Electoral reform must include financial reporting reform

A hard look at the financial disclosures from the recent BC election reveals notable trends and influences

by Dan Crawford

Is there a correlation between campaign funding and votes gained? I decided to delve into Election Financing for the 2005 BC Provincial Election to fund out. Financial Disclosures by candidates have been posted at electionsbc.ca. I thought it would be an easy project, but I thought wrong. It turned into a computer science puzzle bringing back unwanted memories of working as a software developer.

The Elections BC website offers reams of information but it is all in a format not readily assessable for analysis. To make the conversion into a machine-readable format required many hours of data entry transcribing numbers from scanned-in handwritten documents to a raw data format. Once that was completed I started on the software and database portion of the project.

I decided to focus on the three main provincial political parties in BC, Liberal, NDP and Green, transcribing each candidate’s Financial Disclosure from each electoral district. This amounted to a total of 237 Financial Disclosures (three candidates at 79 electoral districts). I narrowed in on a data set of seven specifics—electoral district, name, money raised, transfers received, total income and total expended on a campaign. This information was then compiled into a database along with the election results.

The database analysis provided some very interesting insights on the subject of whether there was any correlation between money spent on a campaign and the election result.

Of the 79 elected candidates, 50 had spent the most money on their campaign in their respective electoral district. This equates to 63%, which draws a definite relationship between money expended on an election and the vote result.

Overall the Liberals won 46 seats and the NDP 33. Of the 46 Liberal candidates, 43 were the top spenders in their electoral district amounting to 93%. For the 33 NDP Candidates that won, only seven were the top spenders in their area, making for 21%. The difference between the two party’s is striking. Needless to say, the Liberals won the majority of seats.

The next analysis was to try and determine where the majority of the money spent originated from. Was it through donations by individuals at the local level or through multi-national corporations and unions?

Before proceeding, a brief outline is in order to describe the organizational chart of a political party. At the very top is the provincial level of the party, and beneath that is the individual constituencies for the party corresponding to the electoral districts within BC. At the very bottom is the actual candidate and the candidate's election campaign. All three levels are separate from each other in regards to electoral financing. Money donated to a party at the provincial level is not considered part of a candidate’s finances unless the funds are explicitly transferred by the provincial party account into the candidates campaign account. Likewise, money donated to a constituency office does not fall into a candidate's hands unless it is explicitly transferred from one account to the other.

The information available on the elections BC website is separated into these levels. There is one financial disclosure for each party at the provincial level, followed by disclosures for each constituency of the party, and then lastly the disclosures for each candidate.

For each disclosure there is a break-down of where the direct donations (excluding transfers) originated from. The amounts are separated into four distinct categories: individuals, corporations, non-incorporated businesses and trade unions.

On a candidate's disclosure it is also stated how much originated from transfers. The transfers must come from a registered political party, constituency or candidate. As can be inferred, the transfers to a candidate are almost entirely from the candidate’s own provincial party office and local constituency.

My analysis showed that, at the campaign level, a grand total of $10.9 million was expended by the 237 candidates during the election. A party-by-party breakdown shows the Green Party with $268 K (2.5%), the NDP with $3.6 million (33%), and the

Liberals with $7 million (64.6%).

The amount of that raised by candidates through direct donations given by both individuals or corporations at the local level break down as follows: Green Party $106 K (42% of their total), the NDP $787 K (22.7% of their total), and the Liberals $1.8 million (24.3 % of their total).

Reviewing transfers from party provincial headquarters to candidates reveals the following information about the source of party donations: For the Green Party, individuals gave 98.0 (or $87 K, corporations gave 1.6% (or $1.5 K), trade unions gave zero.

For the NDP, individuals gave 65.2% (or $3.9 million), corporations gave 3.3% (or $197 K), and trade unions gave 31.3% (or $6 million).

For the Liberal Party, individuals gave 20% (or $2.3 million, corporations gave 70% (or $7.9 million), and trade unions gave 0.04% (or $5 K).

This provides a glimpse at the approximate make-up of the transfers issued by the political parties at the provincial level. It indicates that a significant source of money was not raised at the local individual level. Rather, the interests of big business and unions were behind a very significant percentage of the finances supplied to the NDP and Liberal candidates.

It is interesting to note that both trade unions and corporations do not have the right to vote. Yet, these entities are allowed to influence the vote, in effect influencing democracy, through the financing of a particular political party.

There has been much talk of electoral reform but very little about election financing. It cannot be over-stated that true electoral reform involves election financing reform. I would suggest limiting the donations a political party can receive by only allowing those people who can vote in elections to donate.

Another aspect of this exercise has to do with how a separate “ineligible to vote” segment of the province could influence the vote. This has to do with the youth of BC. Not only are they the ones with the most vested interest in decisions that affect the future, but they also have the means and resources to indirectly participate in those very decisions being made.

Transcribing the specifics of the financial disclosures into a readily accessible and searchable website would be of much use to journalists, political analysts and BC Citizens. This would give the public an essential tool for monitoring the vested interests that our government, corporations and trade unions might have on the legislative floor.

A project where students and schools worked to undertake this financial disclosure database could provide for a valuable learning experience and at the same time give the youth of BC a voice that would be heard and respected.

Financial disclosure research can also be done at the municipal level. The city of Vancouver will be holding its election this November. The financial disclosures from the last election are publicly available at City Hall. Reviewing those may be of considerable interest and use, especially concerning disclosures relating to any returning candidates and incumbents.

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