Fuzzy logic in party loans

Fuzzy logic in party loans

The decision of the Election Commission (EC) to clear 31 political parties of illegal borrowings could cause further confusion regarding the organic law on political parties.

It is inevitable that the cases will be compared to that of the Future Forward Party (FFP), which was disbanded on the orders of the Constitutional Court earlier this year for borrowing 191 million baht from its leader Thanathorn Juangroongruangkit.

According to the EC, the difference is each of the 31 parties borrowed less than 10 million baht a year.

The EC reasoned that the amount is within the legal limit, according to the court's ruling on the FFP.

The logic for this appears fuzzy when looked into in detail.

It must be noted first that the Political Parties Act neither specifically allows nor bars political parties from borrowing money to finance its activities.

In its ruling on the FFP case, the Constitutional Court decided that political parties can borrow money as long as they conform to the spirit of the charter and relevant laws.

The court stated that the purpose of the laws here is to ensure that parties conduct their political activities in an open and accountable manner, while being free from the influence of people who would provide them with money, assets or other benefits.

Considering the intention, it's not clear why taking loans -- a normal business transaction complete with specific terms and conditions -- would not qualify as a legitimate source of income for political parties.

In the FFP dissolution case, the court argued that the money that Mr Thanathorn lent to the party could have given the donor undue influence over the party.

Under the definition, the loans exceeded the legal limit allowed for individuals to donate to political parties (up to 10 million baht per donor per year).

The loans were therefore considered to be income that came from an illegitimate source.

The court also noted irregularities in the lending. It found that the interest rates were lower than market rates, and a second loan was extended even when the party had yet to repay the first.

In the court's view, the FFP loans were considered an attempt to evade the limit on donations under Section 66 of the Political Parties Act.

After considering the facts, the court dissolved the FFP and banned its executives from politics for 10 years.

Meanwhile, the cases against the 31 parties began after activist Srisuwan Janya submitted a petition, asking the EC to determine whether their borrowings violated the political parties law.

According to the EC, a probe into the finances of 31 parties found the loans and advances extended by party leaders or executives with no interest or below-market interest rates were considered to be "other benefits" under the political parties act like the FFP case. However, none of them exceeded the 10-million-baht mark.

But how about the fact that the loans derived by the 31 parties carried no interest or below-market interest rates?

Are there no suspicions that the donors had the intention of wielding influence over the parties, as was thought in the FFP case? Does it make a difference if the amount is 10 million baht or more?

It's understandable that the law governing sources of income for political parties must be fastidious to prevent undue influence. However, equating loans with donations does not give parties a clear guideline.

This detail is meaningful as punishment for the violation could be seeing one's own party dissolved.


Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : anchaleek@bangkokpost.co.th

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