Campaign financing: proposals for reforms

We continue comparing and contrasting the US and Malawi electoral systems. As promised last week, we will look at the proposals on regulating campaign financing as contained in the draft Political Parties Bill which is being championed by the Centre for Multiparty Democracy (CMD).

The Political Parties Bill will replace the current Political Parties (Registration and Regulation) Act in order to address the challenges being faced when regulating the registration, financing and functioning of political parties.

In Malawi the Constitution gives an obligation to the State to provide funds so as to ensure that, during the life of any Parliament, any political party which has secured more than one-tenth of the national vote in elections to that Parliament has sufficient funds to continue to represent its constituency.

As explained last week, political parties and candidates in Malawi do not get state funding for campaign unlike in the US where aspirants get funding for campaign ahead of party primary elections. Parties also get funding for their candidate nominating conventions.

The Parliamentary and Presidential Elections  Act (Section 66) and the Local Government Elections Act (Section 50) provide that every political party(independent candidates included) may, for the purpose of financing its campaign, appeal for and receive voluntary contributions from any individual or any non-governmental organization or other private organization in or outside Malawi.

However, there is no law regulating and requiring political parties to disclose their campaign spending. No party has come out so far to the public to disclose how it has spent the money either received from the State for its sustenance or well wishers for its campaign activities. That is why the CMD has drafted the new bill to among other things address this gap. The proposed bill maintains entitlement for political parties to state funding and outlines the uses for that state funding. Other proposed issues in the bill include:

  • Banking, accounts and audit: parties are expected to maintain a separate bank account, maintain proper books and records for state funding and submit final accounts to the Registrar of political parties who shall forward them to the Speaker and the Auditor General. Parties spending outside the provision of the Act shall be surcharged.
  • Suspension of State funding: The National Assembly is being given powers to recommend to the registrar the suspension of funds to a political party if it fails  to comply with the law.
  • Closure of books and records of account upon dissolution of Parliament: Parties will be expected to close books and records not later than 21 days before date set for elections, submit audited statement to the registrar within 14 days thereafter and also refund to the registrar any unspent balances from state funding not later than a day before poling.
  • Power of Minister of finance: he may issue instructions on better management of the funds.
  • Private funding and receipt of donations: Parties can fundraise, receive membership fees and donations. Any donation, cash or material, worth more than K1 million from individuals and K2 million from organizations should be declared with the registrar within 30 days disclosing the source. Parties shall not receive donations from state-owned corporations. Any person who uses or threatens to use force or violence, injures, damages or harms any person who donates or intends to donate any funds to a candidate, or a member of his family or any of his undertakings on account of the donation, shall commits an offence and be liable to a fine of K500, 000 and imprisonment for five years.
  • Separate bank account for private funding:         All private funding shall be deposited in a separate bank account held in the name of the party.
  • Registration and declaration of assets: Parties shall ensure that private donations (assets) are vested in the names of the parties. During registration and every five years thereafter, a party shall declare its assets to the Registrar.
  • Auditing of private financing: All parties that receive private funding shall be required to maintain a separate bank account which shall be audited by the Auditor General.
  • Members’ access to financial records: A member of a registered political party shall be entitled to have reasonable access to all financial records of the party of which he is a member.

This is in summary of what is provided by the draft bill regarding political party financing.