Campaign Finance in Guatemala’s 2011 elections: The CICIG Report

Photo: CICIG chief Iván Velásquez, from Colombia.

By Richard Brown – Editor, EntreMundos

The International Commission Against Impunity in Guatemala (CICIG) of the United Nations reports in its July, 2015 investigation that in Guatemala “most political finance is illegal and comes largely from corruption” (p. 18).

The Electoral Supreme Court (TSE) is “overwhelmed” and the Public Prosecutor’s Office (MP) lacks the resources necessary to confront electoral crime. Further, in many cases, these agencies “rely on information that is provided by political parties” (p. 105). And, of course, those who spend more generally win more votes (p. 47).

The Law of Elections and Political Parties (LEPP) sets the maximum limit that a party can spend on a campaign as the equivalent of one dollar per voter registered as of December 31st of the year preceding the election. 7,506,923 registered voters as of December, 2014 sets the current limit at approximately Q56,300,000 (around $7,507,000).

But during the 2011 campaigns, most parties far outspent their official budget. The table below shows the findings of TSE and Citizen Action (AC) audits of 2011 campaign spending. These audits only include results from “the monitoring of communications media, and leaves out of their estimates most ground campaigning, which involves hundreds of meetings during which food and promotional gifts are regularly given to participants” (p. 64). Nor does the AC audit include estimates of mobile phone, Internet, or social media advertizing.

The columns of the table, called “Income reported and estimated spending, by party/coalition (in the 2011 general election)”, read from left to right:

Political party; Reported income; Total spending determined via audit; Excess spending (according to TSE data); Estimate of Spending (according to AC data); Excess spending (according to AC data).

The official documents of Partido Patriota (PP), the party of President Otto Pérez Molina, explain that PP raised 93% of its funds through “self-financing activities” like “dinners” that raised over Q36,000,000 (around $4,800,000). The official documents of Líder, the party of current front-runner Manuel Baldizón, cited donations “without specifying names or amounts” (p. 64).

The TSE reported in April that the parties’ 2015 funds will be audited with support from the US embassy, but the CICIG report states, “The system of penalties is so weak that it becomes an incentive for parties to systematically violate the law” (p. 65). When the TSE penalized both PP and Líder for exceeding their spending limits in 2011, it did not suspend them nor invalidate the elections. “The most-voted parties in the 2011 elections, including the one that won the Presidency, violated systematically and with impunity electoral laws: they received more financing than they reported and did not reveal the sources of their spending” (p. 64).

The report also cites “a considerable underreporting of electoral crimes.” And when they are reported, CICIG claims, “the chance of impunity in electoral crime is between 95 and 100%. This shows beyond any doubt that Guatemala is a country where people can commit electoral crimes without suffering any consequences” (p. 46).

Guatemala’s elections are among the most expensive in the region. If the AC audit figures are correct, in Guatemala $10.11 are spent per registered voter, while in Mexico the figure is $3.00 and in El Salvador $6.36 (p. 103). (In the US, almost $7 billion was spent in the 2012 elections, around $45 per registered voter.)

According to experts cited by CICIG, approximately 25% of political finance comes from powerful private sector interest groups, another 25% comes from “criminal organizations, especially those involved in drug trafficking,” and the rest comes from government contractors of different sizes (p. 66).

The report states that the “cornerstone of illicit political financing” at the national level are “illegal politico-economic networks” (RPEI) that usually coalesce around Congressmen and mayors and build networks of construction companies, government contractors, and NGOs that allow them to channel public funds that, through commissions, bribes, or profit sharing, allow for the growth and consolidation of their power on the regional and national level” (p. 72).

This means that in the end, public finance supports many campaigns, albeit illegally. “It is the flow of resources for public works projects that primarily feeds campaign finance” (p. 83). Candidates for mayor often fund their campaigns from their own pockets and from what regional party structures provide. “It is in this area where most frequently accusations arise over flows of money from criminal networks” (p. 73). Candidates are able to come up with so much financing because “construction companies, through commissions, donations, and other forms of transferring resources, directly or indirectly finance electoral campaigns and end up benefitting from the adjudication of public works projects” (p. 85).

This is such a common and lucrative practice that “it has been systematically observed that criminal groups tend to form construction companies to land public works contracts. This permits them to increase their profits as much as launder dirty money… These groups’ actions to decisively influence public appointments in law enforcement and the judiciary are widely documented” (p. 101).

Campaigns in Guatemala are ever more expensive for a variety of reasons. “The democratic system seeks, through political equality, to limit the influence of economic power,” but through campaign finance, current economic powers ensure that the status quo does not change. Meanwhile, campaigns are increasing their spending on mass media advertizing (p. 6).

Further, parties today differentiate themselves less through their platforms. The report cites as causes neoliberal policies and “the reforms that were later systematized in the so-called Washington Consensus” put in place in the 90s that seek to reduce the role and size of the state, privatize public goods, and deregulate the market. “In small countries with few resources that blindly accepted the idea that the ‘market’ alone would organize society, grand political projects lost purpose and blanket policies were applied. Party loyalties evaporated and politics tended toward strong personalities on the local, regional, and national level who could attract support and mobilize voters, as long as they had the necessary financial resources” (p. 7).

This tendency accelerated after the 1993 extra-constitutional power grab by President Jorge Serrano Elías, when “private sector elites launched a media campaign to ‘cleanse’ Congress that attacked the so-called ‘traditional parties.’ The result was the collapse of these parties over the next years and the disappearance of Guatemala’s major political traditions” (p. 23). Further, the political spectrum has been concentrated in the center and the right” due to “the proscription and persecution of parties and leaders of the political left between 1954 and 1995” (p. 24). This “has helped to mold the preferences of the electorate” toward the center and the right and reduce political choice (p. 25).

All of this encourages the tendency toward clientelism; “political connections were increasingly built through networks of reciprocity” that allow those involved to receive resources, jobs, and contacts. “These networks of reciprocity require substantial resources” (p. 6).

One result of these tendencies is the fluidity of the party system. Candidates often change party and live longer political lives than their parties because “politics is organized around people, not political projects” (p. 26). The report explains that “in Guatemala, the elites neither had to create nor had interest in creating their own party. Instead, they have tended to use or manipulate ad hoc, temporary parties to advance their agendas.” This means “political leaders prefer to make agreements with their sponsors before creating solid parties rooted in the electorate” (p. 21).