Stringent regulation of campaign finances

Never more has the importance of transparency in campaign financing been relevant than now, when at least two Members of Parliament are revealed to have accepted millions of rupees from a company whose chairman subsequently became embroiled in one of Sri Lanka’s worst corruption scandals of recent times.

Investigators sifting through piles of documentation related to the Central Bank bond scam will receive in the coming weeks the details of other cheque payments from at least 33 banks where the four companies, at the center of the scandal, maintained accounts. They will also question witnesses and it is likely that the names of other politicians who received money from these donors will emerge.

Ironically, both MPs so far publicly named say the money was not used for personal gain but for their respective electoral races. This is a petty, if completely insignificant, distinction. The funds went towards (so it is said) campaigns to elect the recipients--and not anybody else--to Parliament. If that doesn’t fall under the category of personal gain, it is difficult to say what does.

The MPs have also, at various times, claimed they did not know where the money had come from; that their friends and campaign managers handled these funds and, quite implausibly, kept them in the dark. This is all the more reason to push for a system that’ll enable these candidates to keep track of future donations and account for how the banknotes are spent. It is of vital importance for citizens to know that any money contributed towards an electoral campaign is not used to bribe voters; or that the recipient does not accept the payment on the understanding that he or she will return the favour once in office.

Bribery and corruption are illegal under the laws of the country, including legislation pertaining to presidential, parliamentary, provincial and local council elections. Offering financial or other inducements to voters--be it by way of a bottle of alcohol, a packet of rice or any other means--is unlawful. And if a donation is used for the purpose of bribery or related actions defined by law, the benefactor is also liable. It is, therefore, in the best interest of giver and taker to be as transparent as possible, particularly if, as they loudly protest, no crime was committed.

The argument is simple: When it comes to campaign finance, the people ought to be entitled to know the source of money and how it is spent without eating into matters of privacy related to campaign strategy. There is also the overarching issue of MPs being influenced to unlawfully abuse their legislative standing in parliament and elsewhere on the basis of financial incentives. Full disclosure will guarantee that they are not, to employ a Sinhala saying politicians love to use on others, “kuliyata kahina wanduran.”

The case at hand is particularly interesting because both MPs who accepted cash from a company related to the party that perpetrated the bond scam became members of a parliamentary oversight body-- the Committee on Public Enterprises--that subsequently inquired into the scandal. However hard they argue that their actions within COPE were not influenced by the incentives they had taken, doubt thrives in an environment of disturbing opaqueness. After all, there is no such thing as a free lunch.

Transparency in campaign finance is important at all levels. Say, for instance, a village moonshine manufacturer has contributed to the electoral race of a potential local council member. This knowledge becomes significant when, one day, it is this same local council member that prevails upon the authorities not to act against the hooch operation. These financial interactions run deep. There is reciprocity involved.

There is dark money, too, in campaign finance. On the eve of the 2015 presidential election, the driver of the former President’s Chief-of-Staff, Gamini Senerath went to several banks cashing cheques worth a mind-boggling Rs 1.2bn that had been given to him by Mr. Senerath. He handed the money back to the Presidential Secretariat. Some of the donations were made by well-known business entities. But some came from companies which, investigators say, are dead for all intents and purposes.

This is not unusual. During times of presidential elections--perhaps, too, at other times--it is not unheard of for the main candidates to have stacks of money lying around in vehicles, in cupboards, on the floors of their bureaus. But what is being called for is not a curtailing of campaign finance. What is required, especially in an environment such as that prevailing in Sri Lanka, is complete transparency.

There must be accounting and auditing for such monies; and it must be accepted that the people have a right to know and analyse for themselves the various nexuses and flows of money in the world of politics. But this might not happen unless there is a strong public demand for it, particularly as the very legislators who are responsible for passing laws through parliament are benefiting vastly from the prevailing situation.

Demand, we must. Campaign finance disclosure is an essential public accountability mechanism. And transparency on campaign funding is important. It serves the public interest and is thought to reduce corruption in Government in jurisdictions where it exists. Even if the necessary legislation is passed, however, there will be challenges--such as evasion of disclosure requirements.

It is imperative, however, to start somewhere. Global Integrity, an international NGO tracking governance and corruption trends, in a 2014 report on campaign finance concluded that countries in which political actors are required, both in law and in practice, to adhere to reporting and disclosure standards, may be less prone to violations or abuse of existing regulatory frameworks. But even where violations occur, effective reporting and disclosure can be a mechanism by which to empower the media and civil society to exert some measure of accountability.

Sri Lanka must take note. Given the revelations of the past few weeks and with more due to be made, there must be a strong, if overdue, call made for stringent regulation of campaign finance.