Accountable campaign finance: who’s buying votes?

It is estimated that a combined US$5.8 billion will be spent on the US congressional and presidential elections by polling day on 6 November. This staggering sum, equal to the combined GDPs of a couple of small African nations and US$400 million more than in 2008, has squarely focussed the spotlight on campaign finance.

The United States is not alone. Of the more than 50 elections around the world in 2012, many have been the most expensive on record, from Belarus and Serbia to Ukraine.

The super-spending in the United States appears to be a direct result of the Supreme Court lifting spending caps following its Citizen United decision in 2010. Independent estimates suggest that 78 per cent of the money gushing into the 2012 campaign is a result of the elimination of spending caps on political campaigning by corporations and unions. More in this cycle has come from individuals and corporations than ever before.

Outside the United States, an increase in legislation aimed at limiting the influence of private money in campaigns has done little to prevent more and more wealthy individuals from spreading money around the political world to protect themselves and their interests. Increased regulation across many industries has also spurred more corporations to donate to political parties in an effort to protect profits.

Based on our analysis of 25 European countries, only 13 states have implemented ceilings for donations by private individuals. Where restrictions exist, they vary significantly. Moreover, only 10 countries have opted in favour of making the identity of donors and amounts donated publicly available.

The business of politics

As evident from other countries, unchecked and unaccountable political spending can pave the way for grand corruption in politics. For individuals who get elected through massive private contributions from a few companies or individuals, political favours for favourable regulation or legislation can often be called upon later. And too often, the laws that are passed reflect these private interests rather than those of the public.

In the United States, new figures released suggest that super-wealthy donors have raised 20 per cent of the money being channelled privately through what are known as “super” PACs – independent political action committees that face less stringent restrictions on political fundraising and spending.

Fortunately for the United States, such information must be publicly reported to the Federal Election Commission. But in other countries, there often are limited laws and/or lax enforcement to get individuals and companies to report on whom and what they are politically funding. Based on our research, about half of the world’s 105 biggest companies do not disclose information about their political contributions.

Calculating the political costs

According to our global public opinion poll, political parties are seen as the most corrupt institution among the 100 countries and 100,000 people surveyed.

The same survey findings for the United States show that 82 per cent and 70 per cent of respondents classified US political parties and the Congress as being corrupt or extremely corrupt.

Such results were similar for many European countries that have recently gone through political and/or financial crises. In Greece, Ireland, Italy, Romania and Spain, more than 80 per cent of those surveyed viewed political parties in their countries in the same light.

A large part of these perceptions are based on facts: there are weak political financing laws in many countries, and there is a general need for reforms to set the systems straight. A recent study of 25 European countries found this to be an area of concern in all countries. Even Sweden and Switzerland lack regulation to control party financing, while many other countries – including Germany, Denmark and the United Kingdom – suffer from legislative loopholes and weak enforcement mechanisms.

And the change in legislation in the United States following the Supreme Court’s decision has led to everything from calls for reform by both parties to rap songs condemning the current state of affairs.

Resetting the dial

There are best practice standards for political finance. At the very least, political parties should:

• disclose audited financial statements, itemizing income and expenditure, with identification of specific donors
• be fined for not providing such documentation

And once elected, individual politicians should submit regular interest and asset declarations.

Such rendering of accounts can help to ensure that no politician is unduly benefiting from his or her public service role. They can also help to make sure that politicians are not involved in outside activities or ventures that could compromise their impartiality when it comes time to vote on legislation or related measures.

But it is also crucial that companies operating globally start to come clean about their role in national politics. All companies should report on their political donations and lobbying in an accessible and timely manner.

Moreover, company decisions about public policy engagement and political spending should involve board and shareholders to ensure the maximum oversight and controls possible.

The money that has flowed into the 2012 US election is already spent. Once the ballots are cast, citizens need to be able to see if those elected act in the public interest or solely in the interests of those with deep pockets who funded their campaigns.

Resources

• Watch a BBC introductory video on campaign finance in the 2012 US election