper exercise of public funds.
One model that might be considered is the mechanism for setting the budget for
the National Audit Office (NAO). The NAO's budget is proposed by the NAO tothe House of Commons Public Accounts Commission (which is distinct from themore familiar Public Accounts Committee). This body of MPs (Members of
Parliament) examines the proposed budget before formally submitting it to theTreasury. By convention, once the Public Accounts Commission has approved
the budget, there is no further interference. [6]The complexity of this proposed arrangement and its reliance on “convention” isa sign of the difficulty of achieving impartiality and financial accountability at thesame time. It also indicates that the particular solution proposed relies heavily on
informal understandings (“conventions”) rather than on legal guarantees.

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Chapter VI

Sanctions and Tactical Issues for Regulatory Bodies:
Administrative Penalty Versus Prosecution
One of the challenges that most countries face in launching an effective
enforcement program is weak leadership in the regulatory body. A serious
enforcement program cannot be imposed from the outside, but requires
committed leadership from within. Ideally, this leadership should exist in a
determined political finance enforcement agency with the clout and resources to
execute sanctions in its area of responsibility. The second challenge is finding anappropriate entry point for punishing violations in a case of systemic corruption.
Given the magnitude of the tasks, it is critical to begin at a point where the goals
are feasible and tangible results can be realized within a timeframe that builds
support for further reforms. Small gains can provide essential levers to sway
public and official opinion. Entry points should be chosen in order to tackle highprofile problems such as lack of disclosure, submitting false information, or
funding from illegal sources. As Craig C. Donsanto argues:
A fair, flexible, yet workable enforcement process is the core of any campaign
finance law's effectiveness. Most violations of the FECA are committed as aresult of ignorance, negligence, misunderstanding or mistake. Those offences
are customarily pursued by the FEC administratively, with the usual penalty
being that the offending transaction is ‘backed-out,’ the missing information
added to the public record, and the parties to the transgression required to pay asmall monetary penalty and agree to mend their ways. On the other hand,
purposeful and financially large violations of the Act committed by offenders who
know what the law requires or forbids and flout notwithstanding that knowledge
are subject to prosecution under Section 437g’s criminal penalty. [1]This chapter offers some practical recommendations concerning the imposition ofadministrative penalties and criminal sanctions.
1)

Violations and sanctions

One of the first steps for any agency is to outline clearly what types of violations
and sanctions exist and who is to be held accountable for which infringement of
the law. Illegal political finance usually refers to contributions or uses of moneythat contravene existing laws on political financing, and the concept is based on
legalistic criteria assuming that a political act is corrupt when it violates formal
standards of behavior set down by a political system. However, laws are notnecessarily consistent in interpretation or application across different countries.
Some illegal acts are not necessarily corrupt (foreign funding of democratic
opposition), and some corrupt acts are not necessarily illegal (campaign
contributions from organized crime). Illegality is crucial to many political financeviolations; however, some legally sanctioned, dubious uses of state resources
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might not be covered by political finance regulations and will have to beaddressed by other provisions. Thus, the same violations might not besanctioned in the same way or with the same severity in different states.
Violations of political finance law can range from very minor infringements, suchas the slightly late submission of financial reports, to major fraud. Political financeenforcement agencies should clearly specify particular violations, such as: (1)over-the-limit contributions, (2) prohibited contributions, (3) failure to file reports,(4) submitting false or incomplete information in reports, (5) late filing of reports,(6) conducting political finance activity outside of the reporting account or throughcooperation with surrogates, (7) failure to maintain adequate documentation, and(8) prohibited expenditure.
Another important issue is self-correction of financial reports. Nicole Gordon
suggests that corrections should not be treated as violations. For instance, the
New York City Campaign Finance Board will not assess penalties for acceptance(which means deposit of a check) of a prohibited contribution if the campaign
returned it before the agency notified the campaign that this violation was
discovered, even though the deposit of the check itself would be technically aviolation. Such a case would be noted as a “VNP”—violation no penalty—without
assessing a monetary fine, but making it part of the public record.
In general, enforcement of political finance regulations requires the imposition ofeffective, proportionate sanctions serving as deterrents to violators. Politicalfinance regulations can identify different types of offenses and provide for arange of penalties and sanctions depending on the seriousness of the offense.
An analysis of the sanctions stipulated by the various laws reveals these maincategories:

1)

Financial sanctions including modest administrative fines;

2)

Larger fines for serious violations;3)

Criminal sanctions for significant violations that undermine the integrity ofthe elections;

4)

Loss of reimbursement for election expenses, withdrawal of publicfunding, ineligibility for future funding;5)

Financial benefits transferred or accepted by a party in violation of
specified prohibitions are forfeited for the benefit of the state treasury;

6)

Loss of parliamentary seat, disqualification from standing for future
elections, and ineligibility for appointment as public official;

7)

Dissolution of party; and8)Cancellation of election.

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Furthermore, it is important that the law establish sanctions in proportion to thegravity of the offense. The problem with overly severe penalties is that they may
disproportionately damage new and relatively inexperienced single-issue or small
local political parties. Taking into account the essential role of political parties inany democracy, the prohibition or dissolution of political parties as a particularly
far-reaching measure should be used with utmost restraint. Based on theprovisions of the European Convention for the Protection of Human Rights, theCouncil of Europe has stated that “enforced dissolution of political parties may
only be justified in the case of parties which advocate the use of violence or use
violence as a political means to overthrow the democratic constitutional order.” [2]Sanctions can be directed against both the party and the individual party official
or candidate personally involved in the illicit transaction. In some cases, it is
impossible to determine who should be held accountable for violations of the law.
If the political party were held responsible for every unlawful action related topolitical finance, it would risk being penalized for actions over which it had little orno control (for example, in the case of political provocation, whereby a supporterof one political party makes an illegal donation or buys votes on behalf of anotherparty that he wants to be penalized). According to the Council of Europe
recommendations, a political party as a whole should not be held responsible forthe individual behavior of its members, including candidates, who are notauthorized by the party but who engage in party activities. This could include
illegal fund-raising activities or expenditures by an individual candidate.
There must always be someone who is accountable for violations, whether it isan individual or an organization that has placed responsibility with someone.
Violations may also be found against “agents” of the candidate or party. It is
common for liability for violations to be shared by the candidate, the candidate’s
committee and the treasurer; in specific cases, an “agent” of the campaign canalso be held liable.
If responsibilities for violations are clearly understood and it is clear who isaccountable for which type of infringement of the law, prosecution will be more
likely. Yet, when personal responsibility is assigned to an individual financial
agent, any adverse publicity surrounding convictions will not threaten immediate
voter reaction at the polls, which is supposedly the most effective deterrent toimproper conduct. Because prosecutions will almost always occur after theelection, the candidate who has benefited from violations act may well be in
office by the time his aides are prosecuted. [3]Experience in many countries shows that more effective enforcement can result
from monetary fines and the possibility of limiting public funding than from severe
criminal penalties. In fact, as some experts argue, “Some of the penalties are too
severe for the circumstances and might discourage enforcement.” [4] In postcommunist countries, the statute book contains a relatively harsh enforcement
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regime for offenses involving the funding of election campaigns and politicalparties. Yet the practical value of these sanctions may well be reduced, “as theinfringement of the law seems to be a commonly accepted practice, both among
politicians as well as wider sections of civil society.” [5] The difficulty of using
criminal sanctions effectively is related to the fact that many prosecutors are
reluctant to regard political finance offenses as suitable for criminal law.
According to Keith D. Ewing:
At the end of the day, however, effective and severe sanctions are not theprovince of the criminal law only. Potentially more significant would be powers toprevent individuals from standing for election, to prevent them from taking theirseats when elected, and to have a political party deregistered. Although the lastis unlikely ever to be used in the case of the large parties, there are no doubt
other sanctions which could be employed, such as the refusal of election
expense rebates or the denial of income tax credits for contributions to theirfunds. [6]In fact, the Administrative Conference of the United States (ACUS) has
advocated the use of administrative penalties since 1972, when it stated that,“federal administrative agencies should evaluate the benefits which may bederived from the use (or increased
Case Study - Sanctions for Nonuse) of civil money penalties as aCompliance with Disclosure
Requirements
sanction.” [7] Furthermore, in its report
Polandand Georgia
on the use of civil penalties under theFederal Aviation Act, ACUS writes, After the 1993 parliamentary elections in Poland,"The
Conference
believesthat dozens of committees failed either to submit anadministratively-imposed
sanctions “election expenses return” within the time stipulated
the law or did not write one. The mostare generally faster, less expensive, bycontroversial case was that of the Solidarity Tradeand more effective in enforcing Union, which managed to win nine Senate seats andregulatory schemes than is reliance on later created its own Senatorial Caucus. Solidarity
its election expenses return two days after
judicial enforcement." [8] Thus, the submitted
the stipulated time and subsequently lost aauthority to impose administrative substantial state subsidy equivalent topenalties seems to be fundamental to approximately US $68,850.
any agency's effective enforcement.
In a Georgia election, subjects who do not submit a
A clear system of sanctions should beestablished for any party or candidate
that
fails
to
meet
disclosure
requirements by failing to file adeclaration, filing incomplete or false
information, or failing to present thefinancial report in a timely manner.
Case studies of Poland and Georgia
offer good examples.

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report on the election campaign fund are banned
from taking part in elections, including any relevant
upcoming elections. Moreover, in terms of legal
sanctions, the Central Election Commission might
not take into account the votes received by thoseviolators of campaign finance regulations. After the2004 General Elections, only 12 of 16 parties
registered with the Central Election Commission
submitted their financial reports. As a result of the
CEC decision, four parties—Union of Democratic
Revival, National Democratic and Traditionalists
Party, National Alliance of United Georgia, andNational Revival—were not allowed to take part insubsequent elections

42

2)

Financial sanctions and administrative penalties

Political finance regulatory bodies are faced with hard policy decisions about how
they should deal with minor, but often very common, infringements. If they initiate
legal cases for small offenses, a great deal of time, money and energy will bespent pursuing these cases, and this may distract them from chasing the major
culprits. However, if the regulatory body permits parties and candidates toinfringe with impunity rules about the deadlines for submission of financial
accounts and other such minor transgressions, the whole system of electoraladministration will fall into disrepute. A disadvantage of such a soft approach, if
applied broadly, can be that the costs of paying a small administrative fine may
be less onerous than complying with the law. Moreover, “minor” infringements
may be a convenient cover for major ones.
Case Study – Core Provisions of the FECA
United States
In general, to warrant criminal prosecution, a FECA fraud must have subverted one of the FECA’s
principle, substantive or “core” provisions. [9] These provisions, and the principles underlying them, are:1) Limits on contributions from persons and groups. The FECA puts quantitative limits on theamounts that potential contributors can give to candidates seeking federal elective office and topolitical committees supporting federal candidates.

2) No contributions from corporations and unions.
3) No contributions from federal contractors. Persons and firms that are signatories on contracts
to provide material, equipment, services, or supplies to the United States Government, or who
negotiate for such contracts, should not seek to influence federal officials through political
donations.

4) No contributions from foreign nationals. Persons who are not citizens of the United States orlawfully admitted for permanent residence may not contribute to any political campaign, whether at
the federal or local level, in this country.

5) No disguised contributions. To prevent circumvention of the above limits and prohibitions, and tosecure the accurate public reporting of all significant campaign finance data, contributions to federal
candidates that are laundered through conduits to disguise the real source of the funds areprohibited.

Political finance regulators in Canada and the United States have resorted tosmall administrative fines as a method of punishing minor infringements andencouraging voluntary compliance with the law. This system, similar to thesystem of specified fines for illegal parking in many cities, has the great
advantage that it is easy and inexpensive to administer. In the United States, indetermining which cases should be retained by the Justice Department for
criminal prosecution, two main factors are considered: the dollar amount involvedin the illegal activity and the level of criminal intent it reflects. [33] While matters
are considered on a case-by-case basis, the following guidelines have generally
proven useful:
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3)

1)

A violation of a core provision of the FECA which substantially exceeds
the $2,000 statutory floor and is accompanied by evidence of criminal
intent should be considered for prosecution.

2)

Illegal activity involving less than $10,000 should be charged as an
FECA misdemeanor, absent special circumstances which would warrant
felony charges.

3)

Illegal activity involving over $10,000 should be considered for felonyprosecution.

Prosecutions

Prosecuting cases of political finance corruption is always difficult as the issues
are highly politicized and involve well-known politicians and wealthy sponsors.
Indeed, administrative action or some other measure might be a better
alternative to prosecution, but there are certain political finance violations thatshould be defined as criminal acts and regulated by criminal law. Also, many
recently passed laws regulating political finance (election laws, political party
laws, etc.) define further crimes and harsh punishments.
Depending on the complexity of a political finance system and the framework of
criminal law, certain types of offences will call for prosecution. Prosecution is anecessary part of a comprehensive enforcement process, ensuring thatcandidates and financial agents suspected of crimes are tried in a court of law
and sentenced if convicted. Prosecuting and sentencing the most serious politicalfinance offenders should serve as a deterrent for those who might be considering
illegal activities.
Prosecution in most cases is carried out under the criminal law system and isconducted by the government against individuals (who also represent politicalentities, such as political parties or candidates). Criminal acts require a decision
to prosecute, which is usually made by the prosecution agency. Such an agency
is usually an office or institution separate from the political finance enforcement
agency, with its own staff, policies and procedures. This arrangement can lead toa number of problems, as in many transitional countries the decision to prosecute
is not always made objectively and is seldom based on a detailed review of thecase.
In the 1998 Cambodian elections, observers noticed that:…the National Elections Committee's (NEC) efforts to deal effectively withviolence and election-law violations were largely a failure. Because the NEC had
no law-enforcement or judicial capabilities, cases had to be referred to thegovernment authorities. We had hoped that a few highly visible prosecutions
would serve as a deterrent, but these never took place.

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In retrospect, we should have realized that a legal system that had never dealt
successfully with human-rights cases in the past would not suddenly “snap to”
and salute in response to requests by the NEC. In the future, the NEC might
consider a different approach to election violence, such as having its own
election police, prosecutors and even judges seconded to it as a special electionenforcement unit. [11]In other transitional countries, such as Poland, prosecutors use a determinationof what is “in the best interest of the public” in their determination of whether acase will be prosecuted. In theory, a review of the complaint file and findings
results in an objective determination of whether a prosecution is warranted and isin the best interest of the public. Yet, this can be a subjective decision, as thecase of the Polish prosecution of campaign finance violations illustrates. After the
1993 parliamentary elections in Poland, dozens of committees either failed tosubmit an “election expenses return” within the time stipulated by the law or did
not write one. Committees, which were not entitled to state subsidies, often did
not submit their financial reports and ended up facing prosecution. However, theProsecutors’ Office decided to discontinue proceedings in 58 cases because
breach of the act was virtually harmless socially.
According to Sue Nelson, In deciding what cases to prosecute, prosecutors
usually undertake a thorough and objective review of the case. This review cantake the following factors into consideration:
1)

What laws were broken?

2)

Were the allegations substantiated by the facts and by credible, reliable
witnesses who are willing and able to testify in court?

3)

Did the evidence collected link the suspect to the crime, and is it
admissible in court?

4)

Was the intent criminal in nature? and5)

Is there a reasonable prospect of conviction? [12]She rightly points out that, in some systems, a prosecutor can be an elected
official, very aware of public opinion and the politics of particular cases—
especially election fraud cases that might involve high-profile individuals.
In more established democracies, for example in Canada, a decision toprosecute takes account of:
the seriousness or triviality of the alleged offence, the significant mitigating or
aggravating circumstances, the suspect's alleged degree of responsibility for theoffence, and the effective alternatives to prosecution, the prosecution's likely
effect on public order or public confidence in the integrity of the Acts, the need forgeneral and specific deterrence, the limits on available resources, the time limit
to prosecute has not expired, and where a section of the Acts is found

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unconstitutional in a province, the appropriateness to apply the decision
uniformly across the country. [13]In the case of the United States:
Prosecutors should keep in mind that our society tolerates behavior in election
campaigns that it does not tolerate in commercial, personal or government
relations. Thus, as a general rule, the federal crime of 'voter fraud' embraces only
organized efforts to corrupt the election process itself: i.e., the registration of
voters, the casting of ballots, and the tabulation and certification of election
results. This definition excludes all activities that occur in connection with thepolitical campaigning process, unless those activities are themselves illegal
under some other specific law or prosecutorial theory such as stealing
opponents’ campaign property, breaking into opponents’ headquarters…or illegal
acts under campaign finance laws...most things that candidates do or say about
each other on campaign trail are not appropriately remedied through criminal[14]
prosecution.

Indeed, even in established democracies, political finance corruption is always
politically sensitive. It is particularly difficult to obtain a fair trial in a case involving
corruption related to political finance. First, the defendants in such cases arelikely to be politicians or their agents. Second, prosecutors (who are usually
themselves nominated by politicians) either (1) shy away from prosecuting as
they don’t want to get involved in a politically sensitive case that has the potential
for severe repercussions, or (2) become involved for the wrong motives. Finally,in some circumstances, usually involving political interference and the lack of alegal and judicial infrastructure, enforcement can easily become selective.
All these issues need to be taken into consideration when discussing effective
cooperation among different enforcement agencies. It is equally important todecide which agency should prosecute political finance corruption cases andunder what circumstances to ensure that the prosecution is carried out withintegrity.

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Chapter VII

Some Procedures for Detecting Violations
and Enforcing the Law
Effective enforcement requires both strong authority and procedures that work.
The agency’s enforcement authority is the extent of its ability to detect andpunish violations of the law. In addition to its official authority, the enforcement
agency should formulate procedures that promote efficiency in the agency and asense of fairness for those who deal with the agency. This chapter summarizes
major recommendations in this area.

1) Prioritization System
The long list of causes of non-enforcement can create a false impression thatproper enforcement is almost impossible. Yet, one must realize that an
enforcement agency will never be able to enforce 100% of its cases for manydifferent reasons. Thus, an agency should adopt a system to objectively analyze
cases to decide which warrant the use of limited resources.
After recognizing that they do not have the sufficient resources or ability to
pursue all of the enforcement matters that come before them, some agencies
use a prioritization system to focus limited resources on the most significant
enforcement cases. Such a system can aid the management of a heavy
caseload and complex financial transactions. It allows the agency to focus onwhat it views as the most significant cases; such a system introduces anobjective rating system and allows for prompt dismissal of those cases viewed asless significant. Under such a system, the agency can use different formal criteria
to decide which cases to pursue.
The Federal Election Commission introduced its own prioritization system in
1993. [1] Under this system, the Commission ranks enforcement cases based on
specific criteria, and assigns only the more significant cases to staff. The FEC
uses the following criteria:

1)

The intrinsic seriousness of the alleged violation;

2)

The apparent impact the alleged violation has on the electoral process;and3)

The topicality of the activity and the development of the law and thesubject matter.

If the agency decides to adopt such a mechanism, it should continually review
the system and its criteria to ensure the best use of its limited resources.
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2) Promoting internal control
As Anderson (1977) explains:[W]ith the best of intentions, most people make mistakes. The mistakes may be
end results of their work, needless inefficiencies in achieving those end results,
or both. And sometimes, without the best of intentions, a few people deliberately
falsify. Any organization wishing to conduct its business in an orderly andefficient manner and to produce reliable financial accounting information, both for
its own and for others' use, needs some controls to minimize the effects of theseendemic human failings. When such controls are implemented within theorganization’s systems they are described as internal controls....[ 2]Internal control of a political organization can be broadly defined as a process,put into operation by an entity's personnel, designed to provide reasonableassurance regarding the achievement of objectives in the following categories:(1) reliability of financial reporting, and (2) compliance with applicable laws andregulations.
The first category relates to the preparation of reliable published financial
statements, including interim and condensed financial statements and selectedfinancial data derived from such statements. The second deals with complying
with those laws and regulations to which the political entity is subject.
Party accounts provide an essential element in bringing greater openness andtransparency to the finances of political parties. In general, any political financesystem should encourage political parties to comply with requirements for
professional and accurate bookkeeping. Maintenance of proper accounting
records will help ensure that the party/candidate is not unnecessarily exposed to
avoidable financial risks and that published financial information is reliable.
Accurate bookkeeping can also contribute to the safeguarding of assets,
including the prevention and detection of fraud. However, it is important that theaccounting requirements reflect the size of the political entity and its accounting
unit. Thus, when considering the level of detail required for smaller parties andindividual candidates, it should be recognized that accounts are often producedby volunteers rather than professional accountants.
In addition, effective internal financial controls should include the “doctrine ofagency.” An ideal system would require each political party (or candidate) to
appoint one specific official—“financial agent”—who has the following
responsibilities:
1)

Keeping complete and accurate records of the political finance activity of
the reporting entity;

2)

Submitting reports about financial activity to the relevant bodies;

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3)

Approving all contributions and expenditures by the entity for compliancewith legal restrictions; and4)

Following accepted accounting procedures in performing record-keeping
and reporting duties.

Most importantly, the system based on the “doctrine of agency” foresees that all
funds should be channeled through the agent and that all expenditures must be
authorized by the agent. In addition, the agent must check incoming donations
and expenses to ensure that they are in conformity with the rules. This system ofinternal control can impose serious and continuing duties on the agents: tomonitor donations received, to report some and to decline others, and to submit
proper accounts. Such an internal body must oversee compliance with theserequirements and institute action (using intra-party discipline and codes ofconduct) when necessary. The political parties’ financial agents have a clear
responsibility for the management of financial resources. The institution of a“financial agent” as an internal enforcement body can be a significant change toparty structures, decision-making procedures and financial management
practices.
Additionally, a political finance regulator can require political parties and the entities
connected with political parties to keep proper books and accounts. It can also
prohibit anonymous contributions and state that donations over a certain amountmust be made exclusively by bank check, wire transfer or bank credit card. The
idea is to identify every single donor through the banking system. Thus, allpayments over a certain limit to or by a political entity should be made through abank account. Further, credit card use or advances to the campaign for personal
payments for campaign activities should be strictly controlled. During an election
campaign, the electoral committee and its candidates should also consolidate all
existing accounts and funds into one centralized Electoral Fund. Regulations canalso force parties to maintain separate accounts for routine activities and campaign
activities, and to conduct and report all party financial activities through relevant
accounts.
Instances of “self-correction” should not be treated as violations. For example, in
the United States there is no penalty for acceptance (i.e., deposit of a check) of aprohibited corporate contribution if the campaign returns the donation before theregulator notifies the campaign of its discovery. Although the deposit of the checkis a technical violation, it is simply noted as VNP (violation no penalty) as part ofthe public record.

3)

Disclosure as a necessary condition for effective enforcement

Disclosure is a necessary condition for any system of public control of politicalfinance, and a variety of disclosure requirements can be adopted. Political partiesare required to submit routine or periodic financial reports to public officials. In
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most systems, electoral committees and candidates are required to file special
reports during or immediately after election campaigns.
Disclosure is a prerequisite for the enforcement of expenditure ceilings andcontribution limits, and also for the allocation of public subsidies. The most typicalmechanism of disclosure is employed in many European countries, where
political parties or candidates are required to submit declarations containing theirincome, spending or both. These declarations are offered for public scrutiny bypublishing them in official media or making them available to commercial media.
However, financial information about political parties or candidates can also be
disclosed indirectly, for example when a party reveals information about its
political opponent.
An important issue to be stressed is the timing of disclosure reporting or, rather,
the delay in reporting. Reports can be submitted and published one week to 10
days before an election following an election (usually 30 or 60 days after theelection). With the technology available today, information can be sent to theregulatory body in “real time” and then posted on its website. In jurisdictions
ranging from the United States to Lithuania, computer software is provided toparties and/or candidates for ease in submitting financial reports. Before anelection, some disclosure should be made daily, especially for expenditures orcontributions of a significant amount. These reports should be formatted in a
way that facilitates further statistical studies or audits.
Reporting enhances the accountability of political parties and provides monitoringand enforcement agencies with all the information necessary for proper
verification. For this to be achieved, political finance reports should fulfill these 10
criteria:
1)

Reports should provide for the full accounting of assets and liabilities forthe reporting entity (‘Baseline’ financial statement – required just once oron a cyclical basis);2)

Reports should be prepared by the independent body as a result ofconsultations with parties and candidates and should be supported bymanuals and guides;

3)

Reports should be based on a calendar timeline, such as annual,
biannual or quarterly reporting schedule;

4)

Reports should be introduced before the beginning of the reporting
period;5)

Reports should be publicly accessible (e.g., Internet, newspapers);

6)

Reports should be reasonably detailed and comprehensive and shouldreflect conventional accounting standards;

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7)

Reports should include, in addition to contributions and expenditures,information about in-kind donations, received loans and credits, as well
as debts;

8)

Reports should be unified for routine operations and campaign finance;

9)

Reports should be prepared in such a way as to be easily understood by
the general public;10) Reports should be available for future reference.
Public disclosure of information about income and spending by political parties
and candidates is currently seen as a critically important component of adetection and enforcement process. The law in some countries requires that
violations be publicized. For example, final audits can be placed on theregulatory body’s website, and candidates’ names can be posted when attempts
are being made to collect overdue penalties or public funds payments. This kindof publicity has a very strong deterrent effect, reducing the need for litigation.
Disclosure may help accomplish a number of tasks:

1)

Financial disclosure contributes to an overall transparency of theelectoral process, offering voters an opportunity to learn more about
political contenders in order to make an informed decision at the polls.

2)

Requirements to disclose their sources of funding gives parties andcandidates an incentive to raise and spend their funds in ways that are
acceptable to a majority of voters and do not provoke political scandals.

3)

Disclosure is an obstacle to corruption and trading in influence, which are
likely to be greater when the financial transactions between politicalparties and companies are hidden from the public eye. Therefore,
disclosure strengthens the observance of the principle “one person, onevote.”

4)

Publicly available information about the flow of money to parties andcandidates serves as a deterrent to a risk-free use of funds from illegal or
criminal sources. Therefore, disclosure can serve the purpose ofdignifying politics. Public disclosure can serve as a barrier to excessive
campaign spending in particular countries or cultures where money inpolitics is viewed with suspicion.

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Case Study – Small Parties and Reporting
Is there a need for a two-tier regulatory framework for political parties?
United Kingdom
Of the nearly 300 political parties on the register of parties for Great Britain and Northern Ireland, not all
operate at a level that requires quarterly submission of donation returns, weekly donation returns, anddetailed year-end accounts. During the 12 months between April 2001 and March 2002, over 90% of thequarterly returns submitted to the UK Electoral Commission were “nil” returns. Smaller parties haveconsistently informed the Commission that they would be happy to report any relevant donations, butthat they rarely receive gifts that breach the £200 threshold, let alone the £5,000 reporting threshold.
The commission argues that there is little benefit in imposing the comprehensive regulatory frameworkon parties that repeatedly submit “nil” returns to the agency. A potential administrative burden on smallerorganizations can be alleviated through a system of lighter controls for smaller parties. Parties should be
able to choose either to register to participate in local government elections only, in which case they will
be subject to a lighter regulatory framework (including the submission of annual accounts and an annual
nil-return if no reportable donations are received during the year), or to participate in elections at alllevels in the UK, in which case they would be subject to the current controls.
After reviewing the party statements of accounts, the UK Electoral Commission recommended that a
two-tier regulatory framework be created in which parties could register in one of two different
categories. The first category would entitle them to contest only local elections (including parish andcommunity elections). The second would entitle them to contest elections at all levels in the UK. The
new accounting and reporting requirements would reflect the level at which the party and its accounting[4]
units operate.

However, requirements for disclosure do not necessarily lead to accurate andcomplete reporting. Political parties and individual candidates may be tempted to
avoid reporting or to report a distorted picture of their finances for a number ofreasons. One reason is the receipt of larger donations in cash. In some cases,
these may be so-called “kickbacks” from contracts with public institutions or othercontributions of an illegal character. Alternatively, some donors may be
excessively concerned with preserving their privacy and require no reporting as aprecondition for a contribution. Another reason stems from the requirement(introduced in some countries) to reveal not only finances of a party or candidate
but also resources spent on their behalf. Thus, imprecise and incomplete reports
may be intentional to hide financial supporters or to decrease the overall amountof money reportedly spent on an election campaign. Additionally, unrealistic“ceilings” set in the legislation may encourage a party or candidate to reportlower than actual income in order to comply with the maximum amount of
donations allowed by the legislation. This discussion highlights how illegal
practices and even certain laws and regulations designed with the best ofintentions may discourage compliance with disclosure provisions.
While disclosure is an important element of a fair democratic process, its
significance is reduced in the absence of effective audit mechanisms. Many
scholars and practitioners have admitted that while an excellent legislative
framework for political or campaign finance disclosure is necessary, it is not
sufficient to provide meaningful control over money in politics.
Nicole Gordon from the New York City Campaign Finance Board argues that,
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Meaningful enforcement for many aspects of campaign finance reform must takeplace during the campaign season. If the Board did not take action during the
campaign against certain kinds of potential violations, the public might notreceive accurate and timely disclosure… Furthermore, penalties for substantial
violations of the Act may otherwise come too late to ensure the integrity of theelections process. The Board is charged to publicize violations of the Act, and,indeed, media attention to violations is a far more potent deterrent than any
monetary penalty the Board might assess. [3]4) Verifying the accuracy of financial reports
The authority to review financial reports and audit records is absolutely
necessary in monitoring compliance and detecting violations. Random checks on
the accuracy of financial reports, in particular, can be a powerful deterrent
against violations and have been used successfully by many enforcement
agencies.
Indeed, in many cases, the failure of enforcement does not result from theexistence of highly complex schemes of disguise and evasion on the part ofthose wishing to give and receive illegal political donations. The failure reflects
the fact that no attempt is made to enforce the rules. Those involved inillegitimate political financing know this and take few precautions to hide what
they are doing. A report by a senior official at IFES on the elections held in
Georgia in 2004 describes the damaging effects of the perceived lack of scrutinyof financial reports submitted by candidates and political parties:… Another defect to note is the lack of effective analysis and verification of thedisclosure filings made by election contestants. People I spoke with during mytrip concede that until candidates and parties think that the information they
provided is actually being scrutinized for accuracy and completeness, thecontents of the filings will be suspect. In short, the fact that candidates andparties know that the information they are providing isn’t being properly checkedmeans that they will continue to make filings for the sake of making filings without
rigorous regard for accuracy. [5]It follows from such reports that, as a minimal measure, political financeregulators need to check the accuracy of at least a random sample of financial
accounts submitted for compliance with legal requirements. In addition,
candidates and parties should be warned in advance that such spot checks will
be made and that penalties are liable if significant, deliberate errors andomissions are discovered.

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One method to assure the accuracy and integrity of financial accounts submitted
by parties and candidates is to require examination and certification byprofessional auditors. This is similar to the requirement that applies in many
countries to the annual accounts of business corporations. Auditing is asystematic, objective process of gathering and evaluating evidence about actions
and events reported by the individual or organization being audited. The auditor
will ascertain the degree of correspondence between the reported activities andestablished criteria, and communicate the results to users of the reports.
An audit is an examination of an entity's financial statements, financial records
and banking information prepared by the entity's financial agents for otherinterested parties outside the entity, and of the evidence supporting theinformation contained in those financial statements. Several levels for audit
reviews are possible:
1)

Field audits and simple visits to campaign offices (to establish forexample that an actual campaign is being conducted and that records
are being properly maintained);2)

Statement review (looking for violations that appear on the face ofstatements filed by a campaign);

3)

Review of back-up documentation (Are copies of checks fromcontributors available and do they match reported contributions in the
filed statements?); and4)

Evaluation of overall campaign information (How does this particularcampaign compare against an “average”? Is rent reported? Are certain
expenditures unusually high?).

Audits also look at internal controls to ensure compliance with the legal andregulatory requirements, and internal controls for financial reporting andsafeguarding assets. The timing of any audit review can be very important. In a
jurisdiction that offers public funds to campaigns, an early field audit/visit canhelp the campaign correct errors early on, saving it from problems later on, andhelping regulators uncover activities that are prohibited before any future publicfunds are disbursed.
An audit is a precondition for any serious enforcement system. The agency
requires the authority to review all reports to determine whether they are incompliance with the rules and to conduct field audits, including random audits, ofthe entities required to file financial reports. In some cases, agencies do haverandom audit authority, although they rarely have the resources necessary to
conduct them. Auditing requirements are a significant feature of the systems ofroutine control over reporting of political party finances in many countries
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including Germany, Poland and the United Kingdom.
6) Program
Effective audit procedures must
Case study – Audit
address the following questions:
United Kingdom
Who will conduct the audit? When
will the audit be conducted? What The Political Parties, Elections and Referendums Act
will be audited? Which parties and 2000 (PPERA) introduced a requirement for parties
candidates will be audited? Who and accounting units with accounts of more than£250,000 to subject their accounts to audit (thiswill pay for the audit? Once the requirement can also be applied to other parties where
enforcement body has decided on the commission considers it desirable). In addition,
the direction it wants to take, it parties whose campaign expenditures exceed£250,000 and parties that receive policy development
should either develop an auditing grants are required to engage an independent auditor.
program itself with input from A number of larger political parties have expressed
political entities or instruct political concern over the cost of these audit requirements: one
party paid over £50,000 in additional audit costs underentities to establish their own the requirements of the PPERA. After an initial review,auditing programs. In the latter the Commission recognized that the requirement forcase, the program should be multiple audits had imposed a financial burden on
parties and considered streamlining the current
draftedinaccordancewith requirements.
guidelines set forth by theenforcement body in order to ensure consistency. Grounded in existing laws andprocedures and international auditing standards, the audit program should begin
by clarifying how the audits will be undertaken. Auditing of political party andcandidate accounts can be done (1) by a professional and independent auditor
selected by the political parties and candidates themselves or by theenforcement body, or (2) directly by a government agency such as an
enforcement body, tax authority, or auditing agency within the government.
Should the former apply, the services of professional auditors can be paid for in
one of three ways: (1) the political party can be required to pay for the auditor outof its own funds, (2) the political party can be required to pay for the auditor out of
its own funds and then be reimbursed from public funds, or (3) the enforcement
body can pay for the auditor directly out of public funds. While all three are
accepted standards, a public fund-payment system may be preferable.
In such a case, it is clear that the auditor’s fee does not depend on the findings,
and there is less room for accusations of political pressure.
Clear guidelines should be established that detail what is being audited and how
the audit is to occur. These guidelines should take into account the laws andregulations of the country, accounting and reporting requirements of politicalparties and candidates, and international auditing standards. Those who may be
audited should be included into this process in order for them to better
understand the issues they face and to better ensure compliance. These
guidelines should be clearly defined in a manual for auditors, and theenforcement body should conduct regular training and provide legal andEnforcing Political Finance Laws: Training Handbook
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procedural updates to certified auditors.

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Chart 2 - Political Finance Audit Flowchart
Political Finance Laws and Procedures-andInternational Auditing Standards

Government
Input

Option A
Audit Program
Developed by
Political Entity

Option B
Audit Program
Developed byGovernment

Political
Entity Input

Select Subject of
the Audit

Non-Compliance

Select Auditor
Certified Auditor or
Government Body

Non-Compliance

Perform the Audit
Develop Audit Plan
Conduct Audit

Audit Report

Subject Input

Subject of
Audit

Preliminary Report

Final
ReportEnd of Audit
Final Report
Publication of Report

Final
ReportEnforcement
Body

Violation

Sanctions

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1) Selecting the Subject of an Audit
The enforcement body may want to audit only select political parties andcandidates in order to ensure the best use of limited resources and to ensure thatno excessive burden is placed on these parties and candidates. In this case,clear criteria should be used to select which parties and candidates are to beaudited.
Random checks are of primary importance to an effective enforcement agency.
To ensure the usefulness of random audits, the entities to be audited should beselected randomly from a pool of parties or candidates that meet establishedcriteria, such as a specific threshold of financial activity. Expertise in statisticaltechniques (method of selecting “random” entities, measures of statisticalsignificance) should be sought when conducting random audits. While random
checks and audits are part of the regular apparatus of control, political financeregulators need to recognize signs of irregularities that warrant closer scrutiny.
Such criteria could include those parties and candidates against which a credible
complaint has been lodged or those that the enforcement body has “reason tobelieve” may have committed violations. Campaign history can also be helpful,especially if a candidate, treasurer or committee has had violations in the past.
In a jurisdiction that offers public funds, political parties or candidates receivingsuch funds are highly likely to be audited.
Other selection criteria include parties or candidates that exceed a given
threshold of gross income or total expenditure in any financial year. Even when aparty or candidate does not exceed the threshold, the enforcement body may
consider it desirable to require those accounts to be audited by a qualified
auditor.
2)

Selecting an Auditor

If a political party or candidate is required to select an auditor, clear criteria
should be set for how and when the auditor is appointed. For example, thecriteria may require that an audit be carried out by the end of a six-month period
following the end of the financial year in question. However, if a special audit isrequired by the enforcement body, it must be carried out within three months ofthe date of the order. Further, in order to ensure an accurate and credible audit,
the enforcement body should prepare a list of certified auditors in campaign andparty finance that can be used to conduct such audits.
3) Performing the Audit
The audit should be performed according to international auditing standards byauditors who have a clear understanding of the subjects they are auditing. The
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auditor should present a plan that has been approved by the enforcement bodyand reviewed by the subject of the audit, and that conforms to the guidelines set
forth in the audit program and manual for auditors.

4) Auditor’s Report
The auditor should complete at least two reports—preliminary and final—that
cover the complete scope of the audit as set forth in the audit program anddefined in the manual for auditors. The preliminary report should go through apeer review prior to release to the enforcement agency and the subject of theaudit. Following comments made by the subject of the audit, the auditor willrevise the report where necessary and issue a final report. Once the audit report
is completed, all findings should be presented to the enforcement body and canbe made available to the public.
5) Sanctions
Should the report find discrepancies or violations of the law or procedures, orshould the subject of the audit not comply with the decision to audit, theenforcement body should then decide whether to pursue an administrative or
criminal investigation as discussed earlier.
6) Challenges Facing the Audit
It is important to note some of the challenges that arise through the use ofauditors. These problems should be taken into account when designing theauditing program.
First, it is unwise to assume that the professional standards of auditors are
sufficiently high to be immune from political or commercial influence. A crucial
aspect of the Enron scandal in the United States was the discovery ofquestionable conduct on the part of the internationally reputed firm of auditors
employed by Enron to certify what turned out to be misleading accounts. There
are ways to reduce the danger of appointing politically biased auditors. In Poland,for example, this is done by a system of selection of auditors (paid from publicfunds) by lottery.
Second, professional audits are costly. It is necessary to determine, therefore,
whether the political parties and candidates whose accounts are to be examinedmust pay or whether the costs are to be met with public funds. Both of thesepayment options pose problems. If political parties are obliged to pay for
professional accountants, this forces them to divert money from electioneering tomeet the requirements of complying with the legal controls over their funds. It isarguably unreasonable to impose onerous and expensive duties on parties in the
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form of complex laws. If the costs of auditors are to be met out of public funds,
this creates other difficulties. In view of the reality that political finance regulatory
bodies in many countries have insufficient funds and staff to carry out theircompliance and enforcement duties, it may be better to provide extra money tothem rather than to professional auditors.
Third, a stipulation that their accounts must be professionally audited imposes aparticularly heavy burden on small political parties. Highly developed systems ofcontrol intended to detect sophisticated fraud are unsuitable for small-scale
political organizations. Indeed, such requirements make it virtually impossible forsuch organizations to exist. In the United Kingdom, under the terms of legislation
enacted in 2000, this issue is addressed by setting different auditing
requirements for small, medium and large political parties.

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Chapter VIII

Investigative Techniques
The proper enforcement of the law requires responses to acts of noncompliance, including: (1) investigation of suspicious contributions or
expenditures or incomplete financial declarations; (2) prosecution of improper
activities; and (3) adequate, proportionate and dissuasive sanctions effectively
applied in cases of proven violation or of non-compliance with the law.
1)

Complaints

Any enforcement agency will be able to detect only a fraction of all the violations
if it relies exclusively on its internal monitoring of financial reports submitted by
obliged entities. Thus, an effective agency should also rely on external
complaints of suspected wrongdoing. In an ideal system, any civil society
organization, journalist or even individual who believes that a violation has
occurred should be able to file a complaint with the agency. Press reports can bea particularly good source of information.
The complaint process can require a formal, written document satisfying specificcriteria for a proper complaint, or can have a more liberal character, with theenforcement agency taking action based on press articles or informal allegations.
Some political finance systems also give the enforcement agency the discretionto act on information it receives anonymously.
An interesting example comes from the Ukrainian 2002 elections, where a local
watch-dog NGO conducted a campaign finance monitoring program. The resultsof the monitoring were sent in an official letter to the Central Electoral
Commission. While the Ukrainian CEC ignored the complaints made by thisgroup, claiming some procedural issues, the example highlights the role that civilsociety organizations can play.
In addition to complaints, the enforcement body should have the authority to act
on (i.e., investigate) information received from other sources, including otherpublic bodies (e.g., tax authorities, ministry of justice), the media and anonymous
individuals, as well as the authority to offer whistleblower protection to thesesources.
In transitional regimes, and particularly in post-conflict societies, voters who arein the best position to observe questionable campaign practices may be the mostreluctant to come forward with a formal complaint, since they often fear reprisals.
Therefore, in order to encourage individuals to share information with theenforcement agency, it is recommended that complainants be given
whistleblower protections against reprisals.

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Before discussing investigative mechanisms, a clear distinction should be madebetween an audit, which is administrative in nature, and an investigation. As anecessary part of the audit process, auditors should have extensive
communication with candidates, official agents, etc. Actions taken during an audit
do not necessarily suggest that an offense has taken place. Some actions areadministrative in nature and do not require, for example, an official cautionary
measure aimed at formally advising suspects of their rights against selfincrimination. Thus, the main feature that separates an administrative audit froman investigation is the existence of an adversarial relationship. Furthermore,investigation in most cases is not automatic, while an audit can be.
Nevertheless, the administrative audit can, at some point, become similar to an
investigation, and an adversarial relationship can arise; moreover, the results ofrandom audit can lead the agency to do a full investigation.
While random checks and audits are part of the regular apparatus of control,
political finance regulators need to watch for signs of irregularities that warrant
closer scrutiny. In general, the legal burden of proof should always be on thepolitical party or the candidate to show compliance with political financeregulations; otherwise, the enforcement agency will be in an impossible situation.
The tendency in a number of democratic countries is for the political financeenforcement body to have the power, either on its own initiative or in response tocomplaints, to make inquiries concerning all aspects of political finance. The
enforcement agency can investigate, for example, any allegation or suspicion
that a political party or candidate failed to disclose the names of substantial
donors or illegally accepted foreign donations. In many systems, anonymous
requests are not considered; however, in some countries, a citizen may file anapplication for investigation if he/she has strong proof that the party or candidate
acted illegally.
In many countries, irregularities are investigated by the state enforcement bodies(such as police). Sometimes, for example in Poland, the tax authorities, involved
at the direct request of the National Electoral Commission, can be very efficient.
At the same time, some concern has been expressed about a mechanism
whereby an independent enforcement agency is empowered only to reportsuspicious transactions to other public bodies (e.g. attorney-general, tax
inspection, ministry of justice, etc.), which then decide whether to investigate.
This allows too much opportunity for law enforcement to be influenced bypartisan political considerations.
If permitted, following receipt of a complaint or acting on its own initiative, anenforcement agency may conduct an investigation into possible violations ofrules. Regulators may also undertake a full investigation when information from
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a random audit warrants further action. An agency may use its investigative
powers, and an investigation may include, but is not limited to, field
investigations, desk and field audits, the issuance of subpoenas, the taking ofsworn testimony, the issuance of document requests and interrogatories, andother methods of information gathering. In general, an investigation process canbe divided into the following stages: (1) information gathering stage, (2)preliminary assessment stage, (3) decision to investigate, (4) investigation stage,and (5) compliance agreement or prosecution.
Case Study - Request for an Investigation
United States
Any person may request that the Office of Campaign Finance (OCF) in the City of Washington, D.C.,
undertake an investigation by submitting a complaint in the form of a signed written statement setting
forth an allegation that constitutes a potential violation of the Campaign Finance Act or the Standards ofConduct. The written statement should be as specific as possible, identifying the full name and addressof the complainant and the respondent, plus a clear and concise statement of facts. The statement
should also be verified by the complainant under oath and include supporting documentation, if any. A
request for investigation should be forwarded to the Director of the OCF.
Within 10 days of receipt, the Director will acknowledge a written request for investigation with anotification as to whether the allegation will be investigated. If the Director determines to open an
investigation, the matter will be referred to the OCF Office of the General Counsel. The General Counsel
will have 90 days to investigate the matter and submit a recommendation to the Director. Upon request
to the Board of Elections and Ethics with a showing of good cause, the investigatory period may be
extended no more than 90 days. At the conclusion of an investigation, the General Counsel will submit arecommendation to the Director which may include: dismissal of the matter, a call for a supervisor totake action with regard to an employee for a violation of the Standards of Conduct, or the imposition ofcivil penalties for a violation of the Campaign Finance Act. Upon receipt of the recommendation of theGeneral Counsel, the Director may agree and so order or disagree and order a different remedy. A party
affected by an OCF order may appeal to the Board of Elections and Ethics within 15 days of theissuance of the order by the Director, in accordance with the rules of the Board of Elections and Ethics.
If a fine is imposed by the Director, it shall become due on the 16th day following the issuance of adecision and order, if the respondent does not request an appeal of the matter. OCF also initiates
investigations as a result of information gleaned from the media and staff review of reports and other[ 1]
documentation filed with OCF.

When enforcing the political finance regulations, however, the agency should
respect all safeguards available to an individual under the law. It is imperativethat auditors and investigators working with them during an inquiry clearly state
to a suspect that they are carrying out an investigation. In some cases ofsuspected non-compliance, an investigation may lead to the presentation of
information before the courts, and the courts can rule that individuals are entitledto the appropriate protection available to someone suspected of a criminal
offense.
According to the Center for Responsible Politics, “the method by whichinvestigations of potential violations are initiated should allow for timely action oncomplaints filed, assure due process to respondents and allow for a system ofprioritizing cases which is neither arbitrary nor partisan.” [2]Enforcing Political Finance Laws: Training Handbook
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In the United States, criminal campaign finance fraud investigations at the federal
level involve:
1)

Initial coordination with the Public Integrity Section of the Department ofJustice;2)

Determining whether a core prohibition of the FECA was violated;

3)

Determining whether there was an effort to conceal the illegal
contribution;

4)

Identifying others involved in the scheme;

5)

Determining whether criminal prosecution is warranted;

6)Initiation of a grand jury investigation or FBI full field investigation;

7)

Non-prosecution of straw donors, or conduits; and8)

Prosecution of persons making or receiving the illegal contribution.

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Case Study - Investigation "Threshold Test and Standards"
CanadaIn Canada, the recommendation to initiate, continue or terminate an investigation is based on the"Threshold Test and Standards." When the Commissioner believes, on reasonable grounds, that an act
or omission constituting a specific offense under the Canada Elections Act (the Act) has beencommitted, is about or likely to be committed, the Commissioner may direct an investigation to be
conducted according to the circumstances. All relevant circumstances and factors must be consideredwhen a recommendation is made to initiate, continue or terminate an investigation; they include thefollowing:1)

Reasonable grounds to believe that the allegation deals with an alleged offense committed by
an Election Officer or a specific offense committed by anyone under the Act;

2)

Reasonable grounds to believe that the allegation is founded on specific and verifiable leads,
facts, information or physical documentary evidence, and deals with an act or omission that
could constitute a specific offense under the Act;

3)

Reasonable grounds to believe that the public interest relating to the act or omission
constituting an offense under the Act would justify committing investigative resources;

4)

Reasonable grounds to believe that the act or omission constituting an offense under the Act
requires applying for an injunction, and whether sufficient grounds exist to believe that there
is a reasonable prospect of identifying the suspect and obtaining sufficient information to
apply for an injunction;

5)

Sufficient grounds to believe that the alleged offense was committed and that an investigation
would provide sufficient, substantial, admissible and reliable evidence;

6)

Sufficient grounds to believe that there is a reasonable prospect of identifying the suspect andobtaining compelling information or evidence to prove that an offense was committed by thealleged offender;

7)

Reasonable grounds to believe that substantial, reliable and admissible evidence may beobtained from available avenues of investigation such as the complainant, access to publicrecords and documents, inspection of election documents, and interviewing election officers
and witnesses;

8)

Reasonable grounds to believe that suspects would agree to cooperate and provide
information and evidence, whether self-incriminating or against other individuals;

9)

Whether all reliable, substantial, available and admissible information or evidence on which toreach an informed decision have been collected;

10)

Whether an assessment of the credibility of the information, the weight of the evidence andthe reliability of witnesses has been assessed on objective indicators or factors;

11)

Whether any consideration should be given to any possible effect on the personal
circumstances of anyone connected to the investigation;

12)

Whether the inherent operational expenses associated with a more selective orcomprehensive investigative approach (referral to other investigative agencies) to the various
categories of offenses would be warranted and justified under the circumstances; and public[4]interest factors to be considered.

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Chapter IX

Enforcement and Court Rulings
Enforcement of political finance rules is dependent not only on existing laws, thewillingness to comply, and the determination of the regulators to detect violations
and punish offenders. In a legal system that gives the last word on politicalquestions to judges, enforcement may face an additional hurdle, namely the
courts’ decisions. Karl-Heinz Nassmacher rightly suggests that enforcement will
also depend on such basic questions as: who is to sue?, what are the issues tobe deliberated?, and which principles will a specific court favor in its ruling—
political equality or political freedom? [1]Scholars and practitioners dealing with political finance agree that “more andmore election-related financing is deemed to fall outside the purview of theregulation as it is interpreted by agencies, amended by legislators or restricted bycourt rulings.” [2] In his critical evaluation of the American system, Keith Ewing
observes that any legislation dealing with political finance will “almost certainly
lead to a conflict between the legislative and judicial branches.” He suggests thatthe constitutional protection of freedom of expression as a core value will lead tovery restrictive interpretations of the statutory language. Ewing argues that:
The courts are thus, in effect, validating and encouraging the exploitation ofloopholes and the development of additional evasive devices. (…) [I]n order todeal with possible threats from the courts, important compromises may have to
be made, which although appearing reasonable, nevertheless may be far
removed from the original intentions of the legislators. Not only will suchcompromises eventually destroy the legislation, they may also lead to abuses as
great as the abuses which the legislation was designed initially to address. [3]Court involvement in electoral politics in general and in enforcing political financerules in particular is a relatively new, although growing, phenomenon. The
saliency of courts in the electoral process is a combination of three factors:

1)

Since the late 1940s, West European, East European, Asian and Latin
American nations have gradually established strong judicial institutions
and equipped them with more powers than ever before.

2)

The introduction of public funding of parties and candidates was
accompanied by disclosure requirements that carry with them legal
sanctions for violations.

3)

There is a growing public demand for political accountability andincreasing uneasiness with a situation in which corrupt politicians areallowed to retain their posts untouched when a cloud of suspicion andmistrust hangs over their actions.

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Courts have neither purse nor sword and are prohibited from engaging with othermajor political institutions. Therefore, courts remain in a vulnerable situation
when intervening in the political process. This is especially so when court
decisions affect the careers of elected representatives in legislative institutions. A
court decision is more likely to become a political issue when it has invalidated,rather than upheld, a policy choice made by the political branches. This generalobservation applies to disclosure cases as well.
When a court clears a politician or party of a charge of violating electoral rules,
the losing side may be disappointed, [4] but their wrath tends to be pointed toward
the political body that allegedly has not complied with the prescribed norms,
rather than the court. On the other hand, when the court decides against an
elected official or party, it becomes the chief offender. Furthermore, in exercising
judicial review, the court takes a position at odds with the political majority inmany cases.
Nevertheless, as Table 5 demonstrates, court involvement in enforcing
disclosure requirements is becoming common practice not only in establishedWestern countries but in developing countries as well. The entire field ofcomparative judicial involvement in enforcing political finance rules is a relatively
virgin terrain, but it seems that more and more data is becoming available ascourts are more willing than before to exercise their authority and intervene whendisclosure requirements are circumvented by parties and candidates.

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Table 5: Political Finance and Court Cases: Disclosure of Financial Reports

Country
FranceGeorgia

IsraelCourt Cases
Facts: Investigating judges attempted to interview President Chirac on alleged
extortion of tens of millions of pounds of kickbacks from municipal public works
and printing contracts during his tenure as mayor of Paris.
Decision: The Cour de Cassation ruled that President Chirac was immune from
criminal prosecution and could not be called as a witness. As the head of state
directly elected by the people and guardian of the state’s “continuity,” he could
not be subject to the ordinary law. A president could be tried only by aparliamentary high court and only on the ground of high treason (October 2001).
Facts: Four plaintiff parties asked the court to issue a judgment prohibiting
several other parties from participating in the coming elections for not submitting
financial reports during the local elections of 1998.
Decision: The Krtsanisi-Mtatsminda Regional Court of Tbilisi dismissed theclaim as it found the four plaintiff parties to be incompetent plaintiffs. The
competent plaintiff, the Central Elections Committee of Georgia, refused toreplace the original plaintiffs and the case was dropped.
Union of Democratic Revival of Georgia et al. v. All-Georgian Political
Organization LEMI et al. (July 1999).
Facts: A Deputy Minister was charged with making false entries in the
documents of a corporation, attempting to obtain something by deceit, andmaking a false declaration on an election finance report. He did not resign his
post.
Decision: Taking the right of silence while charged with being involved with false
party election reports with the intent of misleading the state comptroller must
result with the firing of a deputy minister. H.C. 4267/93 Amiati v. Prime minister,47(5) PD 441.
Facts: The three respondents were indicted with filing false reports of the Shasparty general elections campaign in 1988 and local elections of 1989. They did
not report cash payments to party activists of 1 million NIS (about $600,000 atthat time). The intent of filing the false reports was to avoid fines for violations ofcampaign spending regulations.
Decision: As a result of a plea bargain, the respondents received suspended
jail terms.
Tel Aviv Magistrate Court 8074/96 State of Israel v. Pinhassi

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Table 5: Political Finance and Court Cases: Disclosure of Financial Reports(Continued)
New
Zealand

Facts: The requirement of submitting reports by political parties was put into
question.
Decision: The Court of Appeals upheld the need for adequate financial reportingby political parties. Detailed disclosure assists the supervising body, … to besatisfied that the statutory limits have been complied with. Disclosure is also ofvalue in itself in that it increases public confidence in the political system andenables the electorate to make informed choices about which party or candidate
to support.
Electoral Commission v. Priscilla Tate (1999).

UnitedKingdom

Facts: Mrs. Fiona Jones, Member of the House of Commons, wasconvicted at Nottingham Crown Court of making a false declaration of expenses
for the 1997 General Election. The conviction automatically cost her the Newark
seat.
Decision: The conviction was quashed by the Court of Appeal. The court foundthat although some election expenses were questionable, there was no evidence
to conclude the non-disclosure was dishonest.
R v. Jones and R v. Whicher, judgment dated 22 April 1999

UnitedStatesFacts: The Hall-Tyner Election Campaign Committee supported the campaign ofthe candidates of the Communist Party in their drive to be elected president andvice president of the United States, respectively, in the 1976 national elections.
The Federal Election Commission (FEC) asked that the Committee reveal thenames and maintain records of contributors to its campaign coffers. District court
Judge Gagliardi dismissed the FEC's complaint, holding that the recordkeeping
and disclosure provisions of FECA are unconstitutional as applied to theCommittee. He recognized that the ultimate question to be answered is whether
the record establishes a reasonable probability that compelled disclosure of thenames of contributors "will subject them to threats, harassment, or reprisals fromeither Government officials or private parties?”
Decision: There is a paramount public interest in maintaining a vigorous andaggressive political system which includes even participants whose ideologies
are abhorrent to that system. The undisputed evidence demonstrated thatmandatory disclosure and recordkeeping would discourage numerous
individuals from contributing to the Committee on the basis of the reasonableprobability that they would later be subjected to governmental or private
harassment and rebuke. The court declined to apply the recordkeeping anddisclosure provisions to the Committee for such requirements would violate theFirst Amendment of the Constitution.
FEC v. Hall-Tyner Election Campaign Committee. 678F 2d 416; No. 963, Docket
81-6229.

Source:Political Finance and Court Cases prepared by Dr. Menachem Hofnung

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Table 6: Political Finance and Court Cases: Contributions

Country
CanadaFederal
Republic of
Germany

IsraelUnitedStatesCourt Cases
Facts: The case concerns a claim challenging the constitutionality of s. 33(1)of the Public Service Employment Act, which prohibits public servants from"engag[ing] in work" for or against a candidate or a political party .
Decision: The Federal Supreme Court decided that those restrictions apply
to a great number of public servants who in modern government arecompletely divorced from the exercise of any discretion that could be in any
manner affected by political considerations. The need for impartiality andindeed for the appearance thereof does not remain constant throughout thecivil service hierarchy. Section 33, therefore, is over-inclusive and, in many of
its applications, goes beyond what is necessary to achieve the objective ofan impartial and loyal civil service .This section should be redrafted by thelegislature.
Osborne v. Canada (1991). Files Nos. 21201, 21202, 21203.
Facts: Former German Chancellor Helmut Kohl was indicted for accepting atleast $1 million in cash donations for his political party, the Christian
Democratic Union.
Decision: In a deal approved by a District Court in Bonn, Kohl acknowledged
a “breach of trust” for illegally accepting cash donations and paid a fine of$143,000 in exchange for a drop of the fraud investigation (June 2001).
Facts: The Labor party has made an agreement with the Shas party, statingthat Shas would not compete in Trade Union elections and Labor will
reimburse Shas as if Shas won a certain number of votes. Labor gave Shas
1.5 million NIS before the 1992 general elections. The State Comptroller
defined this transfer as an illegal contribution donated by corporate legal entity
and slapped Shas with a heavy fine.
Decision: A party may not accept payments for political support of anotherparty. The petition was denied.
HC 911/93, Shas Party v. State Comptroller, 54 Dinim Elyon 464 .
Facts: The Missouri contribution limit, adopted by the state legislature in 1994,
was challenged by a former candidate for state auditor and a political action
committee that supported him. The candidate argued that the limit was so lowthat, as an insurgent, he could not exercise his First Amendment right to mountan effective campaign.
Decision: In upholding the contribution limits, the US Supreme Court said in a
majority opinion that the relevant test is not any fixed or indexed dollar amount,but whether a contribution limit was so low “as to render political association
ineffective, drive the sound of a candidate’s voice below the level of notice,and render contributions pointless.” Missouri’s cap met this test without“running afoul of the First Amendment,” the court said. The court also drew aline between expenditures and contributions, treating expenditure restrictions
as direct restraints on speech, which nonetheless suffered little direct effectfrom contribution limits.
Nixon v. Shrink Missouri Government Pac, 528 U.S. 377.

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Table 6: Political Finance and Court Cases: Contributions(Continued)
UnitedStates

Source:Facts: The Reader's Digest Association (RDA) sued to enjoin the Federal
Election Commission (FEC) from proceeding with an investigation into whether
RDA violated certain sections of the Federal Election Campaign Act of 1971
"by making expenditures to disseminate to other media outlets video tapes of acomputer re-enactment of Senator Kennedy's accident at Chappaquiddick...."
Decision: The US District Court for the Southern District of New York adopted
a two-step procedure that recognizes the FEC's need to conduct an inquiry,
while at the same time strictly limiting the inquiry in order to minimize harm toFirst Amendment values. Under this procedure, the initial inquiry is limited towhether the press entity is owned or controlled by any political party or
candidate and whether the press entity was acting as a press entity withrespect to the conduct in question. If the press entity is not owned or controlled
by a political party or candidate and it is acting as a press entity, the FEC lacks
subject matter jurisdiction and is barred from investigating the subject matter ofthe complaint. In the Reader's Digest case, the court allowed limited
investigation to determine whether dissemination of the tape was part of
Reader's Digest's press function as a magazine publisher. The motion was
denied.
Reader's Digest Association v. FEC; 509F. Supp. 1210
Political Finance and Court Cases prepared by Dr. Menachem Hofnung

Table 7: Political Finance and Court Cases: Issue Advocacy

Country
CanadaCourt Cases
Facts: The appellant challenged the Referendum Act, which governs
referendums in Quebec. He argued that if he wishes to conduct a referendum
campaign independently of the national committees, his freedom of politicalexpression will be limited to unregulated expenses. Conversely, if he wishes
to be able to incur regulated expenses, he will have to join or affiliate himself
with one of the national committees .
Decision: The Federal Supreme Court, in rejecting the appeal, said that the
spending limit system would lose all its effectiveness if independent spending
were not also limited. The Act promotes an informed vote by ensuring thatsome points of view are not buried by others… [T]he objective is to ensure thefairness of a referendum on a question of public interest. In this light, theregulation of referendum spending pursues one of the objectives underlying
freedom of expression, namely the ability to make informed choices .
Robert Libman v. Attorney General of Quebec (1997).

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Table 7: Political Finance and Court Cases: Issue Advocacy(Continued)
UnitedKingdom

UnitedStatesFacts: Before the British Parliamentary elections in April 1992, Mrs. Bowman
arranged to distribute in constituencies throughout the United Kingdom,
thousands of copies of a leaflet calling for voters “to check on Candidates’
voting intentions on abortion.” Mrs Bowman was charged with an offence
under the Representation of the People Act 1983 which prohibits expenditureof more than five pounds sterling ("GBP") by an unauthorized person during
the period before an election on conveying information to electors with a viewto promoting or procuring the election of a candidate. The case was brought
before the European Court of Human Rights.
Decision: The Court found that the Act sets a total barrier to publishing
information with a view to influencing the voters of Halifax in favor of an antiabortion candidate. It is not satisfied that it was necessary thus to limit her
expenditure to GBP 5 in order to achieve the legitimate aim of securing
equality between candidates. It accordingly concluded that the restriction inquestion was disproportionate to the aim pursued.
Bowman v. The United Kingdom (141/1996/762/959 ).
Facts: An action against several statutes—attacked primarily as violating First
Amendment speech and association rights and Fifth Amendment equal
protection principles—(that (a) limit political contributions by individuals orgroups to any single candidate for a federal elective office to specified sum; (b)limit independent expenditures by an individual or group advocating theelection or defeat of a clearly identified candidate for federal office.
Decision: Contribution limits could constitutionally be imposed, but
expenditure limits could not; disclosure of contributions and expenditures could
be required. Only speech containing "express advocacy" is political enough to
be deemed a "contribution" or "expenditure" as those terms are used in federal
election laws.
Buckley v. Valeo 424 U.S. 1 (1976 ).

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Table 7: Political Finance and Court Cases: Issue Advocacy(Continued)
Facts: In 1980 while Senator Edward Kennedy was a candidate for the
Democratic Presidential nomination, Phillips Publishing Inc. sent a mailing toregular and potential subscribers soliciting subscriptions to the Pink Sheet(a conservative, anti-communist publication)… The mailingon the Leftincluded a one-page letter from the publisher, several promotions, and a"Teddy Kennedy Opinion Poll.” The mailing appealed to political conservatives
and strongly emphasized The Pink Sheet's opposition to Senator Kennedy.
The Federal Election Commission asked for court enforcement of two
Commission orders to answer written questions. The questions sought detailed
information about the personnel and operations of Phillips Publishing.

UnitedStates

Decision: There must be some threshold showing wrongdoing on the part ofrespondent if the press exemption is to serve the purpose for which it was
intended. Here the FEC has not challenged the representation by Phillips
Publishing that it is not owned or controlled by any political party or
candidate, that it frequently sends material through the mail soliciting
subscriptions to The Pink Sheet, and that the materials at issue were sent aspromotional materials to seek new subscribers . Since there is a danger thatfurther FEC inquiry would impinge upon First Amendment freedoms, the FEC's“This opinion should not be read to imply that FEC
petition was denied .
enforcement requests should always be denied where a press entity is the
subject of a ‘reason to believe’ finding and the FEC seeks further information.
Clearly further investigation would be warranted … if the FEC had someevidence linking The Pink Sheet with a political organization or candidate.”
FEC v. Phillips Publishing Inc. 517 F. Supp. 1308; United States District
Court for the District Of Columbia, No. 81-0079).
Political Finance and Court Cases prepared by Dr. Menachem Hofnung

Source:Table 8: Political Finance and Court Cases: Third Party Expenses

Country
IsraelCourt Cases
Facts: The petitioners, who represent a faction in a city council, established anon-profit association. The association conducted election operations withvolunteers. After the elections, the association asked the faction to cover its
expenditures (out of the election funding granted by the state). The faction
asked that these costs be regarded as election expenditures. The request wasdenied by the State Comptroller.
Decision: The Supreme Court turned down the petition. The court said that if
the association had paid the volunteers then it could have asked to regard
those expenses as election expenditures. But when the association did nothave real expenses and intended to use the money for its future activities,
those expenses could not and should not be regarded as election
expenditures.
H.C. 823/90 Bat Yam 1 v. State Comptroller, 44(2) PD 692.

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Table 8: Political Finance and Court Cases: Third Party Expenses(Continued)
UnitedStates

Source:Facts: A Michigan statute prohibited corporations from using corporate
treasury funds for independent expenditures in support of or in opposition to
any candidate in elections for state office. The statute allowed corporations tomake such independent expenditures only from segregated funds used solely
for political purposes. The validity of the statute was challenged by theMichigan State Chamber of Commerce, a non-profit corporation with 8,000
members, three-quarters of whom were for-profit corporations.
Decision: The United States Supreme Court in a split decision held that thestatute, as applied to the Chamber, did not violate the First Amendment, eventhough the statute burdened expressive activity. The statute was supported by
a compelling governmental interest in preventing political corruption inconnection with immense aggregations of wealth that are accumulated bycorporations with the help of the state-conferred corporate structure and thathave little or no correlation to the public's support for a corporation's politicalideas. The statute was sufficiently narrowly tailored to achieve its goal, in that it
permitted speech that accurately reflects contributors' support for a
corporation's political views.
Austin, et al.v. Michigan State Chamber of Commerce 494 U.S. 652
Political Finance and Court Cases prepared by Dr. Menachem Hofnung

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Chapter X

Dangers of Biased Enforcement
Almost as serious as the problem of non-enforcement is the practice, in somecountries, of partisan enforcement. Parties and candidates opposed to thegovernment may find themselves the subject of serious pressures from law
enforcement agencies for minor or non-existent breaches of campaign financelaws. By contrast, parties and candidates that support the government are
virtually free to disregard the rules.
A Bulgarian scholar has given a clear example of the damaging perception thatthe government of the day is, in practice, above the law: “Enforcement is aserious question … It is true that the first party law did envisage the confiscationof party assets for the use of the state in cases of non-compliance. This
provision, however, has never been enforced and it would be unthinkable that it
could be enforced against a governing party, for example.” [1]Biased enforcement is especially serious in countries where there is a high levelof violence. Indeed, it may be argued that in such countries it is desirable thatpolitical finance laws not be enforced. In practice, the enforcement of rules, forexample on disclosure of political contributions, will result in the harassment of
those discovered to have supported opposition parties and candidates. In
countries where there is a dominant ruling party, the enforcement of disclosurerules also may have the consequence of making it very difficult for any opposition
party to attract the support of potential contributors.
Mass media can be an important tool in preventing biased enforcement ofpolitical finance laws. It can be critical of politicians and parties for unseemly
behavior that does not necessarily violate the laws. Unlike the regulatory body,
media can delve into the “political” aspects of political finance.
Another form of undesirable enforcement, differing from that derived from politicalbias, is corrupt enforcement. Corruption is liable to arise when those in charge ofadministering polling booths are rewarded for turning a blind eye to vote buying
or to ballot stuffing. The award of lucrative contracts for electoral equipment andservices presents temptations to higher level officials and to members ofelectoral authorities. Officials who have been bribed are subject to exposure or
blackmail; for this reason, they are unlikely to carry out duties relating toenforcement, including the enforcement of political finance regulations.
There have been independent reports of bribery of election officials in countries
ranging from Cambodia [2], Nigeria and Sierra Leone, to the Philippines and theUnited States. The mention of these countries is not meant to signify that suchreports were proven or that these countries have special problems concerning
the integrity of their electoral management. However, it is important to keep in
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mind that the integrity of those responsible for ensuring that election and party
financing laws are properly enforced cannot be taken for granted. Any
enforcement agency has the weighty obligation to exercise its powers in amanner harmonious within a system of free expression; this results from the factthat a political finance regulator controls very delicate matters such as core
political speech matters and a right to participate in public life.
Concerns about biased enforcement policies are not new. In fact, in 1985 theChief Electoral Officer of Canada suggested that:Complaints received during an election alleging that a candidate has committed
an offence must be handled judiciously, as that candidate’s chances of being
elected could be adversely affected if it became known that he or she was underpolice investigation. The same care must be taken outside the election period toprotect the reputation of individuals. The possibility that the investigation may
prove the complaint to be unfounded adds to my concerns. [3]Thus, an important component of an enforcement mechanism relates to thedegree of trust that political parties and candidates feel in their enforcement
agency. Trust is also an important condition in coordinating the efforts of different
enforcement agencies.

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Case Study – Non-Enforcement
Canada, Macedonia, Russia and Ukraine
Though non-enforcement is the most common shortcoming, politically biased enforcement is a second,significant problem in a number of countries. The following cases are examples of biased enforcement.
Between 1962 and 1974, as many as one-quarter of all candidates in Canada did not submit statementsof expenditure in the relevant general elections. Johnson v. Yake, the only case during this period thatused regulations to punish improper payments and incomplete disclosure. While the defendant in thiscase was a member of a newly formed political party; no prosecution was initiated against members of
the established parties.[4]According to the Law on Political Parties in Macedonia, supervision over party finances is carried out by
the Bureau for Internal Revenue, a body subordinate to the Ministry of Finance. The Manager of thisBureau is a government appointee; thus, the Bureau is hardly free from political influences. Despite thefact that financial scandals have concerned mostly the ruling parties, the Bureau is not active in
exercising control over the ruling party’s finances. As a rule, it spends most of its energies againstcompanies that are well-known supporters of opposition political parties. [5]A detailed assessment by IFES of the parliamentary and presidential elections in Russia in 1999 and2000 refers to the “exceptional difficulties and scrutiny of which the LDPR (Liberal-Democratic Party of[6]
Russia) and (its presidential candidate, Vladimir) Zhirinovsky was an object in particular.”
The law governing the nomination process in the presidential election required candidates to submit
detailed information about their income, assets, property and material liabilities, as well as the same
information for all members of their immediate families. If there was a "serious inaccuracy" in theinformation, the candidate's nomination could be rejected by the Central Election Commission.
When it was discovered that Zhirinovsky's son had failed to disclose his ownership of an apartment in
Moscow, the Central Election Commission rejected Zhirinovsky's candidacy. In his appeal to theSupreme Court, Zhirinovsky pleaded that Article 39(3) [of the election code] gives the Central Election
Commission the power to reject a candidate if the information submitted is "essentially" inaccurate. He
argued that this omission could not be considered "essential" since the apartment represented less than
one percent of the total amount of property disclosed. However, the court upheld the CEC's originaldecision. In response, Zhirinovsky appealed to the Cassation Court. In the meantime, it came to lightthat [Acting President and Prime Minister, Vladimir] Putin had also failed to disclose ownership of acountry house owned by his wife … The CEC dismissed allegations concerning the Putin case because
the house in question was not completed, and as such did not have to be reported … Ultimately,
Zhirinovsky won at the level of the Cassation Court, and he was added to the ballot. In spite of his
victory, however, valuable time was lost in his campaign. [7]
In Ukraine, “[T]he government of President Leonid Kuchma continued to harass opposition leaders andtheir supporters in the run up to the 2002 parliamentary elections. Opposition activists were detained,
and the offices of [news]papers that gave positive coverage to the opposition campaign were raided on
the grounds they allegedly had evaded taxes. For instance, Borys Feldman, a business partner of former
deputy prime minister Yuliya Tymoshenko, received a nine-year prison sentence for tax evasion andfinancial mismanagement.”
One concern is that violations of campaign finance provisions may entail selective application of thelegislation to remove opposition parties and candidates from the electoral process. One of the mostevident examples of selective enforcement was witnessed during the June 2002 by-elections involving
the famous anti-corruption activist and the former head of the Rada inquiry commission on the
Gongadze case, Oleksandr Zhyr. The election authorities in Dnipropetrovsk Oblast revoked Zhyr’s
candidacy a day before the election, arguing that he had engaged in improper campaign spending. [8]If biased enforcement results from bias in the procedures for appointing members of the political financeregulatory body, these procedures must be amended. However, in some circumstances, such bias may
reflect deep-seated political problems and the absence of political liberties and the rule of law. In suchconditions, no enforcement may be better than biased enforcement. For example, in extreme conditions
where those known to have contributed to an opposition party expose themselves to violence andintimidation, there is good reason to not apply laws concerning the full disclosure of political finances.
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Chapter XI

The Role of Civil Society in the Enforcement ProcessThis chapter sets out four straightforward ways in which non-governmentalorganizations (NGOs) can play positive roles in the enforcement process. It has
become a common assumption of international development agencies and ofinternational financial institutions such as the World Bank that civil society
organizations are capable of playing important roles in checking poor or corrupt
performance by public bodies. Several well-known NGOs have monitored
spending on election campaigns and, thereby, shown whether political parties
and candidates are obeying the relevant political finance laws and whether the
regulatory bodies are enforcing them properly. Transparency International (TI),
the Open Society Justice Initiative (OSJI), and the Carter Center have all carriedout such exercises.
It is often argued that such civil society organizations have a legitimate andimportant role to play in promoting good government because they are politicallyneutral, have expertise and represent society at large. Because they do notcontest elections themselves, civil society organizations are able—it is argued—
to raise special issues and bring pressure to bear on politicians andgovernmental authorities. NGOs and civil society organizations vary greatly intheir technical expertise and in the number of people they represent; however, inmost cases, they have significant and positive parts to play in improving thequality of enforcement of political finance laws. In particular, they may help tofocus the attention of the press and of the public on the shortcomings ofenforcement, thereby providing an incentive for improved performance.
In general, NGOs have for main roles in detection and enforcement:
1)

Promoting greater disclosure and transparency;

2)

Searching for evidence of illegal and corrupt political finance;

3)

Evaluating the effectiveness of funding regulations; and4)Creating public pressure and providing support for reform in politicalfinance.

Pressure from non-governmental organizations, contributors, and—first andforemost—the mass media is necessary in order to create an atmosphere that
promotes stronger and more effective enforcement. Recent examples fromBritain, Lithuania, Latvia, Poland, Romania, South Africa and Ukraine
demonstrate the significance of civic society’s role in the fight against politicalcorruption and confirm that the involvement of mass media continues to be anecessary condition for serious political finance reform. Non-governmentalorganizations and independent media emerge as very reliable watchdogs ofparty and campaign finance in many contemporary democracies. These groups
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can best act in the interests of society at large by monitoring election campaigns
and scrutinizing financial records of parties and candidates.
1) The implementation diary
Using an implementation diary is relatively simple (and inexpensive). It involves
keeping records of how and when parties and candidates adhere to politicalfinance regulations. The implementation diary should be considered part of the“tool-kit” of NGOs that wish to play a role in the enforcement of political financelaws.
Such a diary is especially useful in countries where (1) parties and candidates
are entitled to free advertising time on television and radio and advertising spacein newspapers, and (2) parties and candidates are required to file financial
accounts by a particular date. In the case of entitlements to free political
advertising, a group seeking to keep an implementation diary needs to arrange
for members to monitor all relevant broadcasts and newspapers and to record
the time and length of the free broadcasts or newspaper advertisements. In thecase of submission of financial accounts, the NGO should arrange for a member
to make the relevant inquiry on the day the reports are due and ascertain atregular intervals thereafter whether the reports were actually received. A
separate note needs to be kept for each political party and for each candidate.
Once financial reports have been filed, the NGO should review the reports andcheck whether the required information has been submitted. (This normally will
not include a check on the accuracy of the information.) While this is a simple
and crude procedure, it may prove highly effective in some countries whereparties and candidates blatantly disregard the legal reporting requirements, andregulatory bodies fully expect them to disregard the law. By establishing andpublicizing the fact that parties and candidates have failed to meet theirdisclosure obligations, the NGO will put pressure on both the regulatory body andon the political actors to ensure that the relevant reports are submitted.
The mere fact that required information is submitted will not, of course, guarantee
its accuracy, but it constitutes a useful first stage in compliance with the law. It
permits the regulatory authority to move to the next stage, which is to check thatthe information submitted is correct.
2) Analyzing, interpreting and simplifying information
In jurisdictions where political parties, candidates or donors are obliged todisclose financial information, the reports of such information are frequently
detailed and boring. Long lists of names of individual or corporate donors topolitical campaigns or detailed party accounts may mean little to members of thegeneral public. Apart from a few items of information that may appeal to their
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readers, newspapers also have the tendency to avoid the time-consuming task ofanalyzing the published accounts (unless there is a whiff of scandal).
Malbin and Gais have reported on the situation in the United States that has
resulted from the increasing quantity and complexity of the financial information
disclosed under the terms of modern legislation. They argue that political financedisclosure, if it is to be truly effective, needs to reach members of the public
before they vote in an election. Access to information on the financial backers ofeach party and candidate may influence their voting choices:
This [volume of reported financial information] raised two problems. First, thesheer complexity of the reports means that it takes a greater staff commitment[by political finance regulatory agencies] to interpret them…It has also become aproblem for newspapers and other media outlets. In most of the states we visited[for purposes of research into political finance enforcement], very few
newspapers allocated even one reporter's time to analyzing campaign financedocuments. Newspapers that once made [a commitment to reporting on politicalfinance] are now cutting back. From a journalistic perspective, absent a scandal,
the [material] seems complex, repetitive, and less of a news story. As a result,newspapers are giving less space to reporting disclosed information at a time
when the increasing volume and complexity of the reports would require more ofan effort, not less, if the public is to get the relevant information in time for an[1]election decision.

NGOs, therefore, may play a significant role by undertaking the job of analyzing
the data in official reports on party and candidate financing. In the United Statesin particular, several specialist NGOs have undertaken such a task. They include
the Center for Responsive Politics, the Center for Public Integrity, Common
Cause, and the Campaign Finance Institute. In the United Kingdom, the New
Politics Network carries out a similar operation. Information extracted by thesegroups from an analysis of official documents frequently is much more userfriendly than the raw data and is frequently reported in the media.
3) "Money and Politics" (MAP) program
The role of NGOs as intermediaries between officialdom and the public can beparticularly valuable. The IFES “Money and Politics” (MAP) program is an
example of this role. The program uses the Internet to solve one of the main
problems concerning public access to official information about political financing.
In the past, it was difficult, time-consuming and costly for citizens to gain accessto official information about the accounts of political parties and candidates.
Even in countries where parties and candidates were required to submit suchinformation, and even when they complied with the law and made theirsubmissions, members of the general public and even journalists faced thepractical problem of gaining access to the information. The documents were heldin government offices that had limited hours of operation. Charges often were
imposed for making photocopies of the information, or the information needed to
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be copied by hand. The information was sometimes kept in a large number ofdifferent local government offices. It was then destroyed after a relatively shortperiod of time.
At the center of the MAP Program is a user-friendly Internet database of politicalfunding information. Housed and maintained by the enforcement agency, theMAP database serves a number of purposes. It provides free and immediate
access to information on political finance and functions as a rich source of
information for media and analysts following the trends in financing of election
campaigns. It helps inform voters about the incomes and spending of different
candidates and parties and helps them make decisions at the polls. It promotes amore transparent conduct of election campaigns and contributes to improving theclimate of political financial transactions.
By assisting election management bodies to place such information on theInternet and by encouraging debate among political parties, NGOs, journalists
and members of the public, IFES tries to make political finance disclosure more
effective. Following the money trail through disclosure of political and, in somecases, personal accounts gives voters the opportunity to make educatedelectoral decisions that hold candidates and political parties accountable. The
MAP database is designed to provide a vehicle through which political parties,
candidates, media, NGOs and voters can access and analyze information.
4) Litigation
A potentially significant tool for voluntary organizations is the sponsorship ofcourt cases bearing on important matters of election law and party law. The aimof such litigation may be to close some legal loophole and, thereby, make itpossible to implement an otherwise ineffective law.
In India, the strict limits on campaign spending by candidates were virtually
unenforceable because expenditures made by political parties and by acandidate’s supporters did not count against the limit unless they had beenauthorized by the candidate, even when made with the candidate's knowledge.
Proof was required that the candidate had specifically authorized theexpenditure—a standard that was almost never possible to meet. [2]The intent of the law was clarified in a 1996 judgment of the Supreme Court in a
key case brought by Common Cause (Common Cause v. Union of India and Ors,
AIR 1996 SC 3081). Henceforth, when a candidate knew that campaign
spending was being incurred in his support, the onus would be on the candidate
to demonstrate that the expenditure was unauthorized. Otherwise, such spending
would normally count against the legal limit. The Supreme Court gave thefollowing judgment:

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[The] expenditure …in connection with the election of a candidate to theknowledge of the candidate or his election agent shall be presumed to have beenauthorized by the candidate or his election agent. It shall, however, be open to
the candidate to rebut the presumption … [3]Following this case, the Election Commission “called on all political parties atnational and state levels to submit for its scrutiny the details of expenditure
incurred by them both on the general party propaganda and also on the election
campaigns of individual candidates in every general election.” [4] The basis of thisrequest was that party expenditures on the election campaigns of individual
candidates would be presumed to have been authorized by the relevant
candidates unless the relevant party accounts were submitted and showed
evidence to the contrary.
It is beyond the scope of this handbook to assess the practical effects of thisjudgment. However, it is presented as an example of the potentially importantrole of public interest lobbies in the field of political finance law. [5]A further example of political finance litigation is the case brought in 2003 by theInstitute for Democracy in South Africa (IDASA – see www.idasa.org.za) against
five major South African parties (the ANC, DA, NNP, IFP and ACDP). The
objective of the case, brought before the High Court of South Africa in CapeTown, was to establish that political parties are obliged under the terms of a law
on freedom of information (Promotion of Access to Information Act POATIA) todisclose the identity of those making donations of at least SAR 50,000.
IDASA has been calling for reform of the law to require disclosure of substantial
donations since 1997, the year that the Public Funding of Represented Political
Parties Act was passed. In August 2002, IDASA made a submission to
Parliament on this issue in the context of the Prevention of Corruption Bill. In
addition, IDASA also made a written submission to the Private Members' Bill
Committee of Parliament. IDASA asserted in its court papers that because of thereceipt of public funding and the public role that political parties play in a
representative democracy, that they are “public bodies” for the purposes of theright to access information enshrined in section 32 of the Constitution of South
Africa. IDASA’s litigation against the country’s major political parties to reveal
their sources of funding is part of its campaign to bring about transparency andaccountability with respect to private donations. It will be heard in the Cape High
Court in the first half of 2005.
5) The role of academic experts
Individual scholars who concentrate on party and election funding and networksof such scholars are also capable of making valuable contributions. Experts areespecially valuable if they live and work in the country where reforms are being
considered, but foreign advisers may also have a role. Outside experts may be
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influential because they have greater prestige than local ones. As theambassador of a country in francophone Africa explained, leading politicians in
his country were unlikely to accept advice about political finance rules fromsomeone who lived in the country but would be impressed by official visitors fromabroad.
However, in the medium and long term, there is no substitute for local experts.
Visiting consultants normally will not be able to stay long enough to make alasting impact. They will rarely have the determination or the legitimacy ofspecialists with a permanent stake in the country.
Political scientists and legal experts have regularly had key roles in assisting andadvising parties and governmental authorities. Academic publications also have
led to increased press coverage of political financing. In the medium term, thetraining of a small number of scholars specializing in political financing withineach country, especially in newly emerging democracies, is a high priority. A
useful model of an organization devoted to a technical study of issues relating tomoney in politics, which includes experts from different political parties as well as
specialist lawyers and election administrators, is the Campaign Finance Instituteof Washington, DC. Its publications and activities are less mass-media
newsworthy but more authoritative than those of most "public interest" lobbies.
The Institute seeks to find areas of consensus among specialists from politicalparties.
6) Political finance monitoring by NGOs
The term “political finance monitoring" may refer to any attempt to review anddetail the operation of a political finance system. It is a diagnostic tool that
captures how systems operate in practice, as opposed to how they are designed
to function through a given regulatory framework. Monitoring by NGOs can beused as a basis for assessing political parties' and candidates' sources of funding
and campaign costs. Such assessments can then be used to challenge theaccounts submitted by parties and candidates to the political finance regulatory
body.
The first method of political finance monitoring was developed by Poder
Ciudadano. [6] The main feature of the Transparency International-Argentina
model was its focus on total expenditure by parties and candidates on national
election campaigns. In particular, the number of minutes of advertising on
television and radio, the number of column-inches of advertising in certain
newspapers, and the number of posters using commercial poster sites in aparticular geographical area were recorded. The commercial value of suchadvertising was estimated, and on this basis, the overall cost of the election
campaign was calculated.

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Where there are strict legal limits on spending on electioneering, such an
exercise may establish beyond reasonable doubt that some of the parties andcandidates are spending more than is allowed. However, the TI-Argentina
method of monitoring was open to criticism because it concentrated solely on
campaign spending and on national and metropolitan politics. Also, it focused on
estimated spending on mass media; the method thus assumed (and stated) thatmass media spending accounts for the bulk of total political spending in many
countries.
This simple methodology has been modified and improved gradually by NGOs in
Armenia, Latvia, Romania, Russia, Slovakia and the Ukraine, among others.
More recently, a comprehensive monitoring methodology has been developed by
the Open Society Justice Initiative. [7] Its “Monitoring Election Campaign Finance– a Handbook for NGOs” provides a methodology that helps NGOs monitor
different types of campaign expenditure, contributions to political parties andcandidates, and the misuse of state or public resources for election campaign
purposes. Its approach takes into account all election costs of political parties
and candidates and main sources of funding. The authors also suggest
evaluating enforcement records:
Assessment of the legal framework is not complete, however, without anevaluation of the observation and enforcement of existing provisions. Seemingly
sound legal provisions may be dysfunctional in practice, or be poorly observed orenforced. It is important to identify the root of the problem and to determine
whether the existing provisions are: (a) too vague to allow for effective
enforcement; (b) too complicated to allow for effective enforcement; (c) too
restrictive to be observed in practice; (d) adequate but lacking an effective
enforcement framework; (e) adequate but enforced in a discriminatory fashion.
Where the legal and institutional framework has shortcomings, monitoring should
provide evidence of this. Where it is more-or-less sound, monitoring should
assess the extent to which relevant provisions are effective in practice andhighlight any problems with their implementation. In both cases, the findings
should then be used to advocate targeted reforms.

The OSJI initiative is the first systematic effort to consolidate the experience andknowledge of a wide variety of campaign finance monitoring efforts. It should
allow NGOs to carry out more comprehensive campaign finance monitoring andreform programs.
7) Dissemination of monitoring results
NGOs can effectively detect and highlight funding patterns or suspicious
correlations, but these findings have to be communicated effectively to wider
audiences to provoke public discussions or condemnation by voters that arelikely to affect the political fortunes of the parties or candidates involved.
Frequently, the threat of loss of public support is what prevents politicians fromentering into dubious political or financial transactions. It should be noted,
however, that the use of media to publicize information about campaign finance
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may backfire if certain conditions are not met. Despite the deficiencies of official
reports, only the use of the complete documents can divert complaints about
selectiveness of empirical information. Also, analysis must be carried out in abalanced way, looking at the same issues across all relevant politicalorganizations or candidates. Editorial boards of newspapers can be more
influential in this regard than individual journalists. Such a non-partisan approach
will only strengthen the credibility of the conclusions and contribute to a wider
circulation of the report.
NGOs in countries where campaign expense monitoring projects have been
carried out have faced criticism of bias because they have been vague on themethodology of the project. It is of utmost importance, for the success of theendeavor, that indicators and criteria of evaluation be clearly defined and also
made public prior to the launch of the project. A consistent application of thesecriteria throughout the project will add to the seriousness of the effort even if theconclusions reached do not conform to political sympathies of the funders andauthors of the endeavor.
Better publicity for monitoring efforts can be achieved by presenting the project
results to the media in an effective manner. It may be useful to split all
information into two parts: main report and executive summary. The latter ought
to be concise, analytical and easy to read. Visual representation of the main
trends and major problems or issues raised by the inquiry will help communicate
the research results. A convenient way of disseminating the main report is to
publish it on the Internet, creating additional publicity for the institution. A different
approach to publicizing the findings might be a series of commentaries oranalytical articles describing the problems detected, examining their likely causes
and outlining possible solutions. These articles are perfectly suited forincorporating and drawing on the experience of other countries in the sphere ofpolitical or campaign finance. This approach would help maintain the public’s
interest in issues surrounding money in politics.
8) The role of mass media
Over the last few years the mass media in all democracies have published agreat deal of materials disclosing irregularities in the funding of politics andexposed cases of political corruption. To illustrate the importance of investigative
journalism, IFES has collected many examples of articles related to corruption inpolitical finance, which can be viewed in the media section of
www.moneyandpolitcs.net. Involvement of the mass media continues to be anecessary condition for the ongoing fight against political corruption. In fact,examples from both established democracies and transitional countries showthat the public receives information about political finance-related corruption
mostly from the media rather than from the institutions directly responsible formonitoring political finance.

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In this context, the role of the media as a political commentator comes toprominence. Among various activities devoted to encouraging greatertransparency and accountability of political finance, investigative journalism is
one of the most effective anti-corruption tools. Yet, the general characteristic oftransitional countries is that the knowledge of political finance and conflict-ofinterest issues and access to information are limited; some journalists andactivists either possess information that they cannot verify and publish, or they
have a vague understanding of the problems. Furthermore, in most cases, public
control over political finance is conducted only by a narrow group of journalists.
Lack of the necessary expertise, knowledge and methodology in investigative
journalism can become a major obstacle for the mass media dealing with politicalfinance-related corruption in the early stages of democratic transition. The
Council of Europe Parliamentary Assembly, in its recommendation adopted in
2001, remarked that: “Citizens are showing growing concern with regard tocorruption linked to political parties’ gradual loss of independence and theoccurrence of improper influence on political decisions through financial means.”[8]

The mass media have become increasingly active in addressing issues related topolitical finance and political corruption. They make an important contribution toanti-corruption reforms by describing in detail particular cases of conflict-ofinterest or political finance-related corruption. Well-balanced pressure from themass media seems to be necessary in order to create an atmosphere that
promotes anti-corruption initiatives and serious enforcement.

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Endnotes
Part One
Chapter I
1. See also Pinto-Duschinsky (2002), p. 70.
2. For an example of a wide definition of "political", see the Common rules against corruption in
the funding of political parties and electoral campaigns, adopted by the Council of Europe
Committee of Ministers on 8 April 2003. According to Article 6, "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."
3. Pinto-Duschinsky (2002), p. 69; See also Walecki (2004), p. 19.
4. Thus, the definition of a political "donation" given by the Council of Europe is probably too
broad. Article 2 of the Common rules against corruption in the funding of political parties andelectoral campaigns reads: "Definition of donations to a political party: Donation means any
deliberate act to bestow advantage, economic or otherwise, on a political party.”
5. van Ruymbeke (1998), p. 84.

Chapter II
1.
2.
3.
4.
5.
6.

Malbin and Gais (1998), p. 5.
Lujambio (2004), p. 56.
See Chapter IV for more details.
House of Commons Debates, 1st session, 29th Parliament, vol. V, 12 July 1973, p. 5564.
International IDEA, “Matrix on Political Finance Laws and Regulations,” (2003).
In Spain, a tribunal is endowed with the task of supervising financial performance of Spanish
parties both generally and in the course of election campaigns. The Tribunal de Cuentas has
the power to ask the parties for information about the source of donations. However, it is not
obliged to publish this information.
7. For example, Nassmacher points out that “In Italy three different agencies are in charge andhave to deal with different kinds of financial reports. Italian parties are required to file annual
reports of their financial routine operations to the speaker of parliament. The election
campaign donations and expenditures of all parties have to be declared to the Corte dei Conti(state auditor) following each election. Candidates have to declare their expenses to theCollegio Regionale di Garanzia Elettorale, the regional administrative agency in charge ofelections.” See Nassmacher (2002).
8. Rec. 2003[4]9. Kovick and Thornton (2003) p. 48.
10. Doublet (1999).
11. Keesing's Contemporary Archives (1987).
12. Gyimah-Boadi (2001), pp. 304-5.
13. Wanchoo Committee (1985).
14. Dahl (1999).
15. Levush (1995).
16. Bianco and Guardini (1999).
17. Thornton (2003b)
18. K. Z. Paltiel (1981)
19. Rocamora (2001), pp. 9-10.

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20. Jaung and Mo (2001). Also Thornton and Kovick (2003), pp. 281-282, give a similarassessment: “…violations of the law are rampant…breaking the law, rather than adherence
to the law, is the norm in Korean politics.”
21. Hsia and Johnson (1995). Likewise, Kovick (2003), p. 332, reports: “It is widely recognized
and acknowledged that nearly all politicians submit false reports of their campaign
expenditures to the Central Election Commission.”
22. Unpublished study by Peter, cited in Pinto-Duschinsky (2001).
23. Unpublished study by Pidluska, cited in Pinto-Duschinsky (2001).
24. Arlegne and Coronel (2003), pp. 231-2.
25. Malbin and Gais (1998), p. 79.
26. Pinto-Duschinsky (1991).

Chapter III
1. An advisory committee established by the Canadian government in 1964 to “inquire into andreport upon the desirable and practical measures to limit and control federal election
expenditures.” For more details, see Ewing (1992), pp. 46-52.
2. Barbeau (1966), p. 23.
3. IFES Internal report, 14 May 2004.
4. Committee on Standards in Public Life, Fifth Report (1998). The Funding of Political Parties
in the United Kingdom, London: The Stationery Office, Cm 4057, Volume 2, #2075-2076.
5. www.bbc.co.uk/election 97/background/procedure/courts.htm.
6. Malbin and Gais (1998), p. 29.
7. Ibid, p. 29.
8. Chief Electoral Officer of Canada, 1979°, p. 22, quotation after Ewing (1992).
9. Hughes (2001), p. 214.
10. See Robert Williams, “Conclusion: Problems and Prospects,” in R. Williams (ed.), Party
Finance and Political Corruption. Basingstoke and London: Macmillan Press Ltd. (2000), p.
201.

Chapter IV
1. For more details, see http://www.tehelka.com/home/2004/operation/investigation1.htm.
2. Cited in Pinto-Duschinsky (1997): file on "Spending limits."
3. Thornton (2003a), p. 18.

Part Two
Chapter V
1.
2.
3.
4.
5.
6.

For more details, see Federal Prosecution of Election Offenses, 6th edition (1995).
Lopez-Pintor (2000), pp. 49-50.
Ibid, pp. 63 and 123.
Lopez-Pintor (2000), p. 210 and Nadeau (2000), p. 22.
Lopez-Pintor (2000), p. 125.
Committee on Standards in Public Life (1998), Volume 1, 150.

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Chapter VI
1. “Campaign Financing Laws in the United States.” Paper by Craig C. Donsanto, p. 10
2. The Council of Europe, ‘Guidelines on Prohibition and Dissolution of Political Parties andAnalogous Measures’, Adopted by the Venice Commission at its 41st plenary session CDLINF (2000) 1.
3. Adamany and Agree (1975), p. 103.
4. Interview with representatives of the National Electoral Commission, Warsaw 06.2002.
5. Nassmacher (2001), p. 152.
6. Ewing (1992), p. 230.
7. Administrative Conference of the United States, "Adjudication of Civil Penalties Under theFederal Aviation Act," Recommendation Number 72-6, November 1991, p. 67; Quotation
after the Centre for Responsible Politics study, “Discussion of the Model of Enforcement
Agency,” see www.opensecrets.org.
8. Ibid., p. 3.
9. See Federal Prosecution of Election Offenses, 6th edition (1995), p. 114.
10. See Federal Prosecution of Election Offenses, 6th edition (1995), p. 96.
11. Neou, Kassie and Jeffrey C. Gallup, “Conducting Cambodia’s Elections,” Journal of
Democracy, Vol. 10.2 (1999), p. 157.
12. Sue Nelson for ACE Project, http://aceproject.org/main/english/ei/eih01g.htm.
13. Elections Canada, Special Investigators Manual, Chapter 14, p. 4, quotation after Nelson for
ACE Project.
14. Donsanto, Craig, “The Federal Crime of Election Fraud,” Third Annual Trilateral Conference
on Electoral Systems, IFES, May 8-10, 1996, p. 1.

Chapter VII
1.
2.
3.
4.

See FEC 1995 and 2002 Annual Reports
Anderson, R.J. (1977) The External Audit. Toronto: Cropp Clark Pitman, p. 143.
See Gordon, (1997), p. 86
The Electoral Commission, “Political Parties, Elections and Referendums Act 2000,
Recommendations for change,” (2003).
5. Michael Svetlik, TIDE diagnostic assessment, Georgia: background notes, 14 May
2004.ctoral on, Political Pa
rties,

Chapter VIII
1. http://ocf.dc.gov/index.shtm
2. Center for Responsive Politics, “Discussion of the Model Enforcement Agency” report.
3. “Mexican judge orders capture of former oil company chief in election finance scandal” by
JOHN RICE (The Associated Press), 5/9/02
4. Elections Canada, “Investigators Manual,” January 2004.

9) Chapter IX
1. Nassmacher (2003), p. 154.
2. Ibid., p. 154.
3. Ewing (1992), p. 200.

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4. Ewing argues that, “It is of course paradoxical that legislation designed to improve the qualityof representative and accountable government should be frustrated by people who areneither representative nor accountable.” Ewing (1992), p. 231.

Chapter X
1. Kanev, forthcoming.
2. “[M]any observers contend that the ruling party controls the NEC [the Cambodian National
Election Commission] by illegally influencing independent appointees through bribery.”(2003), p. 49.
3. Chief Electoral Officer of Canada, 1985a, p. 5, quotation after Ewing (1992), pp. 225-226.
4. Ewing (1992), p. 40.
5. Renata Treneska (forthcoming). 'Party Funding and Campaign Finance in Macedonia.' Editedby Daniel Smilov. Budapest: Central European University Press.
6. Nadeau (2000), p. 125.
7. Ibid, pp. 41-42.
8. Walecki, forthcoming (b).

Chapter XI
1.
2.
3.
4.
5.

Malbin and Gais (1998), p. 46.
Devi and Mendiratta (2000), p. 840.
Cited in Devi and Mendiratta (2000), p. 840.
Devi and Mendiratta (2000), p. 842.
E. Sridharan summarizes the judgment as follows: "On April 4, 1996, just before the last date
for withdrawal of nominations and the beginning of the 1996 election campaign, the Supreme
Court, in a ruling, upheld the validity of Explanation 1 of Section 77 (1) of the RPA, but
subject to the filing of audited accounts by all political parties. In the absence of the latter,party spending would be clubbed with candidate spending for the purposes of expenditure
limits. These two rulings will force political parties, henceforth, to file tax returns and audited
accounts of some kind, in all likelihood doctored. However, it will force them to go through theexercise and with a vigilant media, will force some degree of transparency of political fundraising and election expenditure, or at least, make fudging more difficult than it has been sofar." Sridharan, (2001).
6. This is the Argentinian chapter of the Berlin-based anti-corruption organization, Transparency
International (TI)
7. See www.osji.org.
8. Council of Europe Parliamentary Assembly, Recommendation 1516 (2001) on Financing ofpolitical parties.

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972) Interviews and Personal Information
Dr. Johannes Becher, Deutscher Bundestag (Germany)
Jacques Bonnet, Chair, Cours des Comptes de Campagnes (France)
Chris Burgess, Compliance Manager, Registration and Compliance Directorate,
United Kingdom Electoral Commission (United Kingdom)
Professor Jean-Claude Colliard, Member, Conseil Constitutionnel (France)
Roger Creedon, Chief Executive Officer, United Kingdom Electoral Commission(United Kingdom)
Luis de Souza, Instituto Superior de Ciencias do Trabalho e da Empresa, Lisbon(Portugal)
John Franks, Compliance Manager, Registration and Compliance Directorate,
United Kingdom Electoral Commission (United Kingdom)Dr. Yves-Marie Doublet, Head, Legal Studies Department, National Assembly(France)Dr. Menachem Hofnung, Senior Lecturer in Politics, Hebrew University ofJerusalem (Israel)
Stephen Lake, Chairman, Association of Electoral Administrators (United
Kingdom)
Malcolm Rawlings, Electoral Policy Division, United Kingdom Department forConstitutional Affairs (United Kingdom)David Rowland, Electoral Policy Division, United Kingdom Department forConstitutional Affairs (United Kingdom)Michael Svetlik, Deputy Director for Europe and Eurasia, IFES (Georgia)
Ellen Weintraub, Vice-Chair, United States Federal Election Commission (UnitedStates)Enforcing Political Finance Laws: Training Handbook
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