|
|
|
|
International Forum >> The Democracy Forum for East Asia>> "Political Finance and Democracy in East Asia: The Use and Abuse of Money in Campaigns and Elections"
|
|
|
Introduction
Session I: Political Finance in a Comparative Context Session II: Political Finance in the Philippines, Thailand, Indonesia, and India Session III: Political Finance in Korea, Japan, and Taiwan Session IV: Regulating Campaign Contributions and Expenditures Session V: Disclosure, Transparency, and Institutional Enforcement Session VI: Making Political Finance More Democratic: Developing an Agenda for Reform Agenda Participants |
Session III: Political Finance in Korea, Japan, and Taiwan Moderator: Daljoong Chang The third session featured the presentation of three additional case studies, those of Korea, Japan, and Taiwan. The Case of Korea Corrupt business-government relations are a major problem in Korea, according to political scientists Hoon Jaung and Jongryn Mo, coauthors of the case study of that country. But while government intervention in the financial sector may have fed the economic growth of the 1960s and 1970s, it left banks in a precarious position when economic conditions later worsened. The main lubricant of the old system was money politics, they said, but the problem has worsened, not improved, under democracy because politicians now have an even greater need for campaign funds. Hoon and Mo reported that major political finance reform bills were passed in Korea in 1995 and 1997, but these have not worked. Politicians complain that spending limits are so low that virtually all candidates must violate them, although generally without fear of government sanctions. And in the absence of reliable campaign finance data, scholars, journalists, and the public have a difficult time understanding the true scope of political finance activity. Most candidates and parties do comply with legal requirements to report their finances to the National Election Commission, the authors reported, and these reports are subject to close scrutiny. The problem, they said, is that the reports contain only a small part of actual activity and few observers dig deeper to uncover hidden spending. In Korean presidential elections, for example, most observers believe that reported spending is just the tip of the iceberg. Huge amounts of unreported funds are said to be spent for vote buying, salaries for unofficial workers, subsidies for party activists, and campaign advertising. But the gap between actual and reported spending characterizes parliamentary elections as well. One major problem, the authors said, is that while the official campaign season for both presidential and parliamentary elections is only a few weeks, the actual campaign lasts six months or more. It is difficult to trace funds spent by candidates for legitimate campaign needs-worker salaries, office rents, travel, and printing-in the so-called preseason. Some experts have estimated that the costs for polling and telemarketing alone exceed the legal limits. In addition to excessive spending on legal activities, campaigns also incur illegal expenses. Many candidates make illegal contributions to party leaders to gain spots on the ballot. And in what the authors called Korea's passive political culture, candidates still need to spend huge sums to motivate voters through various means, including vote buying. Most official political party income comes from private business "support groups" (huwonhoe) and from state subsidies. As in other countries, there is a large gap in Korea between what the ruling party and the opposition parties raise from support groups. Large corporations, in particular, typically make large contributions to the governing party. But even the distribution of state subsidies is skewed toward the larger parties, and small parties frequently complain that they are shortchanged. As in other areas of Korean political finance, few people outside the parties and the support groups know about the precise flow of money. Individual candidates also raise money directly from support groups. As one would expect, senior legislators raise much more than their younger counterparts, and members of the governing party typically raise more than members of the opposition. Members of parliament also receive funds from their parties and from party leaders, while wealthy candidates draw on personal funds for their campaigns. Experts also believe that corporations donate to legislators from their home districts or those whose committee assignments are important to the firm. Nonetheless, beyond these generalities, it is not well known who contributes to individual candidates in Korean politics. The authors thus summarized the current situation in Korea as follows: spending is out of control, the flow of money is not transparent, virtually everyone breaks the law, politicians are regularly involved in major financial scandals, and voter cynicism is growing. They agreed that the goals of reform should be to increase electoral competition, to promote greater transparency and accountability, to make elections fairer, and to facilitate parliamentary deliberation. But they acknowledged that it is impossible to design reforms that meet all of these criteria, and, in any case, Korea's piecemeal reforms since the 1960s, while they have helped to institutionalize some previously unregulated and informal practices, have also led to the current situation. Further reforms are badly needed, Hoon Jaung and Jongryn Mo concluded. The Case of Japan Political finance in Japan is regulated by several complex laws that date to 1947-1950, according to Masaru Kohno, who prepared the case study of that country. The Political Funding Control Law specifies the source, amount, and usage of political contributions. Foreigners, companies in deficit, and companies that receive government subsidies are prohibited from making political contributions. Contributions from individuals, labor unions, and business firms also are all limited by this law. Businesses and labor unions are prohibited from contributing to political organizations other than to parties or organizations established by parties. But political organizations can contribute in unlimited amounts to political parties. During election periods, no individual or group can contribute to individual candidates, only to parties. Political parties, however, can contribute to candidates as well as to other political organizations. The effect of this provision is that political party contributions are exempt from regulation. But while political organizations must disclose their funds, there is no requirement for individual politicians to file financial statements. This fact makes it difficult for researchers to trace the sources of funds to particular candidates. A more recent law, the Political Party Subsidy Law (1994), established a system of state subsidies according to each party's vote share and parliamentary membership. To receive subsidies, a party must have at least five parliamentary members or have one member and a vote share greater than 2 percent in the previous election. The fact that corporations may contribute to political parties creates a major loophole in Japan's regulatory regime, Mr. Kohno said, since parties may simply pass corporate contributions along to individual politicians. There is no centralized monitoring organization that collects and reviews all the financial statements prepared by political organizations. Nor is there an agency with the mandate or resources to charge those who violate election laws. Critics also fault the state subsidy system as being unfair to those in public office who are not members of existing political parties and for distorting the allocation of funds to parties. And the existing law does not consider what happens when a member of parliament changes party affiliation after having been elected. A large variety of reform proposals are currently being debated in Japan, Mr. Kohno said, but most of them can be grouped in two classes. The first class is based on what he called "normative assumptions about the ideal amount of money in politics;" these reforms would close some of the largest loopholes, improve enforcement, and increase penalties for campaign finance violations. The second set would increase disclosure to improve the transparency of the money flow-but would then let the public decide what the appropriate level of money in politics should be. Mr. Kohno said that democracies at different levels of development may require different reforms. In his judgment, Japan was a mature democracy in which the government did not need to set spending or contribution limits. The Case of Taiwan "As far as I can see, the only purpose of political finance laws is to be broken." So said David Huang, author of the case study of Taiwan. Although Taiwan has multiple laws regulating political finance, Mr. Huang said they are not integrated well enough to prevent conflicts in their application and enforcement. In addition, the country's current regulatory framework features significant loopholes that allow politicians to evade or circumvent the intent of the political finance laws. More disheartening to reformers, the Democratic Progressive Party, since coming to power in May 2000, has started to install its representatives in top management positions in banks and other financial institutions just as its predecessor, the Kuomingtang, had done. In such a climate, political finance reform in Taiwan is "mission impossible," Mr. Huang lamented. The laws themselves contain sensible provisions, Mr. Huang said. The Civil Group Law prohibits political parties and other political groups from accepting contributions from foreign individuals and groups. The Election and Recall Law prohibits public officials, candidates, and political parties from receiving contributions from foreign individuals or entities, from other parties and candidates in the same election, and from public enterprises and nonprofit organizations that receive public funds. This law also establishes individual and corporate contribution limits for parties and individual candidates and specifies how much an individual candidate can receive from political parties. Unfortunately, he added, the laws contain overlapping provisions and set different penalties for similar actions, resulting in genuine confusion among candidates as to which provisions apply to them. The laws establish penalties for recipients but not for donors. They contain no provisions regulating contributions to politician-related nonprofit foundations, for example. As a consequence, many politicians have established nonprofit foundations to channel financial contributions to their campaigns and even to their personal accounts. And there is no law regulating the candidate nomination process within parties, opening the process to corruption and vote buying. Taiwan's election laws are enforced by a Central Election Commission, which is understaffed and ill-equipped to monitor the electoral process and political finance, but also by departments within the ministries of justice and internal affairs. This division of responsibilities leads to communication difficulties and inconsistent enforcement. Most campaigns report spending at or close to the legal limits, but experts believe that significant amounts of campaign spending are not reported. As in other countries, some reformers in Taiwan have proposed a total ban on business contributions or prohibitions on transfers from one party to another. Others have called for increased public subsidies to enable smaller parties, in particular, to get their messages out to the voters. No one has found a way to reconcile these competing proposals, Mr. Huang said. In any case, "people are sick of politicians." Taiwan needs not only political finance reform but political reform in general, Mr. Huang concluded. Session III Discussion Jung-Bae Chun, a lawyer and member of the Korean National Assembly, reported to conference participants that on the preceding day (June 28) parliament had passed an anticorruption measure that he predicted would work to reduce government-business collusion. But this was only one of many measures needed to fight such problems as money laundering, excessive contributions and spending, and vote buying. "I will try to clean up politics," Mr. Chun pledged, adding that responsibility for reform lies not only with politicians but with citizens and voters. But Laura Thornton replied that "we cannot leave it up to the voters to solve money politics; it is too much to expect them to know." And Lena Kolarska-Bobinska from Poland added that when laws on party finance in her country are violated neither public opinion nor the judiciary demand enforcement. Masaru Kohno countered, "I actually trust voters more than politicians or parties." Noting that Europe and the United States also have problems with political finance, American participant Marc Plattner asked "Are there any models for success?" Larry Diamond noted that some countries had established extremely low fines for campaign finance violations, while others had severe penalties, including imprisonment, that were almost never imposed. Mr. Diamond recommended instead a system of instantaneous disclosure and realistic and enforceable penalties for those who break the law. Clyde Wilcox noted that when the U.S. Federal Election Commission began posting campaign disclosure reports on the Internet, it stimulated new media coverage of money in politics. Mr. Wilcox recommended such disclosure to countries that had the means of so doing. Michael Pinto-Duschinsky observed that while some Korean participants had said that politics had become expensive because of person-to-person retail campaigning, another participant said that campaign spending increases in India were due to the spread of Western-style media campaigns. Mr. Pinto-Duschinsky added that scholars had found that public funding was more likely to be used in proportional representation systems, while majority-systems were more likely to feature personal spending by candidates. "We need better facts before we can draw conclusions," Mr. Pinto-Duschinsky said. |
|
| |