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SIXTH INTER-AMERICAN ELECTORAL TRAINING SEMINAR SEPTEMBER 9 – 13, 2013

MEXICO CITY

CONCEPTUAL DOCUMENT

EXECUTIVE SUMMARY

The Inter-American Electoral Training Seminars are initiatives led by the General Secretariat of the Organization of American States (GS/OAS) in collaboration with the Federal Electoral Institute of Mexico (IFE) and the International Institute for Democracy and Electoral Assistance (International IDEA). These training seminars are designed to promote improved organization and administration of electoral processes and systems throughout the Hemisphere, and in doing so, help to enhance the installed capacity of the continent’s Electoral Management Bodies. To this end, the Sixth Inter-American Electoral Training Seminar will be held this year from September 9 – 13 in Mexico City; the seminar’s main topic will be “Political Party and Election Campaign Financing: Current Situation, Challenges, and Perspectives.” This will be the first time a single core topic is to be addressed, the objective being to achieve the most comprehensive and rigorous exchange and meeting of the minds possible. A two-pronged methodology will be used: (a) Academic and technical training will be provided by professors and experts in the area; and (b) group sessions will be held with horizontal discussion and cooperation among election officials with broad experience in these matters.

A change in orientation aimed at creating a more robust link between theory and practice has been proposed for this sixth session. To this end, each of the participants selected is to conduct an analysis of the current situation of election campaign and political party funding in his or her country as a starting point for discussion and exchange during the training seminar. The idea is to be able to provide tools to participants—based on these analyses and the training sessions conducted over the course of the week—to enable them to help improve some practice in their country or to incorporate some type of innovation in the institutional duties in their area of responsibility.

BACKGROUND

The first phase of technical electoral assistance spearheaded by the OAS and other international development organizations took place over the course of two decades (the 1980s and 1990s) and fostered the institution of Electoral Management Bodies as the bodies responsible for organizing and managing elections. In other words, international organizations like the OAS played a key role in establishing these entities as electoral bodies with the basic infrastructure needed to operate. This long and comprehensive process accompanied the creation of many of the electoral courts in the Americas. At present, OAS technical-electoral cooperation with such authorities focuses on building their institutional capacity. To help enhance the work of Electoral Management Bodies, the GS/OAS created the Department for Electoral Cooperation and Observation (DECO) seven years ago; this Department is responsible for providing support to electoral systems and institutions throughout the region. By means of its operational

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sections, DECO seeks to work with Electoral Management Bodies to build their management, technological, legal, and institutional capacities, and to identify and disseminate information regarding good practices. One of the activities headed by DECO was the creation of the Inter-American Electoral Training Seminars. The first training seminar was held in 2008, and since then, further seminars have been held on a yearly basis. These seminars employ both academic and technical exercises to support the professionalization of Electoral Management Bodies and promote horizontal cooperation. The training seminars are an attempt to respond to the demand for mechanisms to provide ongoing professionalization opportunities to Electoral Management Bodies; such mechanisms are aimed at building the skills of members and officials of election bodies. Hence, the training seminars are academic and practical exercises designed to help improve the quality of the electoral processes being organized by the continent’s different countries.

For five years—during each iteration—the training seminars have addressed a number of different topics, as well as set aside time for participants to prepare project profiles. After a genuine internal process of reflection following the fifth training seminar, the institutions that organize this project decided to make some adjustments to the sixth training seminar. Such changes, which will be explained in detail in the following section, are a result of the need to ensure that the project continues to meet—to the best of its ability—the objectives that gave rise to it. This Sixth Inter-American Training Seminar is being hosted by the GS/OAS in collaboration with IFE and International IDEA. Drawing from their diverse knowledge and experience, each of these institutions offers specific academic and technical expertise, in addition to relevant international experience. The holding of these training seminars since 2008 has enabled the organizers to offer very productive sessions with high-level academic content and an effective sharing of ideas among officials representing the different electoral bodies in the Hemisphere. Below is a brief summary of the organizers of the Sixth Inter-American Training Seminar:

The Federal Electoral Institute of Mexico (IFE) is an autonomous public institution that is both permanent and independent in its decisions and operations and responsible for organizing federal elections in Mexico. IFE was created by constitutional mandate in October 1990 and its operations are governed by five key principles: certainty, legality, independence, impartiality, and objectivity. Since its inception in 1993, IFE’s International Affairs Office has actively promoted technical-electoral cooperation internationally. Through different agreements and arrangements with diverse stakeholders, IFE has taken part in technical-assistance and electoral observation missions in more than 15 countries throughout the Americas. IFE has likewise organized official visits to both international organizations and electoral bodies in other countries and has held a number of different events to promote democracy and election-based training, in addition to releasing several publications.

IFE’s contribution to this activity is based on its vast experience in coordinating conferences, seminars, forums, courses, and workshops that include interdisciplinary perspectives and comparative electoral analysis and that have facilitated horizontal cooperation among different interest groups globally. Since September 2010, these activities have been conducted within the framework of IFE’s International Center for Electoral Research and Training. IFE provides a technical team with extensive knowledge on election-related matters and political and political party financing.

The International Institute for Democracy and Electoral Assistance (International IDEA) was founded in 1995 as a 25-member state intergovernmental organization to support sustainable democracy worldwide. Its objective is to strengthen democratic institutions and processes. International IDEA’s specific strengths lie in the areas of: Knowledge resources, particularly networks of experts,

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databases, handbooks, and websites; policy proposals to spur debate and action on democracy; and assistance with democratic reforms in response to specific national requests. IDEA works with policy makers, donor governments, UN organizations and agencies, regional organizations, as well as other actors engaged in democracy building. Areas of expertise include: Electoral processes, political representation, constitution-building processes, democracy and gender, democracy and security, and democracy assessments. Based in Stockholm, Sweden, International IDEA works globally through its offices in several countries, including an extensive regional program in Latin America.

METHODOLOGY GENERAL DESCRIPTION The training seminar’s methodology includes four objectives:

1. To provide high-level academic and technical training to officials responsible for electoral processes. To this end, professors and experts on election-related matters with vast experience and knowledge about the real situation in the region will be brought in.

2. To promote horizontal cooperation among election officials. For this, there will be activities involving discussion and the sharing of experiences both during and outside of seminar sessions.

3. To provide specific technical tools to participants that may be implemented in their specific contexts to introduce changes and improvements.

4. To create forums for applying and practicing the concepts discussed during the training seminar’s sessions. To achieve this, each participant must conduct an analysis of the current status of the matter to be addressed; such analysis will serve as the basis for the work to be done. In addition, a simulation will be conducted on the final day of the training seminar.

ORGANIZATION OF THE WORK DURING THE TRAINING SEMINAR Following the fifth training seminar, organizers undertook a process to reengineer the seminars in order to alter the way the sixth training seminar would be conducted. Such changes are driven by the commitment to meet the needs of the continent’s Electoral Management Bodies in a timely manner.

Unlike the fifth training seminar, in which two topics were covered, the sixth training seminar will address just one core thematic area; this will allow more time for in-depth discussion of the different facets of the topic selected. In the upcoming training seminar, the subject of Political Party and Election Campaign Financing: Current Situation, Challenges, and Perspectives stands out as one of the most important matters for the region. Between 2008 and 2013, the OAS has included some type of recommendation regarding political party and election campaign funding in the final reports of 29 Electoral Observation Missions (EOMs).

The training seminar’s themes will be addressed through presentations and panel discussions in which participants will have the opportunity to put the subjects covered each day into practice. These presentations will be given by invited experts who will discuss the subtopics identified as priorities. Details on these topics may be found in the training seminar’s agenda.

Following the presentations, sessions will be held wherein, with the help of a moderator, specialists, academics, and professionals in this area will discuss different points of view; a plenary discussion will then be opened.

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In the afternoons, group work sessions will be held. Such sessions are aimed at identifying the most significant issues affecting the real situations faced by the participants and the magnitude of the gaps between what is acceptable and what currently exists. Thereafter, solutions tailored to the political and election-related financing challenges of each context will be proposed. The idea is that participants should be able to apply the content covered during the training seminar to the context of their own realities. On Friday morning a simulation game will be played in which the participants will be presented with a case that involves a problematic situation in a political process. The objective of this activity is to offer the participants an opportunity to put their knowledge into practice and conduct an analysis of the situation, identify issues based on what was covered during the training seminar, and come up with different ways to solve and address such issues. POLITICAL PARTY AND ELECTION CAMPAIGN FINANCING: CURRENT SITUATION, CHALLENGES, AND

PERSPECTIVES Introduction

The relationship between money and politics took on greater significance in the region starting in the 1990s due to the growing influx into politics of resources stemming from illegal activities, the notorious influence of power groups in election campaign funding, and an increase in the undue use of state resources by those in power (Gutiérrez, Zovatto, 2011. p.5). These three factors have set the agenda for debate on political party and election campaign funding in the Hemisphere.

In order to tackle the challenges that have arisen out of the way countries’ democratic realities have evolved and the growing influence of money on politics, a “series of rules [have been implemented] to regulate that essential flow of financial resources to the political organizations and parties” (Casas-Zovatto, 2011, p.189) that make up political financing systems (PFS).1/ Such systems constitute a regulatory framework that determines the way in which political actors may access and use resources legally to promote their activities, be they party- or election-related.

Existing regulations on political and campaign financing in the region are based on a combination of measures that seek to regulate the flow of financial and material resources in political activities via the implementation of restrictions on private funding (uses, sources, and amounts) and the determination of campaign spending limits, especially those having to do with publicity. Other measures seek to promote an increase in public funding under the assumption that government resources are impartial, and as such, may potentially enhance conditions of equity in election contests compared to funds coming from private sources.

Additionally, political financing systems include sets of rules that determine how political actors are to be held accountable and how state agencies are to exercise government oversight.2/ They also include a system of sanctions that punishes violations and failures to comply with provisions that govern the flow of funding and accountability. Presently, matters related to political financing, the disclosure of financial information, and access thereto have taken on greater significance due to growing demand for more transparency from civil society, the citizenry, the international community, and political actors.

1. Throughout this document, the concept of political financing system is used to refer to “the series of rules

and practices that regulate the flow of financial resources to political organizations and parties¨ (OAS Manual, 2013, p. 7).

2. For further information, see under the annex section: “Political Financing Oversight Bodies in Latin America.”

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Thanks to a wealth of experiences in the different countries of the Hemisphere with regard to political party and election campaign funding, the Sixth Training Seminar offers an ideal forum for sharing ideas and experiences on how to develop better political and election financing systems. There is neither a single solution nor a single model; each country’s reality is different and the approaches thereto must conform to the variety of contexts in which they are to be implemented. Equity and Transparency in Political Financing Systems

The Political and Election Campaign Financing Manual of the Organization of American States (OAS) states that an equitable political financing system is “one that seeks to ensure equal conditions for exercise of the rights to elect and be elected, via the regulation of campaign funds. Regulation entails encouraging resources that foster equal conditions and restricting those resources that jeopardize them, in addition to limiting campaign spending.”

For purposes of achieving an equitable political financing system that fits this definition, the countries of the region must adopt regulatory frameworks that will enable them to “correct distortions that introduce money into politics and threaten the one citizen, one vote balance” (Casas, Zovatto, 2011 p. 18) and that do not exacerbate the distortions. All of this with the understanding that the ultimate goal of financing systems is to “generate a set of rules and incentives that allow for minimum conditions of equity for access to and the exercise of political power” (Navarro, 2005, p. 9).

An equal playing field for political actors must be accompanied by transparency. A transparent political financing system is “one that seeks to ensure the conditions necessary for exercise of the right to access information on the flow of financial resources” (OAS Manual, 2013, p. 7), in political parties’ activities both during electoral campaigns and between elections. These necessary conditions include “political party accountability, government oversight, a system of sanctions, and access to information” (OAS Manual, 2013, p. 7).

Political culture and institution building in the countries of Latin America and the Caribbean have evolved differently in, and even within, each of the regions. In the case of Latin America, for example, most countries have political financing systems with similar structures, but with different regulatory frameworks. In the case of the Caribbean, however, a lack of political financing systems is the rule rather than the exception. Any attempt to understand the current financing situation in the Hemisphere must be made with this in mind. Political and Election Campaign Financing Systems in Latin America

Political and election campaign financing is a pivotal matter for the OAS member states and as such is reflected in the Inter-American Democratic Charter, which indicates that special attention is to be paid to the problems associated with the high cost of election campaigns and the establishment of a balanced and transparent system for their financing.3/ The effective enforcement of political financing laws is important for maintaining and enhancing trust in electoral processes and institutions, as well as to avoid inequality in citizens’ participation in the electoral process.4/

The countries of Latin America have made significant progress over the last 25 years in developing regulations and institutional oversight mechanisms for purposes of establishing balanced systems in political contexts wherein political parties are vying more and more for resources and less for votes (Speck, 2002, p. 23). Nowadays, most of the countries in the region have regulations in place that

3. Organization of American States, Inter-American Democratic Charter. Article 5. 4. José Miguel Insulza, Secretary General of the Organization of American States. Opening ceremony of the

thirty-seventh regular session of the General Assembly of the OAS, Panama, June 3, 2007.

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regulate private and public funding and establish campaign-spending limits. Such regulations likewise create mechanisms for government oversight, accountability, and access to information, and establish systems of sanctions.

Below is a general overview of the current status of political financing systems in Latin America as well as number of points to serve as food for thought.5/ Public funding

There are multiple mechanisms in place in the region for the transfer of public funds to political actors, which means that when conducting a comparative analysis it is necessary to consider the differences in the existing systems. Despite this, in Latin America one tends to find mixed political and election campaign financing systems with different levels of public and private funding. Currently, 16 of the 18 Latin American countries6/ have regulations establishing mechanisms for providing state resources, either directly or indirectly, for political party and election campaign financing (Gutiérrez, Zovatto, 2011, p. 552).

Under the assumption that public resources seek the common good, the use thereof for political financing aims to level the playing field for political actors and thereby correct the distortions created by private funding (Zovatto, 2003 p.51). In practice, Latin American countries have taken different approaches to correct such distortions. Thirteen countries in the region provide public funds both during election campaigns and between elections (Gutiérrez, Zovatto, 2011, p. 6). This variable is of the utmost importance since providing funds to political parties on a regular basis means their relationships with citizens are not time-based. Would giving more public funding to parties between elections be advisable in order to prevent cronyism and vote-buying during election campaigns?

When public funding is provided is another factor that determines how significant it may be in creating a fair fight, depending on whether it is given before or after elections. How equitable is it to provide direct funding after elections when the financing system is mixed? What characteristics should public funding for women have in order to promote equity? How far in advance should public funding be given to political parties?

Countries have different ways of calculating the distribution of public monies to the parties. Some opt for allocating funds based on vote tallies or parliamentary representation; others allocate a proportion of the total funding to be given equally among the political parties. There are also formulas that combine the different methods of appropriating public funds. To what degree do the conditions for providing public funding strengthen parties with political representation to the detriment of the emergence of new political forces? How can laws ensure a balance between a level electoral playing field and a political party system that has an institutional framework and is representative and plural?

One of most widely used mechanisms for indirect public funding is the granting of access, free of charge, to public or private media in order to ensure that all sides in the contest have the opportunity to communicate their political platforms and proposals under equal conditions. Despite this, how effective is such a mechanism in countries where indirect funding comes in the form of access to public media, but public media are not very relevant? How can equal conditions be ensured so that all

5. Several tables are included under the annexes section that sum up the different public and private funding

modalities that exist in the region. 6. For purposes of this section, the countries included are: Argentina, Bolivia, Brazil, Chile, Colombia, Costa

Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela. The two countries that lack public funding are Bolivia and Venezuela.

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contenders have the opportunity to present their proposals in countries where private media dominate? How can access to the media contribute to gender equity? Private funding

Political parties and campaigns also receive contributions from individuals and legal persons, who, in exercising their rights as citizens make contributions to support their preferred political option. This further facilitates the development of ties between citizens and parties. However, when such contributions undermine the “one person, one vote” maxim, it becomes necessary to limit the uses, sources, and amounts of the contributions in order to preserve minimum conditions of equity as far as competitiveness is concerned. How should the sources and categories to be restricted, and under what conditions, be determined? What institutional conditions exist in each country that make it more or less feasible to establish realistic restrictions?

Generally speaking, there are prohibitions on donations from abroad and anonymous donations, as well as limits on private donations and those coming from businesses, especially where a contractual relationship with the state exists. These measures seek to maintain a level playing field in order to respect citizens’ rights to support a political side, but primarily to prevent the “privatization of decision-making by public officials” (Casas-Zamora, Zovatto, 2011, p. 22). This is due to the fact that the use of private financial resources designed to disproportionately support one political side over another gives rise to a latent risk of conditions being imposed on the actions of said side should it reach power.

Thus, one of the greatest challenges that exist in regulating private funding is to preserve the subtle balance that exists between allowing private contributions, without such contributions undermining the principle of equity in competition, and limiting contributions in such a way as to not make them so restrictive that they foster counterproductive practices like cronyism and corruption. How to strike such a balance? What role does the competent election authority play in ensuring equity and transparency in private funding?

Another element to keep in mind is when candidates, rather than political parties, receive private donations. Such practice has been documented in some Latin American countries and is testament to the fact that the ability to raise funds is often tied to the personal qualities of a candidate and not a party. How should this situation be regulated in practice? What effects does this have on a level playing field? How are women’s chances of being elected under equal conditions affected? Campaign spending limits

In contrast to the variety of limits and restrictions placed on private funding in the region, there is a general absence of limits on campaign spending (Gutiérrez-Zovatto, 2011, p. 11). Some countries have included in their legislation limits on “spending triggers” or those categories that lead to exponential growth in the money spent by political parties, especially during election campaigns, such as spending on advertising.

Limits to spending seek to prevent runaway and excessive increases in total campaign costs, whether due to an increase in private funding sources or to the additive effect, namely, public funds being added to parties’ own funds or the donations they receive. In this regard, limits act to modulate spending since they help candidates who lack the tools to raise substantial funds compete within certain parameters of equity. This becomes even more important when bearing in mind that spending on ads in the private media, primarily television and radio, tends to be very high and frequently, access to such media is contingent on the political position of the owners of the media outlets. Are spending limits, especially on spending triggers, enough to ensure a level playing field? Do alternative mechanisms

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exist? Is it advisable to regulate private media fees in order to ensure fair competition? How does an absence of spending limits affect the political financing system? The use of government resources When government resources are given to political actors following clear rules that are objectively enforced, such resources have the potential to level the political playing field. If, in addition, restrictions to private funding and campaign spending limits are effectively regulated, the political financing system creates the conditions necessary for reducing asymmetries in the fight to attain power. Nevertheless, the use of government resources for political and electoral ends knocks the financing system out of whack because the public resources lose their impartiality and therefore exacerbate the lack of equality in a political contest. In addition, those in power make use of their privileged positions to obtain a decisive advantage, thus undermining the conditions that the regulatory framework, which regulates the sources and use of funds used to finance politics, seeks to create. Faced with this situation, some laws in the region include express bans on the behavior of public officials, the use of government funds, and the involvement of elected officials in politics. Nonetheless, the fine line that separates campaign activities from the actual work-related activities performed by government officials makes regulation of such activities very complex in practice. One of the clearest examples of this is the use of social programs and subsidies during election campaigns.

How can this type of regulation be made effective? By increasing the number and severity of penalties? Increasing oversight mechanisms? More public funding? What role do Electoral Management Bodies play in preventing the balance of political financial systems from being jeopardized? What alternatives exist for preventing the use of public funds with political interests? Accountability Accountability is one of the essential elements for regulating the sources, uses, and amounts of political financing. The regulation of public and private funding described above only manages to achieve its mission of establishing a level political playing field if it is accompanied by institutional arrangements and rules that require parties and candidates to register, systematize, and be accountable for the flow of funds they use both between and during election campaigns. At present, 17 out of the 18 countries in the region require accountability before a competent election authority that is responsible for reviewing, verifying, and, in some cases, auditing the information furnished by political parties and candidates. In practice, accountability with regard to income and expenditures, as well as the submission of comprehensive reports is limited by geographic restrictions, a lack of adequate technical capacity, and the individual conditions of each context with regard to how much information should be published. However, if the funds parties received are public, as is the information thereon, should information on funds received from private sources be made public? Why? If citizens contribute their own money to a campaign, to what degree is transparency in private funding more important than protecting a donor’s privacy? What challenges exist for requiring accountability from political parties with low levels of institutional structure? How can Electoral Management Bodies help to resolve these issues? The system of sanctions For government oversight to be efficient and achieve its goal, it must include provisions for punishing any political actor that violates any existing rule governing political financing and accountability. The existence of a system of sanctions has a dual purpose: It serves to dissuade

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behaviors that run counter to equity and transparency in the political contest, and it defines clear rules of the game for political players.

In practice, all Latin American countries have established some sort of penalty for the violation of their political financing systems’ rules,7/ ranging from moral to criminal sanctions and cancellation of a political party’s registration. Despite this, situations exist that make them difficult to apply. For example, during elections, sanctions are largely applied after government oversight is exercised; this might happen months after the final vote. In other cases, penalties are so excessive that the corresponding authorities are reluctant to apply them because of how severe they are (Casas-Zamora, Zovatto, 2011, p.45), meaning the sanctions are never imposed and there is no punishment for the violation committed.

What institutional factors help make an efficient system of sanctions for political financing? How can conditions be created to ensure that laws are enforced? Can personalizing sanctions be an effective tool for deterring violations of existing regulations? Do other effective penalty mechanisms exist? Access to information

Existing financing systems may or may not foster exercise of the right to access to information, both during campaigns and at election time. Under the one citizen, one vote premise, every citizen has the right to know who is funding political parties or what political parties are spending in an election campaign. This not only gives citizens the ability to make the link between oversight and accountability, it also provides them with the information they need to make informed decisions about whom to vote for or not.

The existence of provisions that ensure access to financing systems’ data is key to citizens’ ability to request and obtain information regarding the flow of political parties’ resources. In addition, institutional arrangements should be in place that enable information and request and appeal mechanisms to be published officially.

What responsibility do Electoral Management Bodies have in publishing information about political financing? Is it necessary to have specific laws on access to information that establish how to access and contest such information? What technical and operational issues exist when it comes to providing information to the public? What responsibility do political parties and candidates have when it comes to offering access to information about their financing? The Absence of Political and Election Campaign Financing Systems in the Caribbean

Financing systems in the Caribbean region differ from those in Latin America in that there is a lack of political and electoral regulation. Among the keys that help to explain this difference, the particular legal nature of Caribbean political parties stands out (Zovatto, 2003, p. 51). In most Caribbean countries, political parties do not carry the same legal connotation as those in Latin America and laws governing politics and elections are related to candidates and not parties. Cultural differences also play a significant role. Caribbean societies tend to be smaller, and as a result, they create more favorable conditions for a culture of informal contact in which donors demand confidentiality (SPA/OAS, 2013 p. 3).

7. Table 13

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Since 2006, the Organization of American States (OAS) has deployed 17 electoral observation missions to 12 of the 14 Caribbean member states.8/ Most of the final reports of those missions9/ indicate the absence of a regulatory framework for political and election-campaign financing in the region. Those reports conclude that very few Caribbean countries have legal requirements in place for registering political parties or rules for oversight on campaign spending or contributions.

Generally speaking, the observations were that in the Caribbean, no public funding exists and election campaigns are financed mainly using private funds. Private funding is not regulated, and thus, on occasion, threatens equity and transparency in electoral processes. There are no restrictions regarding sources of funding and as a result, donations from foreign and anonymous sources are common and open the door to corruption and illegal financing, which undermines parties’ independence. There are also no limits to campaign spending, which places political parties with fewer resources at a disadvantage.

Regarding transparency, most countries in the region lack mechanisms for accountability and access to information on campaign financing. In its report, “Politics, Money, and Power: A Dilemma for the Democracies of the Americas,” the OAS indicates as one of the possible causes for this situation the fact that “in small island states, disclosure of information may result in the unfair treatment of those who fund the parties.” As the report specifies, donors fear “unfair treatment by the parties that win the majority in government and that did not receive financial backing.”

Based on the conviction that political and election campaign financing regulation is key for holding competitive, equitable, and transparent elections, the OAS has emphasized the need for Caribbean countries to come up with mechanisms for regulating their political financing systems and that such mechanisms must address the political and institutional reality of the region. The electoral observation missions have been key in demonstrating the importance of discussing this matter and their findings have served as a point of departure for promoting regional meetings with the protagonists themselves.

Thus, in September 2010, the OAS launched, in Kingston, Jamaica, a regional forum on legislative standards in political financing systems in order to involve all high-level players in the development of laws and regulations. The forum sought to promote discussion on the regulation and registration of political parties and their financing systems as well as to provide tools for facilitating possible reforms. The OAS presented a model law to the leaders of both government and opposition parties of the 14 members states of the Caribbean community.

The work begun in Jamaica was taken up again this past May in Bridgetown, Barbados, where the Regional Forum to Strengthen the Regulation of Political Parties and Political Financing was held. This forum, organized by the OAS and the International Institute for Democracy and Electoral Assistance (International IDEA), brought together 42 participants from election management bodies and government and opposition parties from the 14 Caribbean member states.

In his opening remarks, OAS Secretary General, José Miguel Insulza, warned of the consequences the lack of political financing regulation can have on democratic systems in the Caribbean. He referred, on the one hand, to the risk of creating an “uneven playing field in which candidates or parties with more money may have an unfair advantage when it comes to conveying their message to the electorate.” On the other hand, he confirmed such a situation opens the door to irregular financing in the political process and can affect parties’ independence vis-à-vis economically powerful foreign interests or even organized crime. “An even more concerning scenario would be the possibility that criminal elements

8. Grenada, The Bahamas, St. Lucia, Jamaica, Guyana, Haiti, St. Kitts and Nevis, St. Vincent and the

Grenadines, Antigua and Barbuda, Dominica, the Dominican Republic, Suriname 9. See the links to all the final reports in the bibliography attached to the end of this document.

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might have an impact on the results of some elections via their campaign contributions by funding political parties or intimidating voters.” (Insulza, 2013).

During the forum there was discussion on ways to promote regulation in the region and the model law proposed by the OAS in 2010 was updated to include matters like party registration, public financing, and the gender perspective. A conclusion was reached that legislation in this area should conform to the reality of each country and, because of this, the model law was to serve only as a springboard for fostering discussion on how the region should move forward in political and election campaign financing (Barrow-Giles, 2013 p. 2-3).

Four months later, the topic of election financing will be addressed in this training session for purposes of securing new answers to help the countries in the region make their electoral processes more equitable, inclusive, and transparent, thus helping to improve the quality of democracy on the continent.

To this end, it is useful to wonder whether private funds are an appropriate type of political financing or if they make parties with more resources and greater fundraising ability more competitive, as well as whether the preeminence of private funding might affect parties’ independence vis-à-vis foreign or even organized crime interests. Along those lines, we should ponder the reasons behind the lack of public funding in the region. Is the electorate reluctant to support public funding because of the widespread perception that politics and corruption are often linked? (SPA/OAS, 2013 p. 26). Is there a fear that political cronyism leads governing parties to use state resources to distribute social benefits among their supporters in exchange for their votes? (GS/OAS, 2011 p. 107).

It is also necessary to consider what causes the lack of regulation and transparency when it comes to private funds and whether the answer might lie in the type of political system that prevails in the Caribbean, where most countries inherited the Westministerian model of British government under which political parties were traditionally groups of people who assembled together but who constituents elected individually. Under this model, parties do not constitute governing units, and, as a result, they lack their own legal identity. Consequently, parties are not subject to any collective rules and are not required to show accountability (SPA/OAS, 2013 p. 3).

For this reason, where some type of regulation does exist, it focuses more on candidates’ rather than political parties’ activities. In such cases, the financing systems for parties and elections are regulated by the Representation of the Peoples Act, which, in 4 out of 12 of the countries that make up the Caribbean Commonwealth10/ stipulates the maximum amount each candidate may spend, but in no case does it make a similar stipulation for each political party. Taking advantage of this legal loophole, candidates can channel funds through their parties, thus easily eluding the existing legal requirements (Barrow-Giles, 2013, p. 16-17). What alternatives exist to regulate political financing in contexts in which there is barely any regulation of political parties? How can the challenges posed by the dichotomy of financing via political parties and the candidates be tackled?

CONCLUSION

Over the course of these five days we shall endeavor to answer the questions posed herein as well as the many others that will arise. We will discuss modalities for financing parties and campaigns, reforms undertaken in this area, the challenges posed by illegal financing, and the use of public funds and their effect on electoral contests. We will likewise give thought to the regulation of political party and campaign financing, the limits and scope of oversight and accountability, and tools for transparency

10. Barbados, Guyana, Jamaica, Trinidad and Tobago (OAS, 2011 p. 110)

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and access to information. In addition, we will devote time to the logic behind and impact of negative campaigns.

Combining theory and practice, we hope to identify the main challenges the region is facing in terms of political and election campaign financing and create forums for applying the concepts discussed. We also expect the training seminars to provide concrete technical tools that may be implemented in each of our particular contexts in order to introduce changes and improvements to the region’s democratic systems.

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BIBLIOGRAPHY

- ALCÁNTARA, Manuel y M. BARAHONA, Elena (2003) “Política, dinero e institucionalización partidista en América Latina”, Universidad Iberoamericana – IFE - Facultad Latinoamericana de Ciencias Sociales, México.

- AA.VV (2002) “Dinero y política: El financiamiento de los partidos en la democracia”, Ediciones

de Banda Oriental, Uruguay.

- BARROW-GILES, Cynthia (2013) ¨Final Report: Regional Forum on Strengthening Regulation of Political Parties and Political Financing Systems in the Caribbean.¨ Unpublished.

- CARRILLO, Manuel; LUJAMBIO, Alonso; NAVARRO, Carlos; ZOVATTO, Daniel (2003)

“Dinero y contienda político-electoral”, IFE - FCE, México.

- CASAS, Kevin; ZOVATTO, Daniel (2011) Para llegar a tiempo: apuntes sobre la regulación del financiamiento político en América Latina en “Financiamiento de los partidos políticos en América Latina”, 2ª edición, IDEA – OEA – Universidad Nacional Autónoma de México, México.

- GUTIÉRREZ, Pablo y ZOVATTO, Daniel (2011) “Financiamiento de los partidos políticos en

América Latina”, 2ª edición, IDEA – OEA – Universidad Nacional Autónoma de México, México.

- INSULZA, José Miguel (2013) Opening speech ¨Regional Forum on Strengthening Regulation of

Political Parties and Political Financing Systems in the Caribbean¨, Bridgetown, Barbados. http://www.oas.org/en/about/speech_secretary_general.asp?sCodigo=13-0023

- M. FERREIRA RUBIO, Delia (2009) “Financiación política y género en América Latina y el

Caribe”, Encuentros de Mujeres Parlamentarias de América Latina y el Caribe, Madrid. http://www.americalatinagenera.org/main/especiales/2009/parlamentarias/documentos/financiamiento_politico_genero.pdf

- Manual OEA (2012) ¨Observando los sistemas de financiamiento político-electoral: Un Manual

para las Misiones de Observación Electoral de la OEA¨, SG/OEA, Washington DC. Unpublished.

- NAVARRO FIERRO, Carlos (2005) “Regímenes de financiamiento y fiscalización y garantías de equidad en la contienda electoral: Estudio comparado de 19 países de América Latina”, IFE - OEA, México.

- SG/OAS (2011) ¨Política, dinero y poder: Un dilema para las democracias de las Américas¨, FCE

– OEA, México.

- SPA/OAS (2013) Draft working paper “Political Party and Campaign Financing in the Caribbean: Scandals and Repercussions.¨ Unpublished.

- SPECK, Bruno Wilhelm (2002) Como financiar a competição política?Concepções contemporâneas, ilustrações do caso da Alemanha e perspectivas para a situação no Uruguay en AA.VV “Dinero y política: El financiamiento de los partidos en la democracia”, Ediciones de Banda Oriental, Uruguay.

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- ZOVATTO, Daniel (2003) América Latina: Introducción en CARRILLO, Manuel; LUJAMBIO, Alonso; NAVARRO, Carlos; ZOVATTO, Daniel (2003) “Dinero y contienda político-electoral”, IFE - FCE, México.

REPORTS:

- OAS (2013) ¨Electoral Observation Mission Verbal Report General Election in Grenada¨, February 19, 2013. http://www.oas.org/es/sap/deco/MOE_informe/InfoVerbal_Grenada2013.pdf - OAS (2012) ¨Electoral Observation Mission Final Report General Elections in The Bahamas¨, May 7, 2013. http://www.oas.org/es/sap/deco/MOE_informe/Bahamas2012.pdf - OAS (2011) ¨Electoral Observation Mission Final Report General Elections in Saint Lucia¨, November 28, 2011. http://www.oas.org/es/sap/docs/deco/2012/Inf_STLucia_e.pdf - OAS (2011) ¨Electoral Observation Mission Final Report General Parliamentary Elections in Jamaica¨, December 29, 2011. http://www.oas.org/es/sap/deco/moe_informe/Informe_Jamaica_2011_e.pdf - OAS (2011) ¨Electoral Observation Mission Final Report General and Municipal Elections in Guyana¨, November 28, 2011. http://www.oas.org/es/sap/deco/moe_informe/Guyana2012.pdf - OAS (2011) ¨Electoral Observation Mission Final Report Presidential and Legislative Elections in Haiti, first and second rounds¨, November 28, 2010 y March 20, 2011. http://www.oas.org/es/sap/deco/moe_informe/Haiti_Nov2010_Mar20_2011_e.pdf - OAS (2011) ¨Electoral Observation Mission Final Report Assembly Elections in Saint Kitts and Nevis¨, July 11, 2011. http://www.oas.org/es/sap/docs/deco/2012/S_KittsNevis_e.pdf - OEA (2010) ¨ Electoral Observation Mission Final Report General Elections in Suriname¨, May 25, 2011. http://www.oas.org/es/sap/docs/deco/2010/SURINAME_%20MAY25_%202010_e.pdf - OAS (2010) ¨ Electoral Observation Mission Final Report General Elections in Saint Vincent and the Grenadines¨, December 13, 2011. http://www.oas.org/es/sap/docs/deco/2010/StVincent_March1_2011_e.pdf - OAS (2009) ¨Electoral Observation Mission Final Report General Elections in Antigua and Barbuda¨, March 12, 2009. http://www.oas.org/sap/docs/misiones/Antiga%20and%20Barbuda%202009.pdf - OAS (2009) ¨Electoral Observation Mission Final Report General Elections in Dominica¨, December 18, 2009. http://www.oas.org/es/sap/docs/cp23875t01.doc - OEA (2008) ¨ Electoral Observation Mission Final Report General Elections in Grenada¨, July 8, 2008.

15

http://scm.oas.org/doc_public/ENGLISH/HIST_08/CP21290E04.doc - OEA (2008) ¨Electoral Observation Mission Final Report Presidential Elections in the Dominican Republic¨, May 16, 2008. http://scm.oas.org/doc_public/SPANISH/HIST_08/CP21219S04.DOC - OEA (2007) ¨Electoral Observation Mission Final Report General Elections in Jamaica¨, September 3, 2007. http://www.oas.org/sap/docs/DECO/Jamaica%202007.doc - OEA (2006) ¨Observation Mission Final Report General and Regional Elections in Guyana¨, August 28, 2006. http://www.oas.org/sap/docs/DECO/CP17303E04.doc - OEA (2006) ¨Observation Mission Final Report General Elections in Saint Lucia ¨, December 11, 2006. http://www.oas.org/sap/docs/DECO/Saint%20Lucia%202006.doc - OEA (2006) ¨Observation Mission Final Report General, Congress and Municipal Elections in Dominican Republic¨, May 16, 2006. http://www.oas.org/sap/docs/DECO/RepublicaDominicana2006.doc

17

Annexes

Comparative tables from the book, “El financiamiento de los Partidos Políticos en América Latina” [The Funding of Political Parties in Latin America]; Coordinators: Pablo Gutiérrez and Daniel Zovatto. International IDEA and the OAS. Mexico 2011.

Table 2 COUNTRIES WITH PUBLIC FUNDING IN LATIN AMERICA

COUNTRY DIRECT PUBLIC

FUNDING INDIRECT PUBLIC

FUNDING ARGENTINA YES YES

BOLIVIA NO YES BRAZIL YES YES CHILE YES YES

COLOMBIA YES1 YES COSTA RICA YES YES

DOMINICAN REPUBLIC YES YES ECUADOR NO YES

EL SALVADOR YES YES GUATEMALA YES YES HONDURAS YES YES

MEXICO YES YES NICARAGUA YES YES

PANAMA YES YES PARAGUAY YES YES

PERU YES YES URUGUAY YES YES

VENEZUELA NO NO

1. Direct public funding for presidential campaigns comes predominantly from the state.

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Table 3 ACTIVITIES TARGETED FOR DIRECT PUBLIC FUNDING IN LATIN AMERICA

COUNTRY ELECTION- AND PARTY-

RELATED

ONLY ELECTION-RELATED

ONLY PARTY-RELATED

RESEARCH AND STRENGTHENING

ARGENTINA YES NO NO YES BOLIVIA NO NO NO NO BRAZIL YES NO NO YES CHILE NO YES NO NO

COLOMBIA YES NO NO YES COSTA RICA YES NO NO YES DOMINICAN

REPUBLIC YES NO NO NO

ECUADOR YES NO NO NO EL SALVADOR NO YES NO NO GUATEMALA YES1 NO NO NO HONDURAS NO YES NO NO

MEXICO YES NO NO YES NICARAGUA NO YES NO NO

PANAMA YES NO NO YES PARAGUAY YES NO NO NO

PERU NO NO YES YES URUGUAY YES NO NO NO

VENEZUELA NO YES2 NO NO

1. The law does not specify the intended use of the funds, hence they are used discretionally. The law does,

however, permit foreign contributions from “academic institutions or foundations…for educational purposes.” (Article 21(a)).

2. To date, only in referendums, and restricted to television spots.

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Table 6 CATEGORIES OF INDIRECT PUBLIC FUNDING IN LATIN AMERICA

Country

Free Access to Public or

Private Media

Tax

Exemptions/ Waivers

Incentives for Disseminating/

Distributing Publications

Use of Public Buildings for

Political Activities

Transportation

Argentina Yes Yes No No No Bolivia Yes No No No No Brazil Yes No Yes Yes No Chile Yes1 Yes No No No

Colombia Yes No2 No3 No No Costa Rica No No No Yes No Dominican Republic

Yes No No No No

Ecuador Yes Yes No No No El Salvador Yes4 Yes No No Yes Guatemala No No Yes Yes No Honduras No Yes Yes No No Mexico Yes Yes Yes Yes No

Nicaragua No Yes No No No Panama Yes Yes No Yes Yes

Paraguay Yes Yes No Yes No Peru Yes Yes No No No

Uruguay Yes Yes No Yes No Venezuela Yes Yes No No No

In the case of Venezuela, free access to public media is not always guaranteed.

1. Free access to open TV only. Radio and the written press are excluded. 2. Presidential campaign funds are exempt from the tax on bank transactions. 3. Legally constituted movements and political parties enjoyed franking privileges and transportation expense

coverage until Legislative Act No. 01 of 2003 was issued. Under this statute, campaign-financing amounts were raised considerably so that these categories would be included among the replenishment funds.

4. In state-run media, but it tends to not be used.

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Table 7 PROHIBITIONS AND LIMITS ON PRIVATE CONTRIBUTIONS IN LATIN AMERICA: BY

SOURCE AND AMOUNT

COUNTRY

PROHIBITIONS ON CONTRIBUTIONS

(SOURCE)

LIMITS TO CONTRIBUTIONS

(AMOUNT) ARGENTINA YES YES

BOLIVIA YES YES BRAZIL YES YES CHILE YES YES

COLOMBIA YES YES COSTA RICA YES NO

DOMINICAN REPUBLIC YES NO ECUADOR YES YES

EL SALVADOR NO YES GUATEMALA YES YES HONDURAS YES NO

MEXICO YES YES NICARAGUA YES NO

PANAMA YES NO PARAGUAY YES YES

PERU YES YES URUGUAY YES NO

VENEZUELA YES NO

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Table 12 POLITICAL FINANCING OVERSIGHT BODIES IN LATIN AMERICA

Country Oversight Bodies

ARGENTINA Federal judges with electoral jurisdiction (one per district), and the National Electoral Chamber, with nationwide jurisdiction1

BOLIVIA Electoral body BRAZIL Electoral body CHILE Electoral body / Office of the Comptroller

COLOMBIA Electoral body COSTA RICA Electoral body DOMINICAN

REPUBLIC Electoral body / Office of the Comptroller

ECUADOR Electoral body EL SALVADOR Court of Accounts of the Republic2 GUATEMALA Electoral body HONDURAS Electoral body

MEXICO Electoral body NICARAGUA Office of the Comptroller, electoral body, Ministry of Finance and

Public Credit3 PANAMA Electoral body / Office of the Comptroller4

PERU Electoral body (Office of Political Party Funds Oversight of the National Electoral Processes Office (ONPE))

URUGUAY Electoral body VENEZUELA Electoral body

1. With the involvement of the Public Ministry and the Accountant Auditors Corps. 2. In practice [this Court] does not exercise oversight. 3. Assists the Office of the Specific Electoral Prosecutor with its work; such Office falls under the Public

Ministry and is created six months prior to elections. Once its work is completed, it ceases to operate. 4. The Office of the Comptroller intervenes when it comes to state contributions.