Elections are costly and fuel corruption. But there has been no checkOverspending has become a norm but poll body has failed to curb practice, observers say.
A French court sentencing former president Nicolas Sarkozy to a one-year jail term for spending tens of millions of euros more on his election campaigns than the amount permitted by the law has made headlines across the world.
The prosecutors have alleged that Sarkozy’s party splurged nearly double the 22.5m euros (£19.4m) cap on lavish campaign rallies and events, then tried to hide the costs by hiring a public relations firm called Bygmalion to invoice the party, not the campaign, according to a BBC report.
The Sarkozy incident could be a lesson for Nepal’s political parties.
Officials at the Election Commission say it has been a common practice in Nepal for parties and politicians to “overspend” during elections and since this issue is often overlooked in Nepal, unlike in France, everyone gets off scot-free.
In the last parliamentary elections of 2017, the election body had set spending limits at Rs2.5 million for a House of Representatives candidate under the first-past-the-post (FPTP) system.
A 2017 study conducted by the Election Observation Committee Nepal, a poll monitoring body, had revealed that each candidate winning the federal parliamentary elections under the FPTP system had spent, on an average, Rs21.3 million. The runners-up spent an average of Rs14.9 million and the remaining candidates spent Rs8.5 million.
A winning candidate for provincial elections under the first-past-the-post system was found to have spent Rs12.5 million, while runners-up spent Rs11.7 million and others spent Rs7.1 million, according to the study. The election body had set a cap of Rs1.5 million for provincial election candidates.
Overall, local, provincial and federal candidates spent Rs96.91 billion, according to the report.
Chief Election Commissioner Dinesh Thapaliya says he is not aware of any complaint registered at the commission about overspending by any candidate.
“We would have conducted an investigation if any complaint was registered. The spending limit is part of the election code of conduct and we can launch an investigation only if a complaint is made by specifying that there was violation of the code of conduct by overspending,” Thapaliya told the Post.
He admitted that there has been no tradition of investigating overspending without a complaint being registered with the commission.
“The commission does have the authority to initiate investigations based on media reports but there is no tradition of conducting an investigation based on [study] reports,” he said.
Section 26 of the Election Commission Act allows the election body to impose a fine equal to the amount spent or the amount equivalent to the threshold whichever is greater.
“No candidate who contested the last parliamentary elections submitted expenditure details showing expenses more than Rs2,499,999,” said Komal Prasad Dhamala, assistant spokesperson for the commission.
With the commission also not investigating the matter, it has never fined any candidate or any party as neither the candidate submits a report making it clear that he or she has overspent nor the commission investigates potential overspending by itself.
That Nepal’s elections have become quite expensive has become apparent from the statements from political leaders themselves. Parties or individual leaders always fight for what are dubbed “plum” or “lucrative” ministries.
Prime Minister Sher Bahadur Deuba is currently struggling to expand his Cabinet as there are quite some contestants for the Ministry of Physical Infrastructure and Transport and Ministry of Urban Development.
Both the ministries deal with small and large projects and they provide an opportunity for the leaders to raise money, say former bureaucrats.
“It is money after all,” Shyam Prasad Mainali, a former secretary, told the Post last week. “It’s easy to generate money from these ministries.”
Observers say since money works during the elections, Nepali politicians often invest more time and energy on raising money.
It’s not that there is no law, but politicians often manage to get off scot-free.
As per section 26 (1) of the Election Commission Act, the commission can fine the candidate for overspending and those who do not pay the fine imposed by the commission could be disqualified from participating in any elections for up to six years. The commission has the authority to even disqualify the elected candidate for the failure to pay such fines, according to Section 26 (5) of the Act.
“This is understandable that the commission hardly takes action against the political party and candidate because office bearers in the commission are appointed based on political power-sharing,” said Bal Krishna Neupane, a senior advocate who has participated in many hearings related to disputes of political parties. “Legally, the commission is authorised to initiate the investigation into overspending but it has remained passive.”
Khem Raj Regmi, former government secretary and former president of Transparency International Nepal, an anti-corruption watchdog, said that the election body has been weak in enforcing the law regarding the spending beyond the threshold set by the commission.
“The law has authorised the commission even to scrap the candidacy for failure to adhere to the code of conduct. But, the commission has not even warned or sought clarification from those who overspend,” he said.
That the Election Commission, an independent constitutional body, has become weaker over the years has been one of the constant complaints of the anti-corruption activists and proponents of good governance.
Officials at the commission and legal experts say that the commission is the competent authority to look into the complaints about overspending.
“There is no direct route to complain at the court about expenditure beyond the expenditure ceiling. Such a case can go to the court only if the candidate is not satisfied with the commission’s decision,” said Neupane, the advocate.
Anti-corruption campaigners say that the failure to ensure financial transparency when it comes to political parties and leaders has not just facilitated corruption but is also allowing the criminalisation of politics.
If political parties and their candidates spend amounts of money disproportionate to their known sources of income for campaigning, they are more inclined to recoup the money after winning the elections, which leads to a vicious cycle of corruption.
“Non-transparent donations received by political parties and election spending is the main reason corruption is flourishing in the country,” said Regmi. “We don’t see most of the political party leaders contesting elections with their own money. In order to win elections, candidates raise funds from people who make money illegally. After winning elections, such candidates are forced to protect the business interest of their donors which leads the country to a vicious cycle of corruption.”
As per Section 38 (5) of the Law on Political Parties, a party should not accept donations on the condition that the donors will benefit in return. Likewise, a political party also cannot receive donations from government entities, public companies, schools, domestic and foreign non-governmental organisations, foreign governments and agencies and any person or institution whose identity is not disclosed, as per the Section 38 (2) of the Political Parties Act-2017.
The debate that political parties and their leaders need to be clean is not new in Nepal though. After the restoration of democracy in 1990, the then interim government had also raised the issue. But no substantial efforts have been made to ensure clean and corruption-free politics.
One of the ways to bring transparency in political party financing, which has long been considered, is state funding for political parties.
In 2003-04, then finance minister Prakash Chandra Lohani in his fiscal budget had introduced state funding for political parties. As per his proposal, the government would provide grants to the national political parties two months before the elections based on votes they received in the recent elections for the House of Representatives.
As per the proposal, each vote would earn Rs20. The proposal, however, also allowed the parties to raise money via donations from enterprises, but such donations needed to be transparent. The issue of providing state funding was also under discussion at different levels before the 2017 elections.
In its five-year strategic plan, introduced early last year, the commission had proposed state funding for political parties based on the votes they obtained in the last elections.
But Regmi believes that state funding won’t be a solution.
“Our state is not capable of funding the election campaign as the funding requirement of a candidate is too high,” Regmi told the Post.
Commission officials, however, maintain that certain transparency could be ensured in the finance of the political parties if audited by the Office of Auditor General in case the state funds the parties.
“This is our proposal which is still under discussion,” said Dhamala.
In order to bring transparency in political parties’ finances, Section 38 (3) of the Political Parties Act-2017 has made a provision that the parties are required to conduct transactions of any amount above Rs25,000 through banking channels. Section 38 (6) states that a party should ensure that the donor reveals the source of income only if the donated amount is above a certain threshold.
Clause 12 of the Regulations on Political Parties Act has made provision that a party needs to disclose the source of donation above Rs100,000 including the name of the donor, source of the donated amount, and whether the donated amount is taxable.
Regmi said that these legal provisions should be enforced to bring transparency in the finance of the political parties and election finances.
“The best option in my opinion would be to make legal provision requiring the parties and candidates to disclose each and every donation,” he said, “including the source of the donations.”