Transparent Political Party Finance (MN0042)

Main objective:
Improve Law on Political Parties to make the financing and spending more responsible, accountable and transparent.

Brief description of commitment:
Devote attention for renewing Law on Political Parties and speed up the process to develop the draft law and submit the draft for adoption. Disseminate information on submission and discussion of the bill to/by Parliament and conduct broader advocacy activities with participation from OGP stakeholders.

Ambition:
-Regulation pertaining to open disclosure of the political party finances and civil society participation in oversight reflected in the Law on Political Parties and accountability of political parties and civil society will have improved; Oversight and monitoring made by law enforcement agencies in these areas will have im roved and conditions for preventing from any potential corruption will have created.
-Public awareness and knowledge on political parties responsibility and accountability will have improved and capacity to demand the political parties of their compliance with duties will have built.
-The draft Law on Political Parties, which includes transparent disclosure of political party financing and civil society oversight, will have developed and submitted to Parliament.
-Awareness raising event targeting at broader level (decision makers, public, civil society, political parties) will have organized and discussion and adoption process will have accelerated by d increased demand from public.

Milestones:
1. Carry out study on inclusion of "transparency of political parties financing" requirements in the Law on Political Parties, develop draft law and submit to Parliament
2. Provide public with information, present the draft law to attract their support, and organize discussions for feedback and comments based on multi-stakeholder approach at broader level;
3. Organize activities to get pledges and commitment from political parties to support the draft law with presence of public;
4. Carry out advocate work in partnership with OGP stakeholders until the bill is adopted.

8. Create legal environment for transparency of political parties financing

• Devote attention for renewing Law on Political Parties and speed up the process to develop the draft law and submit the draft for adoption.
• Disseminate information on submission and discussion of the bill to/by parliament and conduct broader advocacy activities with participation from OGP stakeholders.

Main Objective

Improve Law on Political Parties to make the financing and spending more responsible, accountable, and transparent.

Milestones

1. Carry out study on inclusion of transparency of political parties financing requirements in the Law on Political Parties, develop draft law, and submit to parliament.
2. Provide public with information, present the draft law to attract their support, and organize discussions for feedback and comments based on multistakeholder approach at broader level.
3. Organize activities to get pledges and commitment from political parties to support the draft law with presence of the public.
4. Carry out advocacy work in partnership with OGP stakeholders until the bill is adopted.

Editorial Note: For the complete text of this commitment, please see Mongolia’s action plan at https://www.opengovpartnership.org/wp-content/uploads/2019/12/Mongolia_Action-Plan_2019-2021.pdf.

Commitment analysis

This commitment aims to establish the legal framework to mandate political party finance transparency, through an amendment to the Law on Political Parties. ^[61] A nearly identical commitment (Commitment 4) was included in Mongolia’s second action plan. Despite the creation of special task forces and civil society advocacy, the commitment did not result in parliament passing an amendment of the law. ^[62] Mongolia’s National Audit Office, General Department of Taxation, Independent Agency against Corruption, National Chamber of Commerce and Industry, political parties, and civil society groups that specialize in transparency and anti-corruption, will work together to implement this commitment.

Political party financing is a prominent and contentious issue in Mongolia, especially during elections. ^[63] High-profile corruption scandals ^[64] have substantiated multiple surveys that confirm that citizens often perceive political parties to be highly vulnerable to corruption. ^[65] Currently, the Law on Political Parties mandates that political parties conduct annual financial audits and publish the audit report. ^[66] However, the law does not mandate a clear mechanism for ensuring transparency of political party financing, noting that political parties should exercise their own financial control. The lack of adequate financial transparency is particularly problematic as political parties are subsidized by the state budget.

Building on the 2019 constitutional reform process, this commitment aims to give effect to provisions on political party financing through amendments to the Law on Political Parties. The amendments will broadly require political parties to adopt and promote a program to democratize internal structures and ensure transparency of their assets, income sources, and expenditures. ^[67] However, it is not clear from the commitment text what the amendment will specifically contain and therefore its potential impact on transparency of political party financing is not clear.

In 2018, the International Institute for Democracy and Electoral Assistance (IDEA) and the Open Society Foundation (OSF) published their assessment and recommendations for political financing in Mongolia. ^[68] The assessment emphasizes the importance of creating a legal regulatory framework that would encourage political parties to source transparent public donations over often obscure private funds. ^[69] It also recommends that the parliament reforms the structure of government subsidies for political parties as a means to curb the prevalence of corporate funds in politics. For example, the report outlines the problem with Mongolia’s current distribution model of political party funding of the state budget, which takes into account the number of seats a party has in the parliament instead of the number of votes that they received in the most recent election. ^[70] This model makes it difficult for smaller political parties to challenge the traditional powers of Mongolia’s political system and furthers the gap between established political parties and smaller, newer ones.

This commitment is relevant to the OGP value of access to information as the passage and approval of the amended law by parliament will mandate improved transparency of political party financing. The commitment also proposes to disclose information through the development of the draft amendment. The commitment is also relevant to the value of civic participation as it proposes to organize a series of discussions for feedback and comments on the draft; which will provide citizens an opportunity to contribute to the drafting of the amendment.

While the commitment is generally verifiable, the description of activities could be more specific. For instance, the commitment proposes to provide the public with information on the draft amendment and conduct discussions for feedback and comment without specifying how such information will be communicated, or the number or nature of discussions that will be held. The commitment also does not indicate how public feedback will inform the development of the draft amendment, or whether the government is obliged to provide reasoned responses on how such feedback was incorporated.

This commitment’s potential impact on transparency in political party financing is evaluated as minor. This commitment is largely identical to Commitment 4 in the previous action plan. ^[71] Both iterations are evaluated to be minor due to the lack of information on what the amendment to the law would seek to change. The absence of detail makes it difficult to assess the commitment’s likely impact on political finance transparency. If the legislative amendment included mandates to disclose political party assets, sources of income, and expenditure, for example, this commitment would represent a significant improvement from the status quo where political party financing is largely shrouded in secrecy. ^[72]

Moreover, the previous action plan demonstrates that the effort to pass such an amendment will require strategic and sustained advocacy of parliament and relevant political stakeholders; a clear plan for which this commitment fails to fully describe. The success of the commitment is also contingent on the scope and content of the eventual amendment; and its capacity to facilitate oversight and enforce or compel political parties to fully adhere to its provisions.

In implementing the commitment, stakeholders should focus on formulating and executing a clear plan to carry out advocacy and lobby parliament to pass the amendment. This plan could leverage and consolidate the work of various programs and initiatives that publicize and promote transparent political financing; including, for instance, the OSF and International IDEA’s “Level Up: Political Finance with Integrity”, which organizes meetings and discussions on political finance, including women and youth. ^[73]

The scope of the amendment itself will be enhanced if it successfully addresses the key gaps in political party financing in Mongolia, as identified by OSF and International IDEA. ^[74] The amendment should mandate the disclosure of political party assets, income, and expenditures. Specifically, legislators should consider introducing provisions to mandate publication of post-electoral and annual reports, as well as reviews by the relevant oversight authority, via multiple channels and a searchable database. The disclosed information should also be kept available for a reasonable period of time. ^[75] If such provisions were included, this commitment would represent an ambitious open government reform in a critical policy area.

8. Create legal environment for transparency of political parties financing

Limited:

The Ministry of Justice drafted a law on transparency of political party funding and introduced it to the Cabinet. To date, political obstacles have blocked the bill’s passage. In 2018, preceding the action plan’s implementation period, the Open Society Forum and International IDEA published an assessment of political party financing, including some recommendations for drafting the bill. [32] Despite setbacks to the bill’s passage, in November 2019, the government amended the constitution to include a clause requiring transparency in political parties’ funding assets, income sources, and expenditures. [33] There is no evidence of public engagement in the process, or organized advocacy work. Following the implementation period, the Open Society Forum intends to undertake a new advocacy strategy of generating buy-in from the president to submit the bill to parliament. [34]