Friday March 31, 2023

Debate on foreign funding to political parties is global

January 23, 2021

LAHORE: When almost all mainstream political parties in Pakistan are accusing each other of receiving funds from prohibited foreign sources, a research by the Jang Group and Geo Television Network shows that fiery debates on this thorny issue have been going on everywhere in the world for years.

In India, where foreign funding to political parties remains illegal, the Delhi High Court, in 2014, had found both ruling Bharatiya Janata Party (BJP) and its key adversary, the Indian National Congress, guilty of receiving foreign funding.

In India, the conduct of elections to the Houses of Parliament and state legislatures is mainly regulated by the 1951 Representation of the People Act. Section 29B of the 1951 Act prohibits all political parties registered with the Election Commission from accepting any contribution from a “foreign source.”

Based in Washington DC, the 188-year-old Law Library of Congress — the world’s largest law library with a collection of over 2.9 million volumes covering virtually every jurisdiction in the world — adds: "…section 3 of the 2010 Foreign Contribution (Regulation) Act bars candidates, legislative members, political parties and party office holders from accepting foreign contributions."

It asserts: "In response to a 2014 High Court of Delhi decision finding a violation of the 1976 Foreign Contribution (Regulation Act) where political parties accepted contributions from local companies that were majority owned by a foreign corporation, the controlling Bharatiya Janata Party government passed a retroactive amendment through a 2016 Finance Bill that excludes from the definition of “foreign sourced” contributions from local companies even though a foreign company owns more than half their shares, provided certain direct investment requirements are met."

However, on March 18, 2018, according to a key Indian newspaper "The Hindu," the Lok Sabha (Indian National Assembly) had passed a bill that had exempted political parties from scrutiny of funds they had received from abroad since 1976.

There was no debate on the bill — a rarity as far as the vociferous Indian legislative houses are concerned!

The FCRA regulates foreign donations with the aim of ensuring that such donations do not adversely affect the “national security” of India."

In 2020, things changed again and according to an "Al-Jazeera" television report, the Foreign Contribution Regulation Act was amended to starve NGOs, particularly rights groups and environmental NGOs critical of the Hindu nationalist government of Prime Minister, Narendra Modi.

Research further shows that political parties in many parts of the planet are legally funded by contributions from multiple sources including grassroots individual donations from supporters, even support from the elite and affluent circles, besides being financed through corporate contributions and endowments coming from business entities.

A few years ago, the London-based Overseas Development Institute had carried a research report on its website, according to which, in numerous fledgling democracies, funding can also be provided through foreign aid.

This 60-yerar old independent think tank on international development and humanitarian issues had viewed: "International donors provide financial help to political parties in developing countries as a means to promote democracy and good governance, or, in some cases, to support preferred political parties. Support can be purely financial or otherwise. Frequently, support is provided in the form of capacity development activities, including the development of party manifestos, party constitutions, and campaigning skills."

In United Kingdom, the current law regarding campaign financing in Great Britain is contained in the Representation of the People Act 1983; the Political Parties, Elections and Referendums Act 2000; and the Political Parties and Elections Act 2009.

The Law Library of Congress holds: "Great Britain has a number of laws designed to ensure that money donated to political parties and candidates are regulated through reporting requirements on the parties and candidates and through spending limits. Donations above specified amounts may only be received from “permissible donors.” Foreign individuals and foreign registered companies are precluded from this definition and thus are not permitted to make large donations to political parties or candidates."

It propounds: "However, there does not appear to be any restriction on the employment of foreign staff by political parties or candidates. Digital campaigns have caused the Electoral Commission concern that foreign individuals and companies may be circumventing the law by spending money on digital advertisements from their home countries when they would be prohibited from doing so from within Great Britain. The Commission has made a number of recommendations that the law be clarified to ensure this action is explicitly prohibited."

In the United States of America, untold amounts of foreign donations are known to have flown into the country's political system with little accountability or limits.

In its November 05, 2019 report, the "Voice of America" had remarked that although election experts said it was impossible to accurately estimate the extent of foreign financial influence over US elections, many agreed it had increased substantially since a landmark Supreme Court ruling nearly a decade ago opened the flood gates.

The "Voice of America" further opined: "Businessmen connected to Trump's lawyer Rudy Giuliani were recently indicted for funneling foreign money to federal and state campaigns and PACs that included the pro-Trump America First Action, the National Republican Congressional Committee, and a campaign committee for Pete Sessions, a former Republican congressman from Texas. Prosecutors said two of men, Ukrainian-born Lev Parnas and Belarus-born Igor Fruman, who helped Giuliani investigate former Vice President Joe Biden, conspired to pass along $1 million from an unidentified Russian businessman to various U.S. candidates."

In Australia, according to the Melbourne-based newspaper "The Age" and the Canberra-based Australian National University, which is a national research institute, political funding deals with political donations, public funding and other forms of funding received by politician or political party to pay for an election campaign. Political parties in Australia are publicly funded, to reduce the influence of private money upon elections, and subsequently, the influence of private money upon the shaping of public policy.

After each election, the Australian Electoral Commission distributes a set amount of money to each political party, per vote received. For example, after the 2013 election, political parties and candidates received $58.1 million in election funding.

The Liberal Party had bagged $23.9 million in public funds, as part of the Coalition total of $27.2 million, while the Labour Party pocketed $20.8 million.

In Australia, the majority of private political donations come in the form of financial benefaction from corporations, which go towards the funding of the parties' election advertising campaigns. Donations and affiliation fees from trade unions also play a big role, and to a lesser extent, the donations coming from individuals.

Donations occasionally take the form of non-cash donations, referred to as gifts-in-kind. The Australian Electoral Commission monitors the influx of these donations to political parties, and publishes a yearly list of political donors. In practice, it is not thus difficult for donors to make undisclosed donations to political parties in Australia and they can sometimes hide their identities behind associated entities.