Corporate link to political parties

The western media reported that President Barack Obama spent about $49.5 million on TV ads, $5 million on online advertising and $427,000 on phone calls and SMS to voters, plus so many other things. In US not only the candidates but also the media has to report its receipts from the politicians during election campaign. The TV stations and other media outlets are also required to make available their records on who booked and paid for advertising. Because of this statutory obligation, the whole world came to know the price of President Obama’s prime time ad-buys in Denver and elsewhere. Fortunately the most dishonest practice of ‘paid news’ is not there in US.

It is also reported that the US President had received over $ 632 million in candidate contributions. Question is from whom? The direct and individual donations in the US are known as “hard money”. Obama got such hard money ranging from $2,500 from Sharolyn Farmer in Stone Mountain, Georgia, to $5 from Ivan Smith in Seattle, Washington. In the US, so-called champion of democracy, political spending is considered part of political freedom of speech and expression. Hence the America does not limit the campaign spending. However, it does require quarterly reporting by candidates, parties and Political Action Committees of expenditure on travel, printing, advertising, direct mail, equipment, staff wages and much more, which means that campaign spending is at least reasonably transparent.

If by system and policy the US gave wider freedom to parties and media to spend but report, there is higher freedom in India for these two organisations by default, because none enforces the law of disclosure strictly. Out of this the demon of paid news raised its multiple heads like tetrahedron. India totally depends on ‘ethics’ and ‘self-regulation’ to control the ‘paid news’ syndrome though Representation of People’s Act has enough provisions to curb this menace. This was proved when one legislator was disqualified by Election Commission which was also upheld by the Supreme Court. If strictly the expenditure of candidates on media is accounted for, seventy per cent of members of Legislature would face disqualification. The Election Commission has neither time nor will to implement these norms.

Corporate funding
With weak and feebly enforced disclosure norms, the elections in India became the battlefield of notes versus notes for votes. Only those rich can spend hundreds of crores who get easy funding from billionaires. Except corporate giants, national or multinational, none can give such huge amounts. There is no effective law and there are no personnel to implement even those weak disclosure norms. New Zealand and Canada have put in place effective laws to limit the expenditure made by political parties on elections. But big democracies are not willing to draft laws to regulate their political parties as such a measure would affect their ‘absolute’ freedom and ‘indefinite’ authority. There is a cap on individual donations to political parties and cap is fixed even for individual candidates in Canada and US. The Canadian cap is a flat CAD$1200 while in the USA the amounts range from US$2500 for candidates up to $30,800 for national party committees, subject to an overall biennial cap of $117,000. In both of these democracies the campaigners are expected to declare all donations over $200 to their respective electoral commissions on a quarterly basis, with the USA requiring additional reports 12 days before an election and 30 days after.

In 2010 Citizens United has ruled that Political Action Committees also can take larger donations from corporations. They have to register with the Election Commissions and undertake to abide by the similar disclosure norms.

No cap on donations in UK
There are no such caps on donations in UK. However the candidates and parties have to file quarterly reports of donations in non-election years and weekly reports during the official campaign period. Only New Zealand mirrors Australia in having a system of uncapped donations where reporting requirements are limited to a single, annual return detailing donations over NZ$15,000 and AUD$12,100 respectively.

National political parties in Australia are treated as separate entities as far as reporting is concerned. Thus a donor can potentially donate up to $96,000 to Labor, the Liberals or the Greens and then it has to be publicly acknowledged.

Spending spree during campaign turns murky in these western democracies. It is stated elections in these countries are characterised with ‘spending arms race’. In an effort to limit the spending, US, Canada, the UK and New Zealand have all introduced campaign caps which limit the total amount of money parties and candidates can spend on running for office. Public reporting of expenditure is mandatory too. For instance, in the UK’s 2010 General Election, national parties could spend no more than £18 million overall, and they had to file reports showing how this was being spent.

In Australia there is no limit to how much political parties may spend. There is also no requirement for them to disclose anything about this spending. However the individual candidates are supposed to report their campaign expenditure, but the Joint Standing Committee on Electoral has stated that the vast majority of candidates indicate “nil” spending as funds are usually centrally controlled and disbursed by party headquarters. This means that the Australian electorate has no way of knowing how much money parties really spend campaigning for office. Thus in Australia there is higher freedom on spending and not reporting among other democracies. Political parties there also enjoy exemption in Privacy Act, 1988 and from misleading conduct provisions of Trade Practices Act 1974.

Expanding corporate power underneath the spending needs of political parties with the support of corrupt systems is the worrying factor. Big companies do offer big chunk of it to political party not as philanthropy but obviously for a quid pro quo. Corporatisation of political parties through hidden funding is more dangerous than criminalisation of politics. Corporates are subsidising political parties to subsidise their profit requirements.

Corporate proprietorial interests and capital interests dominate the public interest. Like judiciary and bureaucracy, the political party also should be independent. If it depends on corporates, democracy leans towards commerce at the detriment of public welfare. The corporates, which already possessed the money power, if also gained the political power, the voice of poor and not so rich sections would seriously suffer. Already certain corporate conglomerates are having a dominant influence over small republics. Most of them are stronger than several nation states. These invisible transactions will lead to long term losses posing a threat to democracy itself.

Freedom of parties to spend and corporates to donate is fine but what about free and fair elections? What about the people’s right to know? When do they vote on their own?