Money talks in politics and political processes globally, which necessitates regulations to ensure democratic values associated with accountability and transparency are not undermined - values that many a Pakistani political party cites as its election manifesto but fails to implement in letter and spirit if elected.
Most nations prohibit political parties from receiving funds from foreign entities, on the premise that if elected, a political party may be influenced to the detriment of national interest by an outside entity. Legal political party funding however is from mainly four sources.
First, public funding - out of 180 countries only 25 percent provided no direct or indirect public funding; and Indian and Pakistani political parties do not receive direct or indirect public funding.
A study undertaken by Friedrich Ebert Stiftung titled Political Finance and Public Funding of Political Parties in Pakistan dated March 2023 (F Bertoa and N Mahar) recommended public funding with the rationale that “complete dependence on private funding leaves the Pakistani politicians and political parties prone to exploiting the loopholes in the law to meet their burgeoning financial needs.
” However, few would support this recommendation, given little oversight of campaign financing in spite of existing laws (a complaint also heard in Western countries where oversight is more stringent compared to Pakistan) and the possibility of further de-emphasizing the need to create fiscal space due to almost routine allocation of public funds to parliamentarians for development schemes.
Second, grass-root support or membership/subscription fees and small individual donations, with only Pakistan Tehreek-e-Insaf (PTI) charging a membership fee.
Third, organizations that share the economic views of a party for example trade unions/particular sector of the economy may fund one party over another for example the trade unions in the UK are generally supportive of the Labour Party. And finally, the fourth source is plutocratic funding defined as donations from wealthy individuals.
Article 4 of Pakistan’s Political Parties Rules (2002) stipulates: “Every political party shall maintain its accounts in the manner set-out in Form-I indicating its income and expenditure, sources of funds, assets and liabilities and shall, within sixty days from the close of each financial year (July—June), submit to the Election Commission a consolidated statement of accounts of the party audited by a Chartered Accountant, accompanied by a certificate, duly signed by the Party Leader to the effect that no funds from any source prohibited under the Order were received by the party and that the statement contains an accurate financial position of the party.”
Till 2014 no case was filed or investigated by the Election Commission of Pakistan (ECP) with respect to the audited financial accounts of any political party and this in spite of prevalent media reports about manipulation through donations of policies subsequent to victory at the polls. On 7 November 2014, Akbar S Babar, PTI founding member, filed a petition in the ECP alleging serious financial irregularities in PTI’s funds from Pakistan and abroad.
Four years later, in February 2018, the PTI petitioned the ECP against PML-N and PPP and five years later on 20 June 2019 the ECP issued notices to PTI, PPP and PML-N for scrutiny of their foreign funding details.
On 2 August 2022, the ECP gave a verdict against the PTI maintaining that the party was a “willing recipient” of prohibited money of 2,121,560 dollars,” and “knowingly and willingly received funding from Wootton Cricket Limited operated by Arif Naqvi.” On 10 December 2022, the Islamabad High Court fixed for hearing a petition by PTI against the ECP for failing to conclude the funding cases against PPP, PML-N and other parties.
Farrukh Habib still a member of the PTI last year pointed out that “the ECP’s committees to scrutinize the bank accounts of PTI, PML-N and PPP were formed simultaneously in March and April 2018. However, the scrutiny committees for PML-N and PPP remained dormant for the most part of the durations and delayed the scrutiny of their bank accounts”, alleging “selective justice” that raises questions of ECP’s credibility.
The timing of the hearing and the subsequent verdict against PTI is cited by critics as a reflection of which particular party is in favour at any given point in time and which is clearly not. On 22 April 2022, the ECP denied criticism over the slow pace in the Scrutiny Committee’s investigation of funding to PML-N and PPP and maintained that it reconstituted the committee on 15 March 2022 with a progress report sought on 28 April 2022. There are no further updates on the investigation or the Committee’s workings.
In Pakistan there is a fifth source of funds for political parties notably non-refundable party ticket awarding fees which were the highest source of income for political parties as per their audited statement of accounts.
This strengthens the pervasive perception that votes are personality driven and in all three national parties, the perception is that the vote is cast in favour of the leader and to capitalize on the leader’s popularity you pay for the party ticket.
There are also frequent allegations that the upper house contenders pay massive sums to ensure selection by the party leader, allegations that surface from time to time and while there is no explicit proof of money changing hands, largely because the executive does not engage law enforcement agencies for the purpose, yet few would consider these allegations hogwash.
The total declared income, unverified, and income from ticket fees of the three major national parties in the 2018 elections are as follows: (i) PML-N’s total income 125 million rupees with 119 million rupees as ticket application fees.
The fee for a national assembly ticket was 50,000 rupees, 100,000 rupees for a reserved seat, 30,000 rupees for provincial assembly seat and 75,000 rupees for a reserved seat; (ii) PPP’s income was 100 million rupees with 93.7 million collected from ticket fees; and (iii) PTI netted 600 million rupees with 334 million rupees from election fees with the rate being 100,000 for award of a national assembly ticket and 50,000 rupees for a provincial assembly ticket - a significant rise from the 2013 application fee of 27000 rupees for a national assembly ticket and 17000 rupees for provincial assembly ticket though youth (under 35 years ) was charged 7000 rupees for both houses.
For 2024 elections the PML-N requires a bank draft of 200,000 rupees for an application for national assembly and 100,000 rupees for the award of a provincial assembly ticket with the same rates applicable for PTI candidates. The PPP is charging a much lower rate of 40,000 rupees for a national assembly and 30,000 rupees for a provincial assembly ticket.
This money is spent largely on organizing jalsas that are addressed by the party leader, or his family members, and/or senior members of the party. These events are getting more and more expensive as they now comprise of songs and entertainment and on some occasion food is also provided. There is little evidence that the party funds are distributed to national, provincial or local aspirants to enable them to effectively canvass for elections.
Recommendations made by Friedrich Ebert Stiftung study are however noteworthy and require consideration: the Pakistan legislators should introduce meaningful reforms to: a) bring the PPF regime on par with the global political finance system that hinges on disclosure, enforcement and sanction; b) mainstream the PPF into the wider anti-corruption drive by, among other steps, making stringent conflicts-of-interest laws, and making lobbying transparent; c) introduce a compliance-incentives structure for political parties and candidates; and d) above all, legislate to introduce public funding for political parties.
The ECP the study notes should: a) enhance its capacity to ensure periodic scrutiny of statements of accounts of political parties; b) clearly define the election expenses for a person making election expenses on a candidate’s behalf; c) devise a mechanism to enforce the relevant provisions of law and sanction non-compliance; and d) publish financial statements by members and political parties on digital platforms for the public.
To conclude, in most democratic dispensations there is clearly a need for ever more cash to effectively canvass and Pakistan is no exception.
Copyright Business Recorder, 2023
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