Tag Archives: Elections

Guest Post: Despite Serious Flaws, U.S. Safeguards Against Political Corruption Can Serve as Model for the World

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Today’s guest post is from Scott Greytak, the Director of Advocacy at Transparency International US.

As much of the world converges on Atlanta for the 10th Session of the United Nations Convention Against Corruption (UNCAC) Conference of the States Parties (CoSP), the urgent need for a renewed, reinforced, and relevant global anticorruption framework takes center stage. Among the most important issues to address concerns political finance transparency, an issue that the current version of the UNCAC does not directly cover. The United States is well-positioned to provide leadership on this issue. While U.S. laws on money in politics have failed to keep pace with America’s evolving political dynamics, aspects of these laws nevertheless can and should serve as inspirations for much of the world as it struggles with political corruption. The CoSP presents a chance for the U.S. to share its experiences and lessons learned with other countries, and to support resolutions and amendments to include commitments on political finance transparency in the UNCAC itself.

Suggesting that the U.S. can be a leader or a model on the issue of regulating money in politics may sound surprising. My colleagues and I at Transparency International US are all too aware of the many failings of American democracy, including the American approach to political finance regulation. More than in any other major developed country in the world, for example, people in the United States believe that rich people buy elections, and U.S. political finance laws are in urgent need of updating, to address persistent problems like the influence of “dark money” in elections, and the need for adequately funded public financing programs for political campaigns. But comparatively speaking, some pieces of the U.S. legal framework can serve as a useful benchmark. For instance, a survey by the Global Data Barometer Political Integrity Module and the International IDEA’s Political Finance Database revealed that of 181 countries surveyed, 100 do not have any limits whatsoever on how much money can be given to a candidate for office. In contrast, the United States has comprehensive contribution limits for candidates, political parties, and traditional political action committees (even though such limits are infamously absent when it comes to “independent” expenditure committees, or Super PACs). Emphasizing this best practice, among others, on the global stage in Atlanta could help jumpstart a much-needed exchange and collaborative approach that could raise the bar for all democratic and emerging-democratic countries.

To this end, the United States should support resolutions and amendments that require countries to enact and enforce laws that disclose campaign contributions to candidates and political parties, as well as expenditures made by those candidates and parties, in a timely and publicly accessible fashion. The U.S. can also support requirements that countries to establish and appropriately fund independent oversight bodies that monitor political spending and enforce political finance laws. The U.S. delegation can support protections for whistleblowers who call out political finance violations and can urge countries to expressly commit to sharing information, best practices, and resources in fulfillment of these commitments, and to engage with civil society closely and consistently when developing and implementing these measures.

Amidst yet another year of increasing global political unrest and accompanying anxieties, successful examples of U.S. laws can and must serve as inspirations to others. In an era of seemingly limitless challenges to democracy in all regions of the world, it is this collaboration and commitment that can fortify its foundations. A first step can and must be taken by the U.S. in Atlanta.

Public Funding of Political Parties Is Unlikely To Reduce Corruption

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Today’s guest post is from Dr. Sergiu Lipcean of the University of Bergen and Professor Iain McMenamin of Dublin City University.

Does public funding of political parties reduce corruption? Intuitively, there are good reasons to believe that it does. After all, when parties receive a substantial portion of their funding from public sources, they are less dependent on private contributions—both legal and illegal. That straightforward logic has led many scholars and prestigious organizations to recommend higher levels of public funding for parties and candidates. The Council of Europe’s Committee of Ministers, for example, recommends public funding of political parties and electoral candidates as an anticorruption measure, and the OECD, while not explicitly using the language of corruption, recommends public funding as part of a holistic system of political finance regulation to limit policy capture.

But the empirical evidence on the anticorruption impact of public funding for parties is surprisingly thin, and results that initially seem to show the sort of effect described above often turn out to be quite fragile and unreliable. We recently published our own study, which examines how the level of public funding for political parties affects enterprise managers’ perceptions of the impact of payments to government officials, using World Bank survey data from 27 post-communist countries. Although we find an association between higher public funding and lower corruption, this result is extremely sensitive to minor changes in method, and the results are too uncertain to recommend public funding as a policy intervention to reduce corruption.

We suspect that one of the reasons that empirical research has failed to find robust anticorruption effects of public funding is that many of the unlawful payments to politicians are used for their personal consumption, rather than for political purposes. As noted above, the economic logic of the view that public funding reduces corruption is that if parties can rely more on public funding for election campaigns and other legitimate political expenses, they will be less tempted to accept bribes, because they will have less need to fill their campaign coffers with dirty money. But if much of the illegal money given to politicians is used for their personal gratification, rather than for political purposes, than public funding of campaigns will not have much of an effect.

This is not to say that countries should not significantly increase public funding of political parties. Corruption is enormously damaging, and even very high levels of public funding for parties are unlikely to have much impact on most national budgets, so even the possibility that significant public funding might reduce corruption, at least in some contexts, may make this investment of resources worthwhile, even if we lack strong direct evidence of effectiveness. And of course there are many other reasons, besides anticorruption, to favor public funding of political campaigns. That said, an honest appraisal of the existing research compels the conclusion that, to date, the evidence that public funding will substantially reduce corruption is weak and speculative, and we should therefore not get too excited about its potential as a general anticorruption measure.

Anticorruption Parties in Central and Eastern Europe: Why Do They Fail, and How Can They Succeed?

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Since the collapse of the Soviet Union, Central and Eastern Europe (CEE) has seen both highly unstable party systems and high rates of corruption. As a result, lots of new parties keep popping up, and an anticorruption focus has proven to be a great way for them to get noticed. In fact, studies have found that new parties are more successful when they center their message on fighting political misconduct.

Among those that actually win, some of these anticorruption parties have been modestly successful in passing reforms. But many other anticorruption parties have floundered when in office. Part of the problem is that these parties often make lofty promises but fail to put forward actual, workable plans. Enough voters will still vote for the “anticorruption” party as a way of expressing disapproval for the incumbent government, without necessarily paying close attention to whether the anticorruption party and its leaders are willing or able to follow through on their promises. As a result, numerous CEE countries have had bad experiences with anticorruption parties that, when in office, appear to have little idea how to govern differently from their predecessors—and sometimes little apparent interest in doing so. Consider a few examples:

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A U.S. Court Just Opened a Huge Loophole in Anticorruption Campaign Finance Laws

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A New Jersey election law prohibits any “corporation carrying on the business of a bank” from donating to political parties. The New Jersey Bankers Association (NJBA), a trade group representing the interests of 88 banks in the state, challenged that law as unconstitutional. For those who follow disputes over U.S. campaign finance law, one might have expected that this case would be decided within a familiar framework: Under the Supreme Court’s well-established principle that campaign contributions are a constitutionally protected form of political speech, the restriction would only be permitted if it is narrowly tailored to advance the government’s compelling interest in preventing corruption or the appearance of corruption.

The federal appeals court’s surprising decision in this case, though, sidestepped that usual inquiry entirely. Instead, the court determined that the law in question did not apply to the NJBA in the first place. The court reasoned that the law applies only to “corporation[s] carrying on the business of a bank,” and because the banks’ trade association (the NJBA) does not itself make loans and receive deposits, the NJBA is not a “bank,” meaning the law does not prohibit the NJBA (as distinct from its member banks) from making political donations.

That reasoning is at least questionable as a purely linguistic matter. To “carry[] on” a business activity can mean both “to engage in or conduct” business oneself and “to develop [a business] beyond a stage already attained.” While a bank trade association does not do the former, it arguably does do the latter—for example, by lobbying against capital constraints that would impede the loan-making capacity of banks. But more importantly, the court’s narrow, literalist reading of the statute is inappropriate in light of its dangerous consequences for New Jersey’s efforts to restrict corruption and the appearance of corruption in the campaign finance system. The court’s ruling permits (at least for now) New Jersey to restrict banks’ campaign contributions, but allows the representative of those banks to make contributions on their behalf. That’s like saying your child isn’t allowed to reach in the cookie jar, but his friend can grab the cookie for him. This misguided decision has thus created a potentially gaping loophole, one allowing affluent industry groups to engage in campaign-related spending that would ordinarily be deemed to present such a high risk of corruption (or its appearance) that government regulation is justified.

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The U.S. Supreme Court Has an Appearance Problem: What FEC v. Cruz Got Wrong

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According to the U.S. Supreme Court, campaign contributions are a form of political “speech” and are therefore protected by the First Amendment of the U.S. Constitution. As a result, the government may restrict such contributions only if doing so serves a compelling state interest. Currently, the only interests that the Court has recognized as sufficiently compelling to justify restrictions on political spending are preventing corruption or the appearance of corruption.

Though sometimes presented as a single interest, the prevention of actual corruption and the prevention of the appearance of corruption are not the same. The reason the government has an interest in preventing actual corruption is obvious. The Court has explained the related but distinct interest in preventing the appearance of corruption by appealing to the importance of maintaining public confidence in the electoral process. If a certain campaign finance activity creates the appearance of corruption, then ordinary citizens may start to view their political participation as futile, and may lose faith in the integrity of elections. Because Congress has an interest in preventing this erosion of public trust, the government can regulate campaign finance activities that the public perceives as corrupt, even when those activities are not associated with actual corruption.

At least that’s what the Court has said. In practice, however, the Court has often failed to apply the appearance of corruption standard in a way that serves these objectives. This is nowhere clearer than in the Court’s recent decision in Federal Election Commission (FEC) v. Cruz. The case concerned a federal law that prohibited a candidate from using post-election campaign donations to repay more than $250,000 of personal loans that the candidate made to his or her campaign prior to the election. The government justified this law partly on the grounds that it prevented the appearance of corruption. After all, when a candidate uses donations to repay personal loans, the donor’s contributions go straight into the candidate’s pockets; the public could easily view such payments as fostering corruption. In support of this argument, the government pointed to a public opinion poll in which 81% of respondents thought it was “likely” or “very likely” that donors who make post-election contributions expect a “political favor” in return. Additionally, the government cited an academic study that found—on the basis of over three decades of empirical evidence—that politicians with campaign debts are “significantly more likely” than debt-free politicians to switch their votes after receiving contributions from special interests.

This evidence, on its face, would seem to support the government’s claim that the limit on using post-election donations to repay a candidate’s large personal loans furthers its compelling interest in preventing the appearance of corruption. However, the Court’s majority opinion dismissed the government’s appearance-based argument in a brief passage with relatively little sustained analysis, apparently treating the flaws in the government’s arguments as self-evident. The Court’s dismissive attitude to the government’s evidence in this case indicates a worrisome approach to the appearance-of-corruption issue more generally.

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How the Corporate Transparency Act Can Shine Light on Dark Money in U.S. Elections

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Last year, in an effort to prevent the abuse of anonymous companies by malign actors, the U.S. Congress passed the Corporate Transparency Act (CTA). The CTA requires certain legal entities, like corporations and limited liability companies (LLCs), to provide information about their beneficial owners—that is, the people who actually own or control the entity—in order to make it more difficult to operate anonymous shell companies for criminal purposes. Pursuant to the CTA, beneficial ownership information must be submitted to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and maintained in a centralized database.

Much of the fight for beneficial ownership transparency was spearheaded by anticorruption advocates, who emphasized the ways in which foreign kleptocrats and other corrupt officials use anonymous companies to hide their stolen wealth. But the CTA’s beneficial ownership transparency measures will be helpful in fighting another kind of corruption, one closer to home: the corrupting influence that so-called dark money—spending by undisclosed donors to influence election outcomes—has on the integrity of U.S. elections and American political sovereignty.

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“Elect a Government That Works”: A Case Study in Populism and Corruption from India 

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As the United States was reeling from President Richard Nixon’s resignation following the Watergate scandal, another imperiled leader—Indian Prime Minister Indira Gandhi—was fighting for her political life thousands of miles away. Although Gandhi and Nixon never got along, their stories overlap. Both barely squeaked into power after close elections in the late 1960s, but then won resounding reelection victories in the early 1970s. Gandhi’s political fortunes, like Nixon’s, took a turn for the worse shortly after reelection, in light of substantiated accusations of illegal campaign activity. But at this point, Nixon and Gandhi’s stories diverge. Unlike Nixon, Gandhi stayed the course and refused to resign. And in the end she prevailed: Gandhi was popularly elected three times with some of the largest governing majorities in Indian history.

How did Gandhi convince the public to reelect her, despite her known, widespread abuses of authority? How did a leader ensnared in scandal and corruption hold onto power to become one of the most beloved leaders in the world’s largest democracy? The answer to these questions may lie in Gandhi’s concentrated emphasis on left-wing populism. She argued to voters that she alone was most capable of effectuating change for India and its most needy citizens by enacting social programs and redistributing wealth. Additionally, Gandhi spent much of her time as Prime Minister consolidating her power within the party and the central government. This enabled much of the corruption that marked her rule but was also what allowed her to argue to the public that she was uniquely capable of fixing the nation’s problems.

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A Media Advisor-Client Privilege Would Be Inimical to Anticorruption in Israel

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The ongoing corruption trial of Israel’s Opposition Leader Benjamin Netanyahu (who stepped down as Israel’s Prime Minister in mid-June 2021 after 12 consecutive years of service, replaced by Naftali Bennett), as well as the investigations that took place before it, have triggered a wide variety of legislative reform proposals. Members of the Knesset (Israel’s parliament) who oppose Netanyahu have proposed bills that would prevent individuals with sufficiently serious prior criminal convictions from serving as the Prime Minister (which Netanyahu is planning on trying to do again), or bar certain criminal defendants from running for Israel’s Presidency (which some had formerly speculated Netanyahu may do). Knesset members from Netanyahu’s Likud Party, on the other hand, have pushed to bolster protections for criminal suspects and defendants, especially elected officials. For example, Likud members have proposed bills that would prohibit some forms of recording of public servants, or make it more difficult for the prosecution to appeal acquittals.

The fact that the criminal proceeding against Netanyahu has relied in substantial part on the incriminating key testimony of Netanyahu’s former media advisor (who became a “state’s witness” in 2018) is the likely (though not explicit) motivation for another recently proposed bill that would establish a “media advisor-client privilege,” according to which “matters and documents exchanged between a media advisor or a spokesperson and his [or her] client [] and which have a material relation to the services provided” could not be submitted as evidence unless the client waived this privilege. In other words, media advisors or spokespersons would generally be barred from testifying against their clients. The bill’s drafters argue that a media advisor-client privilege is justified for reasons similar to that of an attorney-client privilege—the need for “complete openness” between clients and their media advisors or spokespersons.

The impulse to resist the proposed media advisor-client privilege is understandable, given its seemingly blatant relationship to Netanyahu’s trial and the fact that its protection would be afforded to a very narrow class of powerful and wealthy criminal defendants. However, even though we should sometimes resist the impulse to oppose criminal justice reforms whose proponents have questionable motives, in this case even when considered independently from its problematic context, the proposal for media advisor-client privilege raises at least three strong anticorruption concerns that warrant its rejection:

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Sunday’s Election Will Not Be Peru’s Reckoning with Corruption

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It has been a dramatic five years in Peru since the last presidential election.

A series of standoffs between the executive and legislative branches have seen one dissolution of Congress and three attempts at impeachment of the president. Two former presidents have been arrested for their involvement in the Odebrecht corruption scandal, and a third committed suicide moments before the police arrived to arrest him. Keiko Fujimori, the opposition leader and two-time presidential runner-up, was arrested for corruption, released, and is now running for president once more.

This turbulence came to a head last October, when Peru was engulfed in its biggest political crisis in a generation. Martín Vizcarra, the former president who had served for two and a half years since Pedro Pablo Kuczynski resigned in 2018 in the face of a vote-buying scandal, was himself impeached by Congress following credible but unproven allegations that he had accepted bribes earlier in his career. Congress appointed Manuel Merino, the president of the Congress who spearheaded the campaign to impeach Vizcarra, as interim president. Peruvians, outraged at the abrupt removal of a president who enjoyed considerable public support for his commitment to anticorruption reform, took to the streets to protest. They were met with police violence, and two young Peruvians were killed. Merino relented, resigning the presidency after a five-day tenure, and Congress appointed Francisco Sagasti – a moderate who had voted against impeaching Vizcarra – to serve out the final months of the term until the April 11 election.

The magnitude of the public’s mobilization against Merino’s interim presidency was seen by many observers (myself included) as a decisive turning point in the Peruvian people’s willingness to tolerate a corrupt political class. The country’s public health and economy have been ravaged by Covid-19. If there were a perfect moment for a meaningful anticorruption movement to sweep from the bottom to the top – for Peruvian voters to have a sort of “day of reckoning” with systemic corruption – April 11 seemed like that moment.

But now, on the eve of the election, this reckoning looks doubtful to arrive.

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Guest Post: Do More Candidate-Centric Electoral Systems Help Reduce Corruption?

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Today’s guest post is from Rumilda Cañete-Straub, Josepa Miquel-Florensa, Stéphane Straub, and Karine Van der Straeten.

Although many people hope and expect that regular elections will help reduce corruption, this is not always the case: In many democracies, voters elect and reelect corrupt politicians. Why is this? Scholars have suggested that the efficacy of electoral democracy in reducing corruption depends on specific features of the electoral system, and the information available to voters. With respect to the electoral system, a common view is that electoral rules that give voters more formal control over individual candidates—such as primaries in majoritarian systems or open lists rather than closed lists in proportional representation (PR) systems—are more effective in reducing corruption. With respect to information, the conventional wisdom holds that providing voters with more information should help them identify corrupt politicians, thus increasing the chances that those politicians will be punished at the ballot box.

In our recent article, we present findings that challenge both aspects of this conventional wisdom. We focus on the comparison between closed-list PR system (in which voters vote only for a party, with the individual candidates elected depending on their position on the party’s list) and an open-list PR system in which voters can vote for any number of candidates on the list, without any constraint. Continue reading →