Parliamentary Election Campaign Financing - Implementation Assessment

SGK Election Campaign Financing: Transparency Assessment
PARLIAMENTARY ELECTION CAMPAIGN FINANCING: IMPLEMENTATION ASSESSMENT CONTENTS

ABBREVIATIONS ACKNOWLEDGEMENTS PREFACE
CHAPTER ONE
ELECTION CAMPAIGN FINANCING: TRANSPARENCY AND INTERNATIONAL PRACTICES
1. Election campaign financing and transparency: the impact of money on politics 2. Transparency of election campaign financing and the adoption of international standards 3. Transparency and international practices in election campaign financing CHAPTER TWO 1. Survey objectives 2. The legal environment 3. The political environment CHAPTER THREE SURVEY OUTCOMES GENERAL PROVISIONS OF THE SURVEY
1. Election campaigning 2. Election campaign donations 3. Election expenditure 4. Reporting and Publicizing 5. Implementation and monitoring 6. Conclusions and recommendations CHAPTER FOUR
Voter Education Center R. Burmaa
BIBLIOGRAPHY
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ABBREVIATIONS
ACA CC CWP DP DPP GEC MPRP NGO NNP OSF RP SC SGK VEC Anti-Corruption Authority Constitutional Court Civil Will Party Democratic Party Development Program Party General Election Committee Mongolian Peoples Revolutionary Party Non-Government Organization New National Party Open Society Forum Republican Party Supreme Court State Great Khural (Parliament) Voter Education Center
ACKNOWLEDGEMENTS
Ensuring transparency and providing support to the public in their oversight of election campaign financing is crucial for reducing the influence of money on politics, and for preventing corruption. We are grateful for the financial contribution of the Embassy of the United States of America, which supported the VEC to assess the implementation of Parliamentary (SGK) Election Law provisions that refer to transparency in campaign financing; an issue of critical concern in Mongolia and internationally. On behalf of the Voter Education Center, we would like to extend our sincere gratitude to the organizations and individuals who contributed to the survey. This report compares the Parliamentary (SGK) Election Law provisions that relate to transparency with the practical implementation and real life practice of election campaign financing. This study aims to contribute to the strengthening of transparency in relation to election campaign financing in Mongolia, by initiating multi-lateral public discussions, improving the implementation of relevant legislation and pursuing legal reform.
PREFACE
In 2007, with the support of the International Republican Institute (IRI), R. Burmaa, Director of the Voter Election Center (VEC), conducted an assessment survey on election campaign financing as regulated by the amended Parliamentary (SGK) Election Law of 2005. At the report review meeting, it was agreed that campaign financing regulations stipulated in the Parliamentary (SGK) Election Law are insufficient, weak, conflicting and difficult to enforce. The provisions moreover conflict with Mongolias Constitution and other existing
Voter Education Center R. Burmaa 2
legislation. Following this discussion, the VEC informed policy makers and other relevant stakeholders of the identified irregularities. The Parliamentary (SGK) Election Law, amended in December 29, 2005, was applicable to the 2008 Parliamentary Election and this enabled the VEC to highlight the advantages and disadvantages of the law, and the problems associated with its implementation. Based on the aforementioned difficulties, the VEC conducted an implementation assessment survey on the provisions regulating election financing, and subsequently initiated multilateral public discussions on the topic, aiming to propose concrete recommendations for moving forward. CHAPTER ONE ELECTION CAMPAIGN FINANCING: TRANSPARENCY AND INTERNATIONAL PRACTICES 1. Election campaign financing and transparency: the impact of money on politics Countries around the world are paying closer attention to the flow of money in politics. Although spending money on elections and political party financing are standard practices, the improper use of money brings distortion and unfairness to the political process, and creates grounds for corruption. Providing support to ensuring transparency in the flow of money in political processes is therefore central to the consolidation of democracy and development in Mongolia. The term political funding encompasses both funding for political parties and election campaigning.1 Transparency in election campaign and political party financing is related to the following information: Who is providing money? How much money is provided? Who is receiving money? For what purposes is money used?
One. The impact of money in politics Without appropriate regulatory mechanisms, money can negatively influence politics in the following ways: 1. Creating unfairness in the political field: Large amounts of money provide preferential rights to political parties and candidates who have access to these sums; If incumbent parties obtain control of state funds, they gain preferential rights in the election by abusing them; State control of media institutions further promotes unfair competition.
Money in Politics Handbook: A Guide to Increasing Transparency in Emerging Democracies, United States Agency for International Development. Voter Education Center R. Burmaa 3
2. Creating unfair election opportunities for candidates: Elected politicians represent the interest of affluent groups that support them and not Mongolian society more broadly; An absence of regulations over campaign expenditure creates an environment in which candidates with access to a large amount of financing are able to win. 3. Buying out politicians: Elected politicians ultimately serve the interest groups that fund their election campaign and not the public; Politicians become loyal to their main funders and political decisions are subsequently made in favor of large corporations; Reasons for increasing election spending are related to politicians trying to implement their previous election promises, and attempting to serve the interests of prospective donors for the next elections. Dirty politics: When corruption enters the political arena, it compromises the law enforcement and compliance process; Election campaigns funded by illegal revenue raised by criminal groups will result in elected politicians serving and protecting these illicit groups; Politicians who win elections by misappropriating voters tax payments ultimately use these funds for their own personal benefit; For political parties and candidates who buy their power with the use of illegal funds, it becomes a political ransom.
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In reducing the impact of illegally raised revenues on politics, countries around the world have enacted financing regulations; however legislation lacking the appropriate enforcement mechanisms limits achievements and risks the following: Lack of political interest Politicians lack interest in ensuring transparency in political funding and developing appropriate law enforcement mechanisms. The activism of a well established civil society must demand greater political interest. Legislation In ensuring the enforcement of transparency regulations, there is a need for precise legislation and clarity over which organization will retain competencies over the matter. Vague provisions that conflict with one another and that can be interpreted differently reduce the potential for sufficient law enforcement and accountability measures. Insufficient spending Monitoring the flow of finances in politics requires a substantial amount of funds and capacity. In many cases, it is insufficient. Weak law enforcement agencies In many countries, investigative agencies lack the authority to achieve their objectives, and such organizations hold governmental or partial-governmental status and operate as part of the executive branch of government. They may not have the authority to investigate complaints, file court cases, demand information, produce audit reports, issue penalties and take responsibility measures. In addition to a competent law enforcement agency, there is a need to establish a court system in order to address and resolve election campaign and political party funding issues.
Two. Transparency Transparency involves detailed reporting on the flow of finances in politics, including the origin and expenditure of funds, and most importantly, it necessitates publication and public access to the reports. Transparency requires that political parties and candidates openly inform the public about their income and expenditure, and requires disclosure of the following information: List of donors, as individuals or entities, who provide financing for candidates or political parties and the details of the donation; Other sources of income received by candidates or political parties; A list of the products and services that were purchased and what activities were funded during the election campaigning period. Transparency enables the public to access critical information, particularly information regarding the identification of who donated how much money to a politician or political party, and how that money was spent. In ensuring transparency, there is a need to define: the kind of information that should be available; who should have access to such information; how it should be made available; who should be responsible of collecting and managing the information; and in what time frame should it be collected and released. For example: 1) Who should make such information available? It is the responsibility of political parties and candidates to disclose financial information. In addition, a donating party shall also be required to openly announce their donations. 2) What kind of information shall be made available? The two types of information that need to be made available include donations and expenditure. 3) To whom and how the information should be made available? The General Election Committee Commission (GEC) or the government agency responsible for conducting the election shall have access to the financial statements of candidates and political parties. Such organizations are entitled to demand and retain financial statements, however true transparency requires that such information be made available to the general public. Accordingly, the media, non-governmental organizations, civil society groups and researchers should be able to access this information, provide analysis on election campaign financing, and publish their conclusions and comments. 4) Timing for making the information available Transparent information should be disclosed within a legally stipulated timeframe. Election campaign financing reports can be announced one day prior to the actual voting day however, this is only practiced in a few countries and may impact on the voters views. In some countries, political parties report their donations on a quarterly basis, while in other countries political parties are required to report on a weekly basis throughout the election period.
2. Transparency in election campaign financing and the adoption of international standards2 One. Legal grounds The most important standard within legislation is to ensure equality in the election campaign financing and expenditure of candidates and political parties. Political parties need financial resources in order to fund their daily operations and campaigning activities, and it is common practice to regulate these financial transactions. In forming a legal basis from which to develop legislation that complies with international standards, the following factors must be considered: 1. All political parties, coalitions and candidates shall report their funding transparently. 2. All political parties, coalitions and candidates are entitled to receive public donations to the same value. 3. Public funding shall be equally available for political parties. 4. Political parties and candidates shall be provided with the opportunity to compete equally. Two. Spending controls Election legislation can limit the expenditure of political parties and candidates in order to ensure equal opportunity and fair competition. For this reason, political parties and candidates running for elections at all levels of government shall report their election campaign expenditure to the national auditing institution. In most countries, reporting is regulated by the Election Control Council. In some countries including the United States, there is opposition to expenditure regulations as it can be considered a violation of freedom of speech and expression, rights that are protected by the Constitution and which should not impose limits on election expenditure. Three. Reporting and publicizing Setting limits on financial contributions and campaign expenditure is useless if there is no transparency in reporting and publicizing. The following provisions should be included in the Parliamentary (SGK) Election Law in to ensure transparency in the reporting process: All contributions and expenditure must be reported within a specified time period; There must be clearly defined penalties for any failure to report or any fraudulent reporting of contributions and expenditure. There must be a responsible organization charged with collecting, consolidating and archiving financial reports. There must be regulations about when and where contributions and expenditure reports are publicized and who is responsible for publicizing them. Four. Monitoring the implementation of the law and law enforcement In some cases, and particularly in Mongolia, there are numerous laws and regulations that are poorly implemented. It is therefore necessary to designate a legal mechanism or body that will monitor and enforce the implementation of campaigning financing law.
International Institute for Democracy and Electoral Assistance, International Election Standards Manual, translated by the Open Society Forum, 2007. Voter Education Center R. Burmaa 6
The following monitoring questions are used to identify the adequacy of Mongolias legislation regarding the transparency of election campaign financing and expenditure: 1. Do the laws and regulations ensure equality in the enforcement of legal provisions that regulate election campaigning, donations and the expenditure of all political parties and candidates? 2. If election law and related regulations permit the use of budgetary funds in election campaigning, do they ensure equality among political parties and candidates? 3. Are the limitations imposed on election campaign financing adequate, concise and assessable by a third party? 4. Do election laws and regulations require timely reporting of campaign financing and expenditure? 5. Do election laws and regulations ensure transparency and the publicizing of election campaign contributions and expenditure? 6. Do election laws and regulations provide equality in personal funding? 3. Transparency in election campaign financing and international practices The transparency of political financing varies greatly between countries. The International Development Agency of the United States conducted a survey of 118 countries, revealing that one third of countries surveyed had implemented legislation to ensure transparency in political party financing. The table below outlines the transparency classification of the surveyed countries:
Countries Armenia, Australia, Brazil, Canada, Denmark, Greece, Japan, Lithuania, Good New Zealand, Philippines, Russia, Thailand, Ukraine, United Kingdom, United States (N=15) Argentina, Azerbaijan, Belgium, Benin, Bosnia, and Herzegovina, Colombia, Czech, Republic, France, Germany, Hungary, Ireland, Italy, Sufficient Latvia, Lesotho, Macedonia, Moldova, Netherlands, Norway, Papua New Guinea, Poland, Portugal, Romania, Singapore, Slovakia, South Korea, Tanzania, (N=26) Austria*, Bangladesh, Barbados, Belarus, Bolivia, Botswana, Bulgaria, Chile, Bad Costo Rica*, Ecuador*, Gambia, Ghana, India*, Indonesia*,
Isreal*, Jamaica, Kenya, Mali*, Malta, Mauritius, Mexico*, Morocco*, Namibia, Nicaragua*, Nigeria, Peru, Spain, Taiwan, Tonga, Trinidad and Tobago (N=30)
With public control
Algeria, Central African Republic, Dominican Republic, Finland, Gabon, Guatemala, Guyana, Honduras, Lebanon, Malaysia, Maldives, Niger,
SGK Election Campaign Financing: Transparency Assessment Panama, Paraguay, Senegal, Seychelles, Togo, Tunisia, Turkey, Venezuela (N=20) Albania, Angola, Antigua and Barbuda, Bahamas, Belize, Croatia, Dominica, El Salvador, Fiji Islands, Grenada, Kiribati, Madagascar, Closed Malawi, Mozambigue, St.Kitts and Nevis, St. Luicia, St.Vincent and the Grenadines, Samoa, South Africa, Sri Lanka, Sweden, Switzerland, Tuvalu, Uganda, Uruguay, Vanuatu, Zambia (N=27)
In order to compare the transparency of election campaign financing in different countries, features of transparency in Western Europe are identified below: One. Election funding bans and limitations Limitations on election campaign financing can exist for donors and foundations, as well as for election candidates and political parties. In Spain, campaign finance regulations include restrictions on income and expenditure, and a complete ban on donations by public enterprises, government contractors and foreign institutions. In reducing pressure resulting from sources of funding deemed unacceptable (i.e. corporate donations and cash in exchange for favours), only small amounts of private money can be legally contributed to party coffers. The limit for political parties campaign expenditure depends on the number of inhabitants in those constituencies where the party presents candidates. Generally, there are no limits in Italy on donations, whether individual or corporate. Privately-run companies and business are permitted to financially support their favoured political parties. Any party donations must however be approved by the board of directors and appear in the companys annual report. The contribution amount made by an individual to a candidates election campaign (not a political party) are however limited, as is the campaign expenditure of each candidate. In 1995, France banned all campaign donations from private companies, state owned enterprises and international organizations given to candidates and political parties. With regard to contribution amounts, a distinction is made between contributions below or equal to 150 (referred to as cash contributions) and contributions over 150, which must be paid by cheque or online, with the donor duly identified. The ceiling on expenditures for the 2007 presidential campaign for each presidential candidate was 16,166,000.00 for the first ballot, and 21,594,000.00 for each of the two candidates at the second ballot. The spending limitation for Parliamentary candidates is composed of a fixed base (38,000 per candidate), and an additional amount depending on the population of each electoral district. Excluding political parties, donations by legal entities are prohibited, while donations from individuals are limited to 4,600 per year per person (for political parties, the limit is 7,500 per year). As campaign donations and expenditures are capped in France, campaign financing is strictly regulated. All forms of paid commercial advertisements through the press or by any audiovisual means are prohibited during the three months preceding the election. Instead, political advertisements are aired free of charge on an equal basis for all candidates on national television channels and radio stations during the official campaign.
In France, it is a requirement that all donations to election candidates and political parties are given through a financial intermediary, either an individual or a special financial organization. Appointed by candidates, the independent financial representative must undertake all their financial matters relating to the election, and campaign accounts are audited by a special commission. Candidates whose campaign accounts are certified may obtain tax relief or a reimbursement of up to 50 percent of their expenses by the state if they meet certain conditions, including accreditation of the financial intermediary by the National Audit Committee of Political Funding. In Germany, the Netherlands and Sweden, there is no legal limit for political contributions by individual or corporate donors. Likewise, there is no limit on the total amount or on specific items for campaign expenses or routine expenditure. There are however partial restrictions. For example, in Germany there is a ban on tax benefits for corporate donors imposed by the Supreme Court, and a public disclosure requirement of all large donations by the recipient party. Public disclosure of the donor must be made in the annual financial statement of the party only if donations exceed 10,000 per year. Private donations in excess of 50,000 must be disclosed immediately. Donations from charitable organizations and from trade unions, professional associations, and industrial or commercial associations are prohibited. The law expresses this prohibition by stating that these associations may not be used as a conduit for funneling funds to the parties. Donations from governmental bodies, from aliens outside the European Union if the donation exceeds 1,000, and anonymous donations in excess of 500 are also prohibited. Two. Transparency in donor information With Sweden being the only exception (parties are not obliged to provide any public information about their donors), statutory obligations to disclose donors identities have been implemented throughout Europe, although to varying effects. For example, disclosure is vaguely regulated in Spain, but is not seriously enforced. In Italy, the law requires donors to disclose contributions over 2,582, and contribution receiving political parties to disclose donor information for contributions over 6,197; however this provision has also been inadequately enforced. There is undoubtedly a discrepancy between legal requirements and the political reality of policy implementation. In the mid-1990s in the Netherlands, the majority of political parties introduced into their by-laws a stipulation that all donations received from private organizations in excess of what is now the equivalent of 4,444 had to be publicly disclosed by the recipient party. The new Law on State Subvention to Political Parties (1999) required all donations to be published in the annual financial report of political parties. Donations by the same organization within the time-span of one year are deemed to be one donation. The date and amount of the donation and the name of the donor are to be published unless the donor objects to the publication of his or her name, in which case the description of the category of donor has to be given (e.g. business, union, non-profit organization). Three. Financial reporting Reporting procedures in Spain, France, Italy and Germany show some similarities. In France and Spain, a special agency is responsible for regulating reporting requirements the
National Campaign Accounts and Political Funding Commission (Commission Nationale des Comptes de Campagne et des Financements Politiques, the CNCCFP) in France and the Tribunal de Cuentas, the Spanish Court of Audit, in Spain, which is the national agency for monitoring financial management in the public sector. In France, political parties are required to submit an annual report, while candidates must report within a specific time period after each election. Presidential elections are however regulated by a different regime, in which candidates are required to submit their campaign expenditure reports to the Conseil Constitutionnel, which subsequently publish reports in the Journal Officiel two months after the election. Since 1987, each political party in Spain has reported its campaign expenditure annually and related fundraising after each election, as well as its current income and expenditure, to the Tribunal de Cuentas. In Italy all political parties are legally required to report their financial transactions annually. A balance sheet for the national party headquarters has to be submitted to the speakers officer of the Camera dei Deputati, the Lower House of Parliament, by 30 March each year. The speaker is assisted by a committee of chartered accountants in reviewing the reports, and they are subsequently published in the Gazzetta Ufficiale, the medium used for the publishing of laws and decrees. In Germany, a financial report which includes details on income and expenditure, and information on debts and assets at all levels of each party organization, has to be filed with the Speaker of Parliament. All reports and the lists of donors are then published in a parliamentary paper, the Bundestags-Drucksach. Financial reporting has been legally required in Germany since 1967, and is safeguarded by a detailed clause in the Constitution, Article 21, since 1984. Four. Enforcement Since Spains transition to democracy, political parties have been required to submit election campaign financing reports to the election administration, the Juantas Electorales, which can refer any breach of the law to the public prosecutor but cannot impose any sanctions. The Tribunal de Cuentas can only recommend to parliament that the public subsidies for a party which does not comply with the legal rules be reduced. Since the authority to impose sanctions ultimately rests with the Spanish Parliament, which means, in practical terms, with the parties themselves, it is perhaps not surprising that despite the many irregularities in the party accounts and sometimes apparent infringements of the law, effective sanctions have hardly been imposed. Moreover, parties often prefer to pay a relatively small fine rather than comply with legal provisions. Italy passed a number of regulations for the implementation of campaign finance reforms, whereby in the event of irregularities, tax incentives can be suspended until regularity has been restored. Penalties are imposed on political parties for a failure to report contributions exceeding 6,197. If donations from public bodies and companies with public shareholdings of over 20 percent are discovered, those responsible can expect to receive a prison sentence of up to four years. In 1990, National Campaign Accounts and Political Funding Commission (CNCCFP) was established in France as a mechanism for monitoring campaign expenditure and other issues concerning political finance, with a view to making resources transparent and limiting
electoral spending. Charged with two major responsibilities, the CNCCFP monitors the campaign accounts of candidates elected by direct universal suffrage (excluding the Senatorial elections) within constituencies of at least 9,000 inhabitants; and verifies that political parties respect the regulations that refer to their financing. After analyzing accounts, the CNCCFP may: approve campaign accounts; grant approval, subject to adjustments; or reject accounts due to non-conformity with legislative regulations. It can reject campaign accounts for various reasons if a deficit is unaccounted for, if there are no receipts, if there is no audit by a chartered accountant etc. Nevertheless, the powers of the CNCCFP are limited. In the event of a suspected violation of the law it can refer the matter to the Procureur de la Rpublique, the Attorney General, but even then administrative and penal sanctions are quite modest. If there are irregularities in candidates campaign reports, such as if the spending limit has been exceeded, or donations have been received in the absence of an intermediary, the CNCCFP may refer the case to the juge de llection, a special administrative judge who can apply electoral sanctions, including declaring a candidate noneligible, or imposing financial and penal sanctions as stipulated in the election law. The election judge acts not only on the initiative of the CNCCFP, but also on the request of any voter. Enforcement of the German regulations relating to political parties is the task of four separate agencies. The registration of political parties is managed by the president of the federal statistical office, who is the head of the German Election Administration, the Bundeswahlleiter. Registration requirements include the existence of written by-laws, a party program and formal leadership. The list of parties registered is largely identical to the list of parties which are authorized to issue receipts for political contributions and are eligible for tax credits and tax deductions. The compilation of this list is within the jurisdiction of the Internal Revenue Service, the Bundesamt der Finanzen, and may be challenged in court. As required by law, all parties submit their annual report and their donors list to the Speaker of the Federal Parliament, the Bundestagsprasident. Administrative staff proceed to review (although not audit) the reports and comment on them in parliamentary papers. The Speakers office also calculates and pays the (direct) public subsidy to all eligible parties. Political parties are legally entitled to subsidization only if they submit their annual reports regularly and on-time. A commission of experts on party financing, the Parteienfinanzierungs-Kommission, is responsible for establishing and calculating a price index for party expenses. In order to check the reliability of financial reports in the Netherlands, the Law on State Subvention to Political Parties (1999) requires parties to have their accounts audited by a registered accountant. The party is obliged to make its accountant cooperate with the auditor of the Ministry of Home Affairs if the ministry deems it necessary to review the work of the accountant. No specific sanction is mentioned in the event of parties failing to abide by the law, e.g. failing to disclose donations, or failure to cooperate. It would however, be in line with the law to have the subsidy postponed, reduced or even withheld.
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CHAPTER TWO. GENERAL PROVISIONS OF THE SURVEY

1. Survey objectives The survey aims to assess the implementation of the Parliamentary (SGK) Election Law provisions on transparency in election campaign financing, to improve law enforcement on the basis of survey findings and to develop recommendations. In addition, the study aims to compare international practices and to propose applicable solutions and practices to interest groups in Mongolia. 2. Legal environment Since the adoption of the 1992 Mongolian Constitution, there have been five Parliamentary elections (SGK), five Presidential elections and five Local Representative Khural elections. These elections have been regulated by the Law on Political Parties adopted in 1990 and amended in 2005, the Parliamentary (SGK) Election Law passed in 1992 and revised in 2005, and the Law on Presidential Elections and Local Community Elections passed in 1993. The new Parliamentary (SGK) Election Law was passed in Dec 29, 2005 and the Law on the Central Election Authority was adopted on Jan 12, 2006. Parliamentary elections have been organized in accordance with the Constitution and the aforementioned laws. Key provisions of the Parliamentary Election Law that regulate campaign financing are as follows: Provision 8 caps the election expenditure of political parties, coalitions and candidates. The cap is defined by the GEC depending on the size of the electoral district and the population within it. Provision 39.3 stipulates that political parties, coalitions and candidates are jointly responsible for their election expenditure, and independent candidates are responsible for their own election expenditure. Provision 40.1 requires political parties, coalitions and candidates to open an election expenditure account in which all contributions are to be deposited. The provision defines the terms of account opening. Article 41 stipulates that the contribution cap is set at MNT 1.0 million per individual and MNT 3.0 million per legal entity. Donations shall only be made into the election expenditure account, and the election expenditure report shall include all non-cash donations, to be specified by type of donation and valued monetarily.
Below are provisions of decrees and programs on transparency in the election funding approved by the Parliament (SGK): The National Program to Combat Corruption, dated July 04, 2002, outlines a system in which political parties are required to inform the GEC about all contributions received and election expenditure prior to Election Day, and requires that this information be published. The National Program on Human Rights, dated October 24, 2003, specifies that: 2.2.1.7 Voters retain the right to obtain information about candidates and political parties including information about donations and election financing.
2.2.1.8 Parliament members shall prioritize the interest of citizens and the country, and shall establish a mechanism that prevents corruption through stricter campaigning regulations. In ensuring the transparency of election campaign financing, the Parliamentary (SGK) Election Law outlines the following provisions: Provision 9.1 specifies that, election preparation shall be transparent, but this does not apply to the principles of a secret ballot; Provision 40.1 specifies that, the nominating party or coalition shall open election expenditure accounts for each candidate, and independent candidates shall themselves open election expenditure bank accounts, informing the GEC and the public at large; Provision 42.7 specifies that the GEC shall review the election expenditure report and publicly announce the report 45 days after voting day with detailed information on individual donations above MNT 200,000 and donations from legal entities above MNT 500,000.
Another legal requirement on election expenditure reporting relates to the registration of political parties and coalitions. Article 26.3 of the Parliamentary law stipulates grounds for refusing the registration of parties and coalitions if the party failed to provide their election expenditure report within one month after the previous election date. The procedure on election expense account opening, closing, registration and reporting, dated May 19, 2008, is as follows: Provision 2.5 specifies that parties, coalitions and candidates shall inform the General Election Committee about the opening of election expense accounts, Provision 6.6 outlines that the General Election Committee shall review the election expenditure reports of all parties, coalitions and individual candidates, and publicize the results within 45 days after the election. Pursuant to the Law on the Central Election Authority, the General Election Committee is responsible for financial control over an election. Provision 7.1 of the law stipulates that the GEC shall monitor election laws and regulations. Provision 13 of the law specifies the following powers of the GEC in monitoring the election campaigning of parties, coalitions and candidates: 1. To monitor the election financing and expenditure of parties, coalitions and candidates; 2. To demand information from parties, coalitions, and candidates; 3. To demand election financing documents from the state and other organizations, officials and citizens; 4. To develop and consolidate documents in relation to discrepancies in election financing and expenditure. 3. Political environment Mongolia held regular parliamentary elections in 1992, 1996, 2000 and 2008. The Parliamentary elections of 1992 and 2008 were organized in 26 constituencies with 2 to 4
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seats within each constituency. The elections of 1996 and 2004 were organized in 76 constituencies with 1 seat in each constituency. The Parliamentary election held in 2008 was unique in terms of the amount of legal regulations and legal entities that existed compared to previous elections. The differences include: It was regulated by the new Parliamentary (SGK) Election Law adopted in 2005, and therefore represented a changed electoral system; Elections were to be organized within a shorter time period; There were new regulations on election campaigning; There were new types of prohibitions in election campaigning. In 2008, 12 political parties and one coalition participated the election, which included 311 candidates from parties and coalitions, and 45 independent candidates; 66 (18.5%) of the 356 candidates listed on the ballot paper were female candidates. The election was organized in 26 constituencies, 332 branches, 1704 units and employed 20,174 people. On voting day, a total of 16,081 representatives from parties, coalitions and candidates worked in voting centers. The legal status of the GEC, the central election authority, is regulated by the Parliamentary Election Law. Presently, the GEC is comprised of 5 members of the MPRP and 3 members of the DP. The 2008 parliamentary election voters list included 1,542,917 names, and 1,179,448 citizens voted. Compared to the previous election, voters became less active and voter participation decreased.
Number of citizens of voting age Number of voters listed in the voters name list Number of voters not included in the voters list Number % Number of citizens not participated the election Number %
Election years
Number of voters
1992 1996 2000 2004 June 29, 2008 Oct 2008
1,183,041 1,217,227 1,361,529 1,524,347 1,651,819 1.651.819
1,085,129 1,147,260 1,247,033 1,331,721 1,542,917 1.305.645
1,037,392 1,057,182 1,027,985 1,091,203 1,179,448 770.405
97,912 69,967 114,496 192,626 109,202 346.174
8.3 5.8 8.4 12.6 6.6 20.9
145,649 160,045 333,544 433,144 472,371 881.414
12.3 13.1 24.5 28.4 28.6 55.4
43.07% of the total valid votes were for the MPRP, 39.22% for the DP, 4.34% for civil coalitions, 3.49% for the Civil Will Party, 5.25% for individual candidates, and the rest were for other political parties. According to Transparency Internationals Corruption Perception Index, Mongolia was ranked in 35th place with a corruption index of 3.5 in 1998, in 99th place in 2006 with a corruption index of 3.0, and in 120th place in 2009 with a corruption index of 2.7, qualifying as one of the most corrupt countries in the world. Transparency International further conducted an International Corruption Barometer survey, which classified Mongolia in the
2nd group of the most corrupt countries, with an estimated 23-49% corruption. The survey rated public perceptions on corruption by institutions, within a range of 1-5 (1-not corrupt, 5corrupt) and the rate of corruption in Mongolias political parties was reported at 3.9, representing a significant level of corruption in Mongolian politics. The Independent Authority Against Corruption (IAAC) of Mongolia conducted a Corruption Projections in Politics and Law Enforcement Agencies survey in 2009, rating the corruption of politicians from 1 to 5 (1-no corruption, 5-most corrupt) within the following categories: Forms of Corruption Buying out votes Providing an advantage to own company or entity Making decisions in favor of personal interest, and lobbying for the same purposes Donating to the political party Receiving or giving illegal donations for political reasons Coming under the pressure of business groups, and subsequently initiating and passing laws in favor of such business groups Using budgetary funds not for their intended purpose but for personal gain. Misappropriating state property Selling own political power for monetary gain Money laundering Donating money to private companies and foundations Declaring illegal bankruptcy Rating 4.7 4.5 4.5 4.4 4.4 4.3 4.2 4.0 4.0 4.0 3.8 3.6
The most common method for giving bribes to politicians and receiving bribes was to give funding for elections and other activities, which was rated at 4.6, the highest level. Methods Receiving funding for elections and other activities Providing advantages to the close acquaintances, family members and their companies Politicians owning stocks and property Using agents in order to donate money indirectly Using close acquaintances to donate money Purchasing goods at a higher price compared to market price Giving money directly to politicians Gambling with politicians and losing the game intentionally Covering election campaign expenses on behalf of politicians Rating 4.6 4.2 4.1 4.1 3.9 3.6 3.5 3.4 3.4
The following table depicts the 2009 assessment of factors impacting corruption in politics. Factors Conflict of interest among business groups in politics Nomination of unfairly favored individuals to positions of power by
Rating 5.00 4.71

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political parties A Partys funding mechanism Conflict of interest in the SGKs process for law initiation, approval and monitoring of implementation Election funding mechanisms The present election system Conflict of interest in the decision making process of the SGK
4.57 3.79 4.5 4.14 3.79
These international and domestic survey results reveal that corruption in election and political party financing is an urgent issue in Mongolia.
CHAPTER THREE. SURVEY RESULTS

This survey did not aim to assess parliamentary election laws and all provisions related to election campaign financing. Instead, the survey aimed to evaluate the implementation of some of the provisions, drawing special attention to necessary revisions during the law implementation process. 1. Election Campaigning The current Parliamentary (SGK) Election Law does not specify who, or which organization, can provide election campaign funding and for what activities. The law moreover does not outline the activities that constitute election campaigning, election campaign financing and election promotions, and does not explain how certain activities should be funded. As stipulated in Provisions 37 and 40 of the law, election campaigning includes: Organizing meetings and discussions, and establishing promotional units to explain and promote the program of action and ideas of political parties, coalitions and candidates, and other types of activities not prohibited by law; Using promotional materials such as printing and disseminating newspapers, pamphlets, and posters; Broadcasting local television and radio promotions and other types of promotions. Classification of these activities by content includes: Explaining and promoting ones own program of action; Promoting the candidate; Organizing meetings and discussions with the candidate; The candidates and partys election office, administration unit, all communications and transportation, as well as other activities requiring funding which are considered to require campaign financing. 1. Campaign time limits: The election campaign period begins on the date of the candidates registration and ends one day before actual voting day. Implementation: As the campaigning period begins on the day a candidate is registered by the constituency, time limits on the election campaign period and particularly the promotional period became unclear and unequal among political parties, coalitions and candidates. The process of registering candidates lasted for several days, which resulted in a
difference of up to 7 days in the election campaigning period between candidates. The standard procedure applied in other countries is to schedule election activities from a specific registration date, whereby all candidates, political parties and coalitions have the same time frame within which they can campaign. Campaign activities and expenditure, as well as sources of funding, must be managed equally during this time. 2. Election campaigning time limits: Election campaigning is prohibited before registration and the issuing of election identification. Campaigning is also prohibited on voting day and one day prior to voting day. Implementation: Although Parliamentary (SGK) Election Law prohibits election campaigning prior to the candidates registration and issuing of election identification, this provision has not been implemented. The report on SGK Election Campaign Monitoring 2008 survey conducted by the VEC revealed extensive public activities and events that can be classified as election campaigning taking place. These activities and events were moreover organized in illegal forms, predominantly aimed to buy out voters votes, by hosting art performances, shows and competitions, and providing medical and public services with and without charges. The GEC gave notice to the political parties to cease such illegal activities, declaring that the GEC hereby officially informs you that all illegal activities aimed at buying votes will be documented and will be taken into consideration upon the registration and granting of election identification to the political parties, coalitions and candidates in the next election. Although non-governmental organizations revealed these implementation discrepancies, no further action was taken by GEC. 3. Activities: The following activities have been prohibited by law: Provide public and medical services free of charge or with preferential charges; Build religious monuments or carry out religious activities for communities; Disseminate equipment, technology, cash, injections and medicines, groceries and other types of products free of charge or with special prices to voters, their family, young children, organizations and staff members; Organize sporting games, competitions, festivals, art performances and gambling activities; Organize receptions, events and non-election related public events in order to gain voters attention; Other types of activities and attempts to buy votes. Implementation: Below are examples of activities specified in the VEC report on Election Campaign Monitoring in 2008 illustrating how political parties, coalitions and candidates have violated election law by undertaking prohibited election campaigning activities: Some parties and candidates illegally organized election campaigning activities under other events, anniversaries and traditional celebrations and through the use of non-government organizations (NGOs), NGOs or foundations established by political parties, public clubs, or through misuse of a candidates position of power.
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Organizing meetings with voters and distributing newspapers and leaflets in secret or under the name of other organizations and individuals in order to illegally promote political parties, coalitions and candidates. Distributing goods and products to the voters, promising grocery products, providing services free of charge or at a discounted rate and hosting celebrations and receptions. In addition, parties, coalitions and candidates attempted to use campaigning forms not specified by the Parliamentary (SGK) Election Law. For example: Issuing grant invitations to enroll into foreign and local universities; Covering or promising to cover tuition fees; Organizing training workshops free of charge; Distributing art performance tickets free of charge; Providing intermediary services to work and live overseas; Distributing cell phone credits. The Supreme Courts clarification of article 37.11.18 of the vote buying activities referred to in the Parliamentary (SGK) Election Law includes offers of cash, overseas education, work, tuition fees or positions of any type.3 However, there were 17 provisions of direct and indirect promises of money in the program of actions of the MPRP and DP, the two main parties in the Parliamentary election of 2008: The program of action of the MRPR promised MNT 300,000 to families having their third child, MNT 1,000,000 for mothers with the first medal of glorious mother (having six children) and MNT 500,000 for mothers awarded the second medal of glorious mother (having four children), on an annual basis. The DPs program of actions included a MNT 1,000,000 state contribution to all citizens. In addition, the MPRP began promising a MNT 1,500,000 state contribution to each citizen that was not included in the program of action submitted to the GEC when the party was registered for the election. This violated article 37.11.3 of the Parliamentary (SGK) Election Law prohibiting the use of promises not included in the program of action of the political parties and coalitions, or the use of similar activities for election campaign purposes. This illustrates a fundamental failure of the GEC to appropriately enforce election campaign financing provisions. 4. Prohibition on using state funds It is prohibited to use the following resources in funding or conducting election campaigns: State-owned properties and assets owned by others for investment purposes; Vehicles and other state-owned property, as well as state-owned or partially stateowned resources for printing, copying and transporting campaign promotional material whether charges apply or not; The labor of state employees Implementation: The 2008 SGK Election Campaign Monitoring Survey conducted by the VEC identified 118 state organization employees engaged in 202 events observed and 99
3
Description of the Supreme Court of Mongolia, March 31, 2008, No.16. 18
incidences of the use of state funds. State-owned vehicles were used extensively during the election campaign, and state employees were engaged in campaign activities in terms of following candidates, organizing their meetings, distributing promotional material and urging others to support the candidate. Compared to the findings of the VECs 2004 survey on SGK Campaign Financing Monitoring, the 2008 election revealed a lesser incidence of the use of state resources in the funding of election campaigns. The method of using state funds was however similar to the previous election, and implementation of specific legal provisions have not been adequately exercised. The State Authority Council provided instructions to prevent state employees being engaged in election campaign financing which did yield positive results. 2. Election Campaign Donations Donation is the main source of election campaign funding for Mongolian political parties and candidates. The previous Parliamentary Election Law permitted donations that were transferred to the party or candidates election expense account but prohibited all other forms of donation. The revised election law specifies detailed provisions concerning donations as follows: 1.Limitations on the donation amount: The cap on donations to political parties, coalitions and candidates is MNT 1,000,000 from individuals and MNT 3,000,000 from legal entities. Legal party donations shall be made by the legal partys authority, and if the donation is given in non-cash forms, it shall be monetarily valued and added to the total donation amount. The law specifies responsibility measures against illegal actions, including donations that exceed the limit and donations given and received in cash, without having been transferred through the candidates expenditure account. Implementation Since election expenditure is limited by law, it is crucial to define procedures for calculating and monitoring party or candidate income (donations). It is not clear whether the donation cap of MNT 1,000,000 per individual and MNT 3,000,000 per legal party is a limit imposed on the donor, or the recipient political party, coalition or candidate. Moreover, the law does not specify the form of non-monetary donations, and the ways they are to be valued monetarily. It is also unclear as to how products and services should be valued and how discounted services should be included as donations. Given the aforementioned factors, the donation reports provided by political parties, coalitions and candidates list only monetary donations received. 2.Donation prohibitions It is prohibited by law to receive donations from the following parties: Foreign countries, foreign organizations and foreign partners of joint organizations International organizations Local and state authorities Foreign citizens and citizens without residence Mongolian residents under 18 years of age on election day
State-owned and partially state-owned legal parties Indebted legal parties as confirmed by a court decision Trade unions, religious organizations and non-governmental organizations
It is also prohibited to distribute or sell, or use the proceeds of, foreign and local aid products during the election period. Implementation In the event that the above provision is violated, the candidate will be eliminated from the candidates list. There were no reports or complaints of violation of this prohibition in the 2008 election. 3. Amounts and details of reporting donations The law specifies inclusion of the following details in the election expenditure report of the political parties, coalitions and candidates: the name and residential address of the donor the name and residential address of the donors father or mother the banks transaction slip details of the donation form and amount the name of a corporation, the CEO, his/her parents, the donation amount and form The election expenditure report must include the details of donating individuals and legal parties, regardless of the amount donated. The GEC publicizes the names of individuals who donate over MNT 200,000 and legal entities that donate over MNT 500,000. 3. Election Expenses Election expenses of political parties, coalitions and candidates are the joint responsibility of political parties, coalitions and candidates. Individual candidates bear the responsibility of their own election expenses. According to the official report submitted to the GEC, the total expenditure of political parties, coalitions and candidates running in the 1992 parliamentary election was MNT 137 million; MNT 209 million in 1996; MNT 1.841 billion in 2000; MNT 1.558 billion in 2004 and MNT 7.001 billion in 2008. One. Opening Expenditure Accounts Each nominating party or coalition is required to open expenditure accounts for each candidate, and individual candidates are required to open their own expenditure bank accounts, officially informing the GEC, which then announces the account to the public. Candidates are prohibited from opening any expenditure accounts subsequent to the account opened by the party. Implementation: The modified law of May 23, 20084 specified that Article 40 on Election Expenditure Accounts was to be enforced from January 01, 2012, revealing that the most crucial regulations on election expenditure control such as account opening, transaction monitoring and the transferring of all donations into a single account were not implemented before the 2008 election. Election expenditure was therefore not regulated by the law. Provision 58.1 of the Parliamentary (SGK) Election Law stipulates that no amendments or
4
Approximately 36 days before voting day 20
changes shall be made to the SGK election law within six months prior to the regular election of the SGK. The above modification (Article 40) was therefore made in violation of Provision 58.1. Two. Purpose of Election Expenditure As specified by Article 4.06 of the Parliamentary Election Law, the purpose of election expenditure shall include the following: Explaining and promoting the party or coalitions Program of Action; Promoting the candidate, as well as the organization of electoral meetings and discussions for this purpose; Providing payments and incentives for election office staff and assistants, and covering the costs of postal services and communication, travel expenses, salaries and bonuses. Implementation. Election expenditure from the political parties, coalitions and individual candidates of the 2008 Parliamentary election were reported as follows: Expenditure Type MPRP DP Individual candidate Z.Altai 1,025,000 1,700,000 525,000 4,550,000 325,000 0 1,875,000 0 1,500,000 11,500,000
1.
Explaining and promoting the program of action 2. Promoting the candidate 3. Organizing meetings and discussions 4. Payments and incentives for staff and assistants 5. Stationary 6. Costs related to postal services and communication 7. Petrol 8. Travel expenses 9. Other expenses Total expenses Figures are represented in MNT.
699,373,000 233,124,400 0 0 0 1,544,000 0 0 6,550,000 940,591,400
2,432.000,000 1,335,181,500 608,000,000 486,400,000 182,400,000 121,600,000 547,200,000 304,000,000 182,400,000 6,199,181,500
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Represented in graph form, activity expenditure was reported as follows:

4000000000 3500000000 3000000000 2500000000 2000000000 1500000000 1000000000 500000000 0
,
In evaluating these reported figures, serious questions are raised about the fact that: if an individual candidate running in one constituency spent MNT 7,275,000 on meetings, stationery and petrol, how did the MPRP, running in 76 constituencies nationwide, manage to cover meetings, stationery, petrol and transportation costs without any expense. According to the expenditure report of the 2009 Parliamentary by-election, the MPRP candidate spent MNT 4,000,000 merely on petrol in running for a constituency in Ulaanbaatar. It is therefore impossible that 76 candidates running for constituencies over the enormity of Mongolias territory to spend nothing on petrol cost. Instead, this suggests the likelihood of the use of state property, vehicles and petrol during election campaigns. In the event of such activity, Provision 37.11 of the Parliamentary Election Law is violated, which declares: 1. Prohibition of paid or free use of vehicles and other state-owned or partially stateowned properties for the printing and copying of election promotion material as well as transportation etc. 2. Prohibition of the engagement of state employees in election promotion activities. How is it possible that after twelve political parties and one coalition ran for the 2008 Parliamentary election, 78.7% of the total election cost belonged to one party, the Democratic Party? This reflects how inaccurately election expenses are reported. Example: I spent approximately MNT 200 million in the 2008 election. While an independent candidate is spending this much money, how cane the reported spending of the MPRP be MNT 950 million and the DP MNT 6 billion? It is better to not report rather than to submit fraudulent reports. If we divide the total cost of MPRP expenditure by the number of candidates, the party spent MNT 11 million per candidate. The Democratic Party spent MNT 81 million per candidate. If elections can be run with such a small amount of financial resources, it is preferable to organize by-elections. It is a crime for a party, which is obtaining votes, leading citizens and adopting laws, to be submitting such fraudulent reports. The GEC must jointly investigate the financial reports provided by political parties with police and tax authorities.5
5
B.Lkhagvajav, Parliament Should Announce By-Election, Interview of Daily news.Issue #268, 2009-11-06 22
In the 2008 election, 356 candidates ran for office, of which 45 (13%) were independent candidates and only six submitted their expenditure reports to the GEC. These 6 candidates spent MNT 214,637,400 for the election, on average MNT 35,772,900 per candidate. The table below compares their expenditure average with that of the two main political parties leading up to the 2008 parliamentary election.
100000 80000 60000 40000 20000 0 MNT thousand MPRP 12376.2 DP 81568.2 Independent candidate 35772.9
Three. Spending Limits Spending limits: The GEC defines the election spending limits of a party, coalition and candidate by constituencies before Feb 01 of the election year. The constituencys area, location, population and population density are considered in defining expenditure limits. Implementation: Election spending limits were defined by the GEC in directive No.06, dated January 30, 2008. Control over spending limit is assigned to the Secretary of the GEC. In 2008, spending limits per party, coalition and candidate for each constituency were set within the range of MNT 89.6 to 202.8 million. The GEC election expenditure report of the 2008 Parliamentary election revealed that MNT 25.5 million was spent per candidate, per constituency, which is in fact 12.6 to 28.4% lower than the limit. Although there are spending limits per election constituency, there is no monitoring mechanism nor any responsibility measures for violation of such provisions. While there were no parties, coalitions and candidates whose expenditure reports exceeded the election campaign spending limits, this does not mean that election expenditure did not in fact exceed such limits. On the contrary, this provision has likely lead to the fraudulent reporting of political parties, coalitions and candidates, which subsequently leads to a negative impact on election freedom. 4. Reporting and Publicizing One. Reporting before Elections When registering for elections, parties and coalitions are required to submit the audited reports of donations made from both individuals and legal parties that joined the party since the previous election. In addition, the Parliamentary (SGK) Election Law specifies that a failure to provide election expenditure reports within one month after voting day will result in the annulment of the party or coalitions registration in the following election. This provision was however withdrawn by a recommendation issued by the Constitutional Court on November 04, 2009, which was subsequently adopted by Parliament.
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Implementation: Provision 26.1 of the Parliamentary (SGK) Election Law stipulates that when registering political parties, the GEC shall review the accuracy and completeness of audited financial reports concerning donations from individuals and organizations. Election expenditure reports have however been plagued with disputes. Three political parties requested to run for the 2009 by-election in constituency No.24 but did not receive permission to do so. The minutes of the GEC meeting held on September 18, 2009 noted that although the parties made an official request to run for the by-election of the SGK election constituency No.24, and they had the right to do so, the parties did not provide their financial statements in 2008, and pursuant to Provision 26.3.6 of the Parliamentary (SGK) Election Law and Provision 12.3 of the Central Election Authority Law, registration is refused. The New National Party, the Republican Party and the Development Program Party all failed to submit their 2008 parliamentary election expenditure reports, and GEC members therefore agreed to decline the registration of the parties to run for the by-election of Mongolian Parliamentary constituency No.24.... This action reflects that responsibility measures can be taken if a party has failed to submit their election expenditure reports. Question remains however over what to do in instances of fraudulent reporting. Two. Election Campaign Financing Reports The GEC and the Bank of Mongolia are jointly responsible for creating a sample format for reporting the deposit and withdrawal transactions within the election expenditure account, and must approve the procedures of opening and closing bank accounts as well as accounting practices. 1.Who shall report?: Each party, coalition and independent candidate shall produce their own election expenditure reports. The director of the bank shall also provide a report on transactions made within the election expenditure accounts of political parties, coalitions and candidates. Implementation: According to the Parliamentary (SGK) Election Law, it is each political party, coalitions and independent candidate that is responsible for providing their expenditure reports. In reality however, the election expenditure of candidates, coalitions and political parties is not always reported. According to the expenditure reports of the parties and coalitions running in the 2008 parliamentary elections, the candidates nominated by the DP and Civil Will Party did not spend their own money, nor did they report on their expenditure. For the MPRP, 56% of election funding came from the party and the candidate. The fifth category of the election expenditure report was however reported to be MNT 0.0, which creates serious doubts about reporting accuracy. It is clearly impossible to campaign in elections without spending money on stationery, travel, meetings and incentives, however these types of expenses were evidently omitted from the MPRPs report. Implementation of this law has therefore proved to be problematic. 2.When to report? To which organization to report to?: Political parties, coalitions and candidates shall submit their election expenditure reports to the GEC within one month after the election.
Implementation. If expenditure reports are not submitted to the GEC within the month, the political party is not entitled to run in the next election. In reviewing the financial statements provided by the political parties, coalitions and candidates running in the 2008 Parliamentary election, it is revealed that the NNP, MP, RP and MLP failed to submit their financial statements and donation reports. The DPP and DP withdrew their candidates and therefore did not submit their expenditure reports. The GEC declined to register three parties, the NNP, RP and DPP, in 2009 as a result of their failure to submit expenditure reports. Provision 42.7 and 26.1 of the Parliamentary (SGK) Election Law grants authorization to the GEC to review expenditure reports and the accuracy of all documents submitted for registration. In reality however, it is not possible to review expenditure report even though the law authorizes it. Reports can be checked only against the indicators and requirements specified by law, and the GEC has no authority to audit the reports and define whether statements within them are valid or not.6 It is not possible to control the expenditure of political parties by merely opening one account and requiring candidates and parties to use only that account. The establishment of the Financial Monitoring Council has also proven insufficient, as it is still difficult to obtain account information from the bank and from political parties. Moreover, the attempt to control expenditure by appointing the Chairman of the Financial Monitoring Council as the Director of the bank was also unsuccessful. Without the capacity to control election expenditure, the GEC is powerless. The GEC does not have sufficient capacity and authority, and may only monitor account transactions. The GEC is further unable to investigate sources of funding, expenditure and transactions that occur outside of the partys formal expenditure account. Three. Publicizing 1.Who? In what time limit?: The GEC is legally required to review and publicize expenditure reports 45 days after the Election Day. As expenditure reports are to be submitted to the GEC within one month after Election Day, the GECs review period is limited to only 15 days or 10 work days. Implementation. The GEC organized a press conference 45 days after the Election Day to publicly announce the compiled election expenditure reports of each political party, coalition and candidate, along with the list of the donors. The report was published in daily newspapers and selected websites. What information?: Election expenditure totals are announced to the general public, accompanied by a list of the individual donors who donated over MNT 200,000, and legal entities that donated over MNT 500,000. Implementation. The amount of information publicly announced must balance concerns for transparency as well as personal confidentiality. The GEC therefore publishes only the initials of individual donors and the names of companies, together with the amount donated.
6
From the notes of an interview with Luvsanjav, Chairman of the GEC, Ulaanbaatar, 2009 25
5. Enforcement and Monitoring Central and local election committees, the judiciary and the Constitutional Court are empowered to enforce, monitor and resolve disputes pertaining to the specifications of Mongolias Parliamentary (SGK) Election Law. The law itself specifies that certain conflicts are subject to review by election committees. Mongolias election organization system consists of central and local election units. The central election committee is the GEC, and the local units are the branch and unit committees within constituencies. At all levels, election committees monitor the implementation of election law, and resolves disputes and complaints related to violations of the law. The GEC is responsible for the following actions related to election financing: Monitoring the implementation of the election law and regulations; Monitoring the donations and expenditure of political parties, coalitions and candidates; Reviewing, discussing and publicizing the expenditure reports of political parties, coalitions and candidates. Within the framework of the above authority, the GEC retains the right to demand the following: Financial information from political parties, coalitions, candidates and local election committees; Documents on election campaign financing from state institutions, government officials, other organizations and citizens; Documents concerning violations of election financing and expenditure. Relevant parties shall submit requested documents within three days, and if there are less than three days before Election Day, the requested documents shall be submitted on that day. If necessary, the GEC can request Mongolias auditing institution, the State Audit Authority, to audit reports under the state budget. The GEC reserves the right to decline to register any political party, coalition or candidate if breaches of the law are discovered. In elections that took place prior to 2008, the GEC reviewed the expenditure reports of the political parties, coalitions and independent candidates through its temporary financial control office in collaboration with a professional auditing institution and publicly reported the results.7 Following the 2008 elections, the GEC conducted no review on the accuracy of the expenditure reports submitted by political parties, coalitions and independent candidates, and limits the review to merely publicly announcing the consolidated expenditure amounts. 6. Conclusion and Recommendations Based on the survey results, WSP concluded the following: 1. The Parliamentary (SGK) Election Law of 2005 improved on the previous law, particularly by including international practices of election campaign financing regulation, such as prohibition on the use of state resources, limits on donation
7
U.Tserendorj. Transparency and legal environment of the election campaign funding, role of GEC lecture. State transparency: Fair election forum Voter Education Center R. Burmaa 26
2.
3.
4.
5.
amounts, prohibition on donations, requirements to publicly report cash and non-cash donations, limits on election campaigning terms as well as spending limits. Nevertheless, some of the terms, definitions and regulations specified in the law conflict with one another, resulting in ambiguity and enforcement obstacles, including delays in the enforcement of some legal provisions. This also represents a conflict between the election process and the regulations imposed by the electoral system. Election candidates are not provided with an equal opportunity to compete given current regulations on campaigning terms and financing. The law should provide candidates with equal opportunities and protect the principles of fair competition. Currently, the campaigning period differs for candidates, and because of short election campaign terms, new candidates running in extended constituencies with large territories and low population densities are disadvantaged in terms of their capacity to introduce and promote themselves. A candidate who has campaigned in previous elections is therefore at an advantage, and the current system provides a barrier against fair election competition, limiting the voters capacity to make an informed decision. Political parties and candidates have not fully complied with the election law, and law enforcement agencies have not been proactive in ensuring the implementation of, and compliance with, the law. Election results are significantly influenced by money, with increased attempts to buy out votes, such as the offering and distribution of goods and cash to voters, and illegal promises made by political parties. In addition, when registering political parties, coalitions and candidates, the GEC is limited in its function to review the legality of a party, coalition or candidates program of action, and is required to register and announce parties, coalitions and candidates to the public without auditing the completeness and accuracy of financial statements and election expenditure reports. It is therefore doubtful as to whether the election expenditure reports submitted by political parties are accurate. Funding provided by the political parties, coalitions and the candidates for election campaigning is not being reported. Expenses covered by candidates themselves are not always included in the expenditure reports developed by political parties and coalitions, and expenditure amounts are far greater than what is actually reported. Compared to the previous parliamentary election law, the current law described greater detail over the types of responsibility actions and penalties that could result from violations of election campaign financing regulations. The law itself however, has not been a sufficient mechanism to ensure its enforcement and the subsequent compliance of political parties, coalitions and candidates. Classifications within the law that describe prohibitions limited by time frame and subjects permit the possibility of discrepancies in the implementation of the law. For example, violations of the law that occur before the registration of candidates have been omitted from prohibitive and responsibility measures.
Based on survey results, WSP provides the following recommendations: One. Police Reform 1. To consolidate the surveys and analysis of election campaign financing, to introduce recommendations to the relevant parties including political parties, government
bodies, civil society organizations and research institutions in order to initiate public discussions and exchange comments and opinions. 2. To develop a separate law to regulate election campaign financing and the funding of political parties. Two. Development of the Parliamentary Election Law and the Law on Political Parties 1. To appropriately define what an election campaign encompasses, providing detailed explanations of the activities and measures within that definition. 2. To modify the election campaigning period by ensuring equality to all candidates. 3. To establish regulations about election campaigning prior to the announcement of an election. 4. To establish an official system of monitoring and auditing election campaigning and to take concrete responsibility measures against parties, coalitions and candidates that fail to adhere to regulations. 5. To define election disputes, means of resolving procedures precisely by law, reinforcing responsibility measures in response to breaches of the law including prohibiting the right of political parties to run for elections, declining the allocation of budget resources to political parties and furthermore disbanding political parties. 6. To develop and strengthen civil society and external party control over the election process. Three. Implementation and Enforcement 1. To impose responsibility measures against organizations and officials who abuse citizens right to vote and who violate election laws and regulations. 2. To develop a detailed election financing procedure in cooperation with, and based on comments made by, relevant stakeholders, and to deliver necessary trainings and workshops to relevant stakeholders, such as parties and interest groups, media organizations and non government organizations. 3. To retain a balance in the party representation and affiliations of GEC members. This is crucial for ensuring that candidates believe in election justice and free and fair elections. 4. To develop, approve and enforce documentation standards and templates for election campaign finance reporting in compliance with international standards. 5. To achieve greater transparency in elections by publicizing contributions, donor information and election expenditure reports submitted by political parties to the GEC, as well as the list of registered political parties, on the website of the GEC, and to provide information and respond to questions as requested by individuals and companies in relation to such documentation.
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FOUR. BIBLIOGRAPHY 1. Mongolian laws 1. Constitution. 1992 2. Law on civil service. 1995 3. SGK election law. 1992, 2005 4. Law on central authority of election. 2005 5. Law on political party. 1990, 2005 6. National program on human rights. 2003 7. GEC charter and procedures 2. 1. 2. 3. Other documents Recommendations on the election draft law. VEC. 2002 SGK election 2000. Observation report. International Republicans Center. 2000 Election system and law implementation in Mongolia international conference. Political Education Academy. 1994 4. Improving election laws and regulations in Mongolia international conference booklet. 2002 5. Improving election laws and regulations in Mongolia public discussion booklet. VEC. 2002 6. Recommendations on the SGK election draft law, OSF. Daniel Slikov, Kwentin Reed, Mariona Tribunovich. 2005 7. Comments on the draft SGK election law, International institute for democracy and election support. Andrew Ellews, Antonio Spinelli, Imon Iaob, Tina Larserud. 2005 8. Implementation status of right to elect and be elected survey. 2004. National Commission of Human Rights 9. Assessment on corruption in Mongolia report, 2005. Asia Foundation 10. Political partys funding monitoring report. VEC. 2007 11. State transparency: Fair election forum. OSF. 2007. 12. 2008 SGK election campaign monitoring report. VEC. 2008 13. Monitoring on the process of joining European Union translated by OSF. 2002 14. International election standards Democracy and Election international aid foundation. Translated by OSF. 2007 15. SGK election campaign funding assessment survey report. R.Burmaa. VEC. 2007 16. Cash flow in politics, transparency and monitoring Money in politics handbook; A guide to increasing transparency in emerging democracies. Translated by B.Altansukh 17. Justice information, theory and methodology magazine. ACA. 2009, 2010 1.
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