Transparency in political party financing
Political party funding for campaigns and all other activities need to be regulated unambiguously – with violations closely monitored and heavily penalised so as to eliminate corruption.
Political party funding for campaigns and all other activities need to be regulated unambiguously – with violations closely monitored and heavily penalised so as to eliminate corruption.
Political parties are crucial for democracy and governance. The Maldives' registered its first political party in 2005, with the Maldivian Democratic Party registered on 26 June 2005. Since then, 9 more parties have been registered.
The Elections Commission, in its 2020 Annual Report, said that two more parties had been given approval to start the process to register a party in 2020. Two more parties, the Maldives National Party and the National Solidarity Party were given approval to start the process in July and August 2021, respectively.
Political parties need funding to finance their activities and campaigns. However, if the sources and use of funds raised are not regulated, it creates the motive for corruption. It also makes it harder for voters to make uninfluenced decisions. Increased pressures to raise funds leads to increase in the power of pressure groups over the political party – instead of the public or voter interest, the party will tend to, or be, influenced to prioritise the interests of the donor; money matters and those who 'donate' more matters more.
This makes it critical, in the interest of the public, to regulate the sources and ways of raising money to fund political party activities. There are two ways of doing this: through regulations that impose limits and bans and require disclosure; and through the provision of financial subsidies, either through a direct contribution from state coffers or other concessions such as mandating access to state media on an equal footing for all parties.
Political financing in the Maldives is covered under various laws to include both party and campaign financing. The Political Parties Act 2013 stipulates that parties can raise financing through members or well-wishers, government subsidies, from business transactions, fund-raising campaigns, and through debt. It also requires the party to maintain a register of the donor, their address and details of the assistance provided.
It further bans accepting any funding from foreign government, organisations, institutions or any other foreign party, or anonymous donors, unless express written approval is sought from the Elections Commission.
Interestingly Article 42 of the Act states that the income and expenditure of the party must be known to all members of the party. However, a cursory glance through the websites of the three largest parties show that none of this information is made public. There are also no limits on party financing being used for election campaigns, nor any requirements to submit reports on this to relevant authorities.
The General Elections Act stipulates caps on a political candidate's campaign expenditure, limiting it to MVR2,000 per head, based on the number of eligible voters in the constituency that the candidate is contesting in. The Act also bans candidates from accepting funding from foreign governments, institutions, organisations and individuals, and limits financing from an individual to 0.5 percent and from a legal entity to 2 percent of the total resulting from the MVR2,000 calculation above. Funding has to be deposited and expenditures made from a specific account designated specifically for the campaign.
A detailed audited report on funding and expenditure is required to be submitted to the Elections Commission within 21 days of the election. These articles are applicable to the presidential, parliamentary and local council elections.
A 2019 Transparency International report on the role of political party finance reform in the transition from dominant to competitive party systems, notes that 'the abuse of state resources confer clear benefits on incumbent politicians and parties, and creates an unfair playing field.' This remains an issue in the Maldives as well, with no regulatory framework to define and limit the use of state resources by the incumbent.
A 2016 study carried out by Transparency Maldives in collaboration with the UK's Foreign and Commonwealth Office stated that the 'single most important step towards regulating political finance and eliminating undue influence posed by money is proper disclosure of lawful financial reports.' The study found that none of the dimensions assessed on the legal framework on political financing fell within the 'insufficient' range, but that 'in evaluating practice,' many fell within the 'insufficient' range – meaning that the laws and regulations are in place, but as is usual, practice and adherence to these are lacking or inexistent.
The onus in the current legal framework for this is placed on the Elections Commission and the Auditor General's Office, in that parties and candidates for elections are required to submit their financial reports with details of financing to them. They have so far, not published this information, and without this disclosure, there is 'no way of determining how much money is circulating in the political system,' and who is in fact controlling the purse strings.