How much money do political parties collect during local level, provincial assembly and House of Representatives elections? Your guess may not be accurate. The then Maoist Center has submitted details to the Election Commission that it received only Rs 10,000 in donations in the fiscal year 2079/80, when the provincial assembly and House of Representatives elections were held.

The Maoists' annual audit report mentions that they received financial support of Rs 50,000 in the fiscal year 2078/79, when local elections were held. It shows that they received an institutional donation of Rs 50,000 from Arghakhanchi Cement.

The local elections were held on 30 Baisakh 2079 (fiscal year 2078/79) and the provincial assembly and house of representatives elections on 4 Mangsir 2079 (fiscal year 2079/80). Did the then Maoists receive only Rs 60,000 in donations in the three-level elections? 'The donations were a lot, but why were they only shown that much? Now that you mention it, I am also surprised,' said a top leader of the then Maoists.

Ganeshman Pun, who took over as the party's chief secretary six months ago, says that only those who were doing business at that time will know the reality. 'The Maoists did not receive donations at the central level, the reality may be the same,' he said.

If we look at the spree during the elections, the details of donations received by other parties are also not credible. The Congress has submitted to the Commission details of donations of Rs 26.564 million in the fiscal year of the House of Representatives and Provincial Assembly elections and Rs 66.824 million in the year of the local level elections before that.

The Commission has data that the UML has collected a total of Rs 56.68 million in donations, including Rs 75 million for special financial assistance in the fiscal year 2079/80 and Rs 43.168 million under other special assistance. It has details of collecting Rs 17.785 million in 2078/79.

The Rashtriya Swayamsevak Sangh (RSS) has shown the Commission details of individual donations of Rs 18.625 million, 835 million in the country during the year of the House of Representatives elections. The election expenses have only been shown. The RSSS was not established when the local level elections were held, and it did not participate in the provincial assembly elections. 

Janata Samajwadi Party (JSP) has also not disclosed the details of donors. It has submitted details of donations collected of Rs 434,000 in the fiscal year 2078/79 and Rs 300,000 in 2079/80 to the Commission. The expenditure has been shown to be Rs 821,000 in the fiscal year 2078/79 and Rs 277,000 in 2079/80. None of the Congress, UML, Rashtriya Swayamsevak Sangh (RSS), or JSP has mentioned the details of donors. 

Unified Samajwadi Party and RPP have partially disclosed the details of donors in the audit report. According to the RPP report, Rs 155,051,000 was collected in the fiscal year 2079/80. It is mentioned that Pashupati Shumsher Jabra gave the highest donation to RPP of Rs 400,000.

Unified Samajwadi Party collected Rs 525,000 in 2078/79 and Rs 353,03,045 in 2079/80. The report mentions that Kisan Shrestha donated Rs 10 million. UIDAI leader Som Pandey says, ‘Kisanji donated Rs 10 million. We also gave a receipt, that is in the report.’ He said that all the support received by the party is transparent and that the details have been submitted to the commission as per the law.

When the person in charge of the accounting system of political parties was contacted and asked about the donors, one of them showed the other and escaped. Abhishek Ghimire, the head of the Accounts Commission of the Rashtriya Swayamsevak Sangh, says that the names have not been made public because there is no one who donated more than Rs 100,000. 

Congress Chief Secretary Krishna Poudel claimed that the report mentioned what is the reality. UML Central Accounts Commission Chairman Pushpa Kandel also gave a similar answer. He said, ‘If the accounts were prepared in a coordinated manner, the question would not have arisen, the question may have arisen because we kept what is.’ 

Section 38 of the Political Parties Act, 2073 BS, provides for parties to receive voluntary support. According to Sub-section 1 of Section 38, a party can be provided with voluntary financial support by a Nepali citizen or an organization. Sub-section 3 states that a party should receive financial support of more than Rs 25,000 from an individual or organization only through bank check or bank transfer.

Rule 12 of the Political Parties Regulations, 2074 BS states that the source of financial support must be disclosed. The regulations stipulate that when receiving support of more than Rs 100,000 from an individual or organization, the name, surname, address, profession, permanent account number of the person or organization providing such support must be disclosed, as well as the source of the amount of such financial support, and a record of such details must be kept.

The parties also have no basis for not disclosing the names of donors because they contributed less than Rs 50,000. Outgoing Chief Election Commissioner Dinesh Thapaliya says, “A report should be submitted with the names of who donated how much to the party, but that is not the case.”

Madan Krishna Sharma, President of Transparency International Nepal, comments that the parties are flouting good governance by not making the details of actual income and expenditure public. ‘It is not a secret that there is manipulation of power and money in the party,’ he said, ‘If we want good governance from the government, the first agenda must be to end the opaque activities of the party.’

Accounting system opaque 

The Election Commission had the audit reports of political parties examined by an expert team from the Office of the Auditor General. The report prepared by the team comprising the Director of the Office of the Auditor General and four other auditors after the study states, ‘While examining the income and expenditure statements, it has been observed that auditors of some parties submit reports of unsolicited opinions, no transactions are made through banks, no bank balance certificates are submitted, and bank balance certificates are submitted that are different from those shown in the financial statements.’ 

The expert group has mentioned in its report that the parties only include details of the balance amount in the audit reports as a show. The Auditor General's team has also concluded that if the weaknesses pointed out in the report are corrected, the financial transactions and financial status of the parties will be known and it will help the parties maintain financial discipline. 

The Auditor General's expert team had studied the audit reports of 91 political parties for the fiscal year 2078/079. The expert team has mentioned in its report that the Janamat Party, Nepal Mazdoor Kisan Party, and Bibeksheel Sajha Party did not have any balance sheets that year, and that the Janata Samajwadi Party only had a schedule, so there was no basis to ensure the financial status of the parties. Of the parties that submitted the audit reports for the fiscal year 2078/79, 48 had not even disclosed their bank accounts.

UML's source of income is political appointments 

There is a legal provision that allows political parties to show only membership fees, renewal fees, income from sales, interest, support received from members, and financial support in their income. The UML's audit report for the fiscal year 2078/79 also shows the amount received from political appointments as income.

UML has mentioned that it earned Rs 2,531,560 under this heading. The UML has not disclosed the details of who paid the amount for the appointment. The report prepared by the expert team deputed by the Auditor General states, ‘The Election Commission should control such transactions.’

Former UML Vice President Yubaraj Gyawali said that the report did not mention the amount taken separately for appointing a person, but the amount taken as a certain amount as a levy by a party member after getting the appointment. ‘Just like the fixed amount of salary received after becoming an MP, the cadres who have been appointed must also deposit a certain amount of salary in the party’s account. This amount has been transparently included in the report. It is not that they paid the amount for the appointment,’ he said, ‘There should be no doubt about this.’ 

Liberal Commission towards the party

The Political Parties Act has given the Election Commission the right to intervene to make the financial side of a political party transparent. There is a legal provision that an accounting system must be maintained in the format prescribed by the Commission and an audit report must be prepared. The provision is clear that financial support (donations) should be taken only after disclosing the source. But even if a single person donated Rs 10 million, it was not disclosed in the party's audit report. The commission also did not want to investigate. 

Section 40 (4) of the Act provides that the commission can investigate if the donations raised by the party are unnatural and unaccounted for. Based on this provision, the commission had asked a team of experts from the Auditor General to study the audit reports of the parties. Although the commission informed the party about the report prepared by the team after the study, it did not ask any further questions. The law clearly states that the commission can demand any details or documents from the concerned party and that the party is obliged to submit them.

Acting Chief Election Commissioner of the commission, Ram Prasad Bhandari, informed that a provision is being made that the donations received by the party in the upcoming elections can only be received from the amount paid in taxes. 'We have finalised the draft of the rules that will make it mandatory for parties and candidates to disclose the source of donations in the upcoming elections,' he says. 'After the new rules come in, there will be no way for black money to be distributed to the party.' 

Opacity is one of the reasons for public anger 

Angry over the opaque activities and luxurious lifestyles of political parties and their leaders, the Gen-G staged a protest last Bhadra. During that protest, the political parties and their leaders were targeted. Party offices and leaders' houses were vandalized, looted, and set on fire. The angry mob set fire to structures including the Parliament Building, Singha Durbar, and the Supreme Court. 

Gen-G leader Purushottam Yadav says that the 23rd and 24th Bhadra protests were caused by the opaque activities of the parties. ‘People who were prime ministers before I was born are still prime ministers,’ he says, ‘There is division of power from the office that manages the funeral to the Prime Minister's Office. There has never been an attempt to understand the feelings of the youth. Were we born to study abroad?’

He alleges that the parties around the government are not transparent and have trapped the country in a quagmire of corruption. He asks, ‘How are the parties operating? What is their source of income? How are they repaying those who provide support? There is certainly no crowd funding. Shouldn’t the party that governs itself be transparent towards the people?’ Yadav says that it is wrong to damage government structures like the Parliament Building, Singha Durbar and the private property of individuals in anger towards the leader. 

Tribhuvan University Associate Professor Dipesh Ghimire also analyzes that the country has reached its current state because the accounting of the income and expenditure of the parties is opaque. ‘Financial support is not transparent. The expenditure is also not systematic. It is not even in the banking system,’ he says, ‘Parties also fall under the definition of a public body. Parties should make every piece of information public. However, the reality is hidden.’ He says that there will be no improvement in the parties unless there is a system for auditing the party’s accounts by the Auditor General’s Office. ‘Even when we go to ask for the expenditure and income made by the party, it is not available,’ he says, ‘The parties are now facing the consequences of this.’ 

The study also shows the weaknesses of the parties

Transparency International has concluded that economic opacity has increased in Nepal due to political parties violating the law. Transparency International's 2024 report mentions that political parties are considered corrupt institutions in Nepal. 

In fact, it is not the only time that Nepal's political parties have been listed as corrupt institutions in reports by international organizations. In 2013, too, political parties were listed as the number one corrupt institution in the Global Corruption Barometer study. Based on the responses given by the participants in that study, 77 percent of political parties, 66 percent of employees, 58 percent of the police, 51 percent of the parliament and judiciary, and 30 percent of the business/private sector were identified as corrupt institutions. 

According to Transparency International, the main problem of political parties is the lack of financial transparency and accountability. The study suggests that parties should follow the law to practice internal democratic governance, financial transparency, and accountability. 

A study conducted by Purak Asia in Gandaki Province this year also showed a high graph of dissatisfaction among citizens with political parties. The study states that citizens are dissatisfied because political leadership abuses power, position, and authority. In the study conducted using the 'random sampling' method, 89.5 percent of the 1,067 respondents expressed dissatisfaction saying that political leadership abuses power, position, and authority. Only 5.9 percent disagreed with this. 

90 percent of citizens say they are dissatisfied because political leadership protects the corrupt. Only 6.1 percent disagreed with this. The study showed that 93 percent believe that those in the government protect their close ones without taking action. Similarly, 93.3 percent of citizens say that political parties collude in major corruption cases. 

'Democracy is in danger due to lack of party transparency'

Dinesh Thapaliya, outgoing Chief Election Commissioner 

Political parties submit two types of income and expenditure reports to the Election Commission. One, an annual report for each year and the other, an election expenditure report for the proportional system. Each candidate submits the details of the expenditure incurred by them to the commission for direct elections.

We have had the Auditor General audit the status of the audit reports submitted by the parties for the past three years. It was found that the details were given only as a formality as required by law. The party's expenditure report is extremely disorganized and unrealistic. 

How much money did the political party receive from the previous year in a financial year? How much did it collect in donations during the year? It must have earned it itself. It collects levies from its workers. The details related to this are not transparent. 

A party may bring 10-20 thousand people to hold a general meeting in Kathmandu. Banners are hung on dozens of vehicles and workers are brought in from outside. If any program has to be held in Kathmandu, it costs more than 10 million. The party holds conferences and gatherings in districts and municipalities. Central-level leaders go and give speeches. Expenditure is made on platforms, flags, banners, etc. But the record of donations raised by the party throughout the year is only Rs 10 million. 

The situation of all political parties is very pathetic in terms of financial governance. Details of how much income was earned and how much was spent should be passed by the party's central committee meeting. A real 'audit' should be conducted. A report should be submitted with the names of those who donated to the party, but that is not there either. The commission has the right to investigate if someone has provided unexpected assistance. But what to do when there is no detail of who provided assistance? 

The parties have declared their expenses during the election, annual income and expenses within the limits set by the commission. We cannot do anything. But when we speak out, it is different. In fact, I have heard that some candidates have even built their houses with the money they received for election expenses. We have said that candidates and parties should conduct business through the banking system, make their expenses and income public, and we took general action against those who did not make it public, but cases were filed in court. 

The biggest challenge to democracy today is the opaque details of donations and expenses raised by political parties and candidates in elections. There is a situation where it is assumed that political parties and elections are the places where undisclosed black money is spent.

It has been said that a 'registered auditor' should look at the party's expense details. But when you look at the report, the question arises whether such an audit is even done. Doesn't the auditor have to look carefully at the income and expenses within the party? Auditing is certainly not just putting green ink on the documents. We have written to the Office of the Auditor General to monitor such auditors. The Commission has raised questions where there is doubt. We also have limitations. If the parties themselves do not improve themselves, we cannot improve the system. If democracy is eaten by someone and if democracy is in trouble somewhere, it is at the expense of the parties and candidates, that is, the misuse of power and resources has put democracy in danger.