Financing of all parties depends on several dozens of persons. Info-Prim Neo interview with CreDO director Sergiu Ostaf

[ - In the previous election campaign, the Resource Center for Human Rights (CReDO) and the Center for Partnership Development carried out the study “Financing of political parties in the November 28 parliamentary elections”. As far as I know, you will make the results of the research public only now. Why did it take so long?] - There are two main reasons. The first is that the study is rather complex and was made in a short period of time, of 2-3 months. The second is that the findings are very sensitive for society. This research is unprecedented not only in Moldova, but also in the region. It is comprehensive and profound. There are covered such areas as 1) analysis of the donors of parties (on the basis of the lists possessed by the Central Election Commission and the the public income statements); 2) assessment of the incomes in the campaign and of the incomes in general (on the basis of the information provided by the CEC); 3) analysis of the expenditure; 4) monitoring of the de facto costs for organizing public events and meetings, the publication of electoral materials, the appearance of commercial electoral advertisements and hidden publicity, the personnel-related costs, etc. The difficulty resided in the correct collection of observable data and the qualitative approval of the de facto costs in comparison with those recorded by the CEC. The findings and conclusions of the research point to an alarming situation as regards the financing of political parties. Currently, the political parties are very much financially dependent on a narrow circle of large donors. It seems that the political parties do not want the circle of donors to be widened as this implies greater responsibility towards the electors-donors. But the financial dependence on a narrow circle of donors hinders the development of an open system of competition inside the party. The parties continue to be perceived negatively (the parties are ranked the last but one in the Public Policy Institute and Galup studies after the police). The political parties declare only a part of the costs that they incur. These findings are extremely sensitive. [ - To what extent was the previous election campaign transparent and legal? What should we expect from this year's election campaign?] We can determine this by making comparisons with other countries (we can compare Moldova with Ukraine/ Russia or the Netherlands/Czech Republic) or by analyzing how the electoral legislation was observed. There is certain transparency, but it is not sufficient in Moldova for creating an atmosphere of trust and making the parties more responsible towards the people, supporters, party members and donors, including potential donors. If such a situation persists, we will witness the further degradation of the political parties as entities and as democratic institutions, without exception. The requirements as regards income reporting are summary and too general. In the previous legislative elections, the parties did not comply with the these requirements and neglected the CEC's requests to present the required information. The analysis of the lists of donors shows that there are non-authentic donors and donors lacking financial capacity to donate. The existence of these categories of donors is not accidental, but systemic. As regards the expenses, a large part of them are not reported in accordance with the Election Code. The costs for the personnel, the parties' electoral staff, electoral consultancy services, organization of sociological researches are not fully reported. The costs for the electoral materials and organization of public events, especially concerts, are only partially reported. Assessments show that the real costs are practically double compared with the reported ones. Consequently, the transparency of costs is not ensured. Regrettably, the real costs that will be incurred in the local general elections will most probably not be fully reported. It is only several months since the last elections of November 2010. Thus, the recommendations formulated in the report, which are aimed at making the political parties more responsible and their activity more transparent, have not been implemented by decision makers. There are signs that the situation will not improve much. [ - What are the main shortcomings of the system for financing the election campaigns of parties and independent candidates?] - The main drawbacks as regards incomes are: ▪ the cap on donations is too high (1.5 million lei for private individuals). The high ceiling stimulates the political parties' dependence on large donors and discourages the wider participation of persons and small donors. That's why it must be decreased 100 times; ▪ only 0.03% of the persons written in the electoral lists make donations. Over 80% of the spending declared by the political parties represents donations made by several dozens of people. In reality, as the costs are larger and the real incomes are higher, the number of larger donors is also higher. The circle of donors for political parties should be broadened, including by working out fiscal mechanisms for encouraging the direction of a certain percentage of the tax for these purposes; ▪ the state does not finance the political parties, especially the activities performed by the parties between the elections and the formulation of platforms and policy proposals. This makes the political parties vulnerable and dependent on certain economic circles. The main shortcomings as regards costs are: ▪ the costs reporting requirements are not sufficiently specific and concrete. The CEC does not have the ability needed to monitor and impose conformity with the given standards; ▪ the CEC does not have adequate capacity to collect evidence and prove the discrepancy between the real costs and the reported costs, including the difference between the payments for remunerating the electoral staff of parties, producing electoral materials, organizing public events, etc; ▪ the civil society actors and interested sides cannot report violations of the legal provisions concerning cost reporting, committed by the political parties, to the CEC and other competent bodies. Other election contenders have the right to report such violations; ▪ the Broadcasting Coordination Council does not monitor how the broadcasters comply with the requirement not to post more than two minutes of paid advertisements a day. Some of the broadcasters do not observe this norm. [ - Why do the parties hide the real costs incurred in the election campaign and the information about the donors?] - There are a number of reasons why the political parties do not declare all the costs, including: 1. they use a part of the undeclared incomes. The origin of a part of the incomes is dubious as the money comes from undeclared sources and donors. Hypothetically, we can say that this money is provided as a reward for clientilism/favoritism or for protectionism; 2. the bodies that supervise how the financial resources are used in the election campaign (the CEC, the Tax Inspectorate) do not express interest in becoming involved, do not have adequate legal and resource instruments and are dependent on the political environment. At the same time, civil society is limited in promoting the public interest and carrying out activities to make the political parties more responsible; 3. in order to avoid criticism from society and from potential voters and current supporters of the parties as regards the large sums of money spent in the struggle for power. It is a kind of political hypocrisy because Moldova is not a wealthy country, but every political party spends by tens of millions of lei during one election campaign; 4. we are captives of certain game rules (laid down in the past and perpetuated by the current political class) of the political class for which the money is a source of power. It is an absurd mentality that is against the public interest, but civil society and society in general tolerate this situation; 5. the leaders (representatives) of parties want to hold levers of financial influence in the party and the control over the undeclared financial resources make the supporters and members dependent on the party's administration and discourage internal competition. Some of the parties did not post the list of their donors. They argue that they fear negative consequences, but the argument that the parties have money whose origin is not clear seems more plausible. [ - Do unofficial financing imply risks for the person and society? Why should the parties ensure transparency when financing the electoral process?] - The finances are an important element in the work of the political parties. Consequently, the non-transparency of the parties make the people lose trust in them (the surveys show that the parties are the least trusted after the police), discourages democratization by internal competition and collegiality in decision making within the parties. In general, we see that the process of making the country democratic by ensuring transparency in the use of money is hindered. The non-transparent political parties promote the same rules as regards the establishment and functioning of the state institutions. This is serious and inadmissible. The whole society is exposed to risks. [ - Your statement “A very narrow group of persons finances all the political parties in Moldova”, which was made the title of a news story of Info-Prim Neo {published on March 9} aroused interest. Can you now explain it?] - The given statement can be easily argued. Officially, about 700-800 persons (a declining number) donate over 50 million lei (an increasing figure), which is the official cost of the election campaign of all the political parties taken together. By analyzing the data provided by the CEC and by calculation, we determine that less than 20% of the donors contribute 80% of the given sum. In fact, the donors in Moldova represent 0.046% of the number of voters. In the developed countries, this figure is 5-9%. Thus, about 100 persons or up to 15 persons in every party (of the 7-8 parties with important incomes) provide 80% of the financing. In reality, the observed/real costs increase the real cost of the campaign at least twice, from the contributions made by large donors. Consequently, the important backers that donate over 80% of the financing for a party in the elections constitute up to 10 persons per party. The identity of the donors – private individuals or economic entities – can be established. But it is more important to promote policies aimed at freeing the parties from this financial over-dependence on a limited group of people, within a medium term. This will make the political parties more democratic. The goal can be achieved by: a) decreasing the expenditure cap about 100 times; b) strictly reporting how the money is used ; c) providing subsidies from the state budget (by observing the previous condition), d) identifying every donor, etc. [ - Will you monitor how the current election campaign is financed? Can the situation improve?] - We will monitor the financing of parties in the local general elections of June 2011 as well. The methodology developed and piloted by us in the November 2010 elections enables us to significantly reduce the monitoring costs. The findings and recommendations contained in our February report “Moldova: financing of political parties in the November 2010 legislative elections” are medium- and long-term ones. The conclusions and recommendations of the report will be debated during the discussions on the necessity of democratizing the management of the political parties' money. I think that the sincere discussions and debates involving the political parties, civil society and development partners will have a positive impact on the transparency and more democratic management of the finances of the political parties the next years. [Dumitrita Ciuvaga, Valeriu Vasilica, Info-Prim Neo]