Passed in 2023 with high hopes of bringing much-needed transparency and fairness to the election process, the new campaign finance law has fallen far short of its intended goals. The law has clearly faltered in the three election cycles since its enforcement, namely the Presidential Election 2024, General Election 2024 and the Local Government (LG) Elections 2025, showing deep cracks that render it both toothless and impractical.
Having a campaign finance law merely on paper, which nobody cares to comply with or fears to break, is the last thing expected by election authorities and advocates for clean elections. Yet, the growing rate of non-compliance and the absence of meaningful punishment for violators are disturbing signs that this is exactly what is unfolding.
Election Commissioner General Saman Sri Ratnayake
The Regulation of Election Expenditure Act (REEA), which has set limits and rules to keep track of candidates’ money, is meant to preserve the sanctity of the electoral process, a cornerstone of democracy. It requires candidates and political parties to submit a report detailing all donations received and expenses incurred to the Election Commission within three weeks of the election results, regardless of whether they won or lost. Failing to do so or knowingly providing false information is considered an offence.
Turning a blind eye to the law
For the recently concluded LG Elections, the deadline to submit financial reports ends in another three days (May 28). However, according to election authorities, not even 50 percent of the candidates have submitted their reports so far. This is despite the EC coming up with an online application for the candidates to submit their reports, with the option to hand in the original hard copies at a later date.
Election Commissioner General Saman Sri Ratnayake said that responses to the app remain very low. He added that many candidates wait till the last moment to hand over the reports, taking the obligation lightly. More than 75,500 candidates were in the election fray in the last LG Elections.
Ratnayake told the Sunday Observer that 13 of the 38 Presidential aspirants and 1,064 out of 8,821 contestants in the Parliamentary Election had failed to submit the mandatory expense reports.
PAFFREL Executive Director Rohana Hettiarachchi
“The lack of awareness and interest among the candidates and political parties in the campaign finance law hinders its effective implementation. Most of them see the law as a barrier. They do not take it in the right spirit —as an attempt to create a level playing field for all candidates,” said the Election Commissioner General.
Inadequate and difficult to apply
Asked about the delay in taking legal action against those who have not submitted the mandatory reports, Ratnayake said that the preliminary steps in that regard have already been taken, but the process stipulated by the law demands time and labour. To file a case in a court of law, the EC has to inform the Police, who then have to record statements and consult the Attorney General’s (AG) Department.
For example, he mentioned that 150 out of 267 candidates in the Elpitiya Pradeshiya Sabha Election, which was held as a stand-alone election on October 26, 2024, had not submitted their financial reports.
“Then the police have to take 150 statements to file 150 cases. This is a lengthy process. When a law is made, it has to be practical. This law was rushed through Parliament in 2023, when the nominations were being called for the LG polls, overlooking the practical aspects of its implementation. The lawmakers had different motives then. Now we are made to pay for those sins,” he said.
“The Act that came out as law is not as strong as what we proposed. Some of the easily achievable steps were omitted. As a result, not only the EC but all stakeholders, including political parties, have encountered numerous difficulties. Despite all of this, the child that was born must somehow be raised. Therefore, we are in consultation with other stakeholders to sort out its practical problems,” the senior official added.
No checking or follow-up
Campaign funding should be transparent
It is under this law that the Election Commission (EC) announces ceiling limits of campaign expenditure for candidates prior to elections. The ceiling limit depends upon the total number of registered voters in the electoral area for which the election is conducted. It is an offence to incur expenditure in excess of the authorised amount. However, as of now there is no mechanism to evaluate the reports, so the veracity of the given information goes largely unchecked.
“Other than accepting the financial reports, the EC has no power or capacity to investigate and verify the accuracy of the information provided. The financial reports are displayed publicly for 10 days. If any candidate is found to have overspent, the public can complain to the police. The burden of proof lies with the person who claims that the expenditure differs from what is mentioned in the report. There has to be evidence for it,” Ratnayake said.
The election official, while explaining the pain the EC has been taking to scan and upload candidates’ financial reports to the website, expressed his dismay over public apathy in viewing and responding to them.
“Despite having them online, very few people have accessed them. We received only one complaint during the Presidential Election. Scanning and uploading takes considerable time and labour, and all of that means more money. Therefore, we are re-considering whether to upload them to the website this time. However, they will still be available for public viewing at the respective district election offices,” he said.
EC needs more teeth
Speaking to the Sunday Observer, People’s Action for Free and Fair Elections (PAFFREL) Executive Director Rohana Hettiarachchi highlighted the need to empower the EC to monitor the implementation of campaign finance law.
“Currently, it has no mechanism or legal powers to do so. Not submitting the documents within the given timeframe is a clear-cut violation of the law, but the process of applying a penalty is time-consuming. This lengthy process, in fact, is a waste of time and resources of the EC and already overstretched institutions like the Police, Attorney General’s Department and the judiciary,” the PAFFREL chief said.
He proposed imposing an automatic fine and automatic disqualification for those who fail to submit the financial report. “It does not need to proceed to the Court. They should be disqualified for at least seven years. The three-year disqualification, as in the current law, is not enough because the same candidate can contest in the next round of elections, which usually comes after five years. Such a punishment does not make any sense,” Hettiarachchi said.
While emphasising the need for a mechanism to cross-check the information in reports, he said that a Parliamentary Election candidate from the Galle District had exceeded the ceiling limit in his own report, yet had faced no repercussions.
Some key reforms were overlooked
The election watchdog chief, reminding that no-strings-attached campaign funding is hard to come by nowadays, underlined the need to restrict large contributions from a single donor.
“The donors, whether individuals or companies, often expect special favours once the candidate is elected. The initial draft we prepared, in consultation with all stakeholders, contained a provision to limit a single donor’s contribution to no more than five percent of the total expenditure. That provision has been shelved.
“Another progressive proposal that was lost somewhere in the law-making process was to make it mandatory for candidates to have separate bank accounts for campaign financing. All contributions should go into that account, and all expenses should be made from it. This would make monitoring easier.
“This law concerns parliamentarians and politicians, but they are also the ones who pass it. They have shaped it in a way that is comfortable for them. It was a clear case of conflict of interest,” he added.
Hettiarachchi, who led the International Election Observation Mission in the Philippines General Election held on May 12 as the current Head of Mission of the Asian Network for Free Elections (ANFREL), said the implementation of campaign finance laws has been challenging in many countries.
“Campaign finance laws are new to Sri Lanka, and therefore the initial implementation can be difficult. All stakeholders, including the EC and election watchdogs are learning during the implementation process.
A campaign finance ceiling is in operation in the Philippines too, but its implementation has proven challenging. However, in the Philippines, the EC has the authority to disqualify a candidate if he or she violates the law. This time, they disqualified about100 candidates, including one contesting for the Senate. Likewise, we need to develop our own system to implement the law effectively,” he said.
He recommended revising the law through proper consultation with political parties and all stakeholders, including the Police, the EC, civil society, the Inland Revenue Department and the Commission to Investigate Allegations of Bribery or Corruption.
