Comments Regarding Article 56 (Electoral Funds) Of Chapter Ix (Funding Of The Elections) Of The Draft Law On Elections Of Deputies To The State Duma Of The Russian Federation
International Foundation for Election Systems December 1997
1. It is my understanding that Paragraph four (4) of article fifty-six (56) specifies that funds provided to a candidate from the electoral association or bloc that nominated the candidate may not come from the electoral fund of that electoral association or bloc. This seems to contradict the spirit of facilitation of funding for candidates and disclosure of the law. For example, how is the funding for such candidates expected to occur? How will the original source of such moneys be accounted for and publicly disclosed?
2. Paragraph 6 specifies electoral funds of electoral associations and blocs may accept as much as 100,000 times monthly minimum wage from the «monetary resources» of the electoral association or bloc. Where is that money to come from? What would be the specific mechanism to account for and publicly disclose the original primal source of such moneys?
3. The way Paragraph 2 is written, in my understanding, it may produce a disclosure «loophole» by exempting electoral associations and blocs which only nominate candidates in single member districts from having to form and disclose electoral funds. Are these electoral associations or blocs not expected (or permitted) to engage in campaign activity on behalf of their candidates? Does a similar exemption in Paragraph 1 for candidates running on the «party list» create a similar problem? If the law intends to preclude separate campaign expenditures by electoral associations or blocs that only nominate candidates in single member districts, or by candidates on «party lists,» I respectfully suggest that the law should state that norm directly. From a policy point of view, what are the benefits of separating these types of campaigning?
4. Paragraph 20 of this article is very important because it explicitly requires all spending for election campaign purposes by candidates and electoral associations and blocs to be from their electoral funds. In order to prevent «off the books» spending through other means as we discussed during the Roundtable, I respectfully submit that language could be added, in addition to «shall not use any funds,» to include, for example, «nor approve or authorize payments for such purposes by other individuals or entities».
5. Paragraph 28 requires identification of legal entities within the publication by mass media of the reports about donations to candidates and electoral associations and blocs only at a minimum threshold of 500 times the monthly minimum wage (about $6500) in the amount of such donation from a legal entity. In my humble opinion, this threshold amount seems too large for excluding effective disclosure of such donations. The reporting threshold for disclosing donations from legal entities is 50 times higher than for identifying donations from individuals, which differs significantly from the law's limitation upon contributions from legal entities that is only 20 times higher than for contributions from individuals. What is the purpose of setting a disclosure threshold so high in the draft law? For example and discussion purposes, a figure of perhaps 50 times monthly minimum monthly wage (about $650) be more reasonable?
I respectfully suggest that this paragraph would benefit by including a requirement for disclosure on the report of any loan of moneys by individuals or legal entities (other than a loan by a chartered bank) to the electoral funds of candidates and electoral associations or blocs.
6. In my opinion, rather than only stating the norm as «periodically,» Paragraph 26 could specify exactly when election commissions shall send information about receipts and expenditure activity of electoral funds to the mass media. Specification could be a precise time schedule, or a minimum number of times (at least twice during the twenty days before the election) or a time limit linked to the first sentence of the paragraph (within five days of receiving such information from the banks). Specific reporting periods renders the disclosure process the same for every association/ bloc;
otherwise one may wait on the other to see who submits first and to what level of detail.
7. As discussed at the Roundtable on Campaign Finance Disclosure and Enforcement, the disclosure objectives of this draft law, and particularly reporting provisions under Paragraph 24, could be facilitated by requiring all candidate and electoral associations and blocs to appoint a financial agent (»treasurer») for the electoral fund who would, among other duties, be directly responsible for ensuring the accuracy and timeliness of filing disclosure reports.
8. Paragraph 8, in my opinion, would be improved by adding language after the list of impermissible donations to add clarity: «It is prohibited to make a donation by or through another individual or entity, or to make a donation in the name of another individual or entity.»
Furthermore, in this paragraph or in a separate paragraph, language could be added to explicitly state: «It is prohibited for candidates or their representatives, or for representatives of electoral associations or blocs, to utilize the funds, facilities, personnel or other resources of bodies of state power or bodies of local government or state and municipal enterprises for election campaign purposes.»
9. Paragraph 12 could specify an exact time frame within which impermissible or excessive contributions must be returned to the donor (perhaps ten days).
10. Language could be added to the second sentence of Paragraph 18 to include:
«or unreasonably favorable terms or time frames for extensions of credit.»
11. The time requirement seems too long under Paragraphs 1 and 2 by which candidates and electoral associations or blocs must form their electoral funds «no later than 20 days» after notification from or certification by election commissions regarding signature collection. While it is understandable this requirement must allow for practical time problems of applying for and establishing a bank account, it might be better to segment the steps and tighten up the time period (perhaps requiring appropriate election commissions to provide the necessary documentation to candidates and electoral associations and blocs at the time of notification or certification, then require candidates and electoral associations and blocs to make application to banks, with necessary documentation, within 5 days, and require banks to then establish such accounts within 5 days of receiving such applications).
12. Finally, I submit for your review and discussion two policy questions:
(a) Is the total expenditure limitation for candidates in Paragraph 5 reasonable in terms of real political experience and does it encourage competition? Setting the appropriate ceiling is key to encourage compliance while setting a minimum «level playing field».
(b) Do procedures for transmitting donations from individuals and legal entities through state banks discourage the making of private donations? Are any alternatives available that would not compromise accountability and recordkeeping but the act of contributing less onerous/difficult? What has been the experience of candidates / blocs / associations and the CEC in this regard? Who bears the burden ?