For decades, elections in Latin America have been driven by clientelism. It is almost impossible to win an election without investing a considerable amount of campaign money in this non-disclosed item. The purchase of votes, though, violates the nature of citizen choice and accountability central to democracy.
Mexico is no exception. In fact, beginning at the start of the 20th century, Mexican politicians mastered the art of clientelism, winning elections using “whatever it takes.” This practice is generally attributed to the incumbent and long dominant Institutional Revolutionary Party (PRI), but they are far from the only guilty party. For decades, Mexican voters have acknowledged that every six years, millions of dollars are exchanged under the table to gain access to Los Pinos (the Mexican White House).
Electoral clientelism, in simple terms, seeks the direct purchase of the population’s vote through the exchange of food, goods, money or the conditioning of social programs to influence how voters cast their ballots. Since there is no way to legally declare this as campaign spending, the money to buy votes comes from under the table. It also often exceeds the legal caps on campaign spending assigned to each political party. But how this money is moved and who is paid to collect it has remained unknown. Until now.
On May 29th, the Mexican organizations Integralia and Mexicans Against Corruption and Impunity released their report “Hidden Money: Financing and illegal spending in political campaigns in Mexico.” The study addresses how illegal money—both public and private—flows into campaigns; in return, the funders receive promised future benefits from the candidate: public work contracts, special permits and access to favorable regulations to do business.
Coordinated by María Amparo Casar, President of Mexicans Against Corruption and Impunity, and Luis Carlos Ugalde, Managing Director of Integralia Consultores, “Hidden Money” is an in-depth investigation that studies campaign documents, media articles and over 60 interviews conducted with individuals directly and indirectly linked to campaigns—including governors, candidates, political operators, campaign strategists, advisers, members of the business communities, public officials, and journalists—to produce anwell-documented, original report.
“We all knew that illegal financing existed, but in this report for the first time we describe where and how that money flows to campaigns, and we quantified the amount of money involved,” said Ximena Mata, a senior political consultant at Integralia and the research coordinator of the study. The study shows that the generous system of public financing of parties and campaigns that was established in 1996 has failed to combat the influence of illegal money in the democratic process and highlights the need to rebuild the electoral system from the bottom up through new electoral reform.
“Hidden Money” reports that for every peso recorded as an expense in a campaign, there are 15 pesos (approximately $1.30) financed through unofficial backchannels from unknown sources.
According to Mata, most of that hidden money funds clientelism. In a conservative estimate, a campaign for governor in a medium-sized state may spend up to 290 million pesos, or $14.5 million, to buy votes (for context that’s roughly the amount spent by candidates in a competitive U.S. Senate election). On average, candidates for governor spend ten-times more than the legal limit, meaning that if the average expenditure legal limit is 46.8 million pesos ($2.5 million), the average expenditure on governmental campaigns is 10 times higher, up to 470 million pesos ($24 million), depending on the size of the state and its level of electoral competitiveness.
The main sources of illegal support for candidates comes from the diversion of public resources, illegal private financing and organized crime. Their contributions come through money laundering, fraud and tax evasion, shell companies, and illegal media coverage. Money for campaigns is then delivered in cash or in kind, either directly to the candidate or party, or through third parties.
Corruption scandals have already tainted this year’s federal election, but the light shed by “Hidden Money” on illicit campaign financing reveals longer-term and serious, direct threats to democracy. For Mata, illicit campaign funding is the gravest issue facing Mexican democracy because excess dirty money in campaigns undermines representation and accountability and encourages government corruption.
Whoever occupies Los Pinos in December 2018 will have to add this issue to an endless list of corruption allegations surrounding the Mexican political system. Given the nefarious means and characters involved, let’s hope they put it at the top.
The complete study and infographics, as well as an executive summary, are available at: www.dinerobajolamesa.org