Why improving political finance systems must be high on 2023 UNCAC conference of state parties agenda.
SecretsKnown reiterates Transparency International’s call for UNCAC Conference of State Parties (CoSP) action on measures to enhance transparency of the funding of candidates and political parties.
Transparency International’s call points out that the opacity of political finance is a threat to democracy and integrity, as indicated by a growing body of evidence. And campaign finance is the weakest area of electoral integrity in the world. Countries where political finance disclosure requirements either do not exist or are not enforced perform 50% lower in controlling corruption. This situation has been worsened by loopholes which lessen the reliability of financial information reported or published and create incentives for political corruption, state capture, organised crime, or foreign interference. Some of the regulatory loopholes include;
- Largely inadequate timeframes for reporting and disclosure of campaign finance, which prevents citizens from making informed voting choices;
- Most countries that allow companies to make donations, do not require the disclosure of beneficial ownership, or the link to physical persons;
- High thresholds for anonymous donations, or largely unregulated donations in cryptocurrencies and other crypto assets without open ledger or unsupported by a central bank;
- Extensive lack of regulation of third-party financing of activities to influence electoral outcomes, which makes them an attractive conduit to circumvent bans, donation caps, and spending ceilings;
- Most countries lack parameters to determine the monetary value of in-kind donations;
- Spending on digital platforms that publish and deliver online political advertising remains mostly unregulated and unreported;
- Most countries have inadequate systems in place (e.g lack of standardised itemised formats, digital solutions) for bookkeeping, reporting and disclosure of political finance;
- Nearly half of countries do not require political parties, candidates, and third parties to handle cash flows through banking systems (most countries in Africa and Oceania, around a third of Europe, Americas and Asia);
- Less than a third of countries have endowed oversight agencies with sufficient mandates to detect unreported financing the most effective powers and capacities to detect unreported flows (warnings, red flagging, data interoperability, referrals for investigation; requests of information and information sharing mechanisms with other agencies, etc) that build on or draw from existing infrastructures for anti-money laundering, tax evasion and other financial enforcement.
All the aforementioned loopholes won’t be addressed, if there are no deliberate global anti-corruption efforts beyond legislation on improving the quality of political finance systems. Therefore, as the Tenth Session of the UNCAC CoSP takes place on 11th-15th December 2023, SecretsKnowns also makes a clarion call on the need to take action on measures to enhance transparency of the funding of candidates and political parties as stipulated in Article 7 (3) of the United Nations Convention Against Corruption (UNCAC) which calls on countries “to consider taking appropriate legislative and administrative measures… to enhance transparency and funding of candidates for elected public office and where applicable, the funding of political parties”.