“Political Party Funding”, an article by Dr. Leonel Fernández

July 21, 2017

In recent weeks the Bicameral Commission of the National Congress has progressed to a pace in its knowledge of the Political Association and Party Bill that it has entered into its more controversial aspects.

Among these is the debatable area of political association and party finance, which appears in Title 5 of the aforementioned bill, spanning articles 53 to 67.

Regulations on political party funding are controversial due
to the role played by money in political democratic or electoral rivalries.

Although in some countries of Latin America, such as Uruguay and Costa Rica, mechanisms of regulation had been in place for the use of economic resources in the political arena since the first half of the 20th century, it has been in actuality only since the end of the 1970s that the tendency towards financial regulation of political parties was developed during the regional transition to
democratic political systems.

In this way, in the middle of a great debate, the possibility of using public funds to finance ordinary activities of political parties and electoral campaigns was brought about. In the beginning, there was a certain reticence to proceed along these lines – many maintained that it was unjust to use public resources for the benefit of political institutions which had not fully gained the confidence of the public.

However, only in retrospect did the populace come to understand the necessity and importance of public financing in political activity, due to the power and influence that could be derived from exclusively private sector financing.

Thus, in that way, the criteria of combining public and private financing came about, establishing the dual nature system or mechanism which remains predominant in the majority of Latin American and Caribbean countries.

What has been contemplated during the last two decades is the regulation of the way in which parties receive their income and how it is spent in a legal, equitable, just, transparent manner which is susceptible to accountability and sanctions in the case of violation of norms.

Naturally, in spite of these criteria there does not exist in Latin America nor in any part of the world a legislation of universal character which can serve as a pattern of
reference to all others. What we have instead are diverse laws or norms which adjust to specific conditions in each country and which achieve their goals through the aforementioned values and principles.

Limits and Prohibitions

In order to receive public funding, a political organization generally must attain a certain minimum percentage of votes, which tends to be no less than 2%; or it must have achieved
representation in either the National Congress or Municipal Government.

Provoking reflections around the equity or justice with which public funds are disbursed, it has been suggested that distribution should be made in equal quantities for each party. This would mean that large political parties would receive equal amounts as small political parties – which could be considered inappropriate because small parties do not have the same level of
representation as do large parties.

Consequently, instead of the criterion of equity being the deciding factor, the idea has been devised that what’s really appropriate is a distribution in quantities proportional to the number of votes obtained in the most recent electoral competition; or a combination of the two methods.

Insofar as private contributions, concerns reside in determining their origin or provenance; the quantity
which can be contributed; prohibitions from receiving certain types of contributions; institutions in charge of supervising fulfillment of regulations; and sanctions to be established in the case of violation.

The interest that may exist with respect to the origin and provenance of these resources is obvious. The desire is to avoid the influence of organized crime in electoral processes, and therefore, the possibilities to influence future state authorities.

The same can be said concerning the quantity or amount contributed. Some think that a high-value contribution could imply the purchase of the future public servant’s goodwill, or be a potential exercise of influence peddling. Others, notwithstanding, believe that with private contributions, what the donor seeks is to gain access to the authorities to prevent eventual abuses of power by subordinate public servants.

Though only some
legislations limit the quantity able to be donated by a private entity, all legislations, however, coincide in prohibiting donations from foreign governments. This is a crucial point due to the fact that accepting donations from foreign governments is equivalent to interference in the domestic affairs of a country and constitutes an attack on its sovereignty.

In the same way, some laws prohibit foreign individuals or businesses from making contributions to political
parties or electoral campaigns. But this isn’t universal; in many countries it is permitted and therefore not considered an illicit practice.

The Dominican Project

The current bill of political party law being examined by the Bicameral Commission of the National Congress proposes a mixed system, public and private, of political party and association finance.

It will be up to the
Central Electoral Board to administer the distribution of state funds to political organizations. However, it remains prohibited that any other state institution, whether it be a Ministry, a decentralized organization, or local government to provide funds, whether directly or indirectly, to a political party or association.

If the bill is approved, 80% of the public funds destined for political party funding will be distributed to the parties according to the votes
they attained in the last election; and 20% will be distributed in equal portions among all political parties, including newly-created ones.

That said, 50% of these resources will be earmarked to cover operational and administrative costs; 15% will cover education and training costs for members of the political organization; and 35% are destined to support internal processes of the organization, such as the selection of managers, its primary elections, and
candidates for popular elections.

Insofar as contributions made by private individuals to parties and candidates, they cannot exceed 1% of the amount of public funds apportioned to the party which received the most public funds. This means that, for example, if the Central Electoral Board appoints RD$700 million to its largest political recipient, individual contributions to parties can be no later than RD$7 million.

In the United States,
these types of limits to private contributions have been subverted via the creation of Political Action Committees, which are able to directly invest in the party’s campaign; and are prohibited only in the direct distribution of funds to its candidate.

Following the majority of legislation from Latin American and Caribbean countries, our bill considers as illicit contributions those coming from foreign governments, from individuals or legal entities linked
to criminal activities, funds whose provenance or origin cannot be determined, and those from individuals who have been pressured to contribute against their will by their hierarchical superiors.

Our bill proposes for the Central Electoral Board to create a specialized financial control unit for political parties which will have among its functions the responsibility to supervise political party finance as well as relevant expenditure ceilings.

Likewise, when there has been misappropriation of funds from the political organization or diversion of funds to a destination outside of the limits established by law, it proposes sanctions for political parties and associations which range from setting fines equal to 100-200 times the minimum wage to the imprisonment of convicted members.

Upon the Bicameral Commission of the National Congress’s arrival at the final phase of its study and evaluation
of the Political Association and Party Bill, its approval will become the main tool to guarantee the transition to a new age of democracy in the Dominican Republic, which will be defined by higher citizen participation, greater institutionalization of political parties, better training of party members, and more transparency in the use of economic resources.