Election observers urge campaign finance reform

Cayman needs to draft proper legislation to regulate referendums and tighten rules on campaign financing, an international group of observers has recommended.

The Commonwealth Parliamentary Association said the legislation drafted to allow the three referendum questions posed alongside April’s general election was “minimal in substantive regulatory content” and was “inapplicable for future votes”.

The association’s team from the British Islands and Mediterranean Region added that campaign costs were one of the “most contentious” topics among people who spoke to the mission.

The observers’ report highlighted there were flaws and gaps in the present arrangements for campaign spending and that the expenditure limits should be reviewed.

It added that the lack of rules regarding donations from foreign donors and the reporting of accrued campaign costs should be looked at.

Donations of more that $10,000 must be declared and campaign expenditure per candidate is pegged at $40,000 over the official eight-week campaign.

But the report, which followed a preliminary assessment in May, said, “Most candidates that the mission met with criticised this spending gap as outdated and insufficient, given rising campaign costs.

“Independent candidates also noted inequity as political parties can spend $40,000 per candidate, amplifying their overall campaign capacity.”

The report added that donations to candidates from individuals and entities, including overseas funding, private donors and political parties, were legal.

But the team said, “International guidelines advise that political parties should be restricted in their ability to receive funding from foreign sources. Candidates cannot receive donations from the state or an anonymous source.”

The report added that money spent before nomination day was not regulated or reported, which created a “transparency gap”.

It added, “This has raised concerns among stakeholders as significant funds may be spent prior to the official campaign period, including on media, printing, office space and staffing.

“This significantly limits transparency and enforcement.”

The report also highlighted that the Election Office receives the financial reports but had no powers or capacity to investigate incomes and expenditures in detail and that no other official body was mandated to examine submissions.

It said, “Despite recent efforts of the election supervisor, and others to reform the campaign finance regulations, no action has been taken to date.”

Referendum issues

The report said there were no regulations at all on referendum spending, which left major loopholes that were open to abuse.

It added, “This regulatory void raises concerns about the potential for unregulated and undisclosed funding to influence outcomes and undermine fairness.

“The Cayman Islands campaign finance laws lack transparency, accountability, and oversight, comprehensive regulation and enforcement, particularly outside the official campaign period and in referendum contexts.

“To promote transparency, ensure equity among candidates and align with international best practices, legal reforms are needed.”

The referendum questions involved the construction of cruise ship piers, which was rejected, and questions on the decriminalisation of small amounts of cannabis and the creation of a national lottery, both of which were approved.

The report said the legislation to allow for the votes was “very slight in content, setting out in minimal measure how the referendum would be managed concurrently with the parliamentary elections”.

It added, “The law is silent on important matters such as the formulation of the referendum questions, the regulation of campaign advocacy on the referendum questions, campaign finance, the provision of impartial information to explain both sides of the referendum questions, the role of the media and lobby groups and other measures necessary to ensure equity and fairness in the conduct of the referendums.”

The report said, “While there are no binding international standards on the conduct of referendums, the European Commission for Democracy through Law – the Venice Commission – has elaborated guidelines on the holding of referendums that offer insight into good practice in this field of representative democracy.”

Electoral boundaries

The observers added that the boundaries for electoral seats were uneven and unfair and worked counter to the principle of one individual, one vote, and all votes being equal to each other.

But the report said, “The rules on equality have not been well respected as the boundaries are out of date and the numbers of voters in constituencies deviate from the rules.”

It contrasted West Bay South, retained by André Ebanks, now the premier, which had 1,773 voters, the largest constituency, with East End, retained by independent Isaac Rankine, which had 899 registered voters.

The report said constitutional rules stipulated that a boundary commission should be appointed by the governor no later than eight years after the last commission report was submitted.

But it pointed out that the last commission had reported in 2015, with its recommendations implemented for the 2017 general election and also used for the 2021 contest.

The report added a 2023 boundary commission report was rejected by Parliament in 2024 and again in 2025.

It said, “As the recommendations from 2015, the boundaries, as noted above, fail to reflect demographic changes that have taken place in the Cayman Islands during the past decade.”

Read the full Commonwealth Parliamentary Association British Islands and Mediterranean Region election observers’ report here.