The adage, he who pays the piper, dictates the tune, chimes within the figurative minefield of election finance in progressive democratic societies and those nascent countries with similar aspirations. The intentionality in the choice of the word “minefield” is real. That is because it is a question of degree.

In some societies, election finance is intermediated by a robust legal framework, which demands strict adherence to established laws and codes of conduct, with stiff penalties for proven infractions. Whereas, in other societies, a more laissez faire approach is adopted to election finance with an extremely light touch approach to the enforcement of established legal regimen. Irrespective of the model adopted in election financing in any society, there are at least three important constants.

One, as alluded to in the opening sentence, is that the financier secures the opportunity to influence policy direction and legislation. Let’s call this the logic of the special interests. Two, which is a rational inference from the first point, is that whilst a segment of the electorate, XY, and the special interests, may well vote for the same political party in country A, the beneficial outcomes they gain, may well be different. For example, a hypothetical special interest group, Z, donates USD 10 million to political party X, in support of legislation for compulsory national identity cards. X wins the national elections and enacts legislation for compulsory identity cards. Whether or not as a direct consequence of Z’s donation to X; Z, secures a government contract worth USD 200 million over five years to establish the ICT infrastructure for the said identity cards.

By the same token, XY secures tougher reforms to immigration policies and legislation simplifying processes for deporting illegal immigrants. These examples by the way, presuppose that compulsory identity cards and robust immigration policies accord with X’s pre-election manifesto pledges. In both examples, the outcomes are positive for the logic of special interests and XY. However, the quantum of benefits is disproportionately weighted towards Z, because it assures a financial benefit: USD 200 million over five years! This illustrates the theory of toxic necessities. X needs funding. Z provides it and benefits upon X’s victory.

Three, if not carefully managed, the potential for corruptively influencing election outcomes is accentuated to the detriment of the general voting public who believe, perhaps guilelessly, in the context of this illustration, that democracy is the textbook definition thereof: the government of the people, by the people, for the people.

Who then benefits the most from election financing? The people? Which people? The general voting public? Special interests? Are there effective checks and balances in this minefield? How robust are the laws in this regard? Do effective deterrents exist to tackle excesses? Plainly, is election financing from private sources corruptive and should it be funded entirely by taxpayers to create a level playing field for all political contenders?

For starters, it is pertinent to explode fairy tales appertaining to election financing, which, by the way, is not an esoteric concept. It simply means the modus operandi of funding elections, campaign finance, political campaigns, referenda, collectively referred to as political funding. By its very nature, democracy is not cheap and must be paid for. Election financing is a sine qua non for democracy and it inexorably follows that it must be well funded. The question is by who? Private sources or by taxpayers?

There are at least three schools of thought here. The first posits that political funding should be entirely from private sources to avoid any spectre of comingling with taxpayers’ money and, by extension, risk supplanting the delivery of key public services – defence, education, healthcare, policing, public infrastructure etc. The countervailing argument here is the expectation of a reward whether in cash or kind by the private sources of the political funding and a tendency towards corruptive influencing. The second school of thought, advances the proposition that political funding should be entirely state (taxpayer) funded. The argument is that it creates a level playing field for all political contenders which, in turn, obviates the expectation of any reward whether in cash or kind. The opposing argument is that this model increases the costs of governance and necessarily takes away resources from the delivery of important public services.

The third, is simply a hybrid, that is, political funding should emanate partly from private sources and partly from public sources. The logic is that individuals and the private sector have as much a stake in the development and governance of a country as anyone else or any constituted government. Afterall, they pay taxes and are, by far, the largest employers of labour in most countries. The counter-argument against this proposition is overburdening the state’s financial capacity and deflecting resources away from core services.

Turning to the posers raised, it is impossible to ascertain to any degree of exactitude, who benefits the most from election political funding irrespective of the model adopted. It just depends on the context and the applicable variables. For example, an aspiring, senatorial candidate, A, may, subjectively, believe that he benefitted the most if he was able to raise the largest campaign funds and these translated to victory at the polls over political rivals.

Conversely, A’s opinion will differ if, even with the largest campaign funds, A loses his senatorial bid to a political rival, B, with a fraction of A’s campaign funds; because B, was an electrifying candidate, with a sleek campaign, outstanding intellectual capabilities and the ability to effectively connect with a critical mass of a key demographic: young voters. In the latter example, without equivocation, the people, that is the general voting public, benefitted the most because the better candidate won, notwithstanding the quantum and type of campaign funding utilised.

The question of effective checks and balances turns on the robustness of the legal regime in a particular jurisdiction. An example is the UK’s Political Parties, Elections and Referendums Act 2000, which regulates the conduction of electoral campaigns and established an independent Electoral Commission. The latter oversees the conduct of elections and the funding of election campaigns. Plus, it requires political parties to routinely submit their accounts and bans the receipt of funds from foreign or anonymous donors inter alia.

In addition, the UK adopts a hybrid political funding model, supra, and caps campaign funding at £30,000 per parliamentary constituency. Thus, if one political party fielded a parliamentary candidate in each of the country’s 650 constituencies, the maximum they could ever spend was £19,500,000. Any campaign funding in excess thereof, without just cause, would invoke police investigations and, where significant breaches of electoral law are established, penalties or prosecutions by the relevant authorities typically follow. In the 2017 general election, the Conservatives spent £18.6 million, Labour £11million and the Liberal Democrats £6.8 million. In the 2019 general election campaign, the Conservatives spent over £16 million, the highest by far, of any of the main political parties.

Like the United Kingdom, the hybrid campaign funding model applies in the United States with funding from individuals and private sources and government. However, the USA, the bastion of capitalism and libertarianism, has one of the most expensive political funding models in the world. For instance, in 1990, the average cost per winner of a Congressional seat in the House of Representatives was circa USD 407,600. Fast forward to 2020, the average cost for the same Congressional seat was approximately USD 2.35 million. Within the same period, the mean cost of a Senatorial seat increased from USD 3.87 million to USD 27.16 million, an increase of 601.8%.

Meanwhile, approximately USD 14 billion was spent in the country’s 2020 federal election campaigns earning it the title of the “most expensive campaign in US history.” Inevitably, the vast amounts of campaign funds have prompted criticisms from, among others, the Brennan Centre for Justice, which affirms that “big money dominates US political campaigns to a degree not seen in decades…drowning out the voices of ordinary Americans.”

So charged is the issue of campaign funding in the USA that the Supreme Court in the seminal case, Citizens United v Federal Electoral Commission 558 U.S. 310 (2010), decided by a split 5:4 decision in favour, authored by Justice Anthony Kennedy, that the free speech clause of the First Amendment to the US Constitution prohibited the government from restricting independent expenditures for political campaigns by widely defined private sources – corporations, non-profit organisations etc.

That decision overturned Austin v Michigan Chamber of Commerce 494 US 652 (1990) which restricted election spending by incorporated bodies plus, parts of McConnell v Federal Electoral Commission (2003 US LEXIS 9195), which impeded corporate spending on electioneering communications. However, Justice John Stevens registered a dissenting opinion contending inter alia that the ruling affirmed “a rejection of the common sense of the American people, who have recognised a need to prevent corporations from undermining self-government.”

In Nigeria, section 153 (1) (f) of the 1999 Constitution (as amended) establishes the Independent National Electoral Commission (the “Commission”). Pursuant to section 2(a), (b) and (c) of the Electoral Act 2010 (as amended), the Commission is empowered to conduct voter education, promote sound democratic processes and conduct any referendum under the 1999 constitutional provisions and any other law duly passed by the National Assembly.
On campaign finance, section 88 (1)(b) of the Electoral Act supra, criminalises the retention of funds or assets from outside Nigeria in violation section 91. The latter at section 91(1), through (9) inclusive, caps campaign expenditure. For example, the maximum amount a presidential aspirant can spend is N1 billion, a governorship candidate is restricted to N200 million; a senatorial aspirant’s campaign expenditure is capped at N40 million and a prospective member of the House of Representatives cannot spend over N20 million.

Furthermore, an aspirant at a state House of Assembly cannot incur campaign expenses exceeding N10 million. The Electoral Act at Sections 91 (9) (10)(a) through (g) inclusive, (11) and (12) also imposes stiff penalties on persons who infringe these statutory provisions.

Rounding off, philosophically, it seems completely at odds with logic to dictate to a rational person how to spend his legitimately earned money. This notion accords with campaign funding and libertarianism principles in most jurisdictions – Australia, Canada, Germany, UK, USA etc- in that there is an element of public funding attached to election campaigns. Whilst states may not directly fund candidates, they do fund the electioneering infrastructure, logistics, public awareness sensitisation campaigns to enable the free and fair conduct of elections which is reasonable.

The toxic allure of campaign funding however, is the disproportionate influence of special interest groups who donate vast sums to support particular candidates. Those candidates, if successful, are instantly morally conflicted because they owe emotional (and oftentimes practical!) debts, widely defined, to their political benefactors and donors. Those encumbrances have to be repaid somehow and the quid pro quo thereof is to short change the general voting public, which inevitably corrodes democratic legitimacy, creating a figurative toxicity. In short, the case for tighter campaign funding is stronger not weaker upon the preceding discourse. Otherwise, as illustrated at the start, it’s simply a case of he who pays the piper dictates the tune, which is unsustainable in this day and age!
Ojumu is the Principal Partner at Balliol Myers LP, a firm of legal consultants, in Lagos, Nigeria.