A campaign finance law that bites

That's what the AAP can now help bring in.

Written by Vinay Sitapati | Published:December 14, 2013 2:59 am

Atal Bihari Vajpayee once said that “every legislator starts his career with the lie of the false election return he files”. Election expenses in India are a murky business,and politicians spend many times the legal limit to get elected. Not so with the Aam Aadmi Party. Their 28 newly minted MLAs will not begin their careers with a lie. They seem to have spent within the legal limit per constituency; their election returns will likely be accurate. Though subject to a court case and government investigation,little mud seems to have stuck. The list of donors is available online and the party has collected just Rs 20 crore so far. It is certain it was outspent by the Congress and the BJP. The AAP’s relative honesty in election expenses presents an idea for its next campaign: reforming election finance laws.

Those laws are currently a joke. The Election Commission imposes legal limits on campaign finance: Rs 16 lakh for a state assembly seat and Rs 40 lakh for a parliamentary seat in most big states. Contrast this with the public confession by Maharashtra politician Gopinath Munde that he spent Rs 8 crore on his 2009 parliamentary election. Munde is unique only in that he is honest. In a 2012 article in the Election Law Journal,Rajeev Gowda and E. Sridharan argue that campaign finance is a key site for corruption in India. They estimate the various ways in which political parties under-report expenses. Their conclusions will come as no surprise to even a casual observer of Indian politics. It is an open secret,so open that the Mundes of the world are not even punished for admitting guilt. I was witness to this brazenness two years ago,when a prominent MP (and spokesman for his party) told me that illegal money was rife in campaigning. But even he was shocked when “an MLA from within my [MP constituency paid Rs 15 crore to win his election”. Also listening was a spokesperson and MP from a rival party. He too was not shocked at the fact of illegality,but by its scale.

Money power in election campaigns hurts a vital organ of democracy — what the economist Joseph Schumpeter,in his much-cited definition of democracy,calls “a competitive struggle” for the people’s vote. Only if there is true competition between political parties and candidates can voters have a genuine choice. What illegal money does is ensure that only the very rich and well-connected can stand for elections,giving voters little to choose from. Money power also ensures that politicians rely on shady businessmen to win elections. In politics as in economics,there is no such thing as a free lunch. The victorious legislator must spend his time in office returning favours,through government contracts or worse. Five years on,another election demands another round of money given and favours granted. The cycle persists.

There are many proposals to halt this vicious cycle. The first is to remove any expenditure limit,while empowering the EC to force all candidates to publicly disclose what they actually spend. A second proposal is to increase the limit to a more realistic amount. The third is to make the government fund the campaign expenses of political parties,a suggestion made by official committees such as the 1998 Indrajit Gupta Committee on State Funding of Elections. A final suggestion is for a strict audit of party expenditures by the income tax department. In fact,in a 1996 judgment,the Supreme Court forced parties to file income tax returns on their election expenses. These are valuable proposals,but have not turned off the steady trickle of black money into elections. The reason: since every political party is guilty,no politician is willing to adopt these proposals. Why would you bite the hand that feeds you?

No more. The emergence of the AAP allows for a campaign finance law with some bite. Arvind Kejriwal has made much of the fact that his party is driven by small donors,and that he has put their names online. He has knocked on most Delhi doors,enthused volunteers and bought street credibility instead of buying votes and bribing local toughies. Another party leader,Yogendra Yadav,has previously argued for campaign finance reform through state-funding. His party does not yet seem beholden to shady industrialists and is exempt from the code of silence that other parties practise on this topic. This could change. New evidence of fat-cat funding of the AAP could emerge,and sips of power could giddy the party away from its proclamations of fiscal virtue.

But for now,a man known for burning draft laws he abhors is in a position to draft those very laws. For Kejriwal is no more the mere organiser of a movement content with fasting at Ramlila Maidan. His is now a powerful party with 28 loud voices in the Delhi assembly. Those voices should scream for campaign finance reform. They will now be heard.

The writer is a lawyer and doctoral candidate at Princeton University,US

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