Foreign funding in Pakistan politics and its ramifications

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By Ahmed Bilal Mehboob

THE three largest political parties in Pakistan – PTI, PMLN and PPP- which command 86 percent of total membership in the National Assembly, are facing the prospect of dissolution if the charges of being ‘foreign-aided’ organizations are proven against them. 
The Election Commission of Pakistan (ECP) is investigating the charges against the now ruling PTI for the past five years whereas the inquiry against PMLN and PPP started only recently. The ECP has begun day-to-day sittings of the Scrutiny Committee after opposition political parties agitated to expedite the investigation against PTI. The PTI in turn, demanded that the verdict on all three parties be given at the same time. The charges and counter-charges of the parties and media reporting of the ECP investigation has highlighted the issue of foreign funding of political parties and the larger question of political finance.
Irrespective of weak enforcement, Pakistan has some of the strictest laws against the foreign funding of political parties. The Elections Act 2017 prohibits not only ‘…any aid, financial or otherwise, from any foreign government or political party of a foreign country…’ but also ‘…any portion of its funds from foreign nationals.’ This means that any contribution by even a foreign individual can render a party ‘foreign-aided.’ 
Besides a very strict definition of a ‘Foreign-Aided Political Party,’ the Elections Act 2017 prescribes a very severe penalty for a party which is found to be foreign-aided by the ECP and so upheld by the Supreme Court. Such a party, according to the law, shall stand dissolved and all its elected members in the national and provincial legislatures and even local governments shall be disqualified from holding their membership in the legislatures and local governments.
The Elections Act 2017 has further tightened the screws on political parties regarding the reporting requirements of their overall finances and election campaign finances. All enlisted political parties are supposed to submit their yearly audited statements of accounts by September 1 each year which must include details about annual income, expenses, sources of the funds, assets and liabilities. In addition, each party, which has contested an election, is bound to furnish to the ECP a list of contributors who have donated Rs. 100,000 or more for its election campaign expenses.

Head of the party or his/her designated party official has to certify the statement of accounts to be accurate and that no funds were received by the party from any source prohibited under the law. This certificate alone can lead to serious consequences for the party head if the information contained in the statement of accounts is not accurate. 
One can understand the discomfort of the parties and their heads who are facing the detailed scrutiny of their accounts not only because of the foreign-funding aspect but also for the possibility of any inaccurate information which can lead to the disqualification of the party head for not being ‘sagacious, righteous, non-profligate, honest and ameen,’ according to Article 62 (1) (f) of the Constitution of Pakistan, which has been responsible for the disqualification of at least two Prime Ministers, several ministers and legislators in the past.
Electoral laws in Pakistan and in several other countries around the world are quite sensitive to foreign funding because it is generally believed that foreign funding may lead to unfair foreign influence on domestic politics and decision-making and may even jeopardize national security. For similar reasons, the funding of political parties in general or, using a broader term, political finance is assuming a greater importance in all democracies in the world.
Although Pakistan has a robust legal framework for monitoring and managing political finance, the institutional capacity to enforce relevant laws in letter and spirit has been sadly missing. This capacity challenge is at two levels.
Political parties in general do not attach much attention to the reporting on their political finance. A review of the annual statements of political parties for the past 10 years indicates that critical details such as the sources of funding are missing from most of the statements. Political parties need to develop internal capacity or mobilize external expertise to carefully report on political finance. They may, otherwise, face a catastrophic situation in view of the increasing importance and focus on political finance in general and foreign-funding in particular.
More importantly, the ECP needs to build and retain in-house capacity to scrutinize various political finance statements periodically submitted by legislators and political parties. This enhanced capacity will help avoid long delays in arriving at a decision as is the case of alleged foreign funding to PTI. More finance and audit professionals will need to be inducted in a separate department as well as greater financial resources for enhancing this capacity.
(The writer is the president of Pakistan-based think tank, PILDAT. Tweets at @ABMPildat)