Fundraising lessons for parties


Probably for the first time in the country’s history, public attention has been drawn to the critical but largely neglected subject of political finance through the recent judgment of the Election Commission of Pakistan (ECP) in the case of the financing prohibited. Whatever opinion one may have of the ECP’s findings in this case, the eight years of proceedings have revealed uncomfortable realities about political party fundraising practices and weaknesses in monitoring the political funding.

Despite weaknesses in implementation, Pakistan has almost always benefited from a strong legal framework to regulate fundraising by political parties. The Political Parties Act 1962, followed by the Political Parties Ordinance 2002, both contained detailed provisions on the financing of political parties. With slight variations, the same provisions have also been retained in the current law, the Elections Act 2017.

Funding of political parties by domestic corporations was not permitted until 2017, but unlike in the past, the ban on funding of political parties by domestic corporations was omitted from the 2017 election law, as the words “nationally incorporated public or private enterprises”. society” used in the 1962 PPA and the 2002 PPO have been removed from the prohibited sources of funding for political parties. Company law may impose its own restrictions, but at least electoral laws do not prohibit corporate funding of political parties.

Foreign funding of political parties was prohibited in all three laws, but the prohibition was made stricter in the 2002 PPO compared to the 1962 PPA. The definition of a “foreign-assisted political party” in the PPA 1962 included “a substantial part of its funds from abroad”. nationals”, but the PPO 2002 and now the Electoral Act 2017 omitted the word “substantial” from the relevant provisions of the law and replaced it with “everything”. This was a significant change as it significantly lowered the threshold for inclusion of a political party among parties receiving foreign aid.

Article 17(3) of Pakistan’s constitution provides that “every political party shall account for the source of its funds in accordance with law”. The Electoral Law of 2017 is the current law mentioned in the constitution and its chapter XI covers political parties. Article 204 of the law deals with the financing of political parties and its paragraph 3 deals with the prohibition of foreign sources of financing. Article 210 of the law obliges each political party to submit annually to the ECP a consolidated statement of its audited accounts certified by the leader of the party or an official appointed by him.

The ECP publishes photocopies of these statements of accounts each year through publication in the Official Gazette, but it has rarely attempted to examine these statements or even asked a political party to provide the missing information. This is likely due to the fact that there is no express provision in the law authorizing the ECP to review the declarations and take follow-up action if the declarations are inaccurate or deficient. The apparent lack of capacity of the PCE to undertake such a professional review is another reason for inaction.

The recent ECP order and previous investigation into PTI accounts spanning approximately eight years was not due to the ECP initiative; this was made possible by a complaint filed by a founding member and former PTI Information Secretary, Akbar S. Babar, whose tenacity in pursuing his complaint despite court challenges and PTI resistance has led to the completion of the ECP survey.

Despite the fact that the ECP order identified a number of irregularities and violations of laws in PTI’s financial dealings which will ultimately have to be resolved in higher courts, the PTI and its Chairman Imran Khan must be recognized to be the only mainstream party besides probably Jamaat-e-Islami who created an elaborate system of fundraising with particular focus on overseas Pakistanis and, through them, their friends and businesses there ‘foreign. The PTI system was so successful that in 2012-2013 it became the only party to raise more than 1 billion Pakistani rupees in one year. The PML-N is a distant second that could raise around half that amount (Rs596 million) in the same year.

Based on available public records, PTI also has the distinction of raising the highest amount of aggregate funds – 3.66 billion rupees – over the past 13 years, followed by MQM which raised less than 2 billion rupees. rupees and PML-N which collected 1 rupees. 0.48 billion during the same period. PPP and JI could raise 0.68 billion and 0.38 billion rupees respectively. Unless a law is broken, in which case the law should, of course, take its course, the ability to raise more funds should be seen as an advantage to a political party.

As violation of political finance laws can have serious political and security implications for a country, as the integrity of political parties, parliament and government can be compromised, it is important that the PCE be empowered both legally and technically to perform a regular review. at least a random sample, say 10%, of account statements submitted by political parties, legislators and candidates.

It is to be hoped that the ECP and the political parties have learned the lessons of the affair of the forbidden financing of the PTI. The ECP must strengthen its political finance wing and political parties must learn to maintain their books according to the law – both in letter and in spirit.

The author is Chairman of PILDAT – Pakistan Institute of Legislative Development and Transparency.

He tweets @ABMPildat and can be contacted at: [email protected]


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