Choices: The money of politics or the politics of money?

May 01, 2006 (LBO) – It appears that lordships have been sold in the UK, again. Tony Blair, who criticized the Tories for selling honors, is on the back foot, trying to explain away the correlation between those who loaned large sums to the Labor Party and those who were appointed to the House of Lords.

Few years back the scandal was about Bill Clinton rewarding donors to the Democratic Party with nights in the Lincoln Bedroom at the White House.

Helmut Kohl, the former German Chancellor who has been extremely generous to us with post-tsunami assistance, had his good name besmirched by allegations of trading favors for political contributions.

Rajiv Gandhi and Bofors, Lalith Athulathmudali and the missing ship, the list goes on . . .. Good people all, but tainted by scandal.

When the same problem crops up over and over again, affecting different people in different circumstances, you have to ask whether the problem is systemic; whether instead of simply beating up on the perpetrators, we should ask whether something larger than individual greed or bad judgment is at work.

The problem is the fundamental weakness of democracy: the lack of a systemic and practical solution to the problem of funding political parties and campaigns without corrupting the political process.

In the aftermath of another of our periodic elections, this is a most pertinent question.

Who funds the JVP?

There is not much mystery about who funds the UNP.

It is a pro-private-sector party.

It is reasonable to expect that the private sector funds the party and its campaigns.

The other major political player in the country is the Peoples’ Alliance/the Sri Lanka Freedom Party/Mahinda Rajapaksa.

Given the demonstrated success of this entity in winning elections since 1994 and its commitment to a mixed economy, it is also reasonable to expect the private sector to fund its campaigns.

It is known that the all-Buddhist monk JHU (Jathika Hela Urumaya), in its major political campaign in 2004, received significant donations from Sinhala businessmen and professionals motivated by the events surrounding the death of Ven. Gangodawila Soma Thera.

But for anyone who pays attention to the outward manifestations of political campaigning such as the quantity and quality of posters along the streets, the media advertisements, the level of organization of political rallies and demonstrations, etc. the burning question has to be: who funds the JVP?

The four-color posters, the rallies, the newspapers, the television ads, the website.

None of these are costless.

None of these can be explained in terms of selfless volunteers.

Where does the money come from?

Who are the local businessmen who would fund the JVP consistently and at very high levels in the election campaigns that they instigate with increasing frequency?

Given the anti-private-sector stance of the JVP, in statements as well as in practice (union activity in particular), can there be significant private-sector funding for the JVP?

The original explanations of donated MP’s salaries and contributions from the rank and file membership are inadequate to explain the current levels of expenditures of the JVP.

The other explanation, which was donations from Sri Lankans (Sinhalese) living abroad, especially in Japan and Europe, also wears thin in relation to the magnitude of the JVP’s current spending.

The newest explanation is Chavez.

In the same way that the former Soviet Union and China surreptitiously funded sympathetic parties throughout the world, it is stated with relatively good evidence (Forero, Juan (2006, April 4), Chavez uses aid to win support . . . , New York Times) that President Hugo Chavez of Venezuela is spending the proceeds of increasing world-market prices for oil across the globe on various entities that he considers allies in his campaign against the United States.

The number that is mentioned is 25 billion dollars (LKR 2500 billion or LKR 2,500,000,000,000) in total.

Even if 0.0001 per cent of that came to the JVP, it would have received LKR 25 million.

That would have paid for quite a few four-color posters, private security details and escort vehicles.

What’s wrong with foreign funding?

In an increasingly globalizing world, nothing per se.

Everyone knows that the last remaining national liberation movement, the Palestine Liberation Organization, received and continues to receive enormous amounts of money from multiple sources, some government and some non-government and that even Hamas depends on foreign funding.

There is something hypocritical about a political party that takes every opportunity to attack those with views different from it on the peace process and other matters as “dollar kakkas”, depending for its core funding on foreigners, however progressive.

But that aside, the more serious issue is what is the quo for the quid? What does the JVP give in return? If not today, tomorrow?

The Indian experience is illuminating.  Iraqi funding of Congress Party politicians such as Natwar Singh is seen as having affected Indian foreign policy (http://news.bbc.co.uk/1/hi/world/south_asia/4502080.stm). Is the JVP’s obdurate opposition to the peace process driven by foreign interests?

Quo for the quid

Foreign or local, there is always a quid pro quo.

In the real world, no one gives something for nothing.

King Vessantara and King Siri Sangabo are revered and taught about not because their behaviors are common, but because they were so unusual and aberrant.

What does an entrepreneur who gives ten million rupees to a political campaign in Sri Lanka get in return?

The answer is no different from that in all other democratic systems; access and a hearing in all cases, special favors in a few. Normal politics, though not of the purest form in the former; varying degrees of corruption in the latter.

In the United States, where people have the time and the media have the resources to explore these issues in great detail, actions have been taken to regulate the political funding process in a way that allows the transparent funding of political parties, campaigns and candidates while attempting to close the door to corruption.

The solution and the flaws in the solution are educative.

Candidates can accept money from donors, but the donations must be public and subject to limits.  Public donations have tax benefits. Therefore, it is possible to visit a site such as http://www.fundrace.org/moneymap.php?cand=RepVDem&zoom=County and find out exactly who gave how much to George W. Bush and to John Kerry in the last election. This is good. It also shows that many companies, who need access to both political parties, give to both candidates, though in differing amounts.

Companies get access; political campaigns gets funded; should a vigilant citizen or the media wish to see whether any political decision is a quo for the quid, the evidence exists.

Not bad for a system widely rumored to be broken.

Without transparency, no evidence exists to prove or disprove allegations of corruption.

All that happens is that rumors and allegations fly whenever the government makes a decision that benefits or harms a company.

Decisions get delayed; the policy process loses legitimacy; development gets stalled.

This is not good for anyone.

Water, when blocked from flowing downhill, finds a way.

When political contributions intended to influence are blocked, they seek alternative paths: instead of giving to campaigns and be subject to their limits, donations are given to Political Action Committees and Section 527 Groups.

Billionaires like Steve Forbes and Bloomberg fund their own campaigns, outside the discipline of the system.

The flaws of the US system are too many to document here.

But, however flawed that system is, it is better than what goes on here, with people walking into politician’s homes with bags of cash and walking out with favors.

No one, not even people inside the party, knows how much was given by whom for what purpose.

No evidence exists to prove or disprove allegations that decisions were driven by donations.

Isn’t it time to convene a people’s consultation on political funding to identify solutions to the problem of funding parties and elections?

No one has solved the fundamental problem; but that’s no excuse for doing nothing.

If we can’t stop the rot, we can at least reduce it.