Should Money Influence Elections?

Most of us regard Indian politics as particularly corrupt and distorted by money-grabbing politicians. We generally view politics in western countries as being much cleaner. Yet a look at spending in the US Presidential election is sobering.

Astronomical sums are being contributed one way or another by unabashed sectional interests (the tobacco lobby, the Hollywood lobby, the trade unions, the Christian Coalition and so on). According to one estimate, Al Gore and George W Bush will spend over $ 500 million in all, inclusive of “soft money” in the form of advertisements which ostensibly campaign for a particular cause, but are in effect ads for the candidate supporting that cause.

Elections are also due for the US Congress, and candidates are reported to have raised $ 632 million by June this year. In all, election spending this year could be $ 2 billion, or almost Rs 10,000 crore.

This vastly exceeds election spending in India. Forget the Election Commission’s ceiling of Rs 15 lakh per candidate, which is violated by everybody. Big-party candidates spend up to Rs one crore each. Assuming all candidates taken together spend Rs 2 crore per constituency, election spending on the 545 constituencies of the Lok Sabha will add up to just under Rs 1,100 crore. This looks modest compared with the US even allowing for higher incomes and prices in that country.

If US politics is manageably clean despite such heavy spending by nakedly artisan lobbies, why is Indian politics regarded as so contaminated by money?

Let nobody think that extortion or political pressure on businessmen is confined to India. A recent survey of 30 executives of US companies reported in the Wall Street journal says 74 per cent felt pressured to make large political contributions to buy access to influential legislators, or feared retribution.

So, do we simply dismiss Indian corruption as part of a global phenomenon, to use Indira Gandhi’s famous words? Not at all. It is possible to spend far more money in the US and yet have cleaner politics, for several reasons.

  • The US has open disclosure of which business groups are giving money to whom. Election contributions are in white money, and open to public scrutiny. By contrast transparent white money contributions in India are tiny. The bulk is black money, with no public disclosure of who is giving how much to whom for what purpose.
  • In the US, lobbies seeking (and sometimes opposing) changes in laws and rules finance candidates backing such policies. There is a case for saying this distorts democratic politics, yet it is action within the ambit of a rule-based society. However, in India the bulk of money given to politicians by businessmen is to evade or avoid rules, to get exceptional treatment for clearances and contracts. This is a subversion of a rule-based process.
  • In the US, candidates submit audited accounts of contributions and spending. These accounts can be flawed or incomplete, but by and large the system works. In India, audited accounts are meaningless even when available, since most election money is black.
  • In the US, many wealthy people spend their own money to fight elections. Rudi Guiliani is reported to have spent $ 23 million out of his pocket before withdrawing from the New York Senate race against Hilary Clinton. By contrast, Indian politicians view politics as a source of income, not something to spend money on. Ministers regard bribes and kickbacks as personal tax-free income, not to be wasted on elections. All Indian candidates get some money from their party headquarters for elections, but pocket a significant part of this sum.

    One politician told me he viewed the party’s contribution as an allowance to support him for the next five years in case he lost the election!

  • The US has public funding for elections. If a candidate raises money through contributions (limited by law to $ 1,000 per contributor) the state gives the candidate a matching sum. In India there is no ceiling on contributions, and spending ceilings are broken with impunity. There is no state funding by the state, either through a flat grant (which I would favour) or a matching grant.
  • In the US, closeness to powerful politicians will not save you from being jailed for criminal offences, no matter how much you contribute. Some of President Clinton’s close friends in Arkansas have been jailed in the Whitewater scandal. Michael Deaver, a personal friend and Cabinet colleague of Ronald Reagan, was jailed for influence peddling after leaving office. This would be unthinkable in India. Even in rare cases where Indian politicians are convicted (Narasimha Rao, Jayalalitha), the lengthy appeal process will ensure they die of old age before serving a sentence. Many criminals have become legislators believing this will oblige prosecutors to go slow on cases, or offer weak prosecutions which ensure a verdict of not guilty.
  • In sum, democracy is not endangered by electoral contributions by various lobbies. The US Supreme Court has held that the fundamental right of free expression includes the right to spend any amount a person wants on campaigning for any cause. I agree. I am uncomfortable with the power of moneyed lobbies in the US, yet public opinion there is strong enough to prevent money-power from degenerating into capture of the state. Transparent contributions for transparent causes should be regarded as part of the democratic process, warts and all. What does endanger democracy is payment made under the table for illegal ends. In many cases payment represents pure extortion. In other cases (like the Karnataka liquor lobby) it may represent capture of the state.

    How can we shift political money from illegitimate uses to legitimate ones? Fiddling with electoral rules and spending ceilings will not work in a climate where the police, administration and courts are incapable of enforcing the law quickly or efficiently. The answer lies in creating a rule-based society where laws and rules at least reasonably well enforced, where wrong-doers are penalised quickly and honesty is rewarded. In such a society legitimate uses of money will triumph over illegitimate ones in all fields, politics included.

What do you think?