Test case of political finance | Dawn

This article was published in Dawn on June 06, 2021 and is available at the following link


THE regulation of political finance (PF) offers one of the greatest challenges to democracies around the world. Political parties, elected legislators and governments can become hostage to powerful and extremely rich interest groups, if political finance is not effectively regulated and institutions entrusted with the task don’t have robust capacity to enforce the regulations. It is true that political parties and election campaigns require funds for political participation and representation, but ineffective regulation of the flow of money in politics can corrupt political institutions and lead to political corruption and damage public trust in democratic institutions and processes.

PF deals with funding of and spending by political parties, candidates for political office, election campaigns and elected representatives. Each democratic state has put together a set of laws to manage PF. Usually, one or more state institutions are entrusted with the critical task of enforcement of the PF legal framework. As the power and reach of domestic and foreign interest groups have increased and we have seen the emergence of corporate giants commanding budgets far bigger than those of many developing states, the vulnerability of politics to such interests has increased manifold. The management of the PF system has, therefore, become more complex and exceedingly important with time. Societies that have failed to upgrade their PF systems and build the capacity of institutions responsible for ensuring the integrity of PF, are at great risk of falling prey to vested interests.

Pakistan’s PF is mainly governed by the Elections Act, 2017, and the Election Commission of Pakistan (ECP) is entrusted with the responsibility of overseeing the system. Submission of elaborate statements of assets and liabilities by election candidates at the time of filing nomination papers and by elected representatives annually are two important features of Pakistan’s PF system dealing with individuals. Likewise, political parties are required to submit details of election spending after each general election and its audited consolidated statements of accounts duly certified by the party head or his designated official every year. All these documents submitted by the individuals and the parties are made public through gazette notifications.

Although there is definitely room for improvement, Pakistan arguably has a robust legal framework for the PF system. The greatest weakness of the system, however, and like all other laws of the land, lies in its enforcement. The ECP, which is an independent and powerful institution mandated to manage all affairs dealing with elections, has been reluctant to assert its authority in the past. Lately, it has demonstrated that it is now ready to exercise its authority and withstand pressure from other institutions.

Ineffective regulation of flow of money in politics can corrupt political institutions.

The capacity of the ECP’s PF wing, however, urgently needs to be up-scaled. It is important that the PF wing has the capability to undertake regular detailed scrutiny and even do a forensic audit of at least some selected financial statements submitted by politicians and political parties periodically. What is going to prove a test case for the PF wing and the ECP in the next few weeks and months is the professional investigation and expeditious disposal of allegations of prohibited funding received by four major political parties of Pakistan. It will be a test of both the will and competence of the ECP.

Take the relatively recent allegations against the PML-N, PPP and JUI-F, the oldest of these cases is the one against the current ruling party, the PTI. The case started with a petition filed before the ECP as far back as Nov 14, 2014, by a founder member and former central information secretary of the party who alleged that the party has not only received prohibited foreign funding but has also indulged in money laundering and the misuse of funds. Each annual consolidated statement of accounts submitted by the PTI carried the certification by the party chairman and present prime minister Imran Khan that no prohibited funding was received by the party. Therefore, the allegations, if proved, may carry serious consequences for the PTI and its chairman culminating even in the party’s dissolution. It is, at least partly, a measure of the weak capacity and will of the ECP that the case which should have been decided in months, if not weeks, has lingered on for nearly seven years and is still going around in circles. This delay is also partly attributable to the country’s faulty judicial system.

A perusal of the time line of the case tells a sad and painful story of how this most celebrated case relating to PF has been dealt with by the ECP, the courts of law and the political party in question. The ECP has conducted more than 70 hearings of the case during the past six and a half years and passed around two dozen orders, some of which have not even been complied with. It constituted the scrutiny committee in March 2018 to examine the PTI’s accounts and submit its report by April 17, 2020. The report submitted by the committee was so shoddy that the ECP rejected the report and asked for the final report to be submitted by Oct 11, 2020.

Although the scrutiny committee has met about 75 times so far, it has not completed its assignment and its head, a senior ECP official, has said that the proceedings might continue ‘forever’, as reported in the media. The PTI approached the courts around a dozen times to challenge the ECP’s jurisdiction to probe its accounts and other legal issues. A review of the media reports indicate that the PTI sought adjournment of the case close to 30 times and changed its legal counsel at least eight times.

Irrespective of the final outcome of the case, the key question remains whether Pakistan and its institutions will continue to deal with the critical question of political finance in the same way as they are handling the PTI foreign funding case.

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