PILDAT calls out regulatory gaps in political finance, urges reforms in latest report

LAHORE, Sep 25 (APP):The Pakistan Institute of Legislative Development and Transparency (PILDAT) conducted a briefing session with representatives of the media on Wednesday to launch its paper ‘State of Political Finance in Pakistan’, which proposes reforms for strengthening the political finance regulatory framework in the country.

The session began with welcome remarks by Ahmed Bilal Mehboob, who highlighted the importance of accountability and transparency in political finance for any democratic country.

Ms Alena Sadiq from PILDAT then gave an in-depth presentation, where she explained the current rules and regulations governing political finance as outlined in the Elections Act, 2017. Subsequently, she highlighted the gaps and ambiguities in the current regulatory framework for electoral finance. While strict legal spending caps exist for candidates’ expenditures during elections, Section 132 (5) allows for a way around the limits by allowing third parties to spend money on behalf of a candidate “without the consent” of the candidate.

Moreover, while candidates are required to report expenditures, they are not required to report the identity of donors. The law is also particularly vague when it comes to the disclosure of political parties’ election expenditures. While Section 211(2) mandates the submission of political parties’ election expenses, it does not specify a reporting deadline or require public disclosure.

The presentation further touched upon non-electoral political finance, including the permitted and prohibited sources of funding for political parties, referencing the high-profile PTI foreign funding case as a significant example.

Ms. Sadiq shared key statistics from the ECP’s 2023 Annual Report, revealing that 1,190 members of the National and Provincial Assemblies submitted their financial disclosures (Form B) for the financial year ending June 30, 2022. However, a Gazette notification by the ECP, dated January 21, 2023, disclosed that 271 representatives from the Senate, National, and Provincial Assemblies had failed to submit their Form B within the stipulated time frame. Furthermore, 168 out of 175 registered political parties were required to submit their statement of accounts for the financial year 2022-2023, but only 107 parties complied by the due date, while 40 out of 59 parties submitted after being issued show-cause notices for non-compliance.

The briefing also included a comparative analysis with South Asian countries, providing insights into how Pakistan can incorporate regional best practices to strengthen its political finance system. While India limits corporate donations to not more than 7.5% of a corporation’s average net profits from the previous 3 fiscal years, Pakistan has no such limits on donor contributions for either natural or legal persons.

To conclude, Mr. Mehboob put forth PILDAT’s key recommendations for improving the state of political finance in Pakistan: The term ‘source of funds’ should be elaborated upon in the Elections Act, 2017, as defined in Article 17 (3) of the Constitution; The enforcement of political finance laws should be improved through extensive monitoring mechanisms; The audit and accounts personnel within the Political Finance Wing should undergo rigorous training.; Investments should be made in technology and data management systems; A set percentage of political finance records, obtained from political parties and individuals, should be chosen at random for inspection regularly.