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2008 Assessment

Chile: Integrity Indicators Scorecard

Chile : Integrity Scorecard Report > Sub-Category: Political Financing
Indicators		Score
20	Are there regulations governing the financing of political parties?	71
21	Are there regulations governing the financing of individual political candidates?	83
22	Are the regulations governing the political financing of parties effective?	33
23	Are the regulations governing the political financing of individual candidates effective?	40
24	Can citizens access records related to the financing of political parties?	50
25	Can citizens access records related to the financing of individual candidates' campaigns?	50

Indicator and sub-Indicator Details

Are there regulations governing the financing of political parties?

20a: In law, there are regulations governing private contributions to political parties.

Score:

YES

Comments: Law 19.884 establishes limits to individual corporate donations to political parties and candidates during the electoral campaign period, but doesn't establish any prohibition during non-electoral campaign periods. Law 19.885 establishes a limit to the tax exemptions that corporations could receive.

References: Law 19.884 sobre transparencia, control y límites del gasto electoral. Law 19.885 que norma el buen uso de donaciones de personas jurídicas que dan origen a beneficios tributarios y los extiende a otros fines sociales y públicos

20b: In law, there are limits on individual donations to political parties.

Score:

YES

Comments: The limits are just established for donations during electoral campaigns.

References: Law 19.884 sobre transparencia, control y límites del gasto electoral, Articles 4 to 6.

20c: In law, there are limits on corporate donations to political parties.

Score:

YES

Comments: The limits are just established for donations during electoral campaigns.

References: Law 19.884 sobre transparencia, control y límites del gasto electoral, Article 9. Law 19.885 que norma el buen uso de donaciones de personas jurídicas que dan origen a beneficios tributarios y los extiende a otros fines sociales y públicos.

20d: In law, there are limits on total political party expenditures.

Score:

YES

Comments: The limits are just established for donations during electoral campaigns.

References: Law 18.603 Orgánica Constitucional de Partidos Políticos, Law 19.884 sobre transparencia, control y límites del gasto electoral, Articles 4 to 6.

20e: In law, there are requirements for the disclosure of donations to political parties.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there are any requirements mandating the disclosure of financial contributions to political parties. NO: A NO score is earned if there are no requirements mandating the disclosure of contributions to political parties, existing regulations do not require a donor\'s name or amount given, or the regulations allow for anonymous donations.$

Comments: The law establishes that every year all parties must present a balance, identifying the incomes and expenditures during that period. During the electoral process, parties and candidates must present a disclosure identifying the funding sources.

References: Law 18.603 Orgánica Constitucional de Partidos Políticos, Articles 34 and 35. Law 19.884 sobre transparencia, control y límites del gasto electoral, Articles 30 to 49.

20f: In law, there are requirements for the independent auditing of the finances and expenditures of political parties.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there is a legal or regulatory requirement for the independent auditing of party finances and expenditures. The auditing is performed by an impartial third-party. NO: A NO score is earned if there are no legal or regulatory requirements for the independent auditing of political parties\' finances and expenditures or if such requirements exist but allow for parties to self-audit.$

Comments: The laws doesn't establish any mechanism for independent auditing of the finances and expenditures of political parties. Servicio Electoral performs only an auditing of expenditures during electoral campaigns.

References: Law 18.603 Orgánica Constitucional de Partidos Políticos. Law 19.884 sobre transparencia, control y límites del gasto electoral.

20g: In law, there is an agency or entity that monitors the financing of political parties.

Score:

YES

Comments:

References: Law 18.556 Orgánica Constitucional sobre Sistema de Inscripciones Electorales y Servicio Electoral. The agency is the Servicio Electoral.

Peer Review Comments: I am doubtful about the efficiency of SERVEL in effectively monitoring and enforcing these regulations. The analysis of congress members' campaign contributions and spending reports, for instance, shows very different reporting degrees by each political candidate (e.g., some aggregate spending in very general categories, while others provide much more detailed listings) without apparently prompting any actions from the SERVEL.

Are there regulations governing the financing of individual political candidates?

21a: In law, there are regulations governing private contributions to individual political candidates.

Score:

YES

Comments: The only regulations are about electoral financing, expenditures during electoral campaigns and tax exemptions that companies may use.

References: Law 18.603 Orgánica Constitucional de Partidos Políticos, Law 19.884 sobre transparencia, control y límites del gasto electoral. Law 19.885 que norma el buen uso de donaciones de personas jurídicas que dan origen a beneficios tributarios y los extiende a otros fines sociales y públicos.

21b: In law, there are limits on individual donations to political candidates.

Score:

YES

Comments: Law 19.884 states specific limits for donations during the electoral campaign. Those limits are calculated on the number of voters registered in each district, circumscription or municipality. Law 19.885 states a fiscal exemption for donations made by corporations.

21c: In law, there are limits on corporate donations to individual political candidates.

Score:

YES

21d: In law, there are requirements for the disclosure of donations to individual political candidates.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there are any requirements mandating the disclosure of financial contributions to individual political candidates. NO: A NO score is earned if there are no requirements mandating the disclosure of contributions to individual political candidates, existing regulations do not require a donor\'s name or amount given, or the regulations allow for anonymous donations.$

Comments: According to law 19.884, candidates and political parties must present a disclosure when the total sum of all donations made to a specific candidate surpasses the US$20.000, US$30.000, US$60.000 or US$120,000, depending on the kind of election: for mayor, for deputy, senator or president, respectively. The disclosure must include the name of the person who made the donation, the amount of the donation and the receipt of the donation.

References: Law 19.884 sobre transparencia, control y límites del gasto electoral, Articles 30 to 49. Law 19.885 que norma el buen uso de donaciones de personas jurídicas que dan origen a beneficios tributarios y los extiende a otros fines sociales y públicos.

21e: In law, there are requirements for the independent auditing of the campaign finances of individual political candidates.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there is a legal or regulatory requirement for the independent auditing of an individual candidate\'s campaign finances and expenditures. The auditing is performed by an impartial third-party. NO: A NO score is earned if there are no legal or regulatory requirements for the independent auditing of an individual candidate\'s campaign finances and expenditures or if such requirements exist but allow for candidates to self-audit.$

Comments:

21f: In law, there is an agency or entity that monitors the financing of individual political candidates' campaigns.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there is a domestic agency or set of domestic agencies/entities formally assigned to monitor and enforce laws and regulations around the financing of individual political candidates\' campaigns. A YES score is earned even if the agency/entity is ineffective in practice. NO: A NO score is earned if there is no such agency or entity.$

Comments: The agency is the "Servicio Electoral." It was created by law 18.556 to monitor the financing of individual political candidates.

References: Servicio Electoral, created by Law 18.556 "Ley Orgánica Constitucional sobre Sistema de Inscripciones Electorales y Servicio Electoral" Law 19.884 sobre transparencia, control y límites del gasto electoral. Law 19.885 que norma el buen uso de donaciones de personas jurídicas que dan origen a beneficios tributarios y los extiende a otros fines sociales y públicos. Law 18.700 Orgánica Constitucional de Elecciones Populares y Escrutinios

Are the regulations governing the political financing of parties effective?

22a: In practice, the limits on individual donations to political parties are effective in regulating an individual's ability to financially support a political party.

Score:

100

Comments: The limits stated by law just apply to donations during the electoral process and are not according to real expenditures, so a significant number of candidates spend more than the limits. Sometimes those expenditures are not declared and sometimes the candidates prefer to pay the penalties, as they are rather low. Also, the "Servicio Electoral" just audits the financing after the elections.

References: Estatuto Jurídico de los Partidos Políticos en Chile: Veinte años de la Ley Orgánica Constitucional de los Partidos Políticos, Teodoro Ribera, en Reforma de los Partidos Políticos en Chile, Arturo Fontaine, Cristián Larroulet, Jorge Navarrete e Ignacio Walker (editores), 2008. Available at: [ LINK ]

"Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

22b: In practice, the limits on corporate donations to political parties are effective in regulating a company's ability to financially support a political party.

Score:

100

Comments: The limits stated by law just apply to donations during the electoral process and are not according to real expenditures, so a significant number of candidates spend more than the limits. Some times those expenditures are nor declared and sometimes the candidates prefer to pay the penalties, as they are rather low. Also, the "Servicio Electoral" just audits the financing after the elections.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Peer Review Comments: The actual auditing is very spotty, as some scandals in years past have demonstrated.

Peer Review Comments: For the same reasons that the expert mentions in his/her comments, I would give the country a lower score than 50, but greater than 0.

22c: In practice, the limits on total party expenditures are effective in regulating a political party's ability to fund campaigns or politically-related activities.

Score:

100

Comments: The limits stated by law just apply to donations during the electoral process and are not according to real expenditures, so a significant number of candidates spend more than the limits. Some times those expenditures are nor declared and sometimes the candidates prefer to pay the penalties, as they are rather low. Also, the "Servicio Electoral" just audits the financing after the elections.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Peer Review Comments: Limits can be circumvented rather easily, and auditing is not performed uniformly.

Peer Review Comments: For the same reasons that the expert mentions in his/her comments, I would give the country a lower score than 50, but greater than 0.

22d: In practice, when necessary, an agency or entity monitoring the financing of political parties independently initiates investigations.

Score:

100

Comments: The Servicio Electoral doesn't have the capacity to perform its duties. In this sense, the limits to donations could be easily avoided. Outside electoral periods, the statements presented to the Servicio Electoral are very erroneous and vague.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

22e: In practice, when necessary, an agency or entity monitoring the financing of political parties imposes penalties on offenders.

Score:

100

Comments: Even though "Servicio Electoral" dosen't have the capacity to carry out all its functions there are some routine functions that are done, like the formal monitoring of the expenditures. Some other functios like the monitoring of the donations are not done, but still, there are some ocations when the "Servicio Electoral" effectively imposes penalties or sanctions.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

22f: In practice, contributions to political parties are audited.

Score:

100

Comments: The "Servicio Electoral" performs just formal audits. In practice, it doesn't have the capacity to investigate the sources of the donations and the destinations of the expenditures. The balances presented by political parties are really poor.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Peer Review Comments: It should be added that when involving the use of state resources, illegal campaign expenditures could be subjected to investigation by the Contraloría General de la República. That was the case, for instance, with the scandals of Chiledeportes and the Planes de Empleo in relation to the congressional campaigns of 2005.

Are the regulations governing the political financing of individual candidates effective?

23a: In practice, the limits on individual donations to political candidates are effective in regulating an individual's ability to financially support a particular candidate.

Score:

100

Comments: In practice, significant expenditures are not declared to the Servicio Electoral.

Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005.

Peer Review Comments: I think that the limits are actually ineffective. Major parties can get funding under the table and auditing officers just concentrate on official statements, which obviously do not report "black funds."

Peer Review Comments: For the same reasons that the expert mentions in his/her comments, I would give the country a lower score than 50, but greater than 0.

23b: In practice, the limits on corporate donations to individual candidates are effective in regulating a company's ability to financially support a candidate.

Score:

100

Comments: In practice, significant expenditures are not declared to the Servicio Electoral.

Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Peer Review Comments: As I said in my previous statement, these limits are ineffective in practice. Illegal funds are easily transferred in a variety of ways.

Peer Review Comments: For the same reasons that the expert mentions in his/her comments, I would give the country a lower score than 50, but greater than 0.

23c: In practice, when necessary, an agency or entity monitoring the financing of individual candidates' campaigns independently initiates investigations.

Score:

100

$Scoring Criteria :: 100 Score Criteria: The agency or entity aggressively starts investigations into allegations of wrong doing with respect to the financing of individual candidates\' campaigns. The agency is fair in its application of this power. 50 Score Criteria: The agency or entity will start investigations, but often relies on external pressure to set priorities, or has limited effectiveness when investigating. The agency, thought limited in effectiveness, is still fair in its application of power. 0 Score Criteria: The agency or entity rarely investigates on its own, or the agency or entity is partisan in its application of this power.$

Comments: In practice, significant expenditures are not declared to the Servicio Electoral.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

23d: In practice, when necessary, an agency or entity monitoring the financing of individual candidates' campaigns imposes penalties on offenders.

Score:

100

Comments: When the "Servicio Electoral" identifies an infraction it always impose penalties, but the penalties are not really significant, so on many occasions candidates prefer to not respect the law and pay the fines.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Peer Review Comments: Given the number of scandals, particularly at the municipal level, I doubt that monitoring agencies are as effective as they are indicated to be in the country assessment.

Peer Review Comments: For the same reasons that the expert mentions in his/her comments, I would give the country a lower score than 100.

23e: In practice, the finances of individual candidates' campaigns are audited.

Score:

100

$Scoring Criteria :: 100 Score Criteria: The finances of individual candidates\' campaigns are regularly audited using generally accepted auditing practices. 50 Score Criteria: The finances of individual candidates\' campaigns are audited, but audits are limited in some way, such as using inadequate auditing standards, or the presence of exceptions to disclosed contributions. 0 Score Criteria: The finances of individual candidates\' campaigns are not audited, or the audits performed have no value in tracking contributions. Audits may be performed by entities known to be partisan or biased in their practices.$

Comments: "Servicio Electoral" makes only formal audits. In practice, it doesn't have the capacity to investigate the sources of the donations and the destinations of the expenditures.

In the 2005 elections there were a lot of reports about fake bills presented to the Servicio Electoral, but just a few of them were really investigated. Also, there are a lot of expenditures that are not declared to the Servicio Electoral.

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Can citizens access records related to the financing of political parties?

24a: In practice, political parties disclose data relating to financial support and expenditures within a reasonable time period.

Score:

100

Comments: Obtaining access is a long and difficult process. Citizens must personally go to Servicio Electoral and they may end up only with partial information.

References: Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Monitoreo del Gasto Electoral, Corporación Participa, 2005.

24b: In practice, citizens can access the financial records of political parties within a reasonable time period.

Score:

100

Comments: Obtaining access is a long and difficult process. Citizens must personally go to Servicio Electoral and they may end up only with partial information.

References: Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Monitoreo del Gasto Electoral, Corporación Participa, 2005.

24c: In practice, citizens can access the financial records of political parties at a reasonable cost.

Score:

100

Comments:

Financiamiento Político en Chile. Una Batalla Incierta, Andrés Villar, 2006. Available at: [ LINK ]

Can citizens access records related to the financing of individual candidates' campaigns?

25a: In practice, individual political candidates disclose data relating to financial support and expenditures within a reasonable time period.

Score:

100

Comments:

References: Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Monitoreo del Gasto Electoral, Corporación Participa, 2005.

25b: In practice, citizens can access the financial records of individual candidates (their campaign revenues and expenditures) within a reasonable time period.

Score:

100

Comments:

References: Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Monitoreo del Gasto Electoral, Corporación Participa, 2005.

25c: In practice, citizens can access the financial records of individual candidates (their campaign revenues and expenditures) at a reasonable cost.

Score:

100

Comments:

References: Los mitos de la Ley de Transparencia Electoral, Corporación Tiempo 2000, 2005. http:// biografias.bcn.cl/alegislativo/pdf/cat/docs/4696-06/789.pdf

Monitoreo del Gasto Electoral, Corporación Participa, 2005.