Election Reform
20 October, 2011

Arrangement of funding is named as one of the significant factors of the election reform. To this end, several paragraphs were inserted in the new draft election code. However, the non-governmental sector believes that instead of ensuring financial transparency these paragraphs make it even more obscure.

As a reader is probably aware, the draft project sent to the Venice Commission included topics agreed on with a part of the opposition in the end of June, as well as topics authored solely by the Authorities without any previous coordination with the opposition.

It must be noted that experts and politicians place huge emphasis on the factor of funds for pre-election campaigns and the voting itself because fairness and appropriateness of elections depends on it to an extent. It was this argument that led to the insertion of a specific instrument in the agreement text to enable possible extra funding sources for political parties. Yet, non-governmental organizations do not favor this instrument.

Three non-governmental organizations – GYLA, Fair Elections and Transparency International Georgia - who worked on the election changes – prepared the joint conclusion which, among other things, examined the issue of financing and unequivocally criticized the proposed change. The draft election code envisages doubling of the legally permitted limits for voluntary contributions to the election campaign fund. Namely, today the permitted limit of physical persons for voluntary contributions is GEL 60 000. In case of legal persons it is GEL 200 000.

“It is indistinct what circumstances have led to the doubling of current limits. Existence of the upper limit is a preventative tool to neutralize seeds of political corruption. Accordingly, the raising of the ceiling for the parties advices increased carefulness. In terms of the contributions, Georgia is one of the leaders anyway,” – the conclusion reads.

Moreover, according to the draft code, those parties who will overcome 5% election barrier will receive one million Lari from the State Budget to reimburse expenses of its pre-election campaign. The draft text also obliges the receiving party to spend 300 thousand from the above said one million Lari on TV ads.

“We believe that the compensation should not be a flat sum of money for every case. Rather, it must be proportional to the incurred expenses and be reimbursed on the basis of the relevantly submitted financial report,” – this is the recommendation of the non-governmental organizations.

The draft code stipulates that on the elections day funding of election subjects at election commissions of sub-district (“Saolko”) and neighborhood (“Saubno”) election stations will be done via the State Budget. Namely, every one of them at neighborhood and sub-district election stations will get 50 and 100 Lari respectively. This decision too is busted by the above said NGOs as completely unfounded.

“It is possible that an election subject may not have any representative in election commissions. Accordingly, paying to a political party without due consideration of such facts will be a very questionable practice. At the same time, there is no obligation for the paid party to return any unspent money,” – the conclusion points out.

It is noteworthy that these topics turned up in the draft law due to the agreement between the Authorities and the collaborating opposition. Even so, a larger part of the draft text is taken up by topics which were not agreed on at all. As far as the funding is concerned, there are several of such topics. Namely, the draft law sets forth a new rule which entitles the election administration to implement state procurement in the form of simplified purchases to ensure smoothness of the process during the election (referendum) period. On top of it, any appeal against deeds and decisions of CEC or the tender commission related to purchases cannot stop the purchase procedures. This is completely unacceptable for GYLA, Fair Elections and Transparency International Georgia.

“The suggested formula is not acceptable for us. Perhaps, as an exception, this is justified in case of extraordinary elections when the administration has to function within narrower time frames. Plus, it does not require additional legislative regulation because possibility of simplified procurement during narrow time frames is duly considered by the law on State Procurement,” – says the NGO conclusion.

The funding topic, among others, introduces permission for enterprises created with partial State participation to finance parties. According to the draft law, enterprises with less then 50% of State owned shares are allowed to give out voluntary contributions to parties. In contrast, the current legislation prohibits any enterprise with State budge shares to fund political parties election-wise. This innovation was met negatively by the opposition parties because State Budget may become an instrument of unjust discrimination.

“This norm is a sham. Funding from such enterprises greatly heightens the risk of the State support to this or that party. Therefore, we believe that such paragraph should not exist in the code in the first place. Any legal person with at least one State owned share should be prohibited from such contributions,” – demands the conclusion. The three NGOs accentuated the fact that the Authorities ignored many other, election-related topics, repeatedly highlighted in the following recommendations of international organizations:

- Creation of the special independent control body to check legality of funds given to parties either regularly or for election campaigns;

- Elaboration of better rules for financial reporting;

- Publicity;

- Transparency of money transferred by the party into the election fund of its own representative;

- Periodicity of report publishing, i.e. the bank account of the campaign fund should be published not only after the elections but also during the period of the pre-election campaign;

- Companies that won the State tenders in the year preceding the elections and in the election year, should be prohibited to make contributions to the parties; By the same token, companies which fund political parties should suspend their participation in State tenders in the election year and the next year;

- It must be clearly defined that the upper limit of the contribution includes the sum of the party account and the money transferred to the fund of its representative participating in the election.