The Central Information Commission (CIC), on June 3, 2013, stated that political parties are “public authorities” under the Right to Information Act, 2005 (RTI Act). Public authorities under the RTI Act are required to make pro active disclosures regarding their organization and its functioning. In addition, they have to appoint Public Information Officers (PIOs). Members of the public can write to PIOs as per the procedure under the RTI Act, and get any information about that public authority which is not an official secret. The CIC’s decision has been uploaded here: CIC_order.
While I am an ardent supporter of greater transparency into the working of political parties, I do have reservations about the CIC’s decision. In this post, I intend to address one such reservation: information asymmetry. The RTI Act gives individuals the right to receive information from public authorities. However, it does not mandate that such information received should then also be further shared with a wider public. Therefore, if I receive some information from a political party under the RTI Act, I have the right to not share such information with anyone else. Therefore, there is an asymmetry in information between me, and every other member of the public, who would also be interested in this information. How I choose to use such information is then up to me.
I am of the opinion that this asymmetry in information is not an issue when citizens seek information from government departments about ration cards and electricity bills. Those pieces of information pertain to individuals, and there is nothing to be gained by making such information public to all. However, the chief concern about political parties are these: (a) their sources of funding, (b) their manner of expenditure, and (c) how they use any public money/subsidies given to them. This information should be provided to everyone freely. It should not be left to an individual applicant to file an RTI application to get this information. Therefore, it would be much better if the Election Commission frames rules requiring disclosure by political parties of all their sources of income and their utilisation of public funds.
Given below are excerpts from a book titled “Funding of Political Parties and Election Campaigns” which show how parties are funded, and what reporting requirements exist in some other countries around the world (The information given below is copied directly from the linked document). In light of these, I would be very interested in hearing your thoughts on the same. Please feel free to comment and respond.
Sources: Donations are the modal source of political financing in Africa. The major sources of funding remain big business leaders or corporate elites.
Indirect funding: Free air time on radio and television or free advertising space in the publicly-owned print media. Inmany African countries the opposition parties have been too weak and divided to succeed in extracting from the government even the most basic aid the state can give to political parties, namely, free and equal access to the government-owned and -controlled mass media. In Kenya it took the threat of a lawsuit and the personal intervention of the visiting SecretaryGeneral of the Commonwealth to secure equal access for the opposition parties – 90 seconds per day “paid up” advertising on Kenya Broadcasting Corporation’s radio and television, and live coverage “where possible” of their rallies.
Disclosure requirements: Parties must publish both the names of donors and the exact amounts of their donations when they amount to GBP 5.000 (Int’l $ 6.900) or more annually, or GBP 1.000 (Int’l $ 1.400) at the constituency level. Under the new law, audited annual accounts of parties’ income and expenditures will have to be delivered to the Electoral Commission within six months of each year’s end.
Indirect funding: In the UK free broadcasting time is conventionally allocated to parties both during election campaigns and between elections by the BBC, and on a voluntary basis by commercial channels, which consider it a public duty.
Disclosure requirements: At present each party’s agent is required to give detailed information in their annual report of transactions of an aggregate of AUD 500 (Int’l $ 330) or more with persons or organizations.For those over AUD 1.500 (Int’l $ 1.000), names and addresses must be supplied. Non-monetary donations (subsidies in kind by private donors), such as loans of company cars or business jets, must also be included, with a market price equivalent.
The parties must disclose totals of their receipts, payments and debts. The annual reports, covering the period from 1 July to 30 June, must be lodged with the AEC by 20 October. Although they are not published they become available for public inspection at the AEC offices from 1 February of each year.
Indirect funding: In Australia free media time has traditionally been provided by state-owned radio and television services for policy speeches (which correspond to a party election manifesto) and advertisements, and by commercial radio and television stations for policy speeches. In Australia donations up to AUD 100 (Int’l $ 67) by individuals are tax-exempt.
Disclosure requirements: In Canada the source and amount of contributions over CAD 200 (Int’l $ 160) have to be disclosed. Individuals will be mentioned by name and the amount donated stated. Privacy concerns, however, mean that the address, employer and occupation of the donor and even the date of the donation are not included in the information disclosed on contributions.
The chief agent of a registered party has to transmit to the Chief Electoral Officer (CEO) an annual return of the party’s receipts and expenses (other than election expenses) within six month of the end of the fiscal (i.e., calendar) year. In addition, within six months from the date of a general election the chief agent must file a return of the election expenses incurred by the party.
Indirect Funding: In Canada radio and television stations have to make up to 6,5 hours of prime time available for paid advertising or political broadcasts by the parties during the last four weeks of the election campaign. In Canada federal and provincial tax credits for political donations and legal provisions for issuing tax receipts have supported efforts to solicit small donations from individual citizens and small businesses
Sources: In the USA stipulations of the FECA and decisions of the Supreme Court have distinguished between “hard money” – money directly given to a party, an issue or a candidate’s committees – and funds which are raised beyond the limits set by the FECA – “soft money”. The domain of “soft money” was extended considerably when the Supreme Court, on various occasions, lifted the ban on certain contributions. Contributions by individuals are the most important source of income for US federal parties. Legally these contributions belong to the category of hard money, i.e., they go directly to a candidate’s campaign committee for use at its discretion.
Disclosures: Disclosure is at the heart of public supervision of political finance in the USA. The FECA requires candidate committees, party committees and other PACs to file periodic reports disclosing the sources of their funds. Candidates must identify, for example, all PACs and party committees which gave them a contribution. All committees must identify individuals who gave to them more than USD 200 in one year. With respect to independent expenditures the FECA requires persons (and parties since 1991) making such independent expenditures (soft money) to disclose the sources of the funds they used, although there are no limits on independent expenditures.
All candidate committees, party committees and other PACs are obliged by the FECA to file periodic reports on the money they raise and spend. In addition, candidates or candidate committees must report all expenditures exceeding USD 200 per year to any individual or vendor. Persons and parties undertaking independent expenditure (soft money) have to report the amounts of their expenses, even though there are no limits on independent expenditures. All reports filed are open for public scrutiny at the FEC, a public agency.