Election campaign financing 20062007

1
Election campaign financing 2006/2007

• Transparency - Serbia
• January 2007

2
Why is important to monitor campaign financing?

• Campaign affects voters
• Political parties spend a lot of assets for a
  short period of time in the campaign
• Campaign donors affect to decisions of current or
  future authority carriers
• Parities which dispose with public resources are
  tempted to use them

3
Initiative reporting form

• Initiative to change the reporting form for
  reporting on campaign financing. Success media
  support and Ministry of Finance support
  adoption on November 8th 2006
• Important innovations
• Obligation and appropriate column for presenting
  gifts in the form of free or less paid services
  of physical persons and legal entities 
• Obligation to submit the list of donors over 6000
  RSD
• Clear instructions that the budget as source of
  incomes for campaign financing can be stated only
  if the assets are really received from the budget
  (cant be accounted in advance)
• Presentation of the structure of expenditures
  (according to types of expenses stated in the
  demand)
• Specification of the destination of expenditures
  (e.g. how much and to what TV station is paid for
  advertising)
• Obligation of verifying the reports from all
  members of coalition
•  

4
Initiative for changing the REC Rules of procedure

• Problems No sanctioning of violation of rules on
  campaign financing unsecured publicity of
  reports insufficient control capacities
• Initiative is based on the opinion which we
  received from Ministry of Justice, according to
  which REC is authorized to bring misdemeanor
  procedure (before misdemeanor court) for observed
  breaking of the Law on Financing of Political
  Parties which refers to election campaign.
• Second part of initiative refers to REC to
  determine as its obligation to publish reports on
  campaign financing at their web site, and to
  publish in the same way their report on
  conducted control.
• Third part of initiative is to define the subject
  of data check" performed by REC, so that it can
  comprehend completeness, timeliness, accuracy...
• Fourth part of initiative refers to REC to ask
  from authority organs resources for conducting
  control (engaging of auditors).

5
Possible greater role of RBA related to campaign
financing

• In the letter to RBA we asked for information in
  which way will RBA check if broadcasters
  fulfilled the obligation to treat in equal way
  participants in election campaign (e.g. if the
  broadcasters offered same conditions for
  advertising to all parties)

6
Programs and campaigns of elections participants

• Letter addressed to all election participants
  (parties, coalitions, citizens groups). In this
  letter we asked for their election programs, list
  of activities during election campaign (e.g. list
  of gatherings, campaign plan by billboards and
  the like), extracts from statute (harmonization
  with the Law on Financing of Political Parties).
• Only one answer till now
• By insight on the web sites of campaign can be
  seen that negligible number of them has at all
  published program

7
Information on campaign financing for future
analysis

• Data from official reports
• Data on price of renting media space and duration
  and the number of advertisements
• Data on price of renting the space for promotion
• Second available data on sources of financing and
  assessments on campaign expenditures

8
Budget financing

• According to decision on using assets from budget
  reserve for campaign financing 323.026.000 RSD is
  secluded from budget.
• Law says 0,1 percent of the republic budget
  reduced for transfers to other levels of
  authority and organizations of obligatory social
  insurance
• On the bases of what is this amount calculated?
  It should be taken into concern budget amount for
  2006, since the one for current year still isnt
  adopted.
• By calculating in two criteria, from budget
  should be secluded 370, that is 384 million RSD
  for this purposes more than it was secluded in
  practice.
• Consequences of late determining
• Campaign participants, especially smaller
  parties are uncertain to how much money can they
  count on from the budget
• Legal uncertainty regarding the amount of assets
  which can be collected from private sources,
  amount of total campaign expenditures and amount
  of single donations of physical persons and legal
  entities

9
The way of allocating the money and limitations

• To every list 3,23 million RSD from the budget
  before the elections (unspent is returned to
  budget)
• For every parliament seat taken 1.033.683 RSD is
  paid to the list (10 days after the election)
  they have the right to keep that money if they
  spent it in the campaign
• It can be collected and spent (from donations,
  membership fees, incomes from party property)
  64.605.200 RSD at the most. Who gains ¼ of
  parliamentary seats has the possibility to refund
  from the budget expenditures of complete campaign
  (if it was in the scope of legal limits)
• Donation of one legal entity up to 1.292.104 RSD
• Donation of one physical person up to 323.026 RSD

10
Impact of the limitations to the course of
campaign financing

• Small amount of money from the budget for usual
  way of leading the campaign (large number of
  participants)
• Striking avoiding of majority to declare on the
  sources of financing and amount of expenses in
  advance
• Loans and delayed paying using Law loopholes
  or breaking the Law?
• Consequences of previous small allocations from
  budget
• 1. Increasing dependence of parties from their
  donors
• 2. Parties which have more chance to gain incomes
  from membership fees and their own property are
  in advantage
• 3. Parties which have more possibilities for
  using public resources are in advantage

11
Some features of election campaign which affect
to its price

• This campaign is probably the longest, and by
  that probably more expensive than earlier ones
  (lasts round 70 days).
• Possibilities of advertising are better then
  before (e.g. more space for placing billboards)
  but expenses are larger (e.g. prices of political
  marketing are twice as higher than for regular
  advertising).
• Second feature which increases campaign expenses
  is that organizing of gatherings in closed spaces
  is much more frequent than gatherings at the
  squares.

12
(Un) ordinary using of public resources

• Announcements of large investments, works,
  promotions of authority success at the republic
  and local level as party success etc.
• Specific of this election campaign is that its
  precursor was referendum for which neither party
  hasnt placed its bills (if we exclude the
  information from DS that they returned unspent
  amount), and all parliamentary parties got budget
  money for promotion of referendum and used it as
  introduction in promotion of pre electoral
  campaign.
•  
• Separate question is using the assets intended to
  financing of regular work of political parties
  from the budget for election campaign. It is
  against the Law, but is often thought wrong that
  it is allowed. Some parties even speak openly
  that they use this assets for campaign.

13
Questions to which we should turn our attention to

• Respect of formal demands for reporting one
  step forward would be if all participants would
  fulfill their obligations for showing structure
  of recollected and spent assets, completely and
  in time
• Will all of them practice the same methodology
  when reporting important for mutual comparing
• Large possibility that many of the participants
  will exceed established limitations if in the
  future the limit should be increased or by other
  measures limit the expenses?
• Uncertainty regarding completeness of control and
  its consequences (crucial role of REC, but also
  the necessity of public support and securing
  financial and other conditions for conducting
  control)