Wednesday, May 21, 2014

Who are the secret owners of political parties?

Who is the most influential person in Mongolia? For whom exactly does the authority make decisions for? In order to answer these questions fully and accurately, we, the citizens, must at least be aware of who exactly is funding political parties that are producing authorities. In other words, we must know where political parties get their financing from.

Without investigating who donated how much, to which political parties, under whose names, and whether those who made donations or their relatives have been given senior positions inside the government, and without disclosing such information to the public, Mongolia can never stop corruption and remove the biased influence that wealthy individuals and companies have on the decisions that are coming from the government.
Given that they are keeping the financial information of political parties undisclosed to the public, it sounds like a bad joke when the government announces that they will become a “smart government” and have a “glass purse” (meaning their financing will become transparent). The financing of political parties have been increasing after every election, reaching dozens of billions of MNT and there is no transparency in where or from whom political parties get their campaign finance and how they are paying it back.

If a country cannot stop its government policy from serving only few wealthy individuals, people lose their trust in the government and a dictatorship gradually sets in. When that happens, democracy, human rights, and an increase in the living standards of ordinary people become nothing more than a dream.

The life of political parties in Mongolia has two seasons: election season and non-election season. During an election season, financing of political parties is regulated by the election law. If it is a non-election season, the Law on Political Parties governs the funding of political parties.

It is stated by the law that political parties must submit their campaign finance reports to the General Election Committee within a month after the conclusion of an election. According to the General Election Committee, the Democratic Party spent 11.2 billion MNT while the Mongolian People’s Party spent 10.1 billion MNT for the 2012 parliamentary elections. The total expenditure of all political parties was 35.7 billion MNT that year. The committee’s report states that a total of 2,525 people donated up to one million MNT, the maximum amount allowed by law, to the Mongolian People’s party (MPP) whereas the Democratic Party (DP) and Justice Coalition had 3,000 and 1,300 individual donators respectively. If you exclude the donations that came from individuals, the remaining financing of political parties is made up by donations offered by companies. Legally, a company can make a donation of up to 10 million MNT to a political party. However, there should have been independent audits performed on those reports.

The 2012 parliamentary election, the first ever majoritarian and proportional mixed one, had 76 electoral districts and a total of 544 candidates, including 354 candidates by political parties, 190 nominees listed by political parties and 26 independent candidates. If we take these numbers into account, the campaign finance report suggests that each candidate spent 65 million MNT (approximately 50,000 USD) on average. However, the election campaign costs were much higher in reality. The report obviously did not include the hundreds of millions of MNT that the political parties charged their members for nominating them in the party lists.

The finance reports of political parties from a non-election season are never made public. The actual numbers are not even known to ordinary members of political parties. The only glimpse we can have in those finance reports is when such information is sometimes leaked to the media due to internal conflicts within a political party. For example, Ts.Shinebayar, a former member of Parliament, stated in March 2012 that “During the 26th Conference of the Mongolian People’s Revolutionary Party (currently Mongolian People’s Party) U.Khurelsukh, who was the general secretary of the party at the time, said that MAK (Mongolyn Alt Corporation) and NIC (Petrovis) companies each made donations of one billion MNT to the party while members of Parliament Sh.Saikhansambuu, B.Choijilsuren, and Ts.Sodbileg also donated one billion MNT each. D.Damba-Ochir donated 500 million MNT.” The non-election season financing of the Democratic Party is also undisclosed and the total amount of donations they received would presumable be not less than that of the Mongolian People’s Party.

This secrecy surrounding political finance makes people doubt whether the current authorities received some benefits lawfully, by providing cheaper loans to banks and companies, in which they had vested interests, when allocating the proceeds of 1.5 billion USD acquired by the issuance of government bonds. The government needs to have an independent audit carried out on itself, and inform the public of the results.
Viewed as “questionable” by the current Parliament, 130 of the total 260 projects that are funded by the public budget were commenced in 2012, which was an election year. It shows how greatly campaign finance has become dependent on public budget.

At any rate, there is a huge amount of undisclosed financing in Mongolia’s politics. This secret political finance include money collected from state-owned companies’ income rather than profits, all kinds of formal and informal fees charged from large infrastructure projects, under the table dealings for the issuance of government permits, and other donations.

As the real income of the people decreases every year due to weaker MNT rates, the wealth of our senior state officials keeps growing. Therefore, transparency in political finance is one way to achieve justice. A great hope lies in the belief that the new bill on the transparency of financing of political parties will not go up in smoke in Parliament.

We see the need for our country to develop and implement specific laws to regulate the cash flow that is coming in and out of political parties. If there is transparency in political finance, people will be able to oversee the flow of huge amounts of cash found in our political sphere today. It will be great contribution to letting people make informed decisions and boosting their trust in democracy as well as politicians.
Healthy competition in politics is clearly dependent on economic sources. However, there should be a good regulation that allows the oversight on the acquisition of economic sources and their use. A timely report to the public should also be ensured.

In Mongolia, the public budget provides a certain amount of funding to political parties. Ten million MNT for each seat in Parliament was allocated to political parties from the public budget. It was provided once a year and half the money was spent on the electoral districts by the relevant members of Parliament. However, the money given to members of Parliament has been increased to one billion MNT each, which drew a lot of criticisms from the public. The State Fund informed that a total of six trillion MNT were provided as financial assistance to political parties who had seats in Parliament from 2009-2012. Since they are receiving funding from the public budget, political parties are supposed to produce their financial reports on a regular basis as state funded organizations do. However, they seem to have “forgotten” to do this.

International practices show that there are three main components in the expenditures of political parties. These include non-election expenditures (costs associated with structure, organization, and routine operations of political parties), election expenditures (campaign finance), and independent expenditures (when a candidate raises funds independently from the political party). Independent audits are performed on each of these expenditures and detailed reports are released.

It is viewed by policy researchers that the public funding for political parties encourages transparency in public governance, supports healthy political competition, and contributes to the establishment of strong and responsible political institutions. Laws alone will not be enough to ensure transparency in political party funding. In order to make sure that laws are fully implemented, all related stakeholders including political parties, government organizations, media and civil society must work together in harmony.
Every support should be given to government organizations that ensure the implementation of the law on political party finance and to the media, political oppositions, universities, and research organizations that contribute to transparency.

Strengthening democracy is like nurturing a tree. When you plant a tree in the ground, you cannot leave it as if it is a 100-year-old oak, but nurture the tree regularly by watering and protecting it. In a democratic society, the ruling power goes to the political party that has won the public election. The winning political party assumes a great power, which is accompanied by a great responsibility. This responsibility of theirs must start from being able to provide their financial reports on time and make it available to the public. Just as we must constantly nurture the trees, we, the voters, must always make such demands to the political party and start providing regular oversight. This way, our democracy can be strengthened. As our tree grows bigger, there will be more reliable guarantees for less corruption, stronger democracy, and better protection of our rights.

Translated by B.AMAR

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