An election on the horizon - but what of large 'corporate' buying of the vote?

It is perhaps one of the many painful ironies afflicting Sri Lanka’s political landscape that though an ecstatic song and dance was made about the country’s ‘first ever’ law regulating election expenditure passed by Parliament last year, no elections were held thereafter to practically ‘test’ its legal strength.

Morbid fear of elections

We cannot blame anyone but the Government for this given its postponement of elections including local government elections arguing that it did not have the required funds, unashamedly citing the country’s bankruptcy propelled by a crass and corrupt ruling class. Thus, the Regulation of Election Expenditure Act, No 3 of 2023 stood in solitary splendor for more than a year of it being certified by the Speaker on the 24th of January 2023.

Until now, that is. Apparently the Election Commission is going into overdrive summoning political parties for ‘briefings’ on the Act in the expectation of whatever forthcoming elections. The main boast is that this law limits expenditure by political parties, independent groups and candidates in respect of a forthcoming election to an ‘authorized amount’ to be fixed by the Election Commission. This is in consultation with recognized political parties and independent groups.

Affording a wry joke meanwhile, this ‘authorized amount’ is to be determined taking into consideration ‘the prevailing inflation rate and the National Consumer Price Index. But given how wildly unrealistic these measuring standards are, it is anybody’s guess as to what criteria will apply in this regard. No matter, the point is that, once this ‘authorized amount’ is determined, a candidate at an election cannot exceed that spending amount.

Illegal practices under the Act

If so, an illegal practice is committed with ensuing penalties unless the candidate proves that the expenditure was incurred without his/her sanction or connivance. The other touted ‘positive’ feature of the Act is that, by Section 5, the acceptance of donations from certain entities is banned. This is ‘for the purpose of promoting or procuring the [candidate’s] election.’

Such ‘banned' entities include a government department, a public corporation, or a company “in which the government or a public corporation owns any shares, a foreign government, an international organisation, or a body corporate incorporated or registered outside Sri Lanka. Also included is a company incorporated in Sri Lanka 'where the foreign shareholding in such company, either direct or indirect, is fifty percent or above and most importantly, ‘any person whose identity is not disclosed.’

Contravention of this prohibition amounts to an illegal practice. Meanwhile recognised political parties, independent groups and candidates (depending on the type of election in issue) must within twenty one days of the declaration of the results of the elections, submit a return of donations or contributions and a return of expenses. These must be submitted to relevant returning officers and in the case of a Presidential Election, to the Election Commission.

Is this too little, too late?

The return must specify details as to whether the donation or contribution was by way of a gift, loan etc as well as identification details. These declarations can be inspected by any person and copies obtained on payment of a fee. This safeguard could have been further tightened by requiring the Commission to publish these details on its website and to provide for a measure of scrutiny in respect of whether correct information has been provided.

Even so, these provisions are salutary in a country where recently a presidential candidate was heard to bitterly complain that his election donations, frozen due to pending court cases had, in the meantime, been eaten by termites. But the question is whether these safeguards are sufficient? Or is this Act a classic example of ‘too little, too late’? Certainly a number of paradoxes emerge.

For example, why are limits imposed for spending on an election but not in regard to donations by a single entity or individual to a particular party, group or candidate? And should not the information concerned in regard to whatever donations or contributions made before an election takes place, also be subjected to disclosure? The way the provisions are currently phrased, disclosure of the information merely becomes a fait accompli if public knowledge ensues after the results are declared, on the famous doctrine that the ‘winner takes all.’

The ‘election bonds case’ in India

These discussions in Sri Lanka may feed into comparative developments where the regulation of contributions to political parties and candidates has become the subject of intense public debate. Across the Palk Straits for example, India has been galvanized by a 15th February 2024 ruling by a Supreme Court Bench headed by Chief Justice D.Y. Chandrachud which struck down a seven year old Electoral Bonds (EB) scheme initiated by the Modi led BJP Government.

This had enabled unlimited and anonymous donations to political parties. That was through a process where potential donors purchased interest-free, tax-exempt bonds from the State Bank of India (SBI) in order to donate to a political party. The bonds could then be exchanged for cash by the recipient. Though The Government had argued that this was money channeled through legitimate banking avenues, activists and lawyers had been agitating against the Scheme.

This was on the basis that the Scheme enabled electoral manipulation on a large scale, mainly benefiting the BJP regime and that records showed that well heeled corporates were the main users of its benefits. Of particular interest to Sri Lanka is the primary question that the Court dealt with in regard to the role that unlimited corporate funding to political parties and candidates play in political corruption.

Big money, big inequalities

Even with all the constitutional safeguards in place, it was noted that, ‘there is great political inequality in India…this inequality is driven by money. As a result, people with deep pockets influenced political decisions…’ And economic inequality, the Bench said, leads to differing levels of political engagement because of the deep association between money and politics…’ This gives large donors a seat at the table and allows them to influence policy.

The voter, therefore, must have access to information to assess whether ‘a correlation between policy making and large financial contributions’ exists, it was added. Otherwise, the constitutional principle of free and fair elections and equality is violated. That caution was linked to the fact that the Scheme enabled anonymous donations to be made, thus infringing the people’s right to know. The Court asserted the principle that information about funding to a political party is essential to enable the voters to exercise their freedom to vote in an effective manner.’

The argument of the State that the impugned Scheme had been initiated as a matter of ‘economic policy’ was resoundingly rejected. Rather, the questions involved were inextricably linked to the electoral process and the Court could review the same, it was held. The Election Commission was directed to make available all bond purchases since 2019 with the value, date of purchase and the name of the buyer.

The power of ‘votes over notes’

The judgment has been welcomed in India as a major boost towards curbing political finance in aggravating corruption. ‘Backdoor linkages between ruling parties and select corporate entities are well known…this judgment will give an official imprimatur to them’ wrote Zoya Hasan, Professor Emerita, JNU University for the Wire. ‘This is a great victory for democracy and transparency…it establishes the primacy of people’s power over money power – ‘votes over notes’ she said.

It is high time that these questions are asked in Sri Lanka as well.