Published on New Age:
How to curb the influence of black money in the upcoming national elections has been one of the recurring themes which have been a topic of intense debate at the citizens’ dialogues organised by the Centre for Policy Dialogue across the country since April 2006, in association with Prothom Alo, The Daily Star and Channel-i. All deliberations on getting honest and competent candidates elected to the next parliament through a credible election were underpinned by the concern that high flow of unaccounted money in favour of certain candidates would adversely affect public choice.
The agitation about election finance was motivated fundamentally by the following two major concerns:
1) Rising campaign cost is emerging as a barrier to equal opportunity for political participation.
2) High flow of black money in election financing ultimately diminishes aggregate public welfare.
It was very impressive to observe how the participants of these regional dialogues, drawn from a wide cross-section of people, were quick to identify that these exorbitant levels of election financing are in fact investments on the part of prospective Members of Parliament (MPs) to secure control over disbursement of public resources and to influence public procurements. The civil society groups could clearly foresee that expenses incurred by the candidates would be soon reimbursed by the voters through means ranging from kickbacks from delivery of public goods to award of public contracts to appointments in public jobs. Admittedly, all these will finally end up increasing the cost of living of the voters.
Regarding how to stop influx of black money into national elections, the suggested solution was apparently very simple: restrict the duties of the MPs to framing laws and designing of other policy instruments; leave the development works to a strengthened local government system. When confronted with the question of how can an MP, having the ambition to get re-elected, really extricate herself/himself from local issues, a large section of the civil society leaders suggested introduction of party-based proportional representation in the national parliament based on a pre-declared set of prioritised candidates. This is supposed to delink MPs from local compulsions.
While the issue of devolution of authority to elected thana or district councils remains a failed case of political goodwill, one is tempted to believe that the nation, in the near future, will seriously explore the possible merits (and demerits) of having a (full or partial) system of proportional representation of parties in the national parliament.
Notwithstanding the above, the fact remains that the citizens would also like to see some effective measures in reducing the capital-intensity of the upcoming election campaign. It is maintained that it would be only appropriate and opportune if we take the bull by the horns and tackle the election finance issue by way of creatively and committedly building on the relevant legal and institutional provisions available in the country.
Election finance: possible nature of reforms
Political finance reforms have taken varying shapes in different countries. Review of concerned literature allows us to identify four major ways by which democratic societies have tried to regulate political finance in general and election finance in particular. These four approaches are as follows:
• Imposing limits on election expenditures;
• Regulating private contributions to election campaign;
• Provisioning public resources for election campaigns; and
• Enacting reporting and disclosure requirements.
A scrutiny of the state of affairs with respect to the above four points suggests that existing election finance rules in Bangladesh mostly relate to approach (i) and partly to approach (iv). There is almost a total absence of any legal provision regarding approach (ii), and approach (iii) is acted upon implicitly, albeit marginally.
As we all know, the President’s Order No 155 of 1972, better known as the Representation of the People Order (RPO), 1972, with all its subsequent amendments provides the legal and regulatory framework for the conduct of elections in the country. Chapter IIIA – Election Expenses of the RPO (1972), which was inserted through an ordinance in 1985, lays down the accounting and reporting requirements with regard to election-related receipts and expenditures. The provisions have been sequentially strengthened through various amendments made in 1991, 1996 and 2001.
Imposing limits on election expenditures: The major goal of this approach is to reduce election costs for ensuring equal opportunities for participation in the elections to those who are not rich. Limits may be imposed on total expenditures to be incurred by a political party in an election or on total expenditure per candidate per constituency or on specific elements of costs.
We know that the current limit on per candidate per constituency election expenses in Bangladesh is a maximum of five lakh takas. We also know that the actual expenditure, even for the weakest candidates, exceeds the stipulated amount by many times. And for a strong contestant it is anybody’s guess. The candidates are supposed to, inter alia, maintain separate bank accounts, and for election finance to have a voucher for each payment exceeding Tk 100.00 and submit a statement within fifteen days after publication of election results. We further know that most of the candidates neither furnish the required expenditure-related documents nor do they mention the actual expenditure incurred. In fact, the journey of an MP starts with submission of an untrue financial statement to the Election Commission (EC).
If the stated limit on expenditures appears to be unrealistic, we should not hesitate to suitably revise it upward. It may be recalled that in India, in the late 1990s, the expenditure limit for a state assembly candidate was Rs 6 lakh and for a national parliament seat Rs 15 lakhs. But the more relevant issue in this respect is not the level of the limit, but compliance to the limit. Curiously, all successive Election Commissions have shown scant uprightness in enforcing the concerned provisions, while the political parties have craftily abstained from submitting their election-related financial statements.
Regulating private contributions to election campaigns: The major aim of this approach is to lessen dependence on one or a few sources of financing. The RPO (1972) allows the possibility of ‘voluntary contribution’ to an election fund and stipulates that no donation amounting more than Tk 1,000.00 shall be received by a political party unless it is made by a cheque. Interestingly, a party may be punished with a fine extending up to ten lakhs takas for violation of these provisions. The fact that not a single political party has been hauled up for violating these mandatory provisions may not come as a surprise, even to most naïve among us.
However, Bangladesh lacks a legal framework for the corporate sector to make financial contributions to election campaigns. To encourage transparency in business-politics transactions, one may consider making such contributions tax deductible. Indeed, the Tata, Birla and Mahindra groups of India did set up election pool funds in 1997-98 from which contributions were made to political parties, according to certain criteria. In this way they tried to reduce the extortionate demands on them, while practising transparency. The corporate sector in Bangladesh may very well adopt the pool fund approach which will not associate it with any particular party as allocations will be made to a number of parties based on a pre-declared formula.
Provisioning public resources for election campaigns: This provision has been conceived mainly to retain the autonomy of the political agents with regard to their financiers. Financing by the public exchequer may be full or partial, and the recipient may be the party and/or the candidate. However, one has to clarify the eligibility criteria for such financing.
Public funding of elections and/or parties was first introduced in the mid-1950s in Costa Rica and Argentina and later (1959) in Europe by Germany. Nowadays various mechanisms of public financing (or subsidisation) of political parties are used in most of the developed countries. In Bangladesh, election campaigns of the contesting parties are subsidised marginally by the government as they are offered free air-time in the public electronic media.
If we opt to finance the election campaigns through budgetary allocations, how much is it going to cost the country? One may consider one crore takas (about ten lakh takas for ten candidates on an average) as a reasonable amount to be spent in each constituency, which will make the total campaign cost for the government Tk 300 crore, which is less than 0.43 per cent of total public expenditure earmarked for 2006-07 or about 0.06 per cent of the GDP. Even if we increase the allocation to Tk 600 crore, it still remains less than one per cent of the total annual budget of the government, which is less than 0.13 per cent of the GDP. One can readily agree that the aggregate public welfare will be significantly enhanced even after incurring this expenditure as it will reduce the compulsion of our public representatives to extort rent by dint of their privilege to manage public resources.
Enacting reporting and disclosure requirements: This provision is supposed to infuse transparency and accountability into electoral finance and thus to deter black-money holders from participating in the elections as well as to discourage them from financing their proxy candidates.
It has been mentioned earlier that the accounting and reporting provisions contained in RPO (1972) are hardly complied with and are almost never pursued.
The issue of information disclosure has attained new dimensions because of a celebrated ruling of the High Court Division (May, 2005) which empowered the EC to collect a set of information through an affidavit from parliamentary election candidates. The solicited information relates to a candidate’s academic qualifications, profession, sources of income, criminal records, if any. The assets and liabilities of the candidates and their dependants also have to be reported. The candidates should also report to the EC about the amount of loans taken from banks and financial institutions, personally or jointly. Along with these, it has been advocated that tax returns and asset statements of the candidates for the last three years should also be declared.
It is further suggested that, if it is found later that a successful candidate has committed perjury by suppressing or manipulating the solicited information, his/her seat will become automatically vacant.
We observe with great regret that the EC, instead of capitalising on the opportunity to instil more accountability in election finance, has opted to disregard the guidance from the High Court Division, treating it as ‘not mandatory’.
Prospect for election 2007
What are the real prospects for operationalising some of the ideas contained in the foregoing paragraphs? However, enactment of a full-blown regulatory framework for public financing of election expenses for the upcoming elections is a far cry. It is also readily not evident that the society will be able to prepare itself in the remaining period for a transparent mechanism for receipt of private (including corporate) donation for political parties.
However, one does not see why the EC should not make full and unremitting efforts to enforce the necessary conditions regarding election expenses stipulated in the RPO (1972) with its subsequent amendments. In order to make candidates take these provisions seriously, the EC will also have to enforce effectively all other guidelines provided in the electoral Code of Conduct, particularly those having impact on election expenses (number of campaign booths, single colour poster, joint projection meetings, etc).
Whatsoever, the test case of our resolve to curb flow of black-money in election financing is manifested in the challenge in implementation of the directives of the High Court regarding disclosure of information by the candidates.
In this context, one may identify the role of four sets of actors for ensuring the civil society’s aspirations for elimination of the influence of the black-money in the upcoming national elections.
First, the caretaker government which is to conduct a free and fair election, has to make the necessary amendments of the relevant legal instruments to strengthen the scope for cleansing the current murky state of election finance. It is said that the caretaker government is not entitled to take any ‘policy decision’, but it will be well within its mandate to take measures to regulate election finance for creating a level playing-field for all contestants with a view to improving the prospect of credible election outcomes.
Second, the Election Commission will be the key player in forcing the contestants to comply with the accounting and disclosure rules. Sadly, the current composition and modus operandi of the EC do not raise any hopes in this regard. Indeed, even if the present chief election commissioner and his colleagues really want to do the needful, they will possibly fail to do so as they have already forfeited their credibility in public eyes.
Third, other concerned statutory bodies, such as the Anti-Corruption Commission (ACC) — whatever may be its worth in its present state — and the National Board of Revenue (NBR) will have to play an effective and coordinated role in ensuring that the monies spent by the candidates are accounted for in their declared incomes. The ACC and the NBR will also have to review the consistency of the asset statements submitted by the candidates to the EC.
Fourth, most importantly, without voluntary and collective cooperation on the part of the major political parties, it will be difficult, if not impossible, for the caretaker government and EC to implement the measures relating to control of high inflow of unaccounted money into the election campaigns. One wonders why the politicians object to such an initiative if it does not take away some of their unfair advantages. At the same time, if the political parties continue to sell nominations to the highest bidders, it will compromise the efforts to streamline election finance.
Bangladesh will have to sort out its current state of election finance which is undermining the democratic system, eroding the value of economic progress and jeopardising social cohesion in the country. The citizens of the country will definitely wait, in eager anticipation, to see whether this time we shall be able to make a transition from money-driven electioneering to an issue-oriented campaign.