Data analysis on financing of election campaign

1. Data analysis on financing of election campaign Transparency – Serbia May 16th 2007.

2. Election campaign characteristics • Longest campaign until now (full ten weeks) → higher expenses • Campaign is follow up of referendum campaign → parliamentary parties use state “financial injection” and “running start” for elections • For the first time new rules for national minorities’ parties → have easier conditions for participating in elections and they get same amount of budget assets as the others • For the first time assets secluded from the budget are according to law → there wasn’t any problems that campaign 2004 had • For the first time reporting on gathered and spent assets in new form → enhanced chances for public insight and control • Largest public interest until now → hundreds of texts on campaign financing, active monitoring of work of REC

3. New form Things that it should contain: • Data on entity that submits report • Data on campaign • Data on accountcirculation • Data on other incomes (e. g. free services) • Incomes from budget • List of larger sums donors • Data on every expenditure (including unpaid) • Data on categories of expenditures • Data on destination of expenditures • Signing and verification

4. Proceedings of state organs regarding campaign financing Republic Election Commission: • Ignoring of necessity to change Rules of Procedure/ promise of officials that REC will fulfill its duties in spite of that (control, publishing, bringing misdemeanor procedures) • Consequences of decision on subsequent voting on February 8th: possibility of updating the reports and premature disposal with budget money gained on the bases of success at the elections • Contradictory decisions of REC on report publishing (sitting from February 23rd) • Late beginning of data check (20 days) and insufficientlyclearly formulated auditors’ duty (sitting from March 9th 2007) • Uncertain further proceeding of REC and annunciations that the work will be finished in time

5. Proceeding of state organs regarding campaign financing • Ministry of Finances: properly determined assets from budget, payment of assets in legal deadlines (January 24thand 31st) • Republic Broadcasting Agency: by our knowledge report on monitoring broadcasters during election campaign still isn’t published; there are no indicators that checking of respect of Guidelines’ regulations which are important from the aspect of campaign financing is conducted (if the broadcasters enabled advertising to all parties with same financial and technical conditions)

6. Proceeding of campaign participants 1. Desire to put question of campaign financing outside of center of attention • Absence of will to give information on price of the campaign while it lasted and after it although plans had to exist • Giving contradictory statements on their sources of incomes/ accusing political opponents for expensive campaigns and unknown sources of income • Possible reasons: fear for own overstepping of maximum, fear of animosity with voters because of large expenses 2. Uninterested for resolving problematic legal matters regarding campaign financing 3. Making financial plans for the campaign by their own possibilities to gather the assets or over them, regardless of legal limitations 4. Unpublished reports on campaign financing (Official Gazette, political parties’ web-sites)

7. Who did what in campaign? • Four group of parties regarding campaign behavior: • Small (4 parties and coalitions which gained less than 10.000 votes): limited scope of activities because of lack of the assets; budget as almost only source of incomes; these parties showed wider scope of expenses than larger ones – was the motivation to show that the assets gained from the budget were spent in total? • Minority parties: mostly activities limited by territory, advertising mainly on local media (cheaper), budget as main source of incomes, with all except SVM and LZS including wider scope of expenses

8. Who did what in campaign? • Parties “of middle financial strength” (SPS, SPO, PUPS-SDP, PSS): advertising on media, promotional gatherings, billboards, posters etc. less than “the large ones”. It seems that they would have larger campaigns if they had more assets. Overstepping of their possibilities (SPO, SPS) revealed in their reports • Financially most powerful parties (SRS, DS, DSS-NS, G17Plus, LDP): Conventions, commercials, rented TV space, large gatherings, concerts, street promotions etc.) in large scope. • List of activities (gatherings, visits, actions) in special table view on our web site

9. Noticed failures – Formal failures of the reports • There are no signatures of both authorized persons: PSS, SD, KVP, LDP • There are no stamps of all members of the coalition: DSS, LDP, Madjarska sloga, Koalicija Albanaca, separate reports of PUPS and SDP, • Specification of donors aren’t enclosed: LDP, URS • There is no annotation on how the unpaid expenses will be paid (SPO, LDP) • Only partial report submitted: “Madjarska sloga”

10. Unintended use of public resources • Reported use of assets PV and local municipalities (SVM and PUPS – SDP) • Using of assets from the budget of the Republic intended for financing of regular work of political parties – probably by SRS and LZS (commercial on RTS) • Using of assets gained for referendum campaign – probably with many of them, wasn’t proved • Using of public resources for party promotion (e.g.: publication “Thousand days of the Government of Serbia” distributed on party street desks, dilemmas on new year’s concert and its TV broadcast, advertising of Ministry of labor, promotion of parties through news on public labors during campaign)

11. Which expenses are included? • Question of donations’ tax – should it be paid or is it paid? • Presenting election campaign expenses without VAT (SRS) → unknown treatment of eventually returned VAT with all parties • Presenting of signature authorization expenses (only smaller parties) • Presenting of phone bills, premises rent expenses and representation (only smaller parties) • Are expenses of promotion activities presented (only partially) • In which columnare shown expenses of billboard rent?

12. Financing of election campaign continues after elections... • Reported deficitin the campaign budget (DS, LDP, SPS, SPO, RP, SVM). Aren’t provided enough guarantee that this expenses will be compensated from assets which law allows. • Statements on the bases of which can be concluded that receipts for activities are coming even after submitting reports • With all larger and most of the smaller parties indicators that they didn’t report all the unpaid receipts (local media, space rent) – conclusion which imposeson the bases of information that that we got by using demand for free access to information from local public media and space renter

13. Income structure • Common for everyone (except for list of Branko Pavlovic): Direct paying of campaign expenses with money gained on the basis of success in elections – what would be if the success was smaller? • Membership fee: significant with DSS, SPO, SVM and PUPS, unexpectedly small with DS and SPS, complete absence with SRS, G 17 and LDP • “Incomes from property” only by SRS (if the source is stated properly?) • Legacy – only with LZS (no indicators that this is really income from that source)

14. Income structure • Donations of legal entities: rarely. Exception are PSS and PUPS-SDP (overstepping of legal maximum) • Donation of physical persons are often used. Unordinary: no one except from G17 plus and RP has donations below 6000 dinars! • No data for LDP • Obvious avoidingof the Law: donations of PSS with repeatednames of the same donors to coverthe fact that max is overstepped

15. Expenditure structure • Mainly expenses of media and billboard advertising • In neither larger campaign expenses of promotional gatherings and transportdo not exceed one tenth of total expenditures! • Often indirect paying (over engaged agencies), which is not illegal, but lowers possibility of insight and control • Improper entry of certain expenditures (e.g. expenses of TV commercials into “preparation of spots” with SRS and PSS)

16. Conclusions • Progress in campaign financing: more information available to REC, greater interest of public, public obligation that REC will perform its control function Problems: • Reports aren’t published • Parties do not feel the need to reportto voters information on incomes and expenditures • Insufficient guarantees that the reports will be accurate and complete • Campaigns more expensive than financial possibilities of parties, which more gladly enter into conscious risk of breaking the law than to renounce the opportunity to promote themselves, which is serious threat for democracy • Suspicions of public into hidden rich campaign sponsors aren’t disposed, whether they were closeror not → campaigns were expensive, but that still doesn’t mean that they were paid • Surprisingly large number of cases of formal obligations disrespect of election participants when collecting assets, spending assets and reporting – lack of experience or negligence because no one was sanctioned until now? • Majority of participants at the elections hasn’t reported all the expenses of campaign • Unresolved relation of media and politicians: Do media underlieof the pressures enabling great promotion or do they have power to conditionpoliticians to achieve large onetime profit and their accommodations? • Strong clues on various aspects of abuse and inappropriate spending of budget assets • Uncertainty considering further happenings → keys are currently in the hands of REC