The long-awaited law on party financing, as drafted by Nationalist MP Franco Debono, lays historic foundations for political party regulation and campaign spending.

The Times has seen an advance copy of the draft, which is still being fine-tuned by experts.

Although the draft focuses on party donations, it also speaks about financial auditing and introduces the idea of a party register to be administered by the Electoral Commission. It stipulates that during election campaigns, parties should provide the commission with weekly reports of donations.

“This will usher in a whole new way of doing politics,” says Dr Debono, who has been campaigning for this law since his first parliamentary speech.

It has been more than 16 years since the government-appointed Galdes commission came up with recommendations on party financing, which were shelved until Dr Debono was asked to draft the law in 2010.

His draft has been pre-released after another was slammed by the Council of Europe’s anti-~corruption watchdog, which was given an earlier version of the law, since rewritten by Dr Debono.

His draft states that general election candidates should not spend more than €10,000 and MEPs should not spend more than €35,000.

“But we must focus on the structure of the law at this point, not the thresholds which can still be discussed and even after the law is approved, adjusted according to the country’s needs,” Dr Debono says.

Donations

• Political parties shall be funded principally by the contributions made by its members. (No State funding.)

• No donations can be sent in the expectation of financial or political advantage.

• No donations can be given from any public corporation or parastatal body, company or entity in which the State has a controlling interest.

• Non-EU donations cannot exceed more than €1,000 unless they are given directly from the assets of a Maltese national or a business enterprise more than 50 per cent owned by a Maltese national.

• Donations can be given by political parties associations, foundations or organisations with similar ideas to the political party.

• Donations exceeding €7,000, from one source in one calendar year, shall be disclosed to the commission.

• Anonymous donations exceeding €300 cannot be accepted.

• Nor can donations exceeding €50,000 from one source within one calendar year.

• The value of any non-monetary donation shall be taken to be the market value of the gift or property in question.

• Donations exceeding €300 shall be recorded by the party together with the amount of the donation, the donor’s name and address or registration details if the donor is a company, and the date in which the donation was received and accepted.

• Whoever maliciously tries to divide the donations into smaller amounts to conceal the real amount shall be liable to a fine not exceeding €10,000 and/or imprisonment of six months.

• Political parties must prepare three donation reports per year.

• A donation report must also include every donation which has been refused.

• During election periods, the donation report must be issued each week.

Accounting

• Parties must keep accounting records such that they can disclose at anytime and with reasonable accuracy the financial position at that time.

• The treasurer must prepare an annual statement of accounts outlining income and expenditure, the end-of-year financial position, the statement of cash flows and all supplementary notes.

• Any member of a political party shall provide the relevant information and failure to do so will result in a contravention.

• Records must be preserved for at least 10 years.

• The accounts must be audited each year by a registered auditor – who will be covered by the Commission as a civil debt – who must be changed every three years.

• A person who conveys misleading or false information shall be liable to a fine or an imprisonment not exceeding six months.

• The accounts shall be submitted within four months of the end of the financial year.

• Failure to submit a proper statement of accounts shall make a political party liable to a penalty of not more than €10,000.

Campaigns

• The maximum spending by, or on behalf of candidates at a parliamentary election shall not exceed €10,000.

• MEP candidates shall not exceed spending of €35,000.

• Local council candidates contesting smallest localities (less than 5,000 people) should not spend more than €2,500. Candidates of larger localities (more than 5,000 people) should not spend more than €3,500. In largest localities (15,000 people) candidate should not spend more than €4,500.

Internal structure

• Individuals cannot be members of political parties if they do not have the right to stand for election or vote.

• Political parties do not need to give reasons for rejecting an application but no one can be debarred on the basis of gender, race, financial status, sexual orientation or class.

• Party leaders and offic­-ials must be elected democratically by the members or through democratically elected representatives.

• The members of these tribunals shall be elected for a maximum period of three years and must be independent.

• Political parties must establish internal tribunals to maintain party discipline.

• No member can be expelled from a party without being given the chance to defend himself and appeal the decision at a higher tribunal.

• Political parties may be dissolved by a court if they publicly and persistently advocate the use of violence, anti-democratic principles or the use of funds for criminal activity.

Registration

• A register of political parties, to be maintained by the Electoral Commission, will be set up.

• To be registered, parties must have a leader, an official in charge of electoral nominations and a treasurer.

• Parties must provide an approved structured plan on how they intend to comply with the financial and reporting requirements in according with the Act.

• Changes to the register may include changing the name, the party’s description, the emblem or any other information that may be requested by the minister.

• If any changes are refused, parties are to be given the chance to appeal.

• Political parties will have three months to begin complying with these requirements.