Super PACs, Now Made In India – What’s the EC Doing About It?

Super PACs in the US have come under fire – do Indians really want to import the practice to our own democracy?

Guess what? Even as America tries to rid itself of super PACs, India has imported the idea.

(Photo: Kamran Akhter/The Quint)

Video Editor: Mohd Irshad

Will India not learn any lessons from the effects of big money in US politics?

You must have heard of Super PACs (Political Action Committees) in the US – they're controversial groups that fundraise and campaign for politicians (or issues) in elections. They have been accused of subverting American democracy, riding roughshod over the will of the people, and corrupting the electoral system. It has got so poisonous, that even in America's polarised political atmosphere, there are two separate movements – one on the left (Democrat candidates) and one on the right (Freedom Caucus) – to end them.

But the contagion is already spreading to India.

Wait... What’s the Issue with Super PACs, Again?

In the US, they've been legal since 2010, and huge amounts are spent for both Democratic and Republican candidates. So long as political candidates and their campaigns remain independent from them, these super PACs can raise and spend unlimited amounts of money from individuals, corporations, unions or any other group, for or against any candidate (or issue) of their choosing to influence an election result.

So what's the problem?

Pros and cons of super PACs.(Photo: The Quint)

The Pro: It’s a question of freedom – freedom of speech, specifically.

The argument being that if you have money to spend and a political leaning, why can't you try to persuade the public of your pet cause or candidate? Special interest groups take out advertisements all the time. So do companies. Then why not groups of citizens? It's a marketplace of ideas, after all, and in the capitalist system, competition is healthy. So why not?

The Con: It's a question of democracy.

Super PACs are utilised by corporations and the super-wealthy to influence voters according to their interests, leaving ordinary voters with less and less power – how can average citizens match up to the money power of the super-wealthy, who can (and do) spend hundreds of millions on political ads each election cycle?

And these companies/donors are hardly altruistic spenders – of course, there is an expectation of quid pro quo if all that money helps a candidate take office.

Kind of like lobbying, but instead of influencing politicians directly, big corporations and the super-rich are influencing the public for/against politicians.

Politico reported a study back in 2012 (just two years after US super PACs became kosher), which found that over half of the $84 million raised by super PACs in the US was given by less than 200 people.  In 2011, 32 donors gave about $34 million to super PACs. Corporations gave about $16 million, and unions gave $17 million.

For the 2020 US election, Priorities USA, a leading Democratic super PAC, has announced a $100 million campaign.

And this isn't a left/right thing – both Democrat and Republican-favouring super PACs, in the run-up to the 2020 elections, have pledged to spend enormous amounts.

Super PACs Debut in India

See, there is no legislation on super PACs – or indeed PACs – in India. The phenomenon is new here.

“This is something new, these were not used when I was CEC.”

SY Quraishi, Former Chief Election Commissioner (2012)

In fact, social media advertising, also, is new. OP Rawat, chief election commissioner in 2018, said,

“It is evolving, there was very little advertising on social media the last elections, so expenditure observers [EC’s election spending monitors] didn’t have much to do there.”

OP Rawat, Former Chief Election Commissioner (2018)

Both Quraishi and Rawat say the major work of the expenditure observers is to go around to campaign rallies on the ground and ensure, through video recordings and written records, that the candidates are being truthful. But for social media expenditure, Rawat says, the EC largely relies on the social media networks themselves for records of how much each candidate, group or party has spent in advertising during campaigning.

What India does have, is laws against third-party campaigning for candidates, and caps on expenditure. Quraishi says:

“In India, the current law is that third parties cannot campaign, it is not allowed. Each candidate is allowed to spend only Rs 70 lakh per election cycle [from filing nomination]. No third party can spend more than Rs 10 without written permission from the candidate – this would then bring [the allowed spending] under the Rs 70 lakh cap.”

According to Facebook’s political ads archive, the page ‘Nation With Namo’ has outspent all other third-party groups in political advertising over February to 23 March 2019, with Rs 1,17,95,634 in ad money just in that one month. IPAC, the other third-party group in the top 20 political advertisers – it pushed pro-YSR Congress ads – over the same period, has spent Rs 32,89,914.

Like in the US, this is all legal – because, there is a loophole.

Rawat says,

“The EC has no jurisdiction on third parties if they are advertising for a candidate before they have filed nomination.”

OP Rawat, Former Chief Election Commissioner (2018)

This seems to be treading a familiar path. In this Q&A on Orlando Sentinel with NYU Law School's Brennan Centre Counsel Bret Ferguson back in 2015, the exchange goes:

“Q: Candidates aren’t supposed to control their super PACs; how are they circumventing that restriction?”

“A: They’re doing it in several ways. Many surmise that several candidates delayed announcing their presidential candidacies so they could work directly with super PACs.”

If ‘Nation With Namo’ – one third-party page, on one social media platform, over less than one month – can spend over Rs 1 crore this close to the election because the candidate has not filed his nomination yet, the potential for a US-style subversion of democracy cannot be ignored.

Just Another Brick in the Wall of Money

Already, big money has managed to considerably subvert the Indian electoral system in the following ways:

- Electoral bonds have now enabled corporations, wealthy individuals, shell companies, and even foreign entities to donate to the ruling party – in fact, 95% of electoral bonds went to the ruling party in March 2018. Why? Probably because the bonds are anonymous to everyone (the public, and the opposition) but the government, handled as they are by the State Bank of India. It is almost the definition of opaque.

- While there is a cap on candidate campaign spending, there is no cap on party spending. Parties can spend unlimited amounts on their candidates before elections.

Quraishi says,

“The point of these regulations is to ensure a level playing field. Parties being able to spend unlimited amounts is a big loophole, it should be closed.”

- Now, with third-party groups able to campaign for candidates without coming under the Rs 70 lakh cap (provided it is done before the candidate files her/his nomination), this is just another way that big money can corrupt Indian democracy.

Will the EC close this well-known loophole of candidates withholding their nominations in order to gain political mileage so close to polls? If not, what is it doing?