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Remove legislative obstacles to donation reform

Recent reports of huge political donations from white-collar fugitive Chen Yu-hao (陳由豪) have given new momentum to reforming campaign finances. All parties have promised to enact a political donations law (政治獻金法) during this legislative session. However, legislators are still haunted by an illusion that is hampering reform efforts.

Regulation of campaign finances has been thrown around for a decade, but bills seeking to re-regulate the flow of money in the political arena have never reached the floor of the legislature. The most recent gridlock followed disagreement over "time limits" to be imposed on campaign contributions. Insisting that legislators should not be able to receive donations during their tenure except during election season, People First Party (PFP) law-makers have refused to compromise during inter-party negotiations and blocked the bill.

The PFP lawmakers claimed that only by imposing a higher ethical and legal standard could we restore public confidence in the integrity of politicians. On the other hand, many legislators worry that such strict rules will only invite their circumvention. The controversy persists even though the other parties have acquiesced on time limits in the latest round of negotiations.

It is quite natural for politicians to dispute legislation that will impact on their agendas. Despite political consensus that campaign financing needs to be regulated, lawmakers may still find it difficult to reach agreement over the ends and means of the proposed rules.

Even though reforming campaign finances is inherently controversial, the latest dispute seems bizarre. It involves no ideological disagreement over the basic tenets of the proposed regime; in fact, the dispute is centered on a seeming paradox which falls apart on closer scrutiny. The time-limit issue has been framed as a matter of principle, and this merely partisan quarrel has now become a sacred battle between idealists and realists.

No conspiracy or bad faith should be inferred from a routine quarrel such as this, but that it is occurring does indicate that the reforms are fraught with confusion and misunderstanding. The bill might have been passed during the previous legislative session had our legislators been more conscious of what was going on.

Maybe we should start from the basics. Modeled on US law, the bill recognizes that people have the right to make campaign contributions, but that this right is subject to regulation to "prevent corruption or the appearance of corruption." Disclosure is the basic mechanism of the proposed regime, but since large financial contributions imply "quid pro quo improbity," the bill also imposes ceilings on the amounts that can be donated.

Disclosure and donation ceilings provide a dual safeguard against abuse of the donation process. Although violations of the regulations will not necessarily constitute bribery, there will be a clear distinction made between legitimate and illegitimate contributions.

The PFP legislators seem to be insisting that we should, in addi-tion, set a time frame for campaign contributions and outlaw fundraising activities between elections. But under the proposed regime, it is unclear why we would need to restrict the timing of contributions. A contribution made between elections that has been properly disclosed and that is beneath the ceiling hardly creates more danger of corruption or the appearance of corruption than one made during an election campaign.

A time limit is especially problematic in light of the adverse impact on political competition. Given that incumbents usually enjoy greater recognition, it is much easier for them to raise money than it is for newcomers. Under these circumstances, regulation of campaign finances tends to be more detrimental to challengers. A general ban on fundraising activities outside of campaign periods is therefore reprehensible because it only raises the entry barrier into the political marketplace, impeding fair competition.

Certainly, the PFP legislators can defend their position by arguing that a temporal ban is only applicable to incumbents. They might further argue that forbidding incumbents to receive contributions during their tenure will restore or enhance their integrity and make them concentrate on their duties of office rather than fundraising. Unfortunately, this is an argument based on a moral hunch instead of pragmatic considerations. Its merits are illusory.

The notion that a time limit represents a "higher" ethical stan-dard has not been justified because its advocates never tell us why a disclosed, limited contribution received outside a campaign period will harm an incumbent's integrity. It seems that the sense of moral superiority underlying this rule is ultimately derived from some sort of "contribution phobia." Such a sentiment is inconsistent with the proposed regime, which recognizes the value of lawful contributions.

Some commentators have also suggested that the time limit is so unrealistic that candidates would not feasibly be able to abide by the rule when covering their huge expenses. Public subsidies, after all, cannot totally replace donations, which provide a kind of market mechanism that rewards hard work and innovation.

The legislative process for the proposed donations law is about to restart. It's time for us to leave behind an exaggerated dispute and confront the real challenges posed by the reforms. Of course, the proposed regime is by no means infallible, but we don't have to demand a flawless law at the outset, either. The history of reform in this area in the US is one of trial and error. So, in addition to adopting a US-type political donations law, perhaps we should also learn more about that pragmatic attitude behind the introduction of the law itself.

Su Yen-tu is a visiting researcher at Harvard Law School.
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