| Italy: Integrity Scorecard Report > Sub-Category: Political Financing | ||
| Indicators | Score | |
| 20 | Are there regulations governing political financing? | 57 |
| 21 | Are the regulations governing political financing effective? | 58 |
| 22 | Can citizens access records related to political financing? | 83 |
Indicator and sub-Indicator Details
| 20 | Are there regulations governing political financing? | |||||||
| 20a: In law, there are regulations governing private contributions to political parties. | ||||||||
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Comments: Since 1974 (law 195/74) there was a system of public/private financing of political parties. In April 1993, part of this law (the part related to State financing) was abrogated with public referendum (in Italy referendum, i.e. public consultations with legislative power, are only abrogative), while the part related to private contribution is still in force. In May 1996 and in July 1996 two laws set a system of reimbursement of electoral costs to the parties, thus creating a surreptitious system of public financing. In fact, the reimbursement is a forfait for single voter, regardless the effective expenditures for the elections. A law of 1997 set up a new system of voluntary contribution (4x1,000 of own taxes devoted to political partis, as the 5x1,000 for religious churches and (now) 7x1,000 to NGOs), but it was a complete failure. New laws in 1999 and 2002 modified such system by canceling the voluntary contribution of 4x1,000 but increasing enormously the reimbursement costs. In particular with the reform of 2002, when Berlusconi was prime minister, the reimbursememt became annual, whether there are elections or not. For example, according to the results of the 2006 elecions, the political parties and coalitions will get 100 million euros (US$143 million) per year from 2006 to 2010. At present, names of the private people contributing more than 20.000 euros (US$28,603) must be made public, together with the amounts contributed. References: Laws regulating political financing: Law 195 of May 2, 1974 Law 659 of November 18, 1981 Law 369 of July 8, 1996 Law 515 of December 10, 1993 *this is relevant for private contributions (art. 7.5) Law 2 of January 2, 1997 Law. 157 of June 3, 1999 Ministerial Decree (D.M.-Decreto Ministeriale) of February 23, 2001 Law 156 of July 26, 2002
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| 20b: In law, there are limits on individual donations to candidates and political parties. | ||||||||
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Comments: References: Law 195/1974 Law 515/1993
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| 20c: In law, there are limits on corporate donations to candidates and political parties. | ||||||||
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Comments: Legal persons (of any kind) are fobidden to make donations to politial parties, joint political or administrative structures, parliamentary groups if: - they have public holding above 20 percent; - they are controlled by a legal person that has public holding above 20 percent; - the decision is not taken by the legal entity's competent bodies - donations are not declared in the balance. This apart, there is no limit on corporate donations. References: Law 195/1974
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| 20d: In law, there are limits on total political party expenditures. | ||||||||
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Comments: There are limitations on expenditures for elections, but not general limitations. In fact, most of the parties have serious deficit (the two major parties have hundreds of millions of euros of debit). For electoral expenditures, the limit for each candidate is 52.000 euros (US$74,367) plus Euros 0,01 x citizen with the right to vote in the constituency (circoscrizione elettorale). In addition, each political party can spend euro 1,00 x citizen with the right to vote in the constituencys (circoscrizione elettorale) where the party concurs. References: Law 515/1993 (as amended by law 22 of January 27, 2006), art. 7
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| 20e: In law, there are requirements for disclosure of donations to political candidates and parties. | ||||||||
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Comments: Law 659/1981, art. 4: Both the donor and the beneficiary have the duty to send a joint declaration to the President of the Deputy Chamber ("Camera dei Deputati) when the donation is over 50.000 euros (US$71,507). Law 515/1993: Anyone who runs in the elections has the duty to report to the presidents of the two chambers all the donations received for the elections and the source of financing. The sums to be reported are over 20.000 euros (US$28,603) for private persons donations, any any sum for legal persons donations. The Court of Accounts (Corte dei Conti), the highest court for public issues has the duty to verify such reports. Furthermore, representatives or treasuries of political parties must send every year to the president of the Deputy Chamber the general financial report of the party, which is controled by an audit committee, and is published in the Official Gazzette of the State. The article sets the rule of sound financial management. Moreover, the financial report has to be published in two newspapers, one of which with national circulation. References: Law 515/1993 (as amended by Law 2 of January 2, 1997, art. 8) Law 659/1981, art. 4
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| 20f: In law, there are requirements for the independent auditing of the finances of political parties and candidates. | ||||||||
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Comments: The presidents of the two chambers set up the board of auditors, made by five independent experts selected between the professional auditors (revisori ufficiali dei conti). The board has the task to verify the compliance of the annual financial report of political parties. References: Law 2/1997, art. 8 and Annexes A and B
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| 20g: In law, there is an agency or entity that monitors the political financing process. | ||||||||
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Comments: There is a quite good monitoring system for electoral expenditures: controls are made by presidents of the chambers, by the Collegio regionale di garanzia elettorale, an ad hoc board set up in any region, the Court of Accounts, and the Board of Auditors. Political expenditures are, however, much less under control. The presidents of the chambers and the Court of Accounts analyse the political economy through the annual reports provided by parties, which includes the sources of financing. This system of audit (including the activity of the Court of Accounts) for a political party is limited to a control upon the formal compliance of reports with the law requirements (controllo di legittimità) and not upon the merit (controllo di merito). Quite often, judges investigating in criminal systems of financial crimes discover links with political parties, financed sometimes legally (through donations), sometimes illegaly. In this case, the judges can investigate the illegal political financing, but there is no specific agency or entity that monitors the political financing process. References: Law 515/1993
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| 21 | Are the regulations governing political financing effective? | |||||||
| 21a: In practice, the limits on individual donations to candidates and political parties are effective in regulating an individual's ability to financially support a candidate or political party. | ||||||||
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Comments: There are no limits to donations, and this poses a threat because rich actors can finance and influence political parties. For example, the second party in Italy (Forza Italia) is owned and mantained (with a personal guarantee, "fidejussion") by Silvio Berlusconi, the richest man of Italy. Another example is the Federfarma, the federation of Pharmaceutical companies, which for the last elections "donated" more than 250.000 euros (US$357,537), shared between single parliamentarians. WIth regards to public financing of parties, for 2006 political parties had "reimbursements" of 50 million euros (US$71.5 million) for the Deputy Chamber (Camera dei Deputati), 50 million euros for the Senate (Senato), 50 million euros for the regional elections and 50 million euros for the European Parliament elections, for a total of some 200 million euros (US$286 million). References: [ LINK ] Article by Andrea Marini Partiti, l'Ulivo riscopre il 4 per mille August 21, 2007;
Peer Review Comments: Some special restrictions aside, there are no limits in donations to politcal parties, so there is no way to bypass them. Moreover, in practice, political parties get most of their funds from public reimbursement for running campaigns, although this is considerably higher than the amount effectively spent for such a purpose.
Peer Review Comments: Silvio Berlusconi's case is emblematic. He can finance his own party (Forza Italia) bypassing formal limitations. Formally, he is no longer an owner of corporations. However, he is playing a role in them. Italy lacks an effective law on conflicts of interest. So, at present, it is difficult to forbid a dangerous connection between finance and politics.
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| 21b: In practice, the limits on corporate donations to candidates and political parties are effective in regulating a company's ability to financially support a candidate or political party. | ||||||||
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Comments: There are no limits to donations, and this poses a threat because rich actors can finance and influence political parties. For example, the second party in Italy (Forza Italia) is owned and mantained (with a personal guarantee, "fidejussion") by Silvio Berlusconi, the richest man of Italy. Another example is that of Federfarma, the federation of Pharmaceutical companies, which for the last elections "donated" more than 250.000 euros (US$357,537), shared between single parliamentarians.
Peer Review Comments: Some special restrictions aside, there are no limits in donations to political parties, so there is no way to bypass them. Moreover, in practice, political parties get most of their funds from public reimbursement for running campaigns, although this is considerably higher than the amount effectively spent for such a purpose.
Peer Review Comments: Silvio Berlusconi's case is emblematic. He can finance his own party (Forza Italia) bypassing formal limitations. Formally, he is no longer an owner of corporations. However, he is playing a role in them. Italy lacks an effective law on conflict of interests. So, at present, is difficult to forbid a dangerous connection between finance and politics.
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| 21c: In practice, the limits on total party expenditures are effective in regulating a political party's ability to fund campaigns or politically-related activities. | ||||||||
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Comments: In 2006, left-wing parties had 190 million euros (US$ 271.7 million) in debts and right-wing parties 175 million euros (US$ 250.2 million) in debts. References: Article by Massimo Mucchetti, "Trasparenza e bilanci. Quando il partito è cliente della banca" Corriere della sera, July 8, 2007
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| 21d: In practice, when necessary, an agency or entity monitoring political financing independently initiates investigations. | ||||||||
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Comments: These press articles describe the most recent investigation (in progress) of the Public Prosecution Office (Procuratura) of Catanzaro upon a criminal scheme involving about 25 persons with key roles in the Calabria Region. The charges are fraud against the State, fraud against the European Union, money laundering, criminal association, corruption of public officials, illicit financing to political parties.
Peer Review Comments: Sometimes, external pressures have influenced agencies' activities. Taking into consideration recent events, two prosecutors investigating corruption episodes, Luigi de Magistris and Clementina Forleo, denounced pressures and political intimidations. De Magistris, who had a conflict with the Ministry of Justice, has been removed.
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| 21e: In practice, when necessary, an agency or entity monitoring political financing imposes penalties on offenders. | ||||||||
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Comments: There are penal and administrative sanctions for violation of laws on financing of political parties. References: [ LINK ]
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| 21f: In practice, contributions to political parties and candidates are audited. | ||||||||
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Comments: There is annual audit on parties balances. Some political parties publish them online. References: [ LINK ]
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| 22 | Can citizens access records related to political financing? | |||||||
| 22a: In practice, political parties and candidates disclose data relating to financial support and expenditures within a reasonable time period. | ||||||||
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Comments: References: FInancial records of political parties are published in the Official Gazzette every year.
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| 22b: In practice, citizens can access the financial records of political parties and candidates within a reasonable time period. | ||||||||
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Comments: References: FInancial records of political parties are published in the Official Gazzette every year.
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| 22c: In practice, citizens can access the financial records of political parties and candidates at a reasonable cost. | ||||||||
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Comments: References: FInancial records of political parties are published in the Official Gazzette, free of charge.
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