[However, the Aam Aadmi
Party is willing to reject money if the source doesn’t meet its standards for
transparency and honesty. It has turned down donations from certain companies
that it deemed as having a less-than-clean track record or from donors whose
nationality could not be established. Indians living abroad, also known as
nonresident Indians, are allowed to donate to political campaigns in India, but
foreign nationals are not.]
 |
Anindito Mukherjee/Reuters
Supporters of Aam Aadmi Party celebrating after Arvind Kejriwal, leader of the party,
won against Sheila Dikshit in New Delhi on Dec. 8.
|
MUMBAI — The Aam Aadmi
Party, having shaken up the political order in India by its surprisingly strong
showing in the Delhi state assembly elections last month, is also making an
attempt to change the way the country’s political campaigns are financed.
When the party first
began campaigning in 2012, it promised complete transparency in its finances,
creating a website in
which the name of the donor is listed, along with the donor’s country of residence,
the date and the amount of the donation.
These efforts mark a
considerable departure from the murky practices considered the norm in
electoral finance in India. “It’s the first time there has been this level of
transparency in fund-raising by a political party in India,” said E. Sridharan,
academic director at the University of Pennsylvania Institute for the Advanced
Study of India in New Delhi, who has written extensively about electoral
finance.
The party says that
its financial transparency is intended to differentiate Aam Aadmi from the
other political parties, which often accept large donations from private
enterprises and individual donors. These donors often expect a payback in the
form of public sector licenses and favorable regulations.
“It was a very
conscious decision on the part of the party that we are not going to resort to
the usual funding techniques used by political parties, nor are we going to
depend on corporates,” said Ankit Lal, social media and IT administrator for
the Aam Aadmi Party.
While Indian law only
requires donations above 20,000 rupees to be made public, the Aam Aadmi Party
lists the names of those who give as little as 100 rupees. Also, political
parties need to submit their accounts only annually to the Election Commission,
but the Aam Aadmi Party has already published their reports of donations on its
website.
The party has raised
49.5 million rupees, or $794,000, as of Tuesday since its victory in the Delhi
state elections in early December. Before the Delhi state elections, the party
received an average of 500,000 rupees a day, but currently it is drawing 1.5
million to 2 million rupees a day.
For the Delhi
elections, over 70,000 individuals donated, of which 55,000 gave 10,000 rupees
or less, said Mr. Lal. Nearly 60 percent of the total amount was donated
online, where the party has spent much of its fund-raising efforts.
Parties can receive an
unlimited amount of donations, but for the state elections in December, the
party stopped accepting donations on Nov. 17, after it reached its fund-raising
goal of 200 million rupees. “We set a campaign cap because we didn’t want to
take more money than we needed,” said Mr. Lal.
Though the 1-year-old
party has found success in fund-raising, the amounts it has received are still
small compared what the more established parties have raised in the past. A
study by the Association for Democratic Reforms showed that in the 2011-12
financial year, which begins in April, the Congress Party had a total reported
income of 3.07 billion rupees and the Bharatiya Janata Party, or B.J.P., had
1.7 billion rupees.
However, the Aam Aadmi
Party is willing to reject money if the source doesn’t meet its standards for
transparency and honesty. It has turned down donations from certain companies
that it deemed as having a less-than-clean track record or from donors whose
nationality could not be established. Indians living abroad, also known as
nonresident Indians, are allowed to donate to political campaigns in India, but
foreign nationals are not.
According to the Aam
Aadmi Party website, the United States has the highest number of nonresident
Indian donors as of Tuesday, followed by the United Arab Emirates, Britain,
Singapore and Canada. While the average Indian resident donates about 500
rupees, overseas Indians gives an average of 2,000 rupees to the campaign, said
Mr. Lal.
When India’s Home
Ministry ordered an inquiry into allegations of foreign donations to the party
in November, the party welcomed the
investigation and called on the government to look into each party’s sources of
funding. (The inquiry is still pending.)
“Political parties
have always received money from outside the country,” said Mr. Sridharan. “Some
of this money is also being sent out and then being brought back in a round
trip through Mauritius. There is money, which is corrupt money, that is taken
out of the country to Swiss banks, Mauritius or the Cayman Islands, and being
brought back during elections.”
In an attempt to
encourage traceable contributions, political parties receive tax breaks on the
condition that they file audited financial statements.
However, several
loopholes exist in the current political finance laws. While India bans
anonymous donations to political parties, unlimited anonymous donations to
individual candidates are allowed. Also, because political parties only have to
report donations above 20,000 rupees to the Election Commission, many have
claimed that they have received multiple donations of less than 20,000 rupees
from the same donor.
Campaign donations are
widely seen as a channel for illegal money, also known as black money, to be
brought into the country. In a study published in September by the nonprofit
Association for Democratic Reforms, nearly 75 percent of the funding of Indian
political parties comes from unknown sources.
“Political funding
everywhere in the world is fraught with controversy,” said Jagdeep Chhokar, one
of the founders of the Association for Democratic Reforms. “The laws in India
are rather dispersed, and therefore it is easy for political parties to avoid
giving information about their sources of funding and their expenditure.”
In August, the
Election Commission proposed making it mandatory for all political parties to
issue receipts to each donor, irrespective of the amount donated, and maintain
an account of all the receipts that will be audited each year. The commission
also suggested that parties deposit all donations in designated bank accounts
to keep a check on the use of illegal money.
The suggestions have
been resisted by most political parties. The Congress Party, which leads the
governing coalition in New Delhi, sent a letter to
the Election Commission saying that it would prefer to maintain the status quo.
Officials from the
B.J.P. and the Congress Party did not respond to requests for comment.
Samya Chatterjee, a
junior fellow specializing in political funding at the Centre for Governance
and Politics in Delhi, said it was too early to say whether the Aam Aadmi
Party’s actions represent a turning point for campaign finance in India. “But
it has already set a higher threshold for transparency in political funding
than currently practiced by political parties,” he said.
However, other experts
in electoral and political funding are skeptical that the Aam Aadmi Party’s
practices will lead to a greater transparency in Indian campaign finance.
“Political parties
cannot afford to start identifying their donors because a lot of this money is
kickbacks for government contracts,” said Mr. Sridharan. “The lack of
transparency in party funding is directly related to the discretionary and
nontransparent nature of government and public enterprise contracting and
regulations — which is where corruption happens. Right now, there is a sort of
vicious circle that is difficult to break.”
One possible solution
that has been widely debated is the public funding of campaigns. Currently, the
government provides parties accommodation at subsidized rates, income tax
exemptions and free air time on state radio and television.
“Research shows that
one instrument to enhance transparency is direct state funding to parties,”
said Sam van der Staak, program manager at the International Institute of
Democracy and Electoral Assistance in Stockholm, adding that public funding to
parties is now the global norm, with 70 percent of the world’s countries
providing it.
Additionally, state
funding allows the government to insist upon accountability in expenditure and
withhold funds in case of noncompliance, he said. “Since political parties will
always need money to perform their democratic roles in society, this forces
parties to rely on private donations only, many of which come with strings
attached,” he said.
Mr. Chhokar of the
Association for Democratic Reforms said that although public funding has been
debated for a long time, it is not likely to be introduced anytime soon. “The
bottleneck is that there is no clarity about how much funding is needed because
political parties are not willing to share clear expenditure reports,” he said.
“Unless it is known how much money is needed, how will they know much public
funding to provide.”
Regardless of what
happens in campaign finance, the Aam Aadmi Party has signaled that it will do
things its way. “We wanted to send the message that we are not like normal
parties,” Mr. Lal said.
