The Political Party Paymasters

November 27, 2013
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Political parties need money. That’s a fact, if not of life then the political system. You can’t get elected without it. In the same way that a new fizzy drink can’t hope to compete with Pepsi or Coke without a billion-dollar marketing budget, a candidate or party needs hard cash to get enough voters to put an X in their box.

Fair enough, money makes the world go around and politics is no different. But should we be concerned with where the money is coming from? Well, if money makes the difference between elected office and having to get a proper job, then any newly-elected Congressman or MP may well feel a little beholden to anybody who put up a significant amount of cash, don’t you think?

Consider the brouhaha over Russell Brand’s comments at the 2013 GQ awards. Brand was asked to leave/kicked out after observing that the GQ sponsor Hugo Boss got rich making Nazi uniforms during WWII. Tasteless? Yes. Irrelevant? Maybe. But true nonetheless and the point is it not only got him ejected from a tedious awards ceremony but it also generated a lot of (anti-Brand) column inches in the press in the days that followed. As RB himself pointed out afterwards, if, by paying for the GQ awards, Hugo Boss are exempt from criticism, what about major political donors like bankers and energy companies who got the UK government into office?

political party funding

Put simply, the more money a donor puts into a party, the more the party is reliant on that donor. And when you need somebody’s goodwill, it’s only natural to want that they are happy. And so we’re back to the hoary old chestnut of who do our elected representatives really represent and the question, does private funding of political parties undermine the pure ideal of democracy (pause for laughter).

So, how does party funding work? Well, in the U.S., campaign monies may be put up by the candidate themselves, come from individual contributors or from political action committees (or PACs). ‘Big business’ in the form of corporations and unions are forbidden from contributing directly to campaigns. Apparently, following the 2010 elections, the average holder of a seat in the House of Representatives had spent US$1.4m and the average Senator, a whopping US$9.8m. There are of course, strict limits on how much parties can accept from donors. But all that happens is that ways are found to sidestep the restrictions. For example, there are ‘bundlers’, individuals and organizations that gather contributions from many individuals and then present the chosen party with the combined amount; all above board and legal – outsourcing has come to campaign financing. Then there’s the option of funding activities that have no official connection with a particular candidate’s campaign but nevertheless support it. Following the 2010 Supreme Court decision in Citizens United v. FEC, corporations and unions were deemed to have the same free speech rights as individuals which effectively means that via certain PACs, they can spend as much money as they like in their (independent) support of their chosen candidate.

Similarly, in the UK, the vast majority of party funds come from regulated donations. Traditionally, the Labour party gets most of theirs from the unions and the Conservatives from various business donors. Of course, similar to the States, there are limits on the size of donations but are often dodged by calling the injection of cash a loan. Add that to the spate of scandals in recent years – cash-for-questions, cash-for-honours, cash-for-amendments, cash-for-lobbying – and in 2013, the image of UK party funding is in a pretty shabby state. And it’s hardly helped by various ‘incentive schemes’. For instance, bung the Tories more than £50,000 and you’ll be invited to join The Leader’s Group, giving you access to David Cameron and other senior party members at exclusive dinners, lunches and so on.

Basically, on both sides of the pond, despite the existence of restrictions and regulations, anyone with serious political interests is able to put serious money in the pockets of their chosen party. The old adage comes to mind: he who pays the piper, calls the tune.

political party funding

Political party funding is rife with the risk (and likelihood) of undue influence. It could be said that as long as politicians rely on donors for money, then donors will have a string to pull; and puppet parties tend to be the hallmarks of quasi-dictatorships and not true democracies (although if you can name a “true democracy” in this cynical century, then bonus points to you).

The strange thing is, these ‘attached strings’ are constantly being revealed via an unending series of scandals and yet what results is little more than talk and tinkering with the laws regulating how parties receive their money. Although, why should we expect anything else when the talkers and tinkerers are the ones who’d be short of cash should any real restrictions be implemented?

How long before things become even more blatant? How long before we have New Labour sponsored by UniteTM (the union has provided £11.9m in funding to the UK’s Labour party since the general election in 2010, that’s 20 percent of all funding received) or maybe, the Las Vegas Sands Republican PartyTM (the Nevada-based casino and resort company was the biggest political donor in the U.S. in 2012, US$52,408,435 and all to the Republican cause)?

As long as nothing is proven then nothing changes and even then, not much; and that’s the problem with the whole issue of party funding, the press blathers on, party reputations fall into tatters, the ‘people’ are outraged, but the game continues much as it’s always done. The UK Conservative party, receives more than a third of its funding from just 15 ‘groups’ of donors (e.g. individual members of the Bamford family or the various JCB companies owned/run by them contributed almost £4m over a 10-year period). One staggering coincidence (surely nothing more) is that the Tories talked very tough on banking reform in the run up to the 2010 election, then once back in government for the first time in 13 years (helped no doubt by the 50 percent of their funding that came from the financial services sector) did virtually nothing to upset the banks. Needless to say, the other side of the Atlantic has its share. The first half of 2013 saw all sorts of fuss as the IRS came under fire for targeting fund-raising organizations according to their political leanings.

political party funding

This all begs the question, is there a better way? If parties need money (and they do) and money inevitably leads to undue influence or at least the possibility thereof, could we get radical and throw out the babies while keeping the bathwater? Can we do without political parties?

Imagine a party-less democracy… Every Senator, Congressman, MP is an independent; genuinely there solely to represent the interests of Boise, Idaho or Dunny-on-the-Wold or whichever locale elected them. Sounds good in principle but democratic action depends on consensus. How long would agreement on any issue take to reach? Even low debate topics such as child welfare and tax on cigarettes could take forever, let alone issues like abortion, same-sex marriage or military intervention in Syria…

Sadly, The party system is a natural way of actually getting things done in Parliament and Congress. Broad policy stances can be agreed, enforced and the decision process is speeded up by effectively only ever having two sides in any debate (the UK used to have three but ever since the Lib Dems hopped into bed with the Tories we’re back to a two party system). This is, of course, a blunt instrument and many opinions, nuances and minority views are inevitably sidelined BUT at least things happen, decisions are taken, policies are set and laws are passed and enforced. In other words, government occurs.

Sadly, the party system is part of the DNA of democracy and as long as we have political parties, we’ll have party funding; take it out and you’ll end up with a whole different animal… maybe a better one, who knows, but equally, who’s going to take the chance? Just remember it’s not only your interests that they’re looking after.

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