Executive Summary:
On July 30th, 2011 IFES hosted the third one-day Preventing Electoral Abuses Conference (PEACE III) in Kabul, bringing together members from Afghan civil society, media, Parliament, the Independent Elections Commission (IEC), the High Office for Oversight and Anticorruption (HOO) and government ministries.
PEACE III was designed as the follow-on to PEACE I and PEACE II; PEACE I which was held on July 1, 2010 prior to the September 2010 Parliamentary election and PEACE II, held after the election on November 1, 2010.
Both PEACE I and PEACE II provided an opportunity for stakeholders to discuss the myriad of issues related to campaign finance regulation, electoral abuse, and political finance transparency in Afghanistan. While PEACE I focused on problems in anticipation of the then upcoming elections, PEACE II discussed lessons learned from the then recent elections related to political finance, such as candidate campaign finance reporting, campaign contributions, and necessary areas of reform.
As the third instalment to the PEACE conference series, PEACE III brought together many of the same stakeholders (and many new ones) to discuss how to improve political finance regulation and oversight in Afghanistan in the long term for periods between elections.
The discussions garnered through PEACE I and II demonstrate that Afghanistan is making steady improvements in the field of political finance oversight. As such, PEACE III focused on the way forward – how Afghanistan can continue improving political finance regulations and engender greater awareness among the public, which will lead to positive, constructive reforms to increase transparency and oversight in the role of money in politics.
During PEACE III, the political finance working group made a number of valuable recommendations and laid a road map for advancing political finance reform over the next several years.
PEACE III included presentations by IFES’ Political Finance Expert, the IEC, the HOO, and in particular, two presentations by the political finance working group (WG). More information on the WG, its role, and its members is provided later in this report. PEACE III Presentations and discussions centered around (i) political finance in Afghanistan beyond elections and the role of international assistance and (ii) key recommendations for legal and regulatory reform to advance political finance transparency and oversight.
The recommendations and discussions gained from PEACE III will be incorporated into a final report developed by the WG, which will set forth a more formal and concrete set of recommendations to be presented to Members of Parliament, the appropriate ministries, and members of the media and civil society.
Presentations – Introduction to Political Finance Issues & Updates from IEC and HOO:
PEACE III commenced with opening remarks by IFES-CEPPS Director, Peter Noppenau, who introduced IFES’ political finance monitoring programs, explained PEACE III objectives, and introduced the day’s presenters. Following this introduction, IFES’ Political Finance Expert, Dr. Marcin Walecki presented on “International Standards and Best Practices in Political Finance.”
Dr. Walecki provided PEACE III participants with a brief history of political finance; establishing that money indeed plays a central role in politics. Governments cannot function or provide services to citizens without funds. However, Dr. Walecki warned, “democracy needs to control money or money will control democracy.”
Dr. Walecki further asserted that, “the regulation of political finance is essential to guarantee politicians’ independence from undue influence and to ensure the principle of equal opportunity.” Thus, this begs our increased understanding that political finance monitoring, oversight, and reform are prerequisites for combating corruption in any democracy.
Dr. Walecki outlined the compulsory elements for effective control of political finance (civil society/media, voters, political parties’ internal controls, and an independent political finance regulator) as well as the elements needed for an effective regulatory framework (disclosure, strong and independent enforcement, controlling donations, transparent public funding, sanctions, and controlling costs). Dr. Walecki specifically concentrated on the following elements:
“Democracy needs to control money, or money will control democracy. The regulation of political finance is essential to guarantee politicians’ independence from undue influence and to ensure the principle of equal opportunity.”
Disclosure: Full financial and assets disclosure by candidates’ and select politicians’ is needed to better understand what their political and financial interests and influences are. Disclosure further allows media and civil society access to this important information and to adequately inform the public on the interests of their elected and other government officials.
However, disclosure requirements must be enforceable.
Strong and Independent Enforcement: Enforcement of political finance laws and regulations requires a strong, independent oversight mechanism with the authority to level sanctions and end impunity.
Sanctions: By establishing sanctions, we deter non-compliance with the law. Sanctions, however, must be proportionate in nature and there must be a diversity of administrative and criminal sanctions.
In his conclusion, Dr. Walecki pointed out, “we all agree that money in politics should be regulated. We know that money used in politics comes from irregular and illegal sources. And we need to control it.” To achieve this, Afghanistan needs a more flush combination of the above elements, especially independent control and monitoring of finances.
This includes a more active independent media and civil society sector; able to educate voters, who in turn are able to vote the most corrupt politicians out of office. Further, stakeholders must examine carefully the Constitution, electoral law, political party law, and anti-corruption law when considering reforms. These legal frameworks provide the basis on which political finance regulation can be built and improved.
Following Dr. Walecki’s introduction to political finance best practices, representatives from the IEC and HOO provided updates on political finance related policies and practices from their respective agencies (both of which is closely and directly involved in political finance in Afghanistan). First, Mr. Mohsen Farid, Legal Advisor to the HOO provided an overview of the HOO’s work with assets registration.
Mr. Mohsen first emphasized the importance of assets registration as a standard set forth by Article 154 of the Afghan Constitution, which requires assets registration, stating that, “The wealth of the President, Vice-Presidents, Ministers, members of the Supreme Court as well as the Attorney General, shall be registered, reviewed and published prior to and after their term of office by an organ established by law.” Furthermore, Articles 20 and 51 of the United Nations Convention against Corruption (of which Afghanistan is a signatory) also require assets registration.
As such, the HOO, Mr Mohsen explained, is currently tasked with registering the assets of a large array of political actors: President, Vice Presidents, Cabinet Ministers and Deputy Ministers, Supreme Court members, Attorney General Members, Members of Parliament, Ambassadors, Governors, Provincial Council members, and heads of independent entities, such as the Electoral Complaints Commission (ECC).
Several PEACE III participants posed questions to Mr. Mohsen about the assets registration process, and particularly why there appears to be weak enforcement of these assets registration policies. Mr. Mohsen explained that while there is a regulatory basis for assets registration, the HOO currently has little authority to adequately enforce the registration process. This is a gap in the regulatory framework to consider while discussing political finance reforms.
Mr. Jafar Ali Noori, Legal Support Officer with the IEC provided updates on campaign finance developments from within the IEC. Mr. Noori gave a brief overview of the IEC’s recent experiences with campaign finance regulation, most notably with the September 2010 Parliamentary election. Namely, the IEC is responsible for:
(i) registering the assets of electoral candidates (before and after the campaign period),
(ii) receiving and administering candidates’ campaign expense reports, and
(iii) publishing candidates’ financial reports on the IEC’s website. During his presentation, Mr. Noori noted that a more effective banking system is needed to truly advance the monitoring of campaign expenses, as bank account statements are the optimal method for tracking and recording campaign expenses and contributions. He further mentioned concerted efforts must be made to improve the level of compliance with financial reporting requirements (greater disclosure and more public awareness).
Political Finance Working Group (WG) Presentations & Discussions:
Following these initial introductions and updates, the WG presented on two critical areas for political finance reform: (i) campaign finance monitoring and reform and (ii) political party finance monitoring and reform. Over the past several months, the political finance WG has engaged collectively on different areas of political finance reform, including campaign finance regulation, assets disclosure and registration, and political party finance.
The goal of the WG is to review current political finance legislation and regulations, as well as a number of recommendations made to date on political finance reform (from both domestic and international experts). In their review, the WG is distilling this information to generate a set of cogent, feasible recommendations aimed at increasing political finance transparency and accountability in Afghanistan.
The WG is composed of a group of eight reputable Afghan citizens, including Members of Parliament and persons working at various government ministries, the media and civil society. The WG was further divided among two subgroups: one subgroup to concentrate on electoral campaign finance and one subgroup to concentrate on broader political finance issues outside of the electoral cycle (such as political parties finance). WG members participate are independent citizens, not as representatives of their respective organizations.
Draft recommendations for Reform on Electoral Campaign Finance:
On behalf of the WG, Mr. Khalid Orya, Head of the Legal Department for the IEC presented the recommendations to reform campaign finance regulation. In this presentation, the WG first referenced the many challenges which necessitate reform in campaign finance.
These include irregular and illegal misuse of money and state resources in electoral campaigns, influence of foreign and illegal sources of money in campaigns, vote buying, public distrust of the role of money in campaigns and all political processes, and the mass amount of money spent in elections, which creates inequality among candidates and limits the political participation of poorer candidates.
First, the WG recommends more effective control in campaign finance regulation. This requires several important elements: (i) stable and reputable banking systems for tracking campaign expenses and contributions, (ii) ample coordination among all stakeholder agencies and actors (IEC cannot regulate and monitor on its own), and (iii) establishment of a separate unit within the IEC, tasked with monitoring campaign finance, with the authority to enforce and to verify financial reporting. The WG also noted this requires greater involvement by media and civil society organizations.
Second, the WG recommends establishing spending limits of electoral campaigns. By limiting spending, we can limit the use of illegal funding, influence of illegal funding, and create greater equality among candidates. However, there must be an enforcement mechanism for spending limits.
Mr. Orya pointed out that spending limits are not in themselves sufficient to mitigate illegal spending habits during elections. Regulatory bodies must also make clear what are the legal uses of money for electoral campaigns and what actions are restricted or illegal (not be used, for example, in vote buying or purchasing favors in exchange for votes).
“The ECC, as an independent, impartial and professional body should become a permanent entity. In order to ensure the implementation of regulations, the ECC should be able to work on regulating and supervising the electoral expenses of candidates.”
Third, the WG recommends strengthening the legal framework to allow for better regulation of campaign finance provisions. In other words, to effectively reform campaign finance regulations and practices, reforms must be brought to the electoral law, to create a more solid basis for enforcement and strengthen regulations. The WG recommends that the electoral law specifically mention sanctions and disclosure requirements.
Mr. Orya explained that this would grant greater regulatory authority to the IEC to enforce sanctions. The WG also recommends a greater variation of sanctions, ranging from administrative fees to criminal sanctions.
Another output will be more compliant assets declaration, assets disclosure, and collection of campaign expenses reports. Lastly, the WG recommends establishing the ECC as a permanent body with the control to verify reports and recommend sanctions.
Lastly, the WG made a few miscellaneous suggestions, such as removing deposit requirements for women candidates to sure more equal participation of women in elections. Also, The WG set forth recommendations for the donor community, including continued funding of capacity building trainings, advocacy and public awareness programming, and continued technical support to political finance issues. Mr. Orya noted that donors should consider campaign finance as a strategic issue within their anti-corruption efforts.
Draft recommendations for Reform on Political Parties Finance:
On behalf of the WG, Mr. Nader Mohseni, Director of the Assets Registration Department for the HOO presented the recommendations to reform political parties finance. Mr. Mohseni first illustrated the various challenges with political party finance oversight and control, including lack of coordination among Afghan institution, little public awareness, weak political culture of transparency, and the current legal framework is not sufficient and regulations are weak. In short, the law on political parties does not allow for proper control and supervision.
As a first step, the WG recommends reforming the existing political party law and related regulations. A number of specific reforms fall under this recommendation.
First, the WG recommends mandating full disclosure of political parties and political party leaders. Adjoined to this, the political party law should state that political party assets shall not be used for the personal gain or use of political party leaders. The assets of political parties shall only be used for the operational purposes of representing it constituents.
Secondly, registration fees for political parties as they currently exist are too high and too restrictive. Registration and licensure fees should be lowered – political parties should operate as a not-for-profit organization, not as a business.
Third, reporting requirements should be clarified and full financial reporting should be required once per year. Mr. Mohseni explained that the political party law in its current iteration is extremely vague on financial reporting and disclosure. Reports should also be disclosed publicly, subject to verification, and provided on the Internet.
Fourth, a scaled variation of administrative and criminal sanctions should be established to keep political parties accountable and to enforce reporting and disclosure requirements. Members of political parties who use illegal funds should face criminal sanctions.
Fifth, political parties should not be permitted to receive foreign funding. This allows for the undue foreign interests and subjugates the representational purposes of the political party. However, Mr. Mohseni clarified that is it important that political parties be allowed to receive technical support and guidance from foreign organizations. Political parties, as new, emerging political actors in Afghanistan need this technical support to become viable entities.
Sixth, each political party should establish a financial committee to be responsible for the party’s financial affairs. In this way, no single political party leader has complete control, which will prevent misuse of party finances or property.
Seventh, political parties should continue to provide financial support to electoral candidates, but a realistic limit should be established for party contributions. By not limiting party contributions, there is a distinct risk of creating a loophole, whereby wealthy interests may channel funds through political parties rather than directly to candidates.
The political party law in Afghanistan in its current iteration is too vague on assets disclosure and financial reporting requirements. The WG recommends reforming the law, empowering oversight bodies to regulate and enforce compliance.
A couple of PEACE III participants raised concerns over the recommendation to lower political party registration fees, pointing out the importance of revenue and suggesting that these fees could in fact help keep political parties accountable.
It was counter offered that the emerging political parties in Afghanistan need to first grow and become established, and lowered fees remove one barrier to this.
As an overarching principle, the WG asserts that proper oversight and transparency of financial affairs of political parties is needed.
This involves three essential steps. First, the WG recommends establishing an independent committee (or some unit) charged with overseeing political parties’ compliance with these political finance regulations. The independence of this body is critical to ensure truly transparent and nonpartisan oversight.
The WG proposes that the HOO is the organization best suited to house this unit, as the HOO already has assets registration processes in place. Second, regulations should be reformed, requiring political parties to present financial reports to this committee. And third, the committee should be responsible for public outreach to inform the public about the transparency of political party financial affairs.
Lastly, there were some discussions between the WG and participants about public funding. The WG pointed out that public funding should be considered at some point. Public funding ensures equal and fairer access to political participation, and in many ways helps monitoring bodies to hold political parties, as well as electoral candidates, accountable to their spending behavior.
However, there was general agreement among PEACE participants that public funding is not a viable option for Afghanistan at this point. First, Afghanistan (for both campaign finance and political party finance) should improve public control, then it may consider public funding. Other participants pointed out that Afghanistan can now barely afford elections, how will it afford to publicly fund electoral candidates or political parties.
A more detailed account of the WG’s recommendations for political finance reforms in provided with the PowerPoint presentations attached with this report. Also attached is Dr. Marcin Walecki’s presentation on international standards and best practices in political finance.
Key Recommendations and Next Steps:
The recommendations and discussions from PEACE III were extremely effective in outlining a sequence of requisite reforms. With these recommendations in place, it is now time for stakeholders to advocate for positive reform. Improvements in political finance will not take place without action on the part of responsible ministries and government agencies, Members of Parliament, media, civil society organizations, and the public. PEACE III also took place at a critical time when legal reform can take place (the electoral law, for example, may only be amended until mid-year 2013, one year before the next election).
Media and civil society play a central role in elevating political finance transparency and accountability. They educate and engage voters, who in turn realize their power to elect the most corrupt officials out of office.
A main takeaway from PEACE III is that there is a distinct need to strengthen this community of political finance stakeholders (PEACE III participants among other stakeholders).
As Dr. Walecki pointed out, no democracy can succeed without proactively monitoring and regulating political finance.
Moreover, both WG presentations referenced a lack of coordination (among ministries and enforcement bodies) as a major weakness to sound, credible enforcement.
Specifically, the following key recommendations were gained during PEACE III:
Members of Parliament must advocate proactively for improved political legislation (as part of the equation to end corruption)
Ministries and independent bodies must advocate for improved legislation as well (such as the IEC, HOO, Ministry of Justice, Ministry of Finance, etc.), allowing them to strengthen their own regulations.
This will enhance the credibility and enforceability of sanctions, spending limits, assets disclosure, financial reporting requirements, etc.
Legal reform is required to reinforce regulatory framework, allowing independent monitoring agencies (such as the IEC and HOO) to enforce oversight and control mechanisms.
Any monitoring mechanisms developed (whether born through the IEC or HOO) shall remain independent and non-partisan.
Increased disclosure is required to increase transparency and accountability. Disclosure must be done publicly with records provided on the Internet. This allows increased access of information to the public, particularly for the media and civil society watchdog agencies.
Media and civil society must remain informed and engaged. Media and civil society have a responsibility as public watchdogs to educate voters on political finance issues, particularly with concern to corruption and illegal use of public funds.
Greater public awareness is needed. Citizens must be informed about the financial influences and interests of their public figures. Voters must realize their power to vote the most corrupt officials out of office.
Public funding should be considered (for candidates and political parties) in the future. However, Afghanistan first needs public control, then public funding.
The International community should continue to provide valuable technical and capacity support to political finance reform. Reforms should be Afghan driven, but technical assistance will greatly improve and inform the process.
If we, as a community of stakeholders, seek to endow Afghanistan with stronger and more transparent democratic systems, then it is paramount that we work to root out systemic corruption at all levels. Advancing political finance control and anticorruption efforts come hand in hand. The recommendations set forth during PEACE III provide a roadmap for taking important next steps in removing systemic corruption.
Organizations such as IFES will continue to support increased transparency in Afghan political finance, during both elections and periods between elections. Lastly, the WG will build upon these recommendations in the upcoming months to produce a final report. This report will also be distributed widely and among PEACE III participants.
End of Report. Document dated August 24th, 2011
Adam C. LeClair
Civil Society Coordinator
International Foundation for Electoral System (IFES), CEPPS Program
Kabul, Afghanistan
Attachments:
Attachment 1 – PowerPoint Presentation from Dr. Marcin Walecki
Attachment 2 – PowerPoint Presentation from WG on campaign finance reform
Attachment 3 – PowerPoint Presentation from WG on political party finance reform
