Money and political parties: Of big players and their big money

Zdravko Saveski

Money should not influence the election result and decide who should be in power in a democratic country. The one that has the most support is the one that needs to rule. But, the rules of the game of democracy in capitalism are such that not having significant finances makes it difficult, and sometimes even impossible, to get wider election support. The ones that have money can pay individuals to participate in the campaign; they can also pay for advertisement and billboards, and can buy votes as well. All this is cannot be done by parties with lack of financial power, their voices does not reach the voters, so the conclusion is undeniable: Money influence the election result.

In order to reduce the influence of money in politics, there are legal attempts to control this. For instance, in some democracies, mostly where the labor movements had greater influence, political advertising on radio and television is completely forbidden (as it is in Great Britain, France, Ireland, Belgium). While in countries where democracy is just a façade, there are legal loopholes through which the ones with money push their influence. Let’s review the Macedonian situation.

According to the valid provisions of the Electoral Code, parties in the election campaigns are limited in spending money to the amount of 110 denars per registered voter. At first glance, this even seems to be a restrictive solution. Even if we take into account that in 2015 the amount “drastically” has been reduced from 180 to 110 denars, there is no one reasonable who would argue this, right? But let’s have a better look. In the election in 2016 there were 1,784,416 registered voters. This means that every participant in the election was not allowed to spend more than 196,285,760 denars (about 3.2 million euros). Suddenly, the sum is not that small. On the contrary. It’s huge. How enormous it actually is can be seen when determining the actual costs of the parties in the campaigns. The party with the most expenses, VMRO-DPMNE, has spent more money than all other participants in the election combined (two compared to 1,8 million euros), while the one that spent the least, Levica, participates with 0,09 percent of the expenses of the party that spent the most. When the maximum level of expenses in the election campaign legalizes this kind of situation, it is clear that the law tolerates unequal position of the participants in the election and the legally confirmed level of maximum expenses does not function. The elections in Macedonia testify to even more drastic dispersal of money in the amount of a staggering 4.4 million euros that VMRO-DPMNE spent on the 2011 election, but the question remains: is the objective of the existing legal provision is to enable at least a little fair election contest or to favors financially powerful parties? As a reminder, not too long ago, in 2002, the maximum level of expenses in the election campaign was much lower and amounted to 15 denars per registered voter. In 2006, this level moved up to 60 denars, and after only two years it jumped to 180 denars.

Two other issues related to the election costs of the parties should be pointed out, and which also contain a tragicomic element. First, the total cost for exceeding the maximum level of spending in the election campaign in 2015 was increased from 4,000-5,000 to 9,000 euros.

Second, if we compare the amounts of the financial reports of the parties in the first and second part of the campaign in 2016 with the amounts they reported in the total financial statements for the entire campaign, it can be noted that they do not match at all. In doing so, deviations can be drastic.

What is most characteristic case is the one with SDSM, when this party reported  a total financial sum that is 520,000 euros (about 94 percent) higher than the amount reported for the first and second part of the campaign. This enormous deviation, which is not against the law, completely devastates the need to submit financial reports during the election campaign and, among other things, enables rich parties during the campaign, that is, prior to the vote, advertise themselves that they do not spend excessive amounts of money, and thus create a positive image for themselves in the public eye.

Some parties can spend huge sums of money not only in election campaigns, but also in general, because the law allows an enormous influx. For a party, as VMRO-DPMNE to become the richest party in Europe in a poor country like Macedonia, it does not have to do illegal things. Through the high level of both private and public funding that they provide, the legal provisions allow huge amounts of money in some parties.

The private financing of parties can be done by individuals and legal entities, where in Macedonia donations for political parties are maximized to 150 average net salaries from legal entities and 75 average salaries from individuals (56,600 euros from a legal entity and 28,300 euros from an individual), and during the election campaigns – up to 30,000 from a legal entity and 3,000 euros from an individual. The maximum amounts of election donations in 2006 were set at 20,000 and 5,000 euros, in 2014 the amount for legal entities jumped to as much as 50,000 euros, in order to determine some mean value between 2015 in the initial legal solution and the subsequent excessive intrusions in the Election Code. How realistic is it to expect that someone would give 30,000 euros without expecting anything in return? It is clear that this is a legal solution that favors the wealthier citizens and parties that represent their interests.

In public funding, it is particularly noticeable is the attempt by legal provisions to create an impression among the public that the sums received by the parties are not so high. Public funding itself is done on two grounds. On the basis of the Electoral Code, each party that won over 1.5 percent in the election district receives 15 denars per received vote. On this basis, VMRO-DPMNE received about 110,000 euros for the election in 2016, while SDSM got 106.000 euros.
The public is far less informed about the second, financially more important basis for party financing. Namely, for parties that have secured mandates or won 1 percent of the votes, they provide money in the amount of 0.06 percent of the total source revenues of the budget of Macedonia each year. The Ministry of Justice does not inform the public regularly of the annual amount for the parties and the amount of money transferred to each party. So the question remains – Why is it so? To keep the public uninformed? Based on the demand for information of public interest, we have the information that in 2017 they secured 1,7 million euros, and the political parties received the most are: VMRO-DPMNE – 407.000 euros and SDSM – 294.000 euros.

Hundreds of thousands of euros on this basis, hundreds of thousands on that basis, a few tens of thousands of this company, and from that company – and the money is collected. In an economy that seems to not move anywhere, some parties make big money. In order not to know the big funders of the parties, the biggest inflow of funds is paid through the members of the parties, who, sometimes, do not themselves know that they have paid a donation.

There is too much money in politics in Macedonia. And nobody gives money away for free. We cannot expect that there would be no corruption, nor have a fair election process while the political parties have the legal option to manage great sums of money. Laws have to be changed, but in an essential way, and not let any open doors for big sums of money to reach the political parties. Without this, only parties with great financial funds will be able to remain in power, and they will represent the interests of those who gave them those funds. And democracy will not be of public interest.

The author is a political scientist and a member of Levica