Check sources of political funding

By Vision Reporter

AS Uganda makes further progress in the democratisation of the country, it is critical that the issue of political party funding is discussed and appreciated scientifically.

AS Uganda makes further progress in the democratisation of the country, it is critical that the issue of political party funding is discussed and appreciated scientifically.

Funding politics has benefits and costs. These should be very well understood to provide a basis for decision-making.

Political financing has vital effects on the health of democracy. Competitive elections require considerable sums of money.

Candidates and political parties need money to print election materials and organise meetings, among other things.

The current debate about the NRM funding its supporters in Parliament for mobilisation provides the attention required to get people to focus on this subject.

Contrasting methods of regulating and subsidising of election campaign and party organisations are to be found. There is no consensus either among political scientists or among politicians about what constitutes best practice. No single set of laws and no single method of subsidy is likely to suit every nation.

Domestic funding of politics
In this country during 1960s and the 1980 elections and political contest, every party and individuals raised their own electoral resources without any significant state help.

In the Movement political system, there has been more equitable consideration for electoral funding. Presidential candidates in both the 1996 and 2001 elections were each given, out of state funding, the following facilities:

  • A brand-new four-wheel drive vehicle.
  • State security
  • A cash subvention of sh8m
  • The candidates were also, by law, required to provide returns as to how much money they had spent in the campaigns. The candidates were barred from obtaining funding from states believed to be hostile to Uganda.

    External funding
    The issue of funding politics is now topical worldwide.
    In the UK, the government gives regular subventions to political parties. The parties, however, also raise their own resources from members and from the wider private sector.

    In both USA and UK, financing of the political parties remains a dilemma. There are questions of patronage, access to contract awards and undue influence to policy generation. There are now Acts of parliaments to regulate registration and funding of political parties in many democracies in the west.

    In the case of developing countries, there are concerns that developed countries and big multinational companies could subvert states through political party funding.

    There are both formal and informal mechanisms used by developed countries in Europe and America to assist funding development of parties in poor developing countries.

    Last year, I attended the Uganda North American Association Convention in Boston. During the meetings, I met a three-man delegation headed by Dr Richard Otto, the president of the USA DP Chapter. Among other things, he told me he worked to raise funds for the DP within the USA.

    The International Republican Institute (IRI), a USA organisation has now set up a base in Uganda. The representative in Uganda has informed me that approximately US $1m will be available to assist in the democratisation process in Uganda. IRI has so far tried to play fair to all political forces in the country. I have told them it is critically important they do not and are not perceived to influence the politics of Uganda against the aspirations of Ugandans.

    These are only two illustrations of how the American society plays a role in financing politics in developing countries.

    In respect to the UK, I will give the example of the funding mechanism using the Westminster Foundation for Democracy (WFD). WFD is an independent public institution funded by the UK Government.

    According to its mission statement, it works to achieve sustainable political change in emerging democracies. Its programmes are centred on its capacity to undertake party development work through the Westminster political parties. Priority in its activities is given to Eastern European and African countries.

    Half the work of WFD is delivered through the Westminster parties. UK political parties work directly with their partners around the world using this money. For example, the Labour Party usually partners with labour/socialist or leftist parties in other countries.
    Other international organisations directly involved in politics in the country include but are not limited to:

  • Friedrich-Ebert Stiftung (social democrats),
  • Konrad-Adenauer-stiftung (Christian Democrats)
  • Foundation for African Development.
  • It has been observed that when a previously troubled country is preparing for first multiparty elections, international donors rush to donate money not only for electoral administration, but also for political parties themselves.

    However, it should be noted that foreign funding of elections could be associated with serious uncertainties. These intensify during a second or subsequent election. The international tap begins to flow less generously.

    Parties, which have become dependent upon expectations of foreign cash have failed to prepare for the time when this source dries up.

    The costs that must be guarded against in funding of politics include:
  • External negative influence
  • Use of money obtained by international organised crime syndicates, including drug traffickers.
  • Patronage access to contract awards and tax concessions.
  • Undue influence to policy generation.
  • The cost of foregoing other uses to which the money could have been put.
  • There are two methods used worldwide, either separately or in combination, to control financing of politics.

  • Grants to party groups in the legislature or to individual legislators for research assistance or other facilities (though not officially a form of political subsidy, a proportion of such money tends to be used for partisan political purposes)
  • Direct financial payments to parties or candidates from public funds
  • Tax reliefs (income tax reliefs, tax credits, matching grants and other forms of tax remission on political donation
  • Free or subsidised access to television and radio for candidates and parties
  • Other subsidies-in-kind (for example, free postage for election literature, or free use of public buildings or poster sites)

  • Legal regulation consists of a range of activities and below are some examples:
  • Ban on corrupt electoral practices.
  • Financial deposits for candidates, intended to deter frivolous candidates.
  • Disclosure regulations-requiring parties and/or candidates to submit for official scrutiny and /or to publish financial accounts.
  • Limits on campaign expenditure, for example, ceilings on permitted spending by each candidate for Parliament, ceilings on spending presidential candidates and by each of the national party organisations
  • Contribution limits (restrictions on the amounts an individual or corporation is permitted to donate to an election campaign or to political party)
  • Ban against certain types of contribution (for example, foreign contributions or donations by corporations or trade unions) When it comes to formulating regulations and subsidy systems, the issues of penalties and of the responsibilities and financing of enforcement agencies are crucial.

    Experience shows that without local experts in each country, including investigative journalists and electoral administrators as well as scholars, the problem of political financing are likely to be ignored or to be misunderstood.
  • The field of political financing cannot be viewed in isolation.

    Solutions to difficulties relating to money in politics often require a combination of actions concerning press freedom, money laundering and other anti-corruption measures as well as reforms related narrowly to campaign and party funds. Equally, anti-corruption measures must include political funding controls and subsidies.

    The cases of Uganda and the United Republic of Tanzania show some practices on the ground.
    Tanzania's law in part provides that every political party, which has been fully registered, shall:

  • Maintain proper accounts of the funds and property of the party
  • Submit to the registrar an annual statement of the accounts of the party audited by a registered and authorised auditor under the Accountants and Auditors (Registration) Act and the auditor's report on those accounts
  • Annual declaration of all the property owned by the party
  • The registrar shall publish in the official gazette an annual report on the audited accounts of every party
  • Shall disclose to the registrar information relating to any funds or other resources obtained by the party:
  • From sources outside the united republic, whether obtained directly or through sources within the United Republic;
    From foreign organisations stationed within the United Republic; or
    From any person resident in the United Republic who is not a citizen of the United Republic.
    In respect to public funding the law provides that the Government may grant to parties up to no more than 2 per cent of the annual recurrent budget, less the amount payable in defraying the national debt.

    The formula for sharing the government grant is also provided in the Law. The main elements of this provision are:

  • Fifty per cent is distributed among the qualifying parties in proportion to the seats won in the parliamentary race.
  • The balance of 50 per cent of the grant is disbursed amongst qualifying parties each of which won not less than five per cent of all valid votes cast in all constituencies in the republic and is distributed in proportion to the total valid votes that each party won in the whole country in the parliamentary race.
  • In Uganda, besides what I have already referred to, the Political Parties and Organisations Act provides that the Government may contribute funds or other resources towards the activities of political parties and organisations.
    This issue of political party funding was also a subject of discussion in the Government consultations with the political forces early this year.

    The recommendations on this matter were as follows:
  • The parties agree that there should be Government funding of political parties and organisations.
  • The parties agree that the criteria for eligibility for such funding initially be registration as a political party or organisation. After the first multiparty elections, eligibility should be according to representation in Parliament or local government councils or the percentage of votes obtained in parliamentary or local government elections.
  • Parliament should make a law on how to appropriately effect the recommendations.
  • The Political Parties and Organisations Act restricts funding from sources specified below to no more than 5,000 currency points annually.
    These sources are:
  • A non-Ugandan citizen
  • A foreign Government or diplomatic mission
  • A non-Ugandan non-governmental organisation, registered in Uganda under the Non-Governmental Organisations Registration Statute, 1989.
  • Among the other provisions made by this law are:
  • The Registrar-General may, in writing, request an officer of a political party or organisation to furnish, for inspection, records required to be maintained under this Act or such other information as is reasonably required by the Registrar-General to enable it ensure the provisions of this Act are complied with.
  • A political party or organisation which receives any contribution, donation or loan in accordance with Para 6.4 above shall report to the Registrar-General the acceptance of the contribution, donation or loan within 21 days after receipt.

  • Conclusion
    The Political Parties and Organisation Act has made a good start in providing for control of funding of politics. This initiative should be consolidated. Those political parties and organisations which are refusing or delaying to register should be viewed with suspicion.
    I believe one reason they are dodging the law is fear of accountability as required by the law.
    The Uganda People's Congress, the Democratic Party and other political parties have been raising and spending money but to whom are they accounting?

    While it is legitimate to ask the NRM to account, we should, at the same time, not ignore the other political players and the apparently uncontrolled foreign funding of politics in the country. We now have the opportunity to bring everyone under the control of the law.
    The Speaker of Parliament, Edward Sekandi has, in consultation with us and with the assistance of the British High Commission, set up a broad-based committee within Parliament to further examine this question of political party funding. Ben Wacha heads the committee.
    It is expected the committee will assist the country to refine the current provisions in the country in respect to funding politics.
    I wish to encourage members of the public to take advantage and give their views on this very critical matter. There is also the vibrant and though sometimes anarchic Ugandan press to take advantage of.

    The writer is the National Political Commissar

    Check sources of political funding