Political parties have so far failed to enact a law regulating party financing. As Kurt Sansone finds out, cynics are justified in doubting the political commitment behind the latest attempt to get things going.

In the middle of the European Parliament election campaign, a political novice on the Nationalist Party ticket urged his party to shed the perception it is financed by contractors and publish the names of donors.

When environmentalist Alan Deidun made this public statement in April 2009 he was standing in front of a quarry in Mosta. His solo action was intended to highlight environmental degradation, linking it directly to the influence of the construction industry on political parties.

Dr Deidun’s declaration was novel because it came from a PN candidate in the throes of an election campaign but it was not the first time that the issue of political party financing was linked to environmental destruction.

Party financing was forcefully put on the political agenda by Alternattiva Demokratika when it was founded in 1989. The Green Party had argued that democracy and the environment were better served if political parties were transparent about their financial backers.

In their 1987 electoral manifestos both Labour and the Nationalist party spoke of state financing for political parties but their pledge came with no obligation to publish the names of donors.

Then a government-appointed commission chaired by former President Anthony Galdes and composed among others of members from the three main parties, in 1995 proposed that donations above €11,647 be made public while making donations above €23,294 illegal. The commission also proposed state financing for political parties linked to electoral success and capped at 0.02 per cent of GDP.

However, 15 years later party financing remains unregulated, a situation that seems to be comfortable for the two largest parties, which have subsequently grown into large commercial organisations.

Even a parliamentary motion presented by Prime Minister Lawrence Gonzi in 2007 to rekindle the debate eventually ended by the wayside.

The waters were again stirred last year when Nationalist backbencher Franco Debono failed to turn up in Parliament to vote, forcing the Speaker to use his casting vote. Among the issues which Dr Debono said had motivated his action was the lack of a law to regulate party financing.

He later spoke of an “urgent need” to have such a law in place and almost a year later the Prime Minister asked him to prepare the groundwork for legislation to be enacted before the next election.

This renewed drive comes in the wake of the Labour Party’s withdrawal from a parliamentary select committee set up in 2008 that was discussing party financing, among other matters.

During the talks the Labour Party had suggested a system of state financing for political parties that would equate to €5 for each vote obtained in a general election. The proposal and others were made behind closed doors and are now destined to remain in an embryonic state.

Whether Dr Debono’s efforts will lead to concrete results still has to be seen but judging from past experience, cynics are justified in expressing doubt.

The two main political parties already each receive €100,000 a year from public coffers for research purposes and there seems to be little accountability over how it is spent.

According to Edward Warrington, the head of University’s public policy department, having a law is not enough unless the political parties are committed to it.

“There clearly is the need for some kind of law regulating party financing but the big question I have is whether a law would be more effective than a gentleman’s agreement between the parties,” Dr Warrington said.

“The stakes when campaigning for political office are high and unless legislation regulating party financing is accompanied by an efficient enforcement mechanism and the political parties are signed up to it, the law would simply be a dead letter.”

Having a law that is ignored or flaunted with impunity, he added, would only make people more cynical than they already were.

“A law would have to address not only party financing but also electoral campaign financing and expenses related to individual candidates’ campaigns,” Dr Warrington said, referring to the post-election charade when candidates solemnly declare that their personal campaigns did not cost more than the €1,400 allowed by the law.

This issue is also a matter of concern for Alternattiva Demokratika spokesman Carmel Cacopardo. The question is how wide the legal net will be cast.

According to Mr Cacopardo, the law must not concentrate solely on candidates but rope in friends and people who work on their behalf. “A politician may claim innocence and blame his helpers for wrongdoing and this is a situation the law would have to cater for. Even if a politician is honest, human nature is what it is,” Mr Cacopardo said.

Lack of disclosure by the major parties had often led to allegations of arm twisting when questionable building permits were issued, he added, insisting that donors generally consider the money an investment.

Last month during the launch of the Malta Developers Association, its president, former Nationalist minister Michael Falzon, said developers were in favour of a law regulating party financing. He also said that many businesses donate money to both major parties.

How far political parties are indebted to construction companies and large businesses will always be an argument caught in the realm of speculation as long as parties remain reluctant to publish the names of donors.

This may change when a new law is in place but the bigger question for now is whether the political parties are truly committed to transparency by literally putting their money where their mouth is.

AD seeks say

The Green Party yesterday announced that it had set up a group which was ready to take part in discussions about party financing rules.

Carmel Cacopardo and Arnold Cassola, together with Ralph Cassar who is acting as a substitute member, are prepared to participate actively in discussions on behalf of the Alternattiva Demokratika (AD), the party announced.

“While we welcome talks on party financing laws, it is too early to say if there will be any progress,” AD secretary general Ralph Cassar said, following press reports about the possible start of discussions in the future.

“Talks to introduce rules have repeatedly failed to yield any results. The Galdes Commission, way back in 1995, came to a standstill because of the Nationalist Party’s unwillingness to regulate party funding,” he continued.

Mr Cassar said AD has been calling for such discussion for the past 20 years.

Galdes Commission 1995

Majority conclusions
Disclosure of donations: >€11,647
Capping of donations: €23,294
State aid eligibility: Parties that obtain at least 3% of votes
State aid amount: 0.02% of GDP between parties (€465,875 in 1994)
Candidate expenditure: Between €9,317 and €11,647

Party positions

Party Disclosure Capping State aid Candidate expenditure
PN >€23,294 €46,587 Yes €11,647
PL >€11,647 €23,294 Yes No amount specified
AD >€1,165 €2,329 Yes €2,329

Disclosure: the amount above which the identity of donors would be made public.

Capping: the amount above which donations would be illegal. Applies to donations made in any one year by the same individual and members of his immediate family or companies he may own and companies, unions and other entities.

State funding

PN: State funding should be directly linked to a party’s popular support in a general election. To qualify for state assistance a party would have had to obtain at least five per cent of valid votes cast in an election. The level of state funding will be linked to wealth generated by the country. Funds should be earmarked for research, policy development, documentation, training and secretarial support. Funds should not be utilised for propaganda purposes. State funding should not be the only source of income for political parties.

PL: State funding should be directly linked to the popular support in a general election. During the year of a general election state assistance should be increased to reflect higher expenditure. State assistance should be limited to monetary aid and should be administered by the parties themselves and not linked to specific projects. State funding should not be the only source of income for political parties.

AD: State funding should be directly linked to the popular support that a party acquires in a general election although a reasonable minimum level has to be established. The threshold for a party to qualify for state assistance should be kept low not to prejudice new political forces. State funds should not be used to finance a party’s electoral campaign and instead be earmarked towards research, documentation, training and secretarial support. Parties should also depend on other sources of finance and the magnitude of assistance should be linked to wealth generated by the country.

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