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Corruption cases within political parties are no longer unfamiliar. Such as the Riau PLTU bribery case, the proceeds of which allegedly flowed to finance the Golkar Party National Conference, or the congregational corruption of Democratic Party cadres that left the Hambalang Athlete’s House monument stalled. In addition, the corruption of KKP Minister Edhy Prabowo (Gerindra) and Social Minister Juliari Batubara (PDIP) also added to the long list of political party cadres who committed corruption.

The high cost of politics and the competition for financial power within parties can be seen as significant factors. There are two significant influences. First, the uncontrolled circulation of money that colors competition within the party. Second, the accountability and transparency of party finances that are unable to detect the sources of funding for political party operations.

The high circulation of money is caused by the monopoly of financiers with strong financial capabilities. This causes other cadres who have been in the party for a long time to be easily displaced. This condition forces some cadres to maintain their position by contributing more money, so it is not surprising that political corruption is increasingly common.

The role of money is very significant in building oligarchies and accumulating votes within the party. According to Jeffrey Winters (2011), oligarchy and monopoly are built through power over material resources. Therefore, internal party democratization needs to be pursued by limiting the circulation of money in political parties. This restriction needs to be done by regulating party finances that focus on limiting cadre and third-party donations, as well as party financial transparency.

Internal Regulation of Party Finance

When looking at the bylaws of each party that has seats in the DPR, there does not appear to be a strong regulation regarding finance (Pratama, Adlan, & Maharddhika, 2021). For example, in the context of receiving funds, none of the parties limit donations from members. This loophole creates party ATM machines with unlimited power. This also encourages financiers to infiltrate the party with large donations and control the management.

On the other hand, the regulation of membership dues is also counterproductive to internal party democratization. Most parties do not clearly regulate the amount of membership dues in the bylaws, or at least distinguish between the dues of ordinary members and members who get seats in the executive or legislative branches. This condition signals that parties are only for the wealthy.

Only Gerindra, Democrat, PPP, and PAN differentiate the types of membership dues. In the Gerindra and Democrat bylaws, special membership dues are applied to members who hold legislative positions. Meanwhile, PAN and PPP, in addition to legislative members, cadres who sit in the Executive are also required to pay special dues. This diversification is more effective, because the amount of membership dues becomes more proportional (Pratama, Adlan, & Maharddhika, 2021).

Apart from these problems, party financial management and accountability have also not been a concern. The majority of parties do not regulate financial accountability mechanisms and only regulate the duties of the treasurer around bookkeeping and accountability. Golkar and PKB do not even explain the party’s financial management duty holder.

Financial accountability reports also need to be published, as well as audited by public accountants, as stipulated in the Party Law. However, there is no clear vision in the bylaws of each political party regarding transparency and public accountant audits. Only Gerindra and PPP require transparency of financial reports by publishing them on the party website. Both parties also clearly mention in their bylaws the involvement of public accountants in auditing financial statements.

The Big Vision of Party Finance

Law 2/2011 on Political Parties has set limits on third-party donations from individuals and business entities. Meanwhile, donations from party members are handled through internal party regulations. However, these arrangements are not clearly visible in the bylaws of each party, especially in regulating the limits of cadre donations.

In fact, restrictions on donations and cadre dues are important to prevent the control of the party by an individual or group due to their financial strength (Supriyanto (ed.), 2011). In addition, competition within the party will be healthier, with the loss of competition for financial power within it. Therefore, such restrictions cannot only be left to internal party regulations, a clear regulation through the law is needed to limit cadre donations.

On the other hand, the Party Law has also required parties to regulate and detail party income and expenditure through the bylaws. However, not many parties have regulated this. If you look further, the bylaws of PDIP, Golkar, Nasdem, PKB, Democrat and PKS, do not regulate the details of their financial reports at all. Meanwhile, only three parties, namely Gerindra, PPP, and PAN, clearly regulate the details of their financial reports, as mandated by the party law (Pratama, Adlan, & Maharddhika, 2021).

Sound financial statements also require an audit by a Public Accountant. Therefore, the Party Law requires parties to involve a Public Accountant in auditing their financial statements. Unfortunately, the mechanism for appointing a public accountant is still the authority of the party. This arrangement is different from the campaign fund audit, where the Public Accountant is appointed directly by the KPU.

This arrangement raises the potential for conflict of interest, although the integrity and independence of the Public Accountant has been guaranteed by the Code of Ethics. Therefore, the arrangement must be strengthened. The Public Accountant must be appointed by the state, either through the KPU or the Ministry of Home Affairs. On the other hand, the compliance audit mechanism also needs to be changed into an investigative audit, so that potential violations can be detected early.

Limits on cadre donations and transparency of financial reports should be a concern. These efforts are made to ensure transparency and accountability of party finances. This can be realized if the party realizes that competition based on money needs to be eliminated. This awareness will lead the party to produce a big vision related to party financial arrangements, so that public trust can increase. With this vision, internal party democratization can be realized through healthier and ideological competition. []

 

KAHFI ADLAN HAFIZ
Researcher at the Association for Elections and Democracy (Perludem)

This article was published on rumahpemilu.org on October 15, 2021 with the title “Financial Vision in Internal Party Democratization”, https://rumahpemilu.org/visi-keuangan-dalam-demokratisasi-internal-partai/