Liberia's Quest for the Public Funding of Political Parties: A Case of the Good, the Bad and the Ugly in Public Policy Formulation

By Wonderr K. Freeman

The Perspective
Atlanta, Georgia
November 26, 2012

The Liberian Legislature calls it “An Act to Sustain Democracy Through the Public Funding of Political Parties, Coalitions and Alliances, Providing for [an] Annual National Budget Appropriation to Political Parties, Coalitions, Alliances and Independent Candidates – abbreviated as the Democracy Sustainability Act. The rest of Liberia thinks it should rather be called the Act to Legalize the Use of The Liberian Taxpayers Hard-Earned Money to Fund Private Political Fiefdoms. But, is this a clear-cut case of legislative hubris? Do Liberians have reason to doubt their representatives at the Capitol? Is this law a faux pax ab initio? Or are there some good in this policy that is being roughshod over by the sheer revulsion about public funds going to political parties? What is the record from elsewhere on the continent and beyond? Should we, in fact, be bothered by what is obtaining around the world? These are the central pieces of this public finance puzzle that this article is resolved to explore.

The fact of the matter is that while the debate of public funding of political parties is a novelty in Liberia, this discourse has raged on since the last century. The debate has been ongoing on all continents, from nearby Ghana to South Africa (in Africa) to HongKong and the Phillipines (in the Far East), to Germany and Netherlands (in Europe) to Unites States of America and Brazil (in the Americas). Many of these nations have since moved past the debate stage. It would portend well for the Liberian activists and other socio-economic and political commentators to do a little research before speaking or (in this case) writing. Many of the op-eds on this issue have been spontaneous, emotional, and downright hypocritical. Many have opted to criticize without any reference to international best practices. But the Liberia law to fund political parties is neither an all-bad-and-no-good scenario, nor is it an all-good-and-no-bad scenario. Any objective assessment into the Democracy Sustainability Act will reveal that it is a medley of the Good, the Bad and the Ugly.

The GOOD in the Democracy Sustainability Act

The Historical Argument – The Democracy Sustainability Act encapsulates a fundamental principle that political parties, notwithstanding their imperfections, execute a public service that is worthy of support, and without which democracy cannot properly function. Accordingly, it makes all political sense, economic sense and yes, common sense, that the public [to the extent possible] fund a service for which they derive benefit. Many would jump to the argument that Liberia derives no public benefit from functional political parties. But that is the simplistic argument of demagogues and the unschooled. One only needs to look back into Liberian history to realize that the degeneration of Liberia governance structures, started with the demise of all semblance of a truly functional multiparty democracy. Whereas, Liberia experienced a healthy multi-party democracy at the onset of the its independence, i.e., between the True Liberian Party and the Administration parties, the ascendency of the True Whig Party and its subsequent extinguishment of any viable opposition to its rule led to a defacto one-party state that abused the rights of its citizens, especially the indigenes, institutionalize nepotism, cronyism, and corruption. There is little to argue about when it comes to the degeneration of liberia’s body politic under the “Grand Old True Whig Party”. From then on it was a race to the bottomless pit for Liberia body politic as Liberia went through 10 years of military dictatorship, 14 years of bloodletting and 2 year of transition which was characterized by widespread pillage of the public treasury. One sure way of not returning to this dreaded history to have a functional democracy in which political parties are potent and viable to engage in the public discourse. And public funding of political parties can do a lot of good on this score.

The Contemporary Argument – The Democracy Sustainability Act is Liberia’s answer to an already universally accepted international norm. It makes perfect commonsense to publicly fund political parties – at least that how it is seen in South Africa, England, Germany, the Netherlands and in most of Europe. The Philippines lower house passed a similar law (House Bill No 6551) in 2012 – called the Political Party Development Act of 2012 (www.wikepedia.org) . It is de rigueur in places like Hong Kong, New Zealand, USA, Canada, and most of Latin America.

There are many reasons why many of these advanced countries support public funding and it has nothing to do with the fact that they have so much money to waste. Matter of fact, most advance countries run budget deficits, so surplus fund cannot be a factor. However, most have come to realize that funding political parties with public monies promotes accountability and transparency in the electioneering process. It helps to minimize the temptation for politicians to seek private funding which often comes with strings attached, some of which strings are detrimental of the public interest. It minimizes the corruption in public service arising out of the need to payback campaign debts or to cater to whims and caprices of those illegal interests which supplied campaign finance. Public funding of political parties is now actively encouraged by the UN Convention Against Corruption (UNCAC) as another important step in promoting integrity in electioneering and in public service as a whole.

The Local Argument – on the grounds in Liberia, public funding of political parties is all about fairness. Traditionally, the ruling parties have had access to state resources and largess and these resources are enormous in a country like Liberia, where the private sector is less developed. Accordingly, elections have traditionally been free but not fair. Challenging incumbents under such circumstances have proved such a daunting task. The recent election (2011) in Liberia between the incumbent Unity Party (UP) and the Congress for Democratic (CDC) Change and others laid bare the disadvantages of participating in an election where only on party has access to state resources. The UP campaign was expensive and grandiose, while its main opposition and others were left to fend for themselves. It was a lopsided [finance wise] from start to finish. It was free, sure indeed, but nothing near fair. If such situation is left to fester, sooner or later we will be back to the 1870s or the 1950s– the days of the Grand Old True Whig Party, where whatever “Richard Henries” said was the law. We have come too far to look back to a past that did us no good. The opportunity of cost of funding political is a gradual return to a defacto one-party state (TWP style) and possibility of chaos by those excluded. Not long ago, a local politician was threatening to make the Liberia too hot for the President. In hindsight this may appear like Political hubris and grandstanding but, with the departure of the UN peacekeepers, such comments are much closer to reality than to fantasy. Public funding of political parties will engender functional political parties, where extremists and mischief makers will be ostracized by their moderate colleagues who are committed to playing by the rules and maintain their funding.

The BAD in the Democracy Sustainability Act

Duplication in Funds Distribution – While public support to political parties is good in theory, to the nitty-gritty of the allocation shows some of the legitimate bases for public discontent. Firstly, based on the 2011 elections, the Legislature wants to go from zero funding to USD10m over 6 years – shelling out USD2.1m for participants in the Presidential Election, USD2.7 senatorial candidates of ostensibly the same political parties’ member for participating in the senatorial election and USD5.5m for the same parties for participating in the representative election. Now, that’s outrageous given how poor Liberia is! The Legislature’s decision to offer funding to senatorial and representative candidates is an obvious duplication when their parties are already poised to receive under the presidential formula. The senators and representatives don’t run a separate organization nor do they run a separate campaign (as observed in 2005 & 2011). Giving funding to coalitions is equally a duplication, since each party in a coalition is poised to receive as a political party, either in the presidential or the house races. A coalition is not a political party and should not be treated as such, nor should it be encouraged. Another “bad” on the funding issue is the decision to give annual funding to independent candidates who win a seat. Independents do not run a registered political party, why should they get [annual] funding. At the most, winning independent candidates should get a one-time partial reimbursement of campaign expenses. If they want to get annual funding, then they have to join a political party, since, as we understand it, the Law was meant to build institutions

Funds Management and Control – Another “bad” in the Democracy Sustainability Act as is, is the duality of management and control, that is, in practice, split up between the National Elections Commission (NEC) and the political parties. NEC is not the Ministry of Finance, nor the General Auditing Commission (GAC) or the Liberia Anti-Corruption Commission (LACC). It does not have expertise in financial management. Their expertise is in conducting elections. Even if NEC were willing to manage and control such funds, it is doubtful that it will do a good job at management and control of funds that are to be expended by third parties. It appears like the politicians are eager to spend the funds and pass the “accountability buck” onto some other entity. If politicians seek public funds, they should take full responsibility for the accountability issue and pass the buck to NEC. If there is problem with the fund who is to be held to account, NEC or the political parties? That is why factoring in NEC in the accountability aspect should be revisited. It is fraught with practical difficulties. Parties receiving public funds must report to MOF just as any other agency would and be held to account by the GAC and LACC, as is done with other entities. There should be no double standards for institutions receiving public funding.

The UGLY in the Democracy Sustainability Act

Duty-free privileges for political parties – the representatives and senators already enjoy duty-free privileges at high cost to the public treasury. Why should a party getting free government money decline to pay tax, the base from which the free money was gotten in the first place? This idea that public servants are some “super citizens”, who need not pay tax is obnoxious and ought not to have any place in public policy formulation. All citizens and non-charity institutions must pay tax. Politicians, who always claim to love their country so much, must stop utilizing every imaginable opportunity to avoid paying their fair share of taxes. Simply put: duty-free privileges for political parties under this Act is unacceptable.

Not a word on prosecution for mismanagement – Another UGLY aspect in the Democracy Sustainability Act is the complete absence of the word prosecution for mismanagement of funds. All that political parties stand to lose from mismanagement of funds is the suspension and termination of its privilege. This is woefully insufficient, especially against the backdrop of a wary population whose greatest fear is the mismanagement of such funds by politicians. While the rest of the country is subject to prosecution for mismanagement of government funds, the politicians cannot carve up for themselves a lower level of standard of sanction. In addition to disbarment of political parties (as contained in the Act) from the public funding system for mismanagement of funds, the key leaders of the party must be prosecuted as would have been the case if any other person had misapplied government resources.

Double dipping from private and public sources – the fundamental argument for public funding of political parties is to minimize the corrupting influence of funding from private sources. This Law – the Democracy Sustainability Act – is conspicuously silent on the extent to which private funding will be restricted. Ostensibly, this silence means that, given that human wants are insatiable, political parties will get public funding and will equally source as much funds as possible from private sources, and of course be subject to all the attending corrupting influences. This is called double dipping; its ugly and its unacceptable and it defeats the original purpose of the Democracy Sustainability Act. When a party, by law, gets public funds to operate; that party’s ability and proclivity to source private funds must be [partly] restricted by that same law. The Democracy Sustainability Act falls short on this score and same must be correct if this Act is to see the light of day.

Conclusion

Clearly, there is as case to be made for the public funding of political parties in Liberia. The need to have a functional and vibrant political system impels such. Liberia benefits tremendously by ensuring that we can no more go back to the TWP-style one-party-state system of abuse of power. Liberia is also saved from future chaos as functional parties are more likely to have responsible leaders who are prepared to engage the incumbent in the battle of ideas. Another plus for publicly funding political parties is its widespread practice across the globe, where more and more states are realizing that it reduces corruption in elections and in governance. Even the UN Convention Against Corruption promotes this idea as one important way ensure transparency and accountability in elections and governance.

But the Act, as is, has it fair share of flaws and must be reviewed. There is the duplication of funding across presidential and legislative races. There is serious flaw in the system for management and control of funds. The normal GOL reporting standard has been sidelined. Of course, granting duty-free privileges to parties that are already poised to get free government money is terribly offensive, as is the fact those who abuse the public trust (over the funds) may only be disbarred, instead of being prosecuted as is the case with others who breached the public trust. This is called double-standard and should not be coming from our honorable senators and representatives. Also disappointing is the fact that there is no restriction on how much private funds a party can source when the same party is at the receiving end of government funds. Consequently, this Law, the Democracy Sustainability Act, while commendable in principle, needs to go back to committee room for fine tuning and brought out in broad daylight for further public vetting. That’s the way forward for such a major public policy issue.