Saturday, November 5, 2011

Political Party Financing and Corruption

Introduction
In a recent issue of Time Magazine, Fareed Zakaria writes
Special interests [in the US] pay politicians vast amounts of cash for their campaigns and in return they get favorable exemptions or credits in the tax code.  In other countries, this sort of bribery takes place underneath bridges and with cash in brown envelopes …  (October 31, 2011, page 19)
This echoes views held by some people in Mauritius who see political party financing as the root of all corruption.  
Views similar to those above were presented during a workshop at the University of Mauritius on the issue of governance on October 13, 2011.

Excerpts from POCA

While the Prevention of Corruption Act 2002 (POCA) may not include specific provisions relating to political bribery, it does address a range of potentially corrupt activities which many law abiding citizens may not consider objectionable: 

·         An “act of corruption" […] includes [...] “the abuse of a public or private office for private gain”

·         "gratification“ means a gift, reward, […] or other advantage, other than lawful remuneration; and includes  […] the offer of an office, employment or other contract; […] the offer or promise, whether conditional or unconditional, of a  gratification;

·         "public official" –  means a Minister, a member of the National Assembly, a public officer, a local government officer …

·         Bribery by public official

Any public official who solicits, accepts or obtains from another person, for himself or for any other person, a gratification for doing or abstaining from doing, or having done or abstained from doing, an act in the execution of his functions or duties 


Would the above apply, for instance, to those state paid teachers who directly or indirectly impose private tuition on their own students or those state paid doctors who directly or indirectly impose private consultations on their own patients? Would these teachers and doctors be guilty of corruption under POCA?  Are they abusing their public office for private gain and benefiting from monetary gains “other than lawful remuneration”? 

While many of us would not hesitate to condemn a badly paid police officer who accepts a bribe voluntarily offered by a speeding driver, we may not be ready to react in a similar manner to some members of other professions who may be abusing of their public office for private gain.

Is Political ‘Donation’ a Bribe?

Similarly, would “bribery by public official” include political ‘donations’ as Fareed Zakaria implies in the quotation above?  Can political donations be sanctioned under the POCA provisions?  In many countries, political donors would include contractors and other service providers who in return for their financial support are given juicy contracts often with inflated prices which are ultimately paid by the tax payers.  More importantly, contractors who have bribed decision makers are likely to escape close scrutiny with respect to quality and/or timely delivery.  There may even be cases where the contracting firm is owned by the politician or his family / close associates.

Political donors (whether local or international) may also be given the opportunity to purchase state assets (e.g., lands, mining/fishing concessions) at very low prices.  While the state ends up with less revenue, the difference between the market price and the sale price is often pocketed by some politicians who use a small part of this ‘donation’ to in turn bribe the voters to keep them in power.  The rest is used for personal enrichment. 

There are also countries where people involved in criminal activities (e.g., dealing in narcotics) also finance political parties.  As a result these criminals are protected and / or receive other benefits (e.g., contracts) while the number of victims of substance abuse continues to increase.  The political party in these cases becomes a big money laundering machine. 

The Role of the Average Citizen

Where does the ordinary citizen fit in this situation?  Very often he does not see the big picture because he is often a victim of spin doctors employed by the same politicians.  He often is under erroneous impression that the politician is generous and cares for his welfare because every now and then he is also in turn bribed, for example, by being invited to a picnic financed by the party or being ‘given’ a job.   Thus the ordinary citizen unwittingly becomes a passive accomplice in the corruption cycle (he votes the same ‘generous’ politician back in power) while he may consciously not approve of corruption. 

Moreover, what people do not realize is that the politician is only sharing a microscopic fraction of the bribe received from ‘donors’ and pocketing the difference.  The people are not always aware that they are the ones that would directly or indirectly be required to pay for this massive bribery by having to endure poor / inadequate services (e.g., education, health …), by being paid lower salaries or pensions, by paying higher direct / indirect taxes to finance the overpriced contracts, etc.  

The Effectiveness of Current Institutional Frameworks

Is the current institutional framework adequate to deal with corruption given the number of people and the complex ramifications involved?  There is no doubt that dealing with corruption goes beyond catching stray individuals taking petty bribes.  One way forward would be to strengthen the existing institutions and adopt a broader definition of corruption that would encompass political bribery.   This would enable institutions to effectively curb systemic corruption involving large bribes being paid to people in power in return for past or future favours.     

Moreover, while a broader application of existing legal frameworks may suffice to curb corruption, this measure may not be very effective if the ordinary citizen is unwilling/unable to refuse to be bribed by politicians.  This is a difficult proposition for people who are struggling to make ends meet.  This partly explains why many decision makers are not always  keen on taking drastic measures to eradicate poverty because it helps to have a large number of ‘hungry’ and dependent potential voters who can be easily ‘bought in bulk’.     

Finally, expecting the current generation of politicians to come up with the required robust legal framework may involve a contradiction in terms.  Ironically, political corruption goes a long way towards ensuring that the status quo is maintained.  And yet, this systemic corruption, which is considered unavoidable by those who directly or indirectly benefit from it, is one of the root causes of poverty, inefficiency, nepotism, law and order problems, and waste of limited resources (including brain drain).

Published in Le Mauricien on 3 November, 2011

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