Declan writes in a post called Ethical Confusion about the recent judgment in the US Supreme Court which re-enables corporations to donate to political campaigns.
I am not confidently versed enough in US political financing rules to make an assertive conclusion on the matter, but I generally think most restrictions on political financing result in advantages to incumbents, which is why such rules are usually legislated (witness the so-called “gag law” enacted in BC before the 2009 Election to restrict third party advertising which was really a rule that attempted to prevent anti-BC Liberal elements from spending a pile of cash they’ve accumulated for the writ period).
I also think restricting most forms of individual spending on political matters results in more empowerment of the media, although the internet has (thankfully) blunted this off somewhat.
Living in British Columbia, we get three different flavours of political financing rules on the federal, provincial and municipal side.
Federally:
Only individuals can contribute to political parties and candidates. The maximum contribution is $1,100 to a political party, and another $1,100 to a registered association or candidate, and you receive a 75% credit off federal income taxes for the first $400 donated, 50% for the next $350 and 33.3% for the next $525.
Corporations and unions are not allowed to donate.
Political parties also receive about $2 per vote per year, paid quarterly, based on the result in the last general federal election. The minimum threshold to receive quarterly financing is 2% of the popular vote nationally, or the electoral districts where candidates received at least 5% of the vote.
Finally, political parties receive a reimbursement of 50% of their eligible election expenses. Candidates receive a reimbursement of 60% of their eligible election expenses providing that they receive at least 10% of the popular vote in their electoral district.
Political parties, registered association and candidates must have their expense returns audited in order to be eligible for the expense reimbursement. In terms of strict math, a person donating $100 to a candidate incurs a $25 after-tax expense; the candidate can then spend $250 and subsequently receive $150 back after he/she files their expenses. This is why political parties and candidates really appreciate small donations – the leverage on your after-tax cost is 10:1.
In my opinion, despite its complexity, the system has performed rather well. Corporations and unions are typically relegated down to the lobbying level and without the influence to donate to election campaigns.
In particular, you can operate a two-bit political party and still be able to receive quarterly financing from Elections Canada by having your candidates receive more than 5% of the popular vote in a riding during an election. So if your two-bit political party fields 2 candidates and they get exactly 5% of the vote, for a typical riding in Canada that has 40,000 voters, your two-bit party will receive $8,000 a year in financing. No political party has done this; only the Green party has not won any seats but have qualified for quarterly financing by virtue of having greater than 2% of the national vote.
Provincially:
Individuals, corporations, unincorporated associations, non-profits (but not charities) and trade unions can contribute to political parties and candidates. There is no limit to contributions. You (or your corporation) receive a 75% credit off provincial income taxes for the first $100 donated, 50% for the next $450 and 33.3% for the next $550.
There is no provincial election expense reimbursement or equivalent of quarterly financing.
Election expenses are required to be audited above a certain spending threshold for both parties and candidates, but I have never seen in my life anybody prosecuted for violating provincial election spending rules.
One wonders if this election financing regime lead to the two parties that dominate provincial politics representing corporate donations (the BC Liberal Party) and the trade unions (the NDP).
Municipally:
Anything goes. No tax credits, no expense limits. You just have to report donations and very basic expenses at the end of the election, without audit. Just like provincial elections, I have never recalled anybody being charged with violating the Local Government Act with respect to election financing rules. Election financing rules in municipalities are very, very, very loose.
Large-scale municipal elections (e.g. Vancouver) tend to mirror provincial lines, mainly the corporate (NPA), “Yaletown corporate” (Vision – I have no idea what else to call their core support branding other than “Yaletown”) and the unions (COPE). Also prominent in municipal elections are the influence of developers and the real estate lobby, mainly due to the quick access of having councilors that are one decision away from making lucrative rezoning decisions.
Some thoughts:
There are points to be made for all three systems, but it is difficult to deny that the federal financing rules (specifically banning donations from corporations and trade unions) has had an impact on corporate influence in the political world. Most of the corporate and union political donations occur in the provincial and municipal worlds, where there is a lot of influence peddling.
I also do not believe that one regime of political financing would fit all three levels of government. If I were to make an easy tweak, I would cap donations to $1,100 for provincial and municipal donations from any one source.
