How to buy a foreign election

‘US campaigns have become so pricey that donors now see better returns on investment in smaller economies’

Listen to this article

00:00
00:00

Part of the function of the American election campaign is to let the rest of the world gawp and laugh at the US. Hordes of improbable narcissists compete to become the most powerful person in the world, unhindered by much knowledge of said world. Amid the fake piety, fake middle Americanness and fake rage at the candidates’ spiritual home town of Washington, only one thing is real: the money that funds them. Even many Americans now feel that campaign spending has got out of hand. Primary voters have punished Hillary Clinton and Jeb Bush for their proximity to donors, and rewarded Bernie Sanders and Donald Trump for staying pure.

But while foreigners smirk at Americans, most of us have a more insidious campaign-finance problem back home. At least the American process is corrupted chiefly by homegrown money. In many countries, foreign funds now do the job.

Buying into other people’s political systems is a bright idea that is conquering the world. Various trends in post-1990 globalisation have encouraged it: ever more countries at least pretend to hold elections; ever more major powers (notably China, Russia and Qatar) seek influence abroad; ever more national economies have opened to foreign investment; and ever more billionaires can afford to buy foreign elections.

© Luis Grañena

US campaigns have become so pricey that many American donors now see better returns on investment in smaller economies. For instance, Israeli prime minister Benjamin Netanyahu typically gets more than 90 per cent of his funding for his primary campaigns from American donors. Last time, most of it came from just three American families. The Las Vegas-based billionaire Sheldon Adelson takes the additional precaution of funding the free pro-Netanyahu newspaper Israel Hayom, now the country’s highest-circulation daily.

In Britain’s coming European referendum, Goldman Sachs and other American banks are among the biggest funders of the anti-Brexit campaign. Meanwhile, says the OECD’s new report, Financing Democracy, “anti-Islam groups in the US have provided financial support to Dutch politician Geert Wilders . . . whose Freedom party is the least transparent Dutch parliamentary group and a rallying point for Europe’s far right.” The American Islamophobe Pamela Geller urges on her website: “The survival of the Freedom party and Geert Wilders’s struggle for the defense of the west are now in jeopardy . . . There are three ways of how you can donate money.” A year before national elections, the Freedom party leads the Dutch polls.

But let’s not single out American money. “The Kremlin is working hard to buy off and co-opt European political forces, funding both rightwing and leftwing anti-systemic parties throughout Europe,” says US vice-president Joe Biden. France’s Front National borrowed €9.4m from the First Czech Russian Bank in Moscow. Even xenophobic parties love foreign money. The Greek far-right party Golden Dawn took the well-trodden Balkan nationalist path of fundraising among the diaspora in Australia, stopping only after media kicked up a fuss.

Like global south-to-south trade, south-to-south political funding is growing fast. China likes to help out African ruling parties, says Patrick Smith, editor of the Africa Confidential newsletter. Senior officials of the African National Congress (an entity ever harder to distinguish from the South African state) have long benefited from training at the Chinese Communist party’s leadership academy in Pudong. Now the ANC is creating its own Chinese-inspired academy at home in Venterskroon. Possibly coincidentally, the ANC’s head of research discovered in the course of a Chinese study tour last year that China has “opposition parties, whose role was to assist the government to govern” — a model for South Africa’s “rowdy, noisy and disagreeable opposition”, he added, in a newspaper opinion piece after the trip.


Middle Eastern regimes have also got into the campaign-finance game. Qatar funded various Islamist movements in the Arab spring (mostly betting on losing horses), while Spanish police are now investigating alleged payments by Iran to Spain’s far-left Podemos party. Allies of Malaysian prime minister Najib Razak explain that the mysterious $680m discovered in his personal bank account was simply a political donation from the Saudi royal family. (Malaysia’s attorney-general has cleared Najib of wrongdoing over the payment, adding that the prime minister had returned $620m of it.)

Most countries have laws against foreign political funding. But “money-laundering schemes and a variety of other techniques are used to evade them”, says the OECD. One favourite method, it adds, is “setting up branches of the political party disguised as other organisations, such as think-tanks or party foundations, sometimes referred to as ‘offshore islands’ of political parties”.

In any case, in the age of global companies, it’s often hard to say whether a donation is foreign or not. American subsidiaries of the Swiss bank UBS, the Belgian-owned beer group InBev and other global groups generously funded the last US presidential campaign.

It turns out that national elections — like national tax systems and national defence — no longer work very well in an unregulated globalised world.

simon.kuper@ft.com; Twitter @KuperSimon

Illustration by Luis Grañena

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.