Category: Politics

Campaign financing is a hotly discussed issue across many countries. In the United States, the law permits corporate or public financing of elections. However, this year, the Supreme Court, in Brazil voted against public funding of elections. Thus, the stakes have risen further given that a country such as Brazil is viewed as a rank-outsider in governance matters. The question now is whether the United States should also move towards this direction or, stay put in observing its tradition of campaign financing. In this paper, the case for reforming corporate funding of elections is made.

The Supreme Court of Brazil indicated that corporate contributions to parties allowed corruption to interfere with the choice of the country’s leadership. According to the writer, investigators related to the case proved that corporate organizations were using the financing scheme to secure lucrative contracts, especially with Petrobras, a state-operated oil company. In its ruling, the court found that ninety percent of the funding went to leading candidates and, often presidential winners benefited largely from the financing. Despite the court’s ruling, the country’s Congress passed legislation allowing corporations to continue making donations, although in smaller amounts. However, the introduction of a cap of five million dollars would be a major improvement in regard to the limits to which corporate organizations can influence elections. Thus, the time might be right for the US to reassess its position towards corporate financing of elections.

Current Policy

The present policy allows corporate entities to finance elections in the country.  Both public and private organizations are free to offer funding to parties of their choice. The primary objective is to ensure that powerful individuals (in regard to finances) do not dominate the political scene.  Despite the good intentions of the policy makers, it is subject to shortcomings or misuse as demonstrated by the case of Brazil. Besides, in the United States, bias is apparent given that the two leading parties (the Democratic and Republican parties) benefit more than others, as Lioz observed. 

Current Policy Problems and Stakeholders

Many issues are raised regarding the existing policy. One of the main reasons advanced in support of corporate financing of elections is to level the competition for participants. It is commonly accepted that corporate financing enables competitors to face off from a point of equal strength. The expectation is that each party will receive adequate financing to compete with the opposing ones. Although the arrangement works well for big parties, it fails to advance the prospects of poor/ little-known parties. For instance, in the United States, only the Democratic and Republican parties have access to significant contributions. The implication is that only well established political entities have the ability to attract the financing. Thus, the essence of leveling the competition is not achieved through corporate financing. Thus, it becomes untenable to sustain the system in the hope of ensuring an equal campaigning platform. From the above elaboration, it is evident that corporate financing does not promote equal competition. On the contrary, it exacerbates the problem it is supposed to solve by heightening the advantage enjoyed by big political parties.

Corporate financing of elections is expected to direct political campaigns to issues rather than money. Thus, proponents of the scheme are convinced that such financing shifts would make the parties focus on issues instead of possibilities of raising funds. Hayes and Vidal observed that, were such a scenario attainable, the move would yield positive results. However, issues, such as the one demonstrated by the Brazilian case, raises concerns about the connection between financiers and favoritism/ corruption. If the financing was fair, then a possibility of detaching money from issues would be feasible. However, the presence of vested interests sways the agenda significantly, as Hayes and Vidal stated. In this regard, the financing fails to adequately do away with the focus on money for the sake of issue-drive politics.

According to Flavin, exponents of corporate financing observe that it gives the less privileged individuals a chance to take part in politics. The point is valid regarding the role of members of political parties. Given that financing comes from corporate entities, no single individual has the leeway to assume dominance to disadvantage of others. Although some dominant players are not necessarily stressful, they are likely to abuse such positions. Thus, the mode of funding eliminates the possibility of one person becoming too powerful. Giving other persons a chance to contest and win elections is among the best ways of ensuring that the public has a wide array of candidates from whom to select. However, the position remains questionable given the entrenched culture of focusing on big parties. Detractors of the system have observed that the financing system does not accord candidates an equal chance as it often favors incumbents. Thus, the assumption that it allows the less privileged individuals to participate in elections is flawed. Based on the realization, the funding does help political debutants but incumbents.

The role of corporate financing in reducing one group or individual from influencing a candidate is closely linked to the issue of dominance. In practice, many organizations can make contributions to elections. The allowance of many organizations to contribute implies that the possibility of one entity dictating affairs is limited. Thus, it is expected that undue influence would not play a role in skewing governance to its favor or to other parties’ disadvantage.  In essence, no single organization has the power to influence a candidate. However, according to Flavin, the extent to which fairness prevails depends on the transparency of the involvement of organizations in the funding process. 

Corporate financing is also averse to independence. Flavin observed that when entities sponsor politicians they often do so to pursue their hidden agendas. In some cases, the organizations expect kickbacks or preferential treatment on business deals. As a result, the system might contribute to political patronage, which doesn`t lead to fairness and transparency in the running of public affairs. Hence, the issue of doing away with the system or incorporating more checks and balances assumed increased significance.

Apart from the above issues, many other concerns have been raised about the participation of business entities in financing elections. For example, when public organizations are tasked with financing elections, taxpayers are forced to support what they might not believe. In practice, public entities are run using public resources. As such, a decision to donate to finance a campaign is an arrangement to give taxpayers’ money to an endeavor that might not appeal to them, at a personal level.

Stakeholders are identified based on those persons who are subject to the outcome of campaign financing activities. The affected parties include: corporate bodies, the citizenry, political parties and leaders. Organizations are affected because they provide the funding while citizens are stakeholders as they are taxpayers, whose money are used to sponsor campaigns. On the other hand, political leaders and parties are the beneficiaries of the funding.

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Policy Change: Addressing the Problem

The reason for the issue remaining unchanged rests on the idea that the policy seems to have served those in powerful political offices well. Again, the argument supported by various bodies that it is a constitutional obligation implies that it has remained in operation for a long time. Within the United States, understanding the regulation requires one to refer to the first amendment. Under the law, “Congress shall make no law … abridging the freedom of speech.” Section 441b indicates that it is a criminal offence for any corporate entity (whether profit, non-profit, or advocacy) to openly advocate for support or de-campaign candidates or broadcast electioneering issues within thirty days of a primary and sixty days of a general election. Based on the position of the Goldwater Institute, public funding is invasive besides being complicated. Consequently, monetary contributions represent a type of free speech. As a result, taking measures to do away with corporate funding of elections would violate the Constitution.

Without a doubt, the Constitution is a sacrosanct document that must be protected. However, such a product is a reflection of people`s aspirations. Given that change takes place on a daily basis, the possibility of shifts in expectations are always likely to occur. As a result, changing the Constitution to reflect the reality of the times is necessary. In this regard, nobody can justify obedience to an issue that needs a rethink. Now, people need to reconsider and reassess the pros and cons of corporate financing of elections. If found unsatisfactory, as evidence suggests, the necessary steps must be taken, even if they entail altering the Constitution. Thus, people through their representatives have the power to change the policy. To achieve changes, they should consider petitioning the houses of representation to demand the alterations.

Solution/ Policy Proposal

With bribery and corruption remaining persistent, it might be the right time to introduce reforms to address any irregularities. Some observers indicate that despite the fact that many states use electronic voting machines, they malfunction frequently, making it difficult to track the voting trends. In such a scenario, election rigging is possible. Thus, efforts must be made to rid elections of suspicions. One such effort is to address the danger posed by the domineering influence being enjoyed by few players. After the 2010 Citizens United decision, century-long campaign financing rules were obliterated paving the way for few parties to dominate the process. To counter the emerging trend, a new system that supports small-donor public funding should be introduced. The framework will facilitate multiple matching funds for gifts and give ordinary voters a louder voice in elections. It is also necessary to change a legal framework to overturn Citizens United to give power to people instead of leaving it with big corporations.

Alternative Solutions

It emerges from above that corporate financing of elections has not attained its objectives such as leveling the competition, facilitating the participation of candidates in elections, and directing elections to issues rather than money. Given that only leading parties secure huge finances, it is time to establish laws that specify the amount of money that can be donated to a party.  It might also be necessary to require a donating organization to share the donation across all participating parties based on certain criteria. 

Case for Enacting Solution

Reforming the legal system to allow for small donations is likely to attain a number of goals. For instance, individual and small entities will be able to contribute to parties/ candidates directly. Through the engagement, the influence of big corporate entities will be reduced. Thus, the issue of dominance would have been addressed to a certain degree. The approach would also lower corruption tendencies given that a bigger pool of donors would be in existence. Moreover, working under a framework that pushes big donors to fund all participating parties would even the competition thus playing an important role in lowering the influence of money on issues affecting people. Thus, the policy/strategy would be critical in changing political debates from money-focus to issue-based.

Consequences of Inaction

It is often remarked that ‘choices have consequences’. Non-action is also an option with its ramifications. From the above discussion, it is held that corporate financing of campaigns needs reforms. The changes are expected to lower negative tendencies such as dominance by few individuals, to alter political discourse, to allow the less privileged to take part in elections with a chance to win, and to accord citizens the opportunity to influence elections. In essence, failing to take the suggested measures would imply that the status quo prevails. Such circumstances would allow for the continued dominance of few corporate bodies in elections, the participation of the well connected individuals and limited voice of the citizenry. The inaction will also lead to a scenario where corruption thrives as politicians conspire with corporate entities to attain their goals.


Despite the role of corporate financing of elections spanning over a century, questions over the issue persist. Weighing of the pros and cons of the policy justifies reforms. Thus, it is concluded that although the current financing policy gives corporate organizations the power to finance political parties, reforms are necessary to ensure transparency, fairness and justice so that each stakeholder’s expectations are met.

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