An Analysis of the Strengths and Weaknesses of Peru’s Political Party Law

Megan Sowards, J.D.

May 23, 2009

Introduction

Approved in October 2003, Peru’s Ley de Partidos Políticos (LPP) is the first

comprehensive political party law in the country’s history. The LPP governs three major

areas of party activity: formation and registration, internal democracy, and financing. Its

fundamental aims are to consolidate Peru’s political party system on a national level, to

introduce mechanisms of internal democracy and to ensure greater financial transparency.

To be sure, the law represents a significant step toward these goals. Peru’s

general, regional and municipal elections held in 2006 were the first to be conducted

under the new legal framework and should be celebrated as an important milestone in the

consolidation of Peru’s democracy. For the first time, parties submitted detailed financial

disclosure reports and designated internal electoral organs to organize the process of

internal party elections. At the same time, analyses of the law and how it functioned in

practice during the 2006 elections reveal areas of the law that must be refined or

supplemented. Now is the time to do so. Indeed, as Transparencia noted earlier this

year, 2009 presents a window of opportunity for Congress to tackle this important work.1

The country has had sufficient time to reflect on the lessons of learned from the last

elections, yet the next elections are far enough in the future that there is a reduced risk

1
Medina, Percy et. al. La Otra Reforma: 40 Soluciones Elementales para la Legislación Electoral. Lima:
Asociación Civil Transparencia y National Democratic Institute for International Affairs, 2007. P. 9.

1
that gamesmanship designed to achieve short-term political gain will distort proposals for

the law’s reform.

This analysis is the fruit of an eight-week investigation funded by the University

of Michigan Law School’s Clara Belfield and Henry M. Bates Overseas Fellowship and

sponsored by the International Republican Institute’s (IRI) Peru Program. In formulating

her recommendations and assessments, the author interviewed academic experts, political

party leaders, civil society members and government officials at Peru’s electoral organs.

However, the recommendations and opinions it contains are those of the author and may

not necessarily represent the views of IRI.

‘Regional Movements’ and ‘Local Political Organizations’ Not Subject to

Major Sections of the Law

Though there are three types of political organizations in Peru --- political parties,

regional movements, and local political organizations --- the vast majority of the

requirements set forth under the LPP apply only to the political parties. The law should

be amended to include regional and local political movements.

Regional and local political organizations are a significant force in Peru’s political

landscape. While there is no legal definition of a regional movement enshrined in Peru’s

electoral law, these groups are best understood as a spontaneous, grass-roots

organizations composed of members who feel alienated by the national parties. They

2
typically activate during campaign season, but are otherwise dormant. At the present

date, there are 159 registered regional movements in Peru.2 Four hundred and sixty-four

local political organizations registered to participate in the 2006 municipal elections.3 In

recent years, the movements have logged many electoral victories. Twenty-one of the 25

regional governments in Peru are now headed by officials who belong to regional

movements. This is a marked decline from the prior regional elections of 2002 in which

the parties controlled 17 of the 25 regional presidencies.4 Indeed, from 2002 to 2006, the

Alianza Popular Revolucionaria Americana APRA went from holding 12 regional

presidencies to holding two.

Under the LPP, regional movements may participate in regional or municipal

elections and local political organizations may participate in municipal elections; neither

may compete in national elections (presidential and congressional).5 Although Article 17

of the LPP sets forth some registration requirements for regional movements and local

political organizations, they are exempt from the vast majority of the LPP’s requirements,

most notably the law’s requirements regarding financing and internal democracy. As

such, the LPP sets up a very unequal playing field between parties and regional

movements in regional and municipal elections. While parties must spend precious

resources conducting the internal elections and preparing the financial disclosure reports

required by the law, regional movements can focus resources elsewhere. Clearly, this

2
http://documentos.jne.gob.pe/OrgPol/default.aspx. Last accessed May 24, 2009.
3
The registration of a local political organization is cancelled automatically at the conclusion of the
election pursuant to the Reglamento de Registro de Organizaciones Políticas, Article 49. Number of
organizations confirmed by OROP/JNE.
4
Participa Peru: Nota de Información y Análisis, December 2006, p 2.
http://www.participaperu.org.pe/apc-aa/archivos-aa/3c6bb51ada688b58c57cb18308d59d73/NIA_60.pdf
5
Ley de Partidos Políticos (LPP), No. 28094 (2003), Art. 17.

3
disparity creates a disincentive for a candidate considering running for election in a

regional or local election to do so with party backing and a financial disadvantage for the

parties that do present candidates.

The LPP’s haphazard regulation of regional movements is surely a consequence

of the way in which the law was negotiated. According to those involved, only after the

first draft of the law was approved in committee, Congressman Walter Alejos --- head of

the decentralization committee in Congress --- was partially successful in persuading his

colleagues to amend the law to include movements.6 While Alejos won passage of his

proposal to require movements and organizations to register with the Jurado Nacional de

Elecciones (JNE), his proposal to require movements to comply with the law’s other

requirements was rejected.7

While it is an oversimplification to suggest that the resulting disparity is the sole

reason for the parties’ dismal performance in the 2006 elections for the regional

presidencies, it is clear that it creates a legal environment in which regional movements

can flourish. Indeed, one scholar suggests that the disparity is so pronounced that it

caused some parties to not participate in sub-national elections because they lacked the

necessary infrastructure to supervise internal elections required under the LPP.8 Thus,

the LPP’s provisions regarding internal democracy and financing must be extended to

regional movements and local political organizations.

6
Vergara, Alberto. “El Choque de los Ideales: Reformas Institucionales y Partidos Políticos en el Perú
Post-Fujimorato.” XXVI International Congress of the Latin American Studies Association. Montreal, 5-8
Sept. 2007. P. 25.
7
Id.
8
Id., p. 26.

4
 Among the stakeholders in this debate, there is broad agreement on this point.

However, some doubt Congress has the political muscle to take on the movements. For

example, individual members of Congress may fear losing political support among their

electorate if they do so. Still, the Comisión de Constitución has approved a bill that

would obligate movements and local organizations to comply with the internal

democracy requirements of the LPP.9 Although the Comisión transmitted the bill to the

full Congress for its consideration, it is unlikely to be placed on the legislative calendar.

The full Congress used a parliamentary procedure to return the bill to the Comisión for

further consideration, a move that is widely perceived as placing the bill in a political

freezer. Another bill pending before the Comisión would extend law’s financial

requirements to the movements and regional groups.10 It has not been considered as of

the date of publication.

The approval of these two proposals would go a long way to close the law’s

loopholes regarding the movements, but there are many other areas where the law must

be extended to cover the movements. For example, the movements are not required to

submit to JNE by-laws which outline how internal decisions are to be made within the

organization.11 Furthermore, unlike the parties, the movements are not subject to the

annual requirement of turning in their list of registered voters12; nor are their registration

9
Proyecto de Ley No. 2214-2007.
10
Proyecto de Ley No. 2528-2007.
11
LPP, Arts. 5, 9.
12
LPP, Art. 18.

5
cancelled if they do not demonstrate a certain threshold of support in the election.13 In all

of these areas, the law must be expanded to require the movements to do the same.

As policy makers develop proposals to address these disparities, the issue of

ensuring compliance given that movements often appear and disappear during election

season must be considered. In addition, lawmakers must consider whether and how to

provide public funding to regional movements.

Party registration

Despite the fact that the LPP includes more rigorous registration requirements for

political parties, the number of registered parties has only increased since the law’s

passage. There were 24 registered parties when the law was enacted in 2003; prior to the

2006 elections there were 36 registered political parties.14 There are indications that this

upward trend continues. In April 2009, the Oficina Nacional de Procesos Electorales

(ONPE) reported that it had sold 302 electoral kits, the purchase of which is the first step

in the party registration process.15 While only a small percentage of those who purchase

kits actually become registered parties, those familiar with the registration process

estimate that, based on these reports, there could be more than 50 registered political

parties eligible to participate in the 2011 elections.

13
LPP, Art. 13.
14
Tuesta Soldevilla, Fernando. “Regulación Jurídica de los Partidos Politicos en Perú.” In Regulación
Jurídica de los Partidos Politicos en América Latina, ed. Daniel Zovatto. Mexico: IDEA y el Instituto de
Investigaciones Jurídicas de la UNAM, 2006. P. 779.
15
“Vendieron 302 Kits Para Inscripción de Partidos.” Perú 21 13 Apr. 2009:
http://peru21.pe/impresa/noticia/vendieron-302-kits-inscripcion-partidos/2009-04-13/243753.

6
 JNE’s Oficina de Registro de Organizaciones Políticas (OROP) oversees the

registration of political parties and ensures that those seeking to form a new party have

met the law’s requirements. Key among these are the requirements that the applicant

submit approximately 145,000 signatures of voters who support the formation of the

party, proof that local chapters consisting of 50 members have been formed in 65

provinces located in at least 2/3 of the country’s 25 departments, and by-laws that

describe how the organization will make internal decisions.16 Those I interviewed

pointed to areas in this section that require further refinement: the signature requirement,

the committee requirement, and finally, the number of days that OROP has to verify a

party has met the requirements.

Consider the signature requirement. Political parties must gather approximately

145,000 signatures of adherentes. ONPE authenticates the signatures by ensuring that

the signer actually exists, that his signature is authentic and that his name and DNI

correspond. While the scope of my investigation did not permit me to interview the

division within ONPE responsible for verifying the signatures, some report that this

requirement has given rise to so-called “signature factories.” Furthermore, given that an

adherente has no subsequent obligation to a political party, the signatures are a weak

indicator of party support. As such, there is broad agreement among representatives of

the political parties that the signature requirement should be eliminated.17 Those who

advocate the elimination of the signature requirement suggest that, instead, the JNE

16
LPP, Art 5.
17
Balance de los Cinco Años de Vigencia de la Ley De Partidos Políticos. Lima: International Republican
Institute (IRI) and Oficina Nacional de Procesos Electorales (ONPE), 2009. P. 17.

7
engage in a more vigorous verification process of the 65 party committees.18 This

proposal has merit and should be considered. The government’s resources are better

spent ensuring that the party committees are dynamic, active branches of the party within

the provinces rather than confirming that signers who may hold little allegiance to a

political party in fact exist.

Regardless of whether the signature requirement is eliminated, the existence of

party committees should be more vigorously scrutinized. As the LPP is currently written,

OROP confirms the existence of party committees and of their 50 members by

dispatching its staff of eight to each of the provinces in which the committees are located.

However, the LPP does not grant OROP the authority to investigate anything more than

the committees’ location and identity of its members. In order to ensure that these

committees exist more than simply on paper, the LPP should be amended to require that

the committee convene a meeting in the presence of an OROP functionary. The law

should also authorize OROP to make periodic, unannounced visits to the committees to

ensure their continued operation. Those I spoke with suspected that many parties’ 65

committees disappear once JNE has confirmed their existence for registration purposes.

To ensure compliance with this requirement, policy makers should consider

implementing a graduated sanctions regime for parties found to have moribund

committees. In the most severe cases, OROP should have the authority to cancel the

registration of a party whose committees have ceased to exist.19

18
Id. at 17.
19
For a fully developed legislative proposal to this effect, see Balance de los Cinco Años de Vigencia de la
Ley De Partidos Políticos, p. 17.

8
 While the parties may balk at greater scrutiny, strengthening the registration

requirements to ensure parties have a robust presence in the regions would ultimately

benefit the parties politically. The success of regional and local movements in the last

round of elections demonstrates voters’ preference for candidates who address local

matters. Therefore, encouraging active party participation in the provinces would

sensitize party leadership to local concerns and raise the party’s profile among voters

beyond Lima, ultimately helping the party win more votes.

The law’s registration requirements should also be amended to extend the time

period by which OROP must complete the verification process. Pursuant to Article 14 of

the Reglamento del Registro de Organizaciones Políticas, once the appropriate electoral

organ has verified the signatures presented by a prospective party or movement, OROP

has five working days to review the rest of the party’s application to ensure that it

complies with the remaining requirements.20 In practice, OROP begins its field visits to

the provinces while ONPE is verifying the signatures, so it has more than five business

days to realize all of these trips. Even so, five days is a very short period of time for

OROP to conduct adequate due diligence on the other fronts. I recommend extending the

period of time OROP has to review party applications so that it can conduct a more

vigorous investigation into whether the party is a bona fide political organization.

20
Reglamento del Registro de Organizaciones Políticas (RROP)/Jurado Nacional de Elecciones (JNE) No.
120-2008-JNE, Art. 14.

9
 While a prospective party’s registration application is pending, any citizen or

association may, pursuant to the LPP, bring a challenge to the process.21 It is laudable

that the law provides for direct citizen participation in this manner. However, bringing a

challenge to a party’s registration is costly (approximately 18,000 soles) for the average

citizen.22 Still, in 2006, groups brought five challenges; none succeeded. The formation

of watchdog groups with the resources to monitor the registration process and mount

these types of challenges should be encouraged.

Another means of ensuring the vibrancy of political parties is the LPP’s current

requirement that each party submit to OPOP its padrón or list of affiliates who are

eligible to vote in internal party matters.23 Yet, there is no sanction for parties who fail to

submit this document. Despite this fact, only three parties failed to present their padrón

in 2008.24 Electoral officials at the JNE note that this uptick in compliance corresponds

to the fact that elections are approaching. In previous years, the rate of compliance was

much lower. For example, in 2005 only 5 of the 27 parties turned in their padrón by the

deadline.25

The LPP should be amended to require regional movements to submit a padrón

and to implement a graduated sanctions regime for those parties and regional movements

who fail to do so. For example, parties and movements who are simply late in submitting

21
LPP, Art. 10.
22
RROP/JNE: arts. 17-19, 22.
23
LPP, Art. 18.
24
http://documentos.jne.gob.pe/OrgPol/default.aspx. Last accessed May 24, 2009.
25
“Partidos No Entregan Padrón de Afiliados.” Peru 21 31 Mar. 2005:
http://peru21.pe/impresa/noticia/partidos-no-entregan-padron-afiliados/2005-03-31/110845.

10
the document should be fined, while OROP should have the authority to cancel the

registration of those who fail to submit a padrón altogether. This regime must be

developed through an amendment to the LPP; it cannot be done through an administrative

rulemaking. In addition, JNE should exert pressure on the parties to comply with this

requirement by announcing publicly the parties that have complied with the requirement

and those who have not. In 2009, JNE released a press release that listed the parties that

complied with the requirement but it did not mention the three that did not.26

Internal Democracy

The second major area that the LPP regulates is the internal democracy of Peru’s

political parties. While my eight-week investigation did not permit me to conduct an

exhaustive investigation of this aspect of the law, a cursory examination of this area

reveals two major subjects that deserve further study and possible amendment.

First, the law does not authorize government oversight of the parties’ compliance

with the internal democracy requirements, either on the front end through obligatory

government assistance with internal party elections or on the back end through

sanctions.27 Though the law authorizes ONPE to provide technical assistance to the

parties in complying with these requirements, he parties themselves must request this

assistance. Roughly half of the registered parties have done so.

26
http://www.jne.gob.pe/prensaypublicaciones/archivonoticias/Paginas/TRECEPARTIDOSPOL%C3%8DT
ICOSPRESENTRONPADR%C3%93NDEAFILIADOSALJNE.aspx
27
LPP, Art. 26.

11
 In crafting proposals to ensure that internal party affairs are conducted

democratically, policy makers should consider measures to ensure greater governmental

involvement at the outset of the process. While a sanctions regime might deter some

from engaging in undemocratic practices, they are likely to be imposed after popular

elections have already occurred and therefore would not be as effective in achieving the

end goal of ensuring that a given party’s slate of candidates was chosen in a democratic

manner. To this end, the law should authorize ONPE to provide obligatory technical

assistance to the parties. There is a proposal pending before Congress to this effect and it

should be adopted.28

While some have proposed that the JNE assume a greater administrative role in

this regard, the JNE’s constitutionally designated role as the highest judicial body with

respect to adjudicating disputes regarding a party’s compliance with the electoral law

renders it unsuited for this task. The law should ensure a marked separation between

judicial and administrative functions to ensure the impartiality and public confidence in

JNE’s judicial capacity.

The second major area of the LPP´s internal democracy title requiring further

refinement is the gender quota. Under the LPP, 30 percent of the candidates on each

party’s slate of candidates for Congress and municipal and regional councils must be

either male or female. To be sure, the gender quota has led to the greater representation

28
Proyecto de Ley No. 2297-2007.

12
of women in government. For example, since the gender quota was first implemented in

1997, the representation of women in Congress has increased from 11 to 29.7 percent. 29

Nevertheless, the gender quota does not guarantee female representation in

Congress. In a proportional representation system such as Peru’s, congressional seats are

held by parties and not individual candidates. The number of seats each party holds is

determined by the percentage of votes it obtains. The individuals who fill these seats are

then determined based on their position on the party’s candidate slate. The LPP does not

regulate the order of the candidate slate. Thus, under the LPP, a party could comply with

the gender quota by ensuring that 30% of its candidates are women, but place the female

candidates at the bottom of the candidate slate. Unless that party won 100 percent of the

vote, the female candidates at the bottom of the list would have almost no chance of

being seated in Congress.

Peru’s electoral law allows voters some opportunity to reorder a party’s candidate

list through the preferential vote. In 2006, six of the 35 female members of Congress

were elected as a result of the preferential vote.30 Under this system, voters are allowed

to designate two candidates whom they wish to be seated first, despite their position on

the candidate list.

29
Gallo, Maxim, Kristen Sample, and Gregory Schmidt. “Las Elecciones Legislativas Peruanas en 2006:
Un Caso Exitoso de Cuotas con Voto Preferencial.” In El Impacto de las Cuotas de Género en América
Latina: Mujer y Política, ed. Marcela Ríos Tobar. Santiago, Chile: FLACSO, 2008. P. 182.
30
Oficina Nacional de Procesos Electorales (ONPE). Democracia en los Partidos Políticos: Análisis de las
Elecciones Internas 2005-2006. Lima: ONPE, 2006. P. 46.

13
 Indeed, despite these measures designed to facilitate women’s participation in

politics, most of those I interviewed agreed that more must be done to achieve this goal.

On this controversial political topic, however, there is a sharp divide regarding how to do

so. Some advocate requiring parties to list candidates on the slate alternating between

male and female. A more middle-ground position would require parties to locate at least

some of their female candidates at the top of the list. Others would amend the LPP to

impose greater sanctions on those parties that fail to comply with the law’s internal

democracy title, but allow the party autonomy in ordering its list.

While time constraints did not permit me to conduct an analysis of this area of

the law with depth sufficient enough to recommend a particular approach to ensuring

greater female representation, I noted significant confusion among the electorate and

members of Congress alike about how the gender quota functions. Groups such as IRI

can advance efforts to reform the law in this regard by providing educational materials

and trainings for voters, parties, government officials and the news media regarding this

mechanism.

In addition, reforms to the preferential vote mechanism, which Congress has

recently considered eliminating, should be carefully weighed in light of its link to

women’s participation in Congress.31 As I note above, the preferential vote allows voters

to reorder the composition of a party’s slate of candidates and has allowed female

candidates who occupy an undesirable position on the candidate slate to be seated in

31
Santillán, José. “Habrá 10 congresistas más en el Parlamento tras las elecciones del año 2011.” El
Comercio 22 May 2009: http://www.elcomercio.com.pe/noticia/289917/pleno-congreso-aprobo-elevar-
130-numero-parlamentarios.

14
Congress. In 2006, six of the 35 female members of Congress reached office as a result

of the preferential vote.32 While there are persuasive arguments both for and against the

preferential vote, the fact remains that if it is eliminated, voters would have no

mechanism by which to reorder the candidate slate and must depend on parties

themselves to place women in favorable positions on the list. Groups such as IRI should

make clear this link to those involved in debating reforms to the bill. In my view, any

proposal to eliminate the preferential vote should be accompanied by mechanisms to

further strengthen the internal democracy requirements of the LPP.

Political Party Financing

The LPP’s title regarding the financing of political parties is transformational.

For the first time in the country’s history, it authorizes direct public funding for those

political parties that obtain congressional representation and prescribes a formula by

which the funds are to be distributed annually over a five-year period: sixty percent of

the total funds received by a party is based on the number of votes the party received in

the previous congressional election; the other 40% is distributed equally among all of the

parties.33 Had the government disbursed public funding to the parties for the five-year

period 2007-2011, the 11 political parties currently represented in Congress would have

shared in the receipt of approximately 52 million soles or $17.3 million dollars.

32
Democracia en los Partidos Políticos, p. 46.
33
LPP, Art. 29.

15
 Nevertheless, under the law, distribution of the funds is subject to budgetary

availability.34 Pointing to this clause as its rationale, the current government --- led by

APRA --- has not disbursed public financing as called for under the law. There was

broad consensus among those I interviewed that the root causes for the state’s failure to

distribute these funds are two: (1) it is politically expedient for APRA to maintain the

status quo in which there are numerous, but weak, political parties; and (2) the general

public holds the political parties in such low esteem that it would be politically unpopular

for APRA to provide taxpayer money to the parties. 35 In short, the parties are trapped in

a vicious cycle. So long as there is scant public support for public financing of the

parties, it is unlikely that any government in power would risk the political fallout

associated with disbursing the funds. Yet, without the funds, the parties have little hope

of becoming fully professional entities, and in turn convincing the Peruvian electorate

that they are worthy of receiving the funds.

It is critical that Peru break this vicious cycle for the funds would go a long way

to help the parties professionalize their operations. Currently, most party officials hold

other, full-time employment and many volunteer their time. At the regional level, the

base of party operations is often the home or business of a supporter and there is a

notable lack of coordination among national and regional party officials. Owing to this

reality, there is widespread agreement among the Peruvian political parties that the funds

34
LPP, Disposición Transitoria Tercera.
35
According to a 2007 poll conducted by Latinobarómetro, only 14% of Peruvians had confidence in
Peru’s political parties. A December 2008, IRI-sponsored poll of 2500 Peruvians residing in five major
regions of the country indicates that only 11.8% of those polled thought that parties should receive state
funds.

16
should be disbursed. The parties should capitalize on this area of consensus to pressure

the current government to release the funds.

Should the parties persuade the government to disburse the funds, it is critical that

ONPE develop a legal framework to govern their use and that its budget be increased to

adequately ensure that the parties comply with these requirements. There is already a

skeleton of a legal framework in place: the LPP and a corresponding administrative rule

specify the purposes for which the funds can be used.36 This must be fleshed out to

require the parties to keep records of how the funds are used, to authorize ONPE to audit

the parties to determine that the funds are being used for authorized purposes and to

specify sanctions for parties that might misuse the funds. According to experts in

Peruvian administrative law, the accounting and audit guidelines could be developed

under a rulemaking by ONPE. On the other hand, any sanctions regime must be

implemented through an amendment to the LPP itself. I recommend that to be eligible

for public funds, the government require the party to submit a letter of agreement and a

written certification in which party agrees to:

• Spend public funds only for formation, training and research;

• Keep records and supply evidence of qualified expenses;

• Cooperate with an audit of expenses;

• Repay misused public funds, if necessary; and

• Pay any civil penalties imposed by the ONPE.

36
LPP Art. 29. Reglamento de Financiamiento y Supervisión de Fondos Partidarios (RFSF), Arts. 4-5.

17
 With regard to the sanctions regime, monetary penalties are perhaps the most

appropriate model and the government should consider ensuring that the parties pay these

fines by authorizing ONPE to withhold future disbursements of public funding in the

event that a party fails to pay the fine directly. This amendment should also specify a

mechanism by which the parties can challenge the findings of the government audit or

imposition of sanctions.

In parallel with this effort, the parties must work to develop adequate systems to

administer the funds. Indeed, ONPE notes that many of the parties have not developed

internal accounting systems, as required under the LPP, to ensure the proper handling of

party finances. Foreign governments and civil society groups can lend assistance in this

regard such as by familiarizing party officials with the permissible uses of public funding

and helping officials gain the necessary accounting skills to prepare disclosure reports.

Although it appears that it will be an uphill climb for the parties to convince the

government to disburse the funds, the parties should continue to press the state to

disburse the funds for it will inevitably spark an important national conversation about

the health of the political parties in Peru and their level of responsiveness to constituent

needs. While it would be legally permissible for foreign governments or foreign

political parties to provide direct financial assistance to Peru’s parties for party formation,

training or research37, most experts agree that this is an unpalatable option. It would be

financially difficult to fund all of the political parties registered in Peru and funding some

of them would certainly generate charges of favoritism. In addition, a recent poll

37
LPP, Art. 31.

18
conducted by IRI indicates that only 8.2% of Peruvians polled would favor foreign

funding of the country’s political parties.38

Indirect Public Financing

One alternative that the parties may wish to propose in their negotiations with the

government on this subject is dedicating the funds that the state currently expends on

providing the franja electoral to public financing. In 2006, the government spent

approximately 20 million nuevos soles to provide the parties with free access to radio and

television time between 30 and two days prior to general elections.39 Yet, as many of

those I spoke with observed, some parties do not have the financial means to develop a

sophisticated, professional advertisement to air during their allotted times. In funding

the franja and not party training and formation, the government, in my opinion, has its

priorities out of order. Ensuring more professional, better trained and adequately staffed

parties with a robust presence throughout the country is a more urgent priority than

providing for political advertising.

Private Financing

The LPP also limits the amount of money that parties may receive from donors

and bars parties from accepting contributions from religious orders, state entities and

state-owned businesses. It also limits, to some degree, donations from anonymous

38
Evaluación ex ante del proyecto Todos Hacemos Política, Question #38. Encuesta IRI. Cinco ciudades.
Diciembre 2008.
39
LPP, Art. 37.

19
donors and foreign governments.40 For example, individual donors as well as legal

entities such as corporations can donate up to approximately $70,000 annually to a party.

Nearly everyone that I interviewed agreed that this was an appropriate limit though one

high-ranking political party officer suggested the limit be increased to keep pace with the

rising price of television advertising. Overall this does not seem to be a problem area in

the law.

Disclosure

The LPP requires parties to submit financial disclosure reports to ONPE at

periodic intervals. They are required to submit an annual balance sheet detailing income

and expenses as well as biannual reports that identify the source and amount of cash and

in-kind donations from private sources. During campaign season, parties must submit

this information bimonthly. Sixty days after the results of the election are proclaimed,

parties must submit an accounting of their campaign expenses. ONPE publishes all of

these reports in full on its website.

On the whole, parties are complying with these requirements despite the fact that

the sanctions for not doing so are toothless. Indeed, the only consequence for not

submitting the information is the loss of public funding, but since the state has not

disbursed these funds, this is a hollow threat. Nonetheless, in 2007, only four parties

failed to submit their annual report.41 The rate of compliance for the biannual and

bimonthly reports is nearly the same. For example, during the 2006 general elections,

40
LPP, Art. 31.
41
http://www.onpe.gob.pe/modFondospartidarios/downloads/Comunicado.22.01.2009.pdf. These include
Despertar Nacional, Partido Politico Adelante, Agrupación Independiente Si Cumple, Fuerza Nacional.

20
ONPE reports that 94 of the required 102 bimonthly reports were submitted.42 The eight

reports that were not submitted corresponded to three political parties.43 Despite this

generally high rate of compliance, this area of the law should be amended in favor of a

graduated system of monetary fines, uncoupled from the receipt of public funding.

ONPE has proposed such an approach, though the formal proposal is still being vetted

internally. The parties have also begun to develop a consensus regarding what such a

regime would look like. In late 2008, IRI convened roundtable discussions on the subject

in which party members, government officials, and civil society members participated.

The group proposed a very reasonable sanctions regime that would impose monetary

fines commensurate with the gravity of the infraction.44

As part of this reform package, Congress should consider requiring the parties to

include their campaign expenditures in the bi-monthly reports parties must submit during

campaign season. Currently, the LPP requires the parties to submit this information 60

days after the results of the election are proclaimed. Providing this information before

the election would have a two-fold effect: it would further pressure campaigns to fully

disclose their contributions by providing an indirect mechanism to verify the veracity of a

party’s reported donations and provide information that rival campaigns, journalists and

citizens could use to make a more informed decision in the voting booth. Financial

disclosure reports should also include the donor’s employer information to permit

42
“Primera Experiencia de Rendición de Cuentas y de Verificación y Control.¨ Partidos y Democracia ,
Año IV, No. 15, Febrero 2007: p. 4.
43
Medina, Percy. “Rendición de Cuentas, Control, y Divulgación: El Dinero en las EE. GG 2006.” In
Cinco Años de la Ley de Partidos: ¿Qué Cambió y Qué Falta Cambiar?, ed. Jorge Valladares. Lima:
Colección Agneda Integridad, Biblioteca de la Reforma Política Nº 7, 35-50, 2008. P. 38.
44
Balance, p. 53-54.

21
analyses of which industries are favoring particular parties. The parties would clearly

need greater resources in the form of public financing to comply with these amendments,

however. On a practical note, this process could be simplified by requiring that all

parties use the same software to prepare these reports.

Though the law does not specify a deadline by which ONPE must publish this

financial disclosure information on its website, in practice, ONPE typically makes the

information available approximately two weeks after receiving it from the parties and

after an initial verification process. ONPE’s speed in publishing the information is

laudable, but Congress should consider amending the law to require ONPE to publish the

raw data in almost real time. This is especially critical during campaign season. Parties

could make their compliance with the transparency rules a selling point in their

campaign.

In tandem with legislative reform efforts, it is critical to encourage investigative

political journalism and cultivate the growth advocacy organizations that press for greater

transparency in government. Providing greater information to the public regarding

political financing is one of the most effective ways to ensure greater participation in the

political process.45 Civil society groups such should consider sponsoring workshops that

train journalists in how to use information available through government websites and the

Law of Transparency and Access to Public Information to shine the spotlight on money

in politics. They can also provide positive incentives for parties to disclose this

45
Ferreira Rubio, Delia M. “Financiamiento Político: Rendición de Cuentas y Divulgación.” In
De Las Normas a Las Buenas Prácticas: El Desafío del Financiamiento Político en América Latina, ed.
Steven Griner and Daniel Zovatto. San Jose, Costa Rica: OEA and IDEA, 2004. P. 79.

22
information by publishing scorecards that highlight each party’s compliance with the

LPP’s major requirements.

Accuracy of Information

To administer the new financial disclosure requirements, the LPP authorized the

creation of the Office of Supervision of Party Funds (GSFP) within ONPE, to which the

parties must submit their disclosure reports. The LPP assigns the GSFP the exclusive

responsibility to verify and audit the economic and financial activity of the parties.46

Nevertheless, Article 178 of the Constitution grants the JNE exclusive investigative

authority in electoral matters. In short, JNE lacks the statutory authority to investigate

the parties and ONPE lacks the constitutional authority to do so. As a result, no one is

fully investigating the party reports. To remedy this catch-22, a constitutional

amendment would be required to grant ONPE full oversight authority. It is extremely

unlikely that this would occur. JNE, which was founded in 1931, is a powerful

organization that is unlikely to agree to cede this authority to ONPE. On the other hand,

ONPE is unlikely to press for it because, as the younger organization (created in 1993),

the fear of being abolished or having its budget cut looms in the background.

This is not to say that ONPE’s GSFP is a rubber stamp. The GSFP’s team of

accountants regularly contacts donors listed in party disclosure reports to verify that they

indeed donated to the party. This questioning is conducted under oath, so there is some

incentive for those contacted to tell the truth. Nevertheless, GSFP does not have the

authority to investigate individual donors so they much take those contacted at their word
46
LPP, Art. 34.

23
that they did or did not provide the donation in question. GSFP also shares the

information with the Unidad de la Inteligencia Financiera (UIF), an investigative body

that works to detect money laundering. If the UIF spots a problematic donor on a

financial disclosure list, it has the authority to open a government inquiry into the matter.

ONPE does not.

Individual candidates failing to notify their party of contributions received

Without government oversight it is difficult to determine the accuracy of party

financial disclosure reports. It is clear, however, that most parties’ financial disclosure

statements do not fully account for the funds raised and expended by individual

candidates. As it is currently written, the LPP requires that candidates inform their party

of the contributions that they receive and the party must in turn include these donations in

the financial disclosures they provide to ONPE. Despite this prescription, many

candidates are not doing so and the parties lack the wherewithal to detect when this is

occurring. Indeed, experts widely acknowledge that during the 2006 elections this

problem was rampant. To illustrate, an ONPE publication notes that one of law’s

principal deficiencies highlighted in the 2006 campaign was a lack of communication

between individual candidates and their party regarding funds received by individual

candidates.47 A Transparencia publication estimates that during the 2006 election

season, individual candidates spent more than 2 million soles on publicity without the

knowledge of their party or alliance.48

47
Partidos y Democracia, p. 5.
48
Medina, p. 42.

24
 While a party could be sanctioned for failing to include these contributions, the

law does not grant ONPE the authority to sanction individual candidates for failing to

report contributions to the party. This is perhaps one of the biggest loopholes in the law’s

financing title. Many donors give directly to candidates and candidates actively seek

these donations.49 This phenomenon is driven by the very design of Peru’s electoral

system. Through the preferential vote, voters in congressional elections may choose two

candidates on any party’s slate that they wish to elevate to the top of the list. The slate of

candidates is then reordered based on the number of votes each candidate received. This

system clearly incentivizes candidates to seek contributions to their individual accounts

and to spend money of their own accord.

While there has been some indications that the current Congress may consider

legislation to eliminate the preferential vote, experts believe congress is unlikely to

eliminate it because many members of congress owe their presence there to the

preferential vote and it is also linked to the thorny political subject of the gender quota.

Recognizing this political reality, it is advisable to modify the LPP to include greater

controls over donations to individual candidates and that ONPE’s GSFP begin to sanction

parties for failing to include this information in their reports.

There is a divide about how to regulate individual candidate donations. To be

sure, requiring individual candidates to submit disclosure reports would create a great

deal of work for ONPE. This was considered when the LPP was debated, but again,
49
Partidos y Democracia, p. 5.

25
members of congress, realizing that as candidates they would be subject to these

reporting requirements, scrapped them. At the very least, civil society groups should

pressure ONPE to sanction parties whose candidates do not report their expenditures.

In the long term, if Peru continues to maintain its preferential voting system, the

LPP should be amended to require individual candidates to render accounts and to

provide for sanctions for those who do not. This too would necessitate an increase in

ONPE’s budget and personnel. In this regard, there are few models employed in the

region to look to since few Latin American countries require individual candidates to

render accounts.50 Colombia offers one model: it requires presidential and parliamentary

candidates to provide regulatory authorities with records of their campaign

expenditures.51 Under the Colombian system, candidates must present periodic campaign

finance reports to the government, which has the authority to audit the reports and impose

sanctions in the form of monetary fines, reduction or elimination of public funding.52

Graver still, a successful presidential candidate proven to have violated Colombia’s

financial norms, may be barred by the Congress from assuming the post altogether.53

Publicity being contracted by individual candidates/National Treasurer the only

one who can contract publicity

50
Zovatto, Daniel. “The Legal and Practical Characteristics of the Funding of Political Parties and Election
Campaigns in Latin America.” In Funding of Political Parties and Election Campaigns, ed. Reginald
Austin and Maja Tjernstrom, Stockholm: IDEA, 2003. P. 108.
51
Id.
52
Hernandez Becerra, Augusto. “Regulación de los Partidos Políticos en Colombia.” In Regulación
Jurídica de los partidos politicos en América Latina, ed. Daniel Zovatto, Mexico: International IDEA and
Universidad Nacional Autónoma de México, 2006. P. 353.
53
Id.

26
 Another area of the law’s financing title that requires modification is Article 40,

which states that the party’s national treasurer is the only person allowed to contract

electoral publicity. All reports indicate that this requirement was broadly ignored in the

2006 elections. Obviously in the fast-paced environment of a political campaign, there is

little incentive for candidates or local party operations to contact the national treasurer,

who is probably based in Lima, to request he purchase advertising. As a result, regional

party chapters and individual candidates are purchasing electoral publicity without the

knowledge of the party, and the party, in turn, is not including these expenditures it is

financial disclosure reports. The rulemaking that implements this portion of the law

should be refined to specify that the treasurer may delegate this authority to treasurers at

the sub-national level. While one reading of the rulemaking associated with this article

of the law would permit the treasurer to delegate this authority, it is worth making

explicit in the rulemaking the treasurer’s ability to do so.

Conclusion

As this study demonstrates, there are several major areas of the LPP that must be

refined and supplemented. The most urgently needed reforms are those that would level

the playing field for movements and political parties, increase the scrutiny of party

committees at the sub-national level and require individual candidates to render accounts.

In addition, it is critical that the parties band together to pressure the government to

disburse the public funding they are due under the law. There are other areas of the law

that should be examined more fully to determine whether further refinements are required

27
and what form they should take. In particular, an analysis of the gender quota and how it

has functioned in practice would be timely in light of Congress’ intention to consider

legislation to eliminate the preferential vote. Future studies of the law might also

examine the party by-laws on file with OROP to determine whether they include the

provisions prescribed by the LPP. Despite this long list of suggestions for future

refinements and further study, it is worth remembering that little more than five years

ago, Peru was one of the few Latin American nations without a comprehensive political

party law. Its passage of the LPP and associated administrative rulemakings represents a

significant step forward in the process of strengthening the legal framework that governs

Peru’s political parties and in turn ensuring their robust participation in the governance of

the country. Now the task is to refine this solid foundation to ensure the further

consolidation of Peru’s political party system.

28