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Oversight project

See overview of Oversight here

0.2 Acknowledgements
0.3 Glossary
1 Part 1 Implications of the Legislative Framework for Oversight Institutions
1.1 International Standards and Agreements
1.2 Reasons to Regulate Political Finance
1.3 Components of Political Finance Regulatory Systems
1.4 Emerging Legal and Regulatory Issues
2 Part 2 Strategic Framework and Planning
2.1 Overview of Strategic Framework
2.2 Overview of Planning
2.3 Overview of Project Management
2.4 Risk Management
2.5 Performance Management
2.6 Stakeholder Engagement
2.7 Continuous Improvement Opportunities
3 Part 3 Operational Delivery
3.1 Oversight Institution's Role(s)
3.1.2 Advisory Services
3.1.3 Publication of Financial Reports and Your Decisions and Actions
3.1.4 Policy Development
3.1.5 Increasing Public Awareness
3.2 Compliance Control Mechanisms
3.2.1 Supervision and Monitoring
3.2.2 Preparing Reporting
3.2.3 Receipt and Review of Statutory Reports
3.2.4 Complaints and Allegations
3.2.5 Audits
3.3 Handling Issues of Non-Compliance
3.3.1 Investigations
3.3.2 Enforcement
3.4 Ensuring Appropriate Resources to Deliver the Oversight Institution's Role
3.5 Operational Policies and Procedures

1.2 Reasons to Regulate Political Finance

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It is widely agreed that political parties play a vital role in democracy, and they need money to do their job. It is also well acknowledged that money, although necessary, can result in undue influence and corruption which, in turn, undermines the democratic process. Protection against corruption and undue influence is one of the key reasons to regulate political finance.

A second reason for regulating political finance is to ensure transparency about the source of party and election funding and how it is spent. Most countries impose reporting and transparency requirements as part of their political finance legislation. Transparency allows the public to know who is backing whom and about the spending decisions of the political actors. This information can help voters decide how they will cast their ballots. At the same time, transparency serves as an important mechanism for deterring corruption. 

As the oversight body, you are likely to shoulder responsibility for the implementation and enforcement of the reporting and disclosure rules. It thus is vital that you understand the importance of ensuring timely, accurate and meaningful disclosure of political finance data and deliver this area of your remit well. See further in the sections Publication of data, actions and decisions and Receipt and review of statutory reports.

A third rationale for regulating political finance is to provide equality of opportunity or a level playing field for electoral contests. Rules governing public funding, limits on the size of donations and election campaign spending restrictions are legislative tools designed to help achieve fair competition. Of course, their effectiveness will depend largely on how well you, as the oversight institution, control compliance with the requirements set out in law. Effective control requires that you have solid policies and procedures for supervising and monitoring political finance, see the sections on Receipt and review of statutory reports and Operational policies and procedures.

Finally, the fourth rationale for regulating political finance is to ensure proper accountability. There is no point in having rules if they are never enforced or enforced in a partial and unfair manner. This simply brings the entire system into disrepute. Once again, as the oversight body, your actions are essential to making the required accountability a reality. Depending on the jurisdiction, this will likely mean that you need mechanisms in place for handling issues of non-compliance, that your agency can undertake timely and credible investigations and that you impose (or recommend) proportionate sanctions where the law has not been followed.