O vercoming I mpediments to R eform

1. Overcoming Impediments to Reform Josip Kregar- University of Zagreb School of Law Trg Maršala Tita 3 HR 1000 Zagreb, Croatia josip.kregar @pravo.hr ++385 14597 522

2. The Politics Politics is the process and method of gaining or maintaining support for public or common action. Although it is generally applied to governments, politics is also observed in all human group interactions including corporate, academic, and religious. Political science is the study of political behavior and examines the acquisition and application of power, i.e. the ability to impose one's will on another.

3. Polics: two forms of the duty Es gibt zwei Arten, aus der Politik seinen Beruf zu machen. Entweder: man lebt “für” die Politik, – oder aber: “von” der Politik.

4. Aber der, der das tun kann, muß ein Führer und nicht nur das, sondern auch – in einem sehr schlichten Wortsinn – ein Held sein. Nur wer sicher ist, daß er daran nicht zerbricht, wenn die Welt, von seinem Standpunkt aus gesehen, zu dumm oder zu gemein ist für das, was er ihr bieten will, daß er all dem gegenüber: “dennoch!” zu sagen vermag, nur der hat den “Beruf” zur Politik. Only he has the calling for politics who is sure that he shall not crumble when the world from his point of view is too stupid or too base for what he wants to offer. Only he who in the face of all this can say 'In spite of all!' has the calling for politics. Politisc as Vocation

5. Die Politik bedeutet ein starkes langsames Bohren von harten Brettern mit Leidenschaft und Augenmaß zugleich. Es ist ja durchaus richtig, und alle geschichtliche Erfahrung bestätigt es, daß man das Mögliche nicht erreichte, wenn nicht immer wieder in der Welt nach dem Unmöglichen gegriffen worden wäre. Politics is a strong and slow boring of hard boards. It takes both passion and perspective. Certainly all historical experience confirms the truth--that man would not have attained the possible unless time and again he had reached out for the impossible

6. Money and Politics • “There are two things important in politics. The first is money • and I can’t remember what the second one is”. • Mark Hanna,1904

7. The party finance reform and regulation of electoral campaigns, beside the manifest goals have effects in development of participative political culture. It is a learning and constructive process and not a set of tricks to make politics a vocation for the honest people Learning or tricks/lerning tricks

8. Increase of costs Professionalism Public relations Electronic media Trading of influence Lobbyng costs Oligarhisation The changing nature of political campaignes

9. Money lies at the root of several political evils: (1) Corruption. Politicians and parties may be tempted to give improper favours in return for political contributions. The search for founds has often led to corruption. (2) Unfairness. Money may lead to unfairness and may distort electoral competition. (3) Financial barriers against standing for political office. The health of democracy demands that members of every group – rich or poor - should be able to undertake a career in politics.

10. Inside the parties: soft money and hard governance • Who care about integrity? Parties are organizations • Oligarhization and concentration of power and knowledge on finances • Records and secrecy, books and soft money, audit • Connections and influence of donors (“no free lunch”)

11. Democratic politics cannot proceed without financial resources. Political parties would be unable to organise themselves, politicians could not communicate with the public, and election campaigns could not be held if money was not collected. Therefore political funding is not only indispensable, it is also desirable.Nevertheless, the financing of politics has led to severe problems in most democracies. The first lesson from Western experience is that there are no simple solutions to these difficulties.

12. Types of Regulations Limits on expenditures. Contribution limits. Restrictions on the amounts an individual is permitted to donate. Disclosure regulations. Mandatory declaration of the names of contributors to campaigns and to parties and disclosure of the amounts contributed by each. Bans against certain types of contribution. For example, the regulation or restriction of political payments by business corporations, trade unions or foreign organisations and foreign citizens.

13. Types of Regulations2 Bans against certain types of expenditure. Measures designed to encourage donations: Tax reliefs, tax credits and other forms of tax remission on political donations. Subsidies-in-kind: For instance, free postage for election literature, free or subsidised facilities to parties for broadcasting on television or radio. Public subsidies: Financial payments to parties or candidates from public funds.

14. Rational balance of financing (public and private) Fair criteria for distribution Strict rules and limits of private donations Limits to overall costs of campaigns Full transparency of accounts Independent auditing body Sanctions Recommendation 1516 (2001)22.May 2001

15. The ban on foreign donationsto political parties and for open declaration of donations at the level of £5,000 or above. Committee report in using the concept of an "impermissible source“i.e. anonymous, a company donations or "third parties". The Electoral Commissionhave the function of receiving accounts and reports of disclosable donations from the parties and a duty to investigate discrepancies State funding of political parties+free mailing free airtime for election broadcasts for the political parties tax relief on political donations). THE NEILL COMMITTEE REPORTBritish System

16. Why are Political Financing Regulations Often Evaded ? The professional politicians are encouraged to engage in a creative search for potential loopholes. The ill-considered reform proposals. Reform legislation has a tendency to create new and unexpected problems.

17. Why are Political Financing Regulations Often Evaded ?  (1) Loopholes. Although contributions to political parties and to election campaigns are two of the most important and most direct channels through which money may be use to influence politics, they are not the only ones. Restrictions on the financing of parties and elections are likely to prove ineffective if other forms of 'politically relevant' financing remain unchecked. (2) Inadequate enforcement. In a field as controversial and complex as the funding of parties and campaigns, laws require effective supervision and implementation. Election law has been a burgeoning field of activity - and of profit - for the legal profession.

18. Get money first: virtue comes after (Horace)

19. Scandals or Standards • Scandalisation of political life is not a regulation • The standards are flexible, the rules adaptive • The balance: protection of privacy, excessive administration etc.

20. Emphasis and Highlights • Financing of political parties is priority in anti corruption • Standards and principles of regulation are developed, in spite of loopholes and abuses • Respect for local circumstances • The Role of Civil Society • Internal organizational issues of political parties

21. CONFLICT OF INTEREST REGULATING THE PREVENTION OF CONFLICT OF INTEREST OF PUBLIC OFFICIALS

22. WHICH APPROACH? • LAW • CODE OF ETHICS • NONE

23. Public officials • President of the Republic • Members of the Parliament • Members of the Government • Deputies and assistants to ministers • . • . • Total: approx. 400 persons

24. General Prohibitions Officials shall not: • receive or request any gifts or any other advantage or any promise of a gift or any other advantage for the exercise of their office; • exercise or acquire an entitlement in the case where the principle of equality before the law is violated; • abuse the special rights of officials arising from, or necessary for, the exercise of their office; • receive additional remuneration for work done in exercising public office; • give promises or exert influence over decision-making; • request, accept or receive anything of value or any service for voting on any matter or exerting influence over a decision of a body or person; • promise employment or any other entitlement in exchange for any gift or any promise of a gift; • give preferential treatment to persons on the grounds of their party or other affiliation or origin, or personal or family connections; • deny access to their financial transactions; • exert influence over the assignment of tasks or commissions by the state; • accept direct payment in cash for themselves or for anyone else; • use for personal advantage, or for the advantage of a related person, non-public knowledge concerning the activities of state authorities; • use public office in any other way in order to exert influence over the decision-making of legislative, executive or judicial authorities, with the aim of gaining personal advantage or the advantage of a related person, a privilege or an entitlement, or to conclude a legal transaction or in any other way to favour personal interests or the interests of a related person.

25. Obligations • Report with data on property, permanent or expected income, property of a spouse and children • Tax card is considered a public document for the purpose of the Law • Responsible and economical use of public property • Registration of remuneration • Notification of influence exerted on official’s impartiality • Duartion of obligations

26. Receipt of Gifts • Definition of a gift • monies • objects • entitlements • services without remuneration • any other advantage • 3 types of gifts; division by value • 1. may be kept and should not be reported • 2. may be kept in principle and should be reported • 3. may not be kept • special category (money, securities, precious metal)

27. Officials – entrepreneurs? • Shares in companies • Divestment? • Trust? • Blind trust? • Officials as members of management boards and supervisory boards? • Public companies • Private companies

28. Supervisory body • Commission for the resoulution of conflicts of interest • Composition • Legal ground for activity • Procedure

29. Sanctions • Rention of part of net monthly salary • Warning • Publication of the Commission’s decision - Constitutional problem and possible solution

30. Objections to the draft law • Code of conduct instead of a parliamentary bill • Law is “anti-entrepreneurial” • Law suggests that all entrepreneurs have “dubious moral” • Law would discourage involvement in politics • Law is “anti-constitutional” • Law is too strict