The failure of cryptocurrency exchange FTX, which had its nerve center in The Bahamas, according to court documents, and which funded a wide array of local groups and causes with big money in recent months, has triggered questions in some circles about whether FTX sought to buy influence from politicians in the lead up to the general election last year.
Though Opposition Leader Michael Pintard has made no strong public push at any point in his political career for any campaign finance bill to be passed in Parliament, and though there is no record of him ever making public any donors to his campaigns or that of his political party, the Free National Movement – Pintard – last Friday led a group of FNMs outside the Office of the Prime Minister demanding to know whether any members of the governing Progressive Liberal Party (PLP) had accepted money from FTX or its now disgraced former CEO Sam Bankman-Fried.
Responding to a reporter’s question on Monday, Prime Minister Philip Davis said that to his knowledge, no PLP member had accepted any donations from FTX.
Given that there is no legal obligation for any politician to declare donors to their campaigns, Davis could easily not know if, in fact, any of them had received any money from FTX, which was the first exchange to be registered under the Digital Assets and Registered Exchanges Act (“DARE Act”).
FTX opened its office in The Bahamas three weeks after the PLP was elected to office on September 16, 2021.
According to court filings by the liquidator appointed in the wake of the FTX collapse, FTX Digital Markets Limited was registered in The Bahamas on July 22, 2021 as an International Business Company.
Pintard’s queries about whether FTX was a campaign donor once again raised the question in our mind about whether the time has, or will ever come, for money in politics to be regulated in The Bahamas.
In its report on the 2021 Bahamas general election, released in August 2022, the Commonwealth Observer Group recommended: “The government and the House of Assembly should initiate consultations on the development of a regulatory framework governing campaign financing prior to the next election in order to promote fairness, transparency and accountability.”
The recommendation has been contained in multiple reports from various observer groups over multiple election cycles.
There is, not surprisingly, no appetite among politicians for such a framework in The Bahamas though, and voters do not seem to care enough to demand one.
As a result, we will likely never know who is contributing to whom, and to be able to make a reasonable assessment about whether such contributions have influenced or are likely to influence government policy and decision making.
While we know that FTX sponsored some government events – like the Dubai 2020 World Expo, the state reception for the Duke and Duchess of Cambridge in The Bahamas in March, and the Hurricane Dorian Relief Benefit Concert in September, as we reported last week – we do not know just how far FTX dollars spread throughout our society, and whether any made it directly into the hands, or bank accounts, of politicians.
The veil of secrecy remains.
Back in July 2012, Perry Christie, at the time prime minister, told the House of Assembly that the two international groups that monitored the 2012 general election called for the government to create laws that would limit campaign spending.
The groups also recommended that the government prohibit anonymous donations or international donors from giving money to campaigns and create a mechanism to oversee the use of money within campaigns.
Christie claimed he knew of many instances where politicians used money to buy votes.
While in opposition in 2011, he was critical of the failure of the Ingraham administration to deal with the issue of campaign spending.
“It is critical, really, to the integrity of elections,” said Christie, adding that the Progressive Liberal Party (PLP) was looking at laws passed in the region “to ensure that we not only make sound recommendations, but recommendations that have been tested”.
No such law was ever introduced.
Fast forward to 2017 when the Minnis administration in the Speech from the Throne committed to regulating campaign financing.
It promised to “amend the Public Disclosure Act to broaden the scope of application to include campaign finance reform and to make provisions for direct referral to an independent prosecutor”.
Again, no such bill was introduced.
Under the heading “good governance”, the Progressive Liberal Party, led by Philip Davis, in its pre-election document “Our Blueprint for Change”, also makes these commitments.
It has promised campaign finance reform, in addition to a new Public Disclosure Act, code of conduct legislation, a Procurement Act and a Whistleblower Act.
Will the PLP deliver on these reforms?
Almost up to the end of the last term, the former administration claimed it would address money in elections.
In January 2021, Carl Bethel, at the time attorney general, told National Review that though the government was nearing the end of its term, legislation to regulate money in campaigns was still going to be introduced.
Political parties would be required to provide proper accounting of their campaign donations, he said, and the names of donors would be kept private and forwarded to a special commission.
We were surprised that Bethel was still insisting such legislation would be brought. We were not surprised when the term ended with no bill being introduced.
We doubt that one would have been introduced had the then-prime minister decided to run out the eight months remaining in the term.
There is no government that would deal with that kind of legislation smack in the middle of a campaign season.
Not a priority
We do not see the Davis administration turning its attention to campaign finance legislation anytime soon – if at all – even if one or two members of the administration might be strong proponents of such legislation.
Former Attorney General Alfred Sears, a constitutional scholar who is the current minister of public works, previously noted that The Bahamas on January 10, 2008 acceded to the United Nations Convention Against Corruption, which states that each signatory “shall also consider taking appropriate legislative and administrative measures, consistent with the objectives of this Convention and in accordance with the fundamental principles of its domestic law, to enhance transparency in the funding of candidatures for elected public office and, where applicable, the funding of political parties.”
Writing on constitutional reform while in private life, Sears noted: “Financial contributions provide political parties with the means to quickly travel the length and breath of the archipelago and orchestrate large conventions, rallies and distribute expensive posters, handbills, shirts, and purchase ads in the media, etc. [which] can project the appearance of momentum which will influence the voters.
“However, the long-term effect of secret campaign contributions will be voter cynicism arising out of a general impression that the political process is corrupt and/or favors foreign investors and other secret donors.”
Sears recommended that the constitution be amended to provide for the public funding of national elections, with appropriate legislation to establish a system of public campaign financing to better secure the right to vote, reduce corruption of the political process and increase competition by independent candidates and small parties.
In The Bahamas, politicians do not have any incentives or legal obligation to be transparent in the sources of their campaign contributions, and many also have no enthusiasm about following the Public Disclosure Act, which does mandate the annual disclosure of their personal assets and liabilities.
The issue of campaign financing pops up from time to time, particularly during election season.
We previously reported in National Review that in the 1980s, a bill to regulate the use of money in politics was drafted during the Pindling regime.
The comprehensive proposed act “to make provision for the registration for political parties; for the regulation and control of political contributions; for the public funding of elections and for other purposes incidental thereto and connected therewith” never made it to Parliament.
This matter was not a priority item during the three terms of former Prime Minister Hubert Ingraham either.
When he was prime minister, Ingraham said he did not believe that campaign financing laws were necessary, adding that the government cannot “legislate honesty”.
However, Ingraham said he would have no difficulty whatsoever disclosing the sources of his political financing.
“The campaign financing laws are very ineffective,” he said in 2011.
“What they spend on elections in the US is unbelievable, and they have campaign finance laws. You cannot legislate honesty. The dishonest will be dishonest no matter what you do. That’s why people still murder other people even though the law says ‘thou should not kill’.”
Pindling’s bill from more than 30 years back would have mandated that all political parties have a chief financial officer responsible for proper records, to ensure that contributions are placed in the appropriate depository and financial statements are filed with the registrar of political parties.
The bill would also have mandated that all money contributed to political parties, party branches and candidates in excess of $100 could only be made by a check having the name of the contributor legibly printed, signed by the contributor and drawn on an account in the contributor’s name or by a money order signed by the contributor.
The chief financial officer would also have been responsible for ensuring that contributions consisting of goods or services were valued and recorded.
In addition to covering a number of other key areas, including campaign advertising, the bill also outlined a number of offenses.
For example, any financial officer of a political party, party branch or candidate registered under the act, who contravened any of the provisions would have been guilty and liable to a fine of $1,000.
Again, that was 30 years ago.
Former parliamentarian George Smith previously offered an explanation for why the bill died before it was brought to the House.
“It wasn’t considered a priority,” he told National Review.
“I think we were preoccupied with other things like social legislation, a works program, trying to expand the tourism plant. We were trying to expand agriculture and the fisheries industry, growing the economy with some diversification.”
Likewise, in 2011, when Christie was critical of the Ingraham administration for not moving on the issue, Christie said the reason why he did not address it in his first administration was because other important matters took priority.
We suspect this would also be the explanation provided by the current prime minister.
In 2020, Davis said the Minnis administration’s failure to bring a campaign finance bill was more evidence that the FNM’s 2017 campaign had been built on “empty promises and political expediency”.
Davis now has an opportunity to show that he and the PLP are different in this regard.
We would be surprised if he takes up this matter now that he has the authority to move it forward.