State Funding of Political Parties: Why the Rush?

Raise the Ethics and Accountability Bar First.

By: Ofosu-Appiah, Ben,

State funding of political parties is a controversial issue which has generated heated debates elsewhere because of the added implication that state funding means taxpayer's funding and that money could be better channeled elsewhere. Currently the issue is under debate in countries like Britain and New Zealand. In Ghana, somewhere in 2001 the issue was raised by the then NPP administrationand as recently as last week the President, John Attah Mills was said to be committed to state funding of political parties by the deputy minister of local government, Elvis Afriyie Ankrah.

Obviously there are some sections of soceity who are against the idea. They are of the opinion that taxpayers money for funding political parties could be channeled into improving educational facilities, and other social infrastructure of the country. There are some who see state funding of political parties as an euphemism for providing unemployment benefit and pension for some unemployed politicians and retirees.

Politics and Money Politics need money but somehow the money gives the impression of corrupting politics. Without money political parties simply cannot do their job. It is very important that political parties raise the money they need for their political activities from their members and supporters because it has been found out that, that keeps them active and in touch with the people in the constituencies but will they be able to raise enough money through membership dues alone? The answer is obvious no. That leaves room in present day politics to political donations which is currently unregulated in Ghana. This is even more dangerous to the health of our infant democracy than using tax payers money to fund political parties in a regulated way.In the run up to the last three elections (2000, 2004 and 2008 ) in Ghana, there were speculations and rumours of certain political parties and individuals soliciting for funds and receiving same from foreign sources.

This is tantamount to mortgaging the interest of the party in question and the state (if the party wins the elections) to foreign interests. And it is apparent that the party in power in African politics fraudulently uses state resources to fund its political activities always giving it an edge over its political opponents. This creates an uneven playing field. Besides without state funding, political parties in Ghana can accept and they do accept tainted donations from business interests and individuals with money but questionable backgrounds. In fact this practice has brought a stench into politics and politicians need to clean up their act because it creates the impression that parties can be bought and that influence in government is for sale.Dr. Ruth Lee of the British Institute of Directors has stated " It's fairly clear that some business people do contribute to political parties because they do expect favours, whether it's contracts or grants or whatever, in return for the political donations they have given to those parties". In Ghana this translates into award of contracts behind the scenes without competitive bidding subverting all laid down administrative and procurement procedures, and unregulated access to the corridors of power. This does not augur well for democracy.

Checks and Accountability

State funding of political parties is usually linked to controls on other sources of finance and this can be argued to be beneficial since financial resources should not be thought to determine the outcome of elections. I think the only system under which political parties can be held properly accountable is state financing within set limits on political expenditure, advertising, and political donations, and to prevent political parties from being seen to cut deals with business entities. A more level playing field should be created for the smaller, disadvantaged, and less endowed parties.

Given our own peculiar circumstances, our HIPC status, and our tendency to abuse any system (no matter how well intentioned the system is), and to prevent any group of riff-raffs from setting up a "political party" for the purpose of securing money from the state, this has to be done with extreme caution and in a transparent manner with lot of controls and clear guidelines. To this end I would like to offer some ideas for consideration:

Modalities

Already the Political Parties Law defines what qualifies to be called a political party but for the purpose of receiving funding from the state I would like to add the it must have a national structure and must intend to field not less than 10 candidates in a parliamentary elections. Candidates so fielded must receive or must have received not less than 5% of the votes cast in their respective constituencies to qualify for state funding. A presidential candidate must receive or must have received not less than 5% of the votes cast nationally and so declared by the Electoral Commission to qualify for state funding.

Funding shall therefore be based on number of seats got in parliamentary elections and the percentage of votes cast in favour of a presidential candidate in presidential elections.State funding of political parties shall be carried out from the National budget in a procedure established by an Act of Parliament and the funds allocated by the national budget for state funding of political parties shall be transferred to a special account determined by the Electoral commission at a credit institution with the concurrence of the Bank of Ghana.

Modalities on how payments are to be made to political parties and how much is to be paid shall be worked out by Parliament, the Electoral Commission, and a Commission of all registered political parties with the agreement of the Bank of Ghana but shall not exceed 0.5% of the GDP or 1.5% of all tax revenue which one is small.

Checks and Controls With state funding of political parties in place, Parliament can then move to set limits and controls on political donations and political expenditure. Political parties which receive political donations from individuals and businesses must be under full obligation to provide the full name and address of the donor, if the donation is made in kind, its value must be given, the date the donation was made and received, the organization within the party the donation is for.

There must be outright ban on anonymous donations to political parties in excess of one million old cedis(US$100) by individuals and in excess of five million old cedis (US$500) from business entities. There must also be a total ban on foreign funding of political parties. I know there is a problem of defining a foreign source but those who are registered voters and those entitled to vote are eligible to make political donations. This means Ghanaians abroad are qualified. Foreign companies incorporated in Ghana, joint ventures are also qualified under my proposition.

Registered political parties should not accept a donation unless the party has established beyond its reasonable satisfaction that it is made by a permissible donor. Only donations from a permissible source must be accepted and all such donations should be reported to the Electoral Commission (more on this later). To prevent undercover political donations, criminal sanctions shall be imposed on deliberate acceptance of donations from a source outside the definition of a permissible source, and the party or the candidate concerned be liable to forfeit that sum. Parties will have 30 days from the date of receipt of donation to undertake any necessary enquiries about the bona fide of a donor.

There must be full public disclosure of donations including donations made in kind totaling 10million old cedis (US$1000) or more to the national secretariat or 5million old cedis(US$500) or more to the regional secretariat or 2 million old cedis(US$200) or more to the constituency office of a political party in any one year from one person or source. Multiple donations to different constituencies or to the National, or regional or constituency offices cannot be made.To prevent fraudulent accounting and the cooking of the financial books to provide slush funds for political activities and to prevent sleaze and corruption, the national treasurer of all registered political parties will be under duty to ensure that proper accounting records are kept.

Keeping Proper Accounts

A political party and its regional branches and constituency branches shall file financial accounting reports to the Electoral Commission and the Internal Revenue Services. National Secretariats shall submit quarterly financial reports to the EC, regional branches shall submit bi-annual financial reports to the EC, while constituency branch offices submit annual financial reports to the EC. Every year not later than Dec.31st.a political party shall file a consolidated financial report with the Internal Revenue Services copied to the EC indicating sums received and disbursed by the political party in the accounting year.The consolidated financial report of a political party shall contain information about the sources and amounts of funds received to the accounts of the political party and its regional and constituency branches, about disbursement of these funds and about the property of the political party, with indication of its cost and registration data.

Amounts spent by the political party and its regional branches on the preparation and conduct of elections in an election year shall be recorded separately. All political parties will have their accounts audited by independent auditors appointed not by the government but by the Electoral Commission. Again all political parties must be under obligation to publish their end of year financial statements in the print media. Their audited accounts must also be made public for the taxpayer who finances their activities one month after the completion of the auditing and submission of audited reports to the EC.

Prosecute Fraudulent Cases

The EC can then refer any fraudulent cases not to the AG's office but the Serious Fraud Office (SFO) for prosecution. The SFO must be strengthened and made independent to prosecute cases of serious fraud against the state. This will prevent the situation where the AG office will refuse to prosecute cases against the government and the party in power.Now to answer the question posed as the title of this article, I would like to make reference to British voters when asked the same question by the Guardian: 51% answered yes, 41% answered no, and 6% weren't sure. In Ghana, people are poorer, and the country is already a HIPC with a crumbling economy, so we need to institute a water tight system of probity and accountability first before we ever think of throwing tax payers money into a bottomless pit. The point is that if we are able to put adequate safeguards in place (some of which I have enumerated above), state funding of political parties will help cut sleaze (corruption) in politics and make political parties and politicians more accountable to the people whose tax cedis support their activities.

To this end I think most Ghanaians will be willing to make extra sacrifices to bring some sanity in the body politic.

Ben Ofosu-Appiah Tokyo, Japan.

The Author is aPublic Policy Expert, Senior Political and Social Analyst and also a Policy Strategist based inTokyo, Japan. He welcomes your comments and criticisms.

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