AUDITING AND CONTROL OF POLITICAL PARTY RESOURCES THE MEXICAN CASE

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AUDITING AND CONTROL OF POLITICAL PARTY
RESOURCES THE MEXICAN CASE
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CONTENTS

• I. REASONS FOR AUDITING
• II. ELEMENTS TO BE REGULATED
• III. DEVELOPMENT OF THE MEXICAN AUDITING SYSTEM
• IV. CONCLUSIONS

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I. REASONS FOR AUDITING

• TRANSPARENCY
• Trust and certainty of clean elections
• EQUITY
• To avoid the undue influence of money or diverse
  powers in parties and electoral competitions

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II. ELEMENTS TO REGULATE

• Financing origins and amounts
• Public
• Private
• Other prerogatives (free time on radio and TV)
• Amount and destination of expenditures
• Political party obligations
• Reports
• Sanctions
• Authorities in auditing matters
• Review
• Investigation

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III. DEVELOPMENT OF THE MEXICAN AUDITING SYSTEM

• 1977-1993. Hegemonic party.
• 1993-1996. Dominant party.
• 1996-2007. Alternance.
• 2007-2008. Open competition.

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MEXICAN DEVELOPMENT 1977-1993. Hegemonic Party

• ESTABLISHMENT OF PUBLIC FINANCING
• FREE RADIO AND TELEVISION PROGRAMS (15 minutes
  monthly)
• Positive effects on the plurality of the party
  system

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MEXICAN DEVELOPMENT1993-1996. Dominant Party.

• Mantainence of public financing. Distribution
  criteria.
• Increase of free radio and television time for
  campaigns (some spots).
• Regulating private financing.
• Methods of payment (political affiliation
  supporters self-financing financial yields,
  funds and trusts).
• Limits to private contributions.
• Prohibited individuals (government, firms,
  churches, foreigners).
• No anonymous contributions or stock exchange
  activities.

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MEXICAN DEVELOPMENT1993-1996. Dominant Party

• Campaign spending limits.
• Representatives. Senators. President.
• IFE as an auditing authority.
• Proceeding with the right to correct errors or
  omissions.
• Electoral Tribunal as the reviewer in case of
  appeal.
• Annual and campaign reports.
• 1 annual report per party.
• 300 Representative reports.
• 32 Senator reports.
• 1 Presidential report.
• Sanctions regime.

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MEXICAN DEVELOPMENT1996-2007. Alternance

• Substantial increase in public financing and
  better distribution.
• 350 more (350 mdd).
• 70 proportional. 30 egalitarian.
• Reduction of private financing.
• Never greater than public financing.
• More strict limit to individual contributions
  (100,000 USD).

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MEXICAN DEVELOPMENT1996-2007. Alternance

• Reduced campaign expenditure limits.
• Greater requirements for party obligations on
  income, expenditure, and reporting.
• Income only in candidate bank accounts.
• Contributions through checks (more than 1000
  USD).
• In-kind contributions through contracts and asset
  identification.
• Limited credits within private financing limits.
• Supplier identification.
• Travel expense logs.
• Expenditures with receipts and contracts.

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MEXICAN DEVELOPMENT1996-2007. Alternance

• Greater powers for the electoral authority (IFE)
• Auditing, investigation, and attention to
  irregularity complaints.
• Commercial radio and television monintoring,
  advertising in foreign press and publicity.
• Registration of politically risky people (money
  washing).
• Precampaign reports.
• Reports anticipated during campaigns.
• Public transparency of reports.

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MEXICAN DEVELOPMENT2007-2008. FULL COMPETITION

• Creation of the Auditing Unit within IFE.
• Breaking with banking, fiduciary, and fiscal
  secrecy.
• Reduction of campaigns.
• Prohibition of purchasing commercial spots on
  radio and television.
• Free promotional time on radio and television
  (between 22 and 23 million spots for the 2009
  campaigns).

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MEXICAN DEVELOPMENT2007-2008. FULL COMPETITION

• Reduction of public financing (to 300 mdd).
• Additional limits to private financing. (To the
  methods of payment).
• Reduced campaign limits. (from 50 to 20 mdd
  President).

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MEXICAN DEVELOPMENT2007-2008. FULL COMPETITION

• Precampaign, quarterly, pre-campaign and campaign
  reports.
• Multiple rules for presentation of income and
  expenditures in reports (200 rules).
• Auditing, investigation, and resolution of
  irregularity complaints for party income and
  expenditures.
• Public transparency of reports.

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IV. CONCLUSIONSADVANCES

• Solid legal framework
• Constitution.
• Federal Code of Electoral Institutions and
  Procedures.
• Auditing Regulation.
• Auditing Complaint Regulation. (Complaints and
  Investigation).
• Official Auditing Procedures Regulation.
• Greater plurality and equity in the party system.
  
• Greater transparency on the origin of resources
  and expenditure destination.
• Greater control and financial discipline for
  political parties.

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V. CONCLUSIONSCHALLENGES

• Avoiding excessive bureaucracy.
• 333 campaign reports per party.
• Nearly 1000 pre-campaign reports per party.
• High volume of audits, documentation, and
  investigations.
• Being efficient and expeditious in reviews and
  public transparency.
• Improving registration and reporting technology.
• Avoiding money from illicit sources
  (narcotrafficking and organized crime).
• Studying the effects of high public financing,
  restricted private financing, and low campaign
  expenditure limits on transparency and equity.