On Wednesday, news broke that the Russian government may have spent as much as US$300 million since 2014 on influencing elections and buying political influence abroad. Reportedly, some of the countries affected include Albania, Montenegro, Madagascar, possibly Ecuador and an unnamed country in Asia.
That same day, European Commission President Ursula von der Leyen highlighted “covert foreign influence and shady funding” by authoritarian regimes as a threat to democracy, specifically calling out China.
Most countries recognise the threat of foreign political finance. In fact, 70 per cent of countries around the world ban foreign-sponsored campaign donations. To wiggle around this ban and to disguise the origin of money, China and Russia have abused the global financial system’s loopholes – including anonymous shell companies. According to a 2020 study by the German Marshall Fund of the United States, both countries have increasingly relied on such means to sway elections and interfere in other democratic processes.
At the risk of sounding like a broken record, this is yet another reason why governments must end secret ownership of companies. The new global standard adopted in March 2022 – following our campaigning – requires all countries to set up verified central registers that list who really own companies. If implemented well, this will close one loophole shady actors use to secretly channel donations to politicians abroad.
Corruptive foreign political finance can have lasting and dreadful consequences for the influenced country, and lead to public disenchantment with democracy. Detecting and exposing it is a powerful strategy. Our new policy brief, published earlier this week together with the National Democratic Institute and Open Government Partnership, proposes key transparency and oversight measures to the governments who want to stand up to this threat.
Foreign interference is not a new problem; nor is it exclusively perpetrated by authoritarian regimes. Some democracies, including the US, have a long history of meddling in elections and domestic politics abroad. This is equally unacceptable.
If governments are serious about protecting democracy, the threat of authoritarian influence should not be taken lightly. But any response needs to start with transparency and integrity.
