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2007 Assessment

Moldova: Integrity Indicators Scorecard

Moldova: Integrity Scorecard Report > Sub-Category: Political Financing
Indicators		Score
20	Are there regulations governing political financing?	14
21	Are the regulations governing political financing effective?	21
22	Can citizens access records related to political financing?	0

Indicator and sub-Indicator Details

Are there regulations governing political financing?

20a: In law, there are regulations governing private contributions to political parties.

Score:

YES

Comments: There is a draft on financing political parties, which has not been yet adopted by the Parliament. There were no mechanisms to enforce financial oversight and enforceable control to safeguard the implementation of funding-related provisions in Moldova. The new legislation is supposed to bring sanctions proportional to the violations of financial management procedures.

References: Comments on the draft Law on Political Parties of Moldova Heinrich Vogel, Venice Commission of the Council of Europe www.venice.coe.int/docs/2007/CDL-AD

Peer Review Comments: Private contributions are not mentioned in the law, therefore these are legal. Only Article 12 of the Law on Political Parties and Social-Political Organizations contains an indirect reference on private contributions: it prohibits the financing from foreign individuals and legal entities (either public or private). It also bans contribution from joint ventures where the state or foreign founder(s) controls more than 20 per cent.

20b: In law, there are limits on individual donations to candidates and political parties.

Score:

YES

Comments: Funds for running political parties are created from the membership fees paid by its members, profits from mass media companies or TV stations, selling of leaflets, branded products, private/physical donations (art.12). No foreign financing is allowed for the political parties in Modlova.

References: Law on Political Parties (No.718-XII of 17.09.1991)

20c: In law, there are limits on corporate donations to candidates and political parties.

Score:

YES

Comments: Art.10(12) prohibits explicitely financing from external sources for political parties. The same prohibitions are applied to financing from public organizations, joint ventures in which the state shares exceeds 20 percent, unregistred citizens groups, unidentified individuals, foreign individuals or organizations residing abroad. There is no mention of the limitations on corporate donations otherwise. External sources mean bylaw 'ouside of the country sources'. A new draft of the law on party financing attempts to restrict the financing from corporative sources (inside of the country), providing only the state with the responsibility to finance parties, which shall also rely on membership fees, but it is quite unclear at this point wheter this will be a fair option, accepted by the political class, and pertaining to the political realities/realms of the democratic process.

References: Law on Political Parties (No.718-XII of 17.09.1991) Code on elections

Peer Review Comments: The author alone mentions the restrictions above, so the score should be YES (the question does not ask specifically about private or public corporations).

20d: In law, there are limits on total political party expenditures.

Score:

YES

Comments: There are no limits to the total political party expenditures, overall, and perhaps with the adoption of the new Law on Political Financing (still a draft under consideration), this will be settled. Art.35 of the Election Code sets up the limits of the financing provided by law for certain election campaigns, and the total ratio is decided by the Parliament through the state budget prior to the upcoming election year. Election competitors may receive loans for their election campaigns from the state, which shall be returned in case they have not succeeded to collect sufficient votes (!) Election competitors who received less than 3 percent of the votes expressed in elections shall return the loans in no more than three months from the date of elections. Parties and individual candidates shall present regular (weekly) evaluations of the way they have spent/are spending their state-delivered resources in election campaigns, and CEC/Ministry of Justice are entitled to verify the actual spending.

References: Law on Political Parties (No.718-XII of 17.09.1991) Election Code (No.1381-XIII of 21.11.1997)

Peer Review Comments: If the exception in Article 35 of the Election Code does not count, then the answer is NO.

20e: In law, there are requirements for disclosure of donations to political candidates and parties.

Score:

YES

$Scoring Criteria :: YES: A YES score is earned if there are any requirements mandating the disclosure of financial contributions to political parties or candidates. NO: A NO score is earned if there are no requirements mandating the disclosure of contributions to political parties or candidates, existing regulations do not require a donor\'s name or amount given, or the regulations allow for anonymous donations.$

Comments: Art. 38 of the Election Code stipulates exact conditions through which individual or corporate donations can be transmitted to political candidates and parties.

References: Law on Political Parties Election Code

20f: In law, there are requirements for the independent auditing of the finances of political parties and candidates.

Score:

YES

Comments: Art.38 of the Election Code stipulates that election candidates (parties or individuals) shall open up a special account in a bank with a title 'election fund', and all donations for campaign shall be accumulated there. The respective bank will inform accordingly the CEC on the money received by candidates and, on the basis of its full-fledged mandate as supervisor and implementor of the election legislation, CEC may request the Auditing Court and the Fiscal Inspectorate of the Ministry of Justice to undertake a financial control over the resources legally received by election candidates, correct evidence of the transfers, and their appropriate use.

References: Election Code

20g: In law, there is an agency or entity that monitors the political financing process.

Score:

YES

Comments: There is no agency that is in charge with monitoring the political financing in Moldova. The tax inspectorate does have the competence to verify the accountant's reports of the parties as legal entities, but cannot be seen as a 'specialized agency', which exist in other countries, aiming to restrain eleciton actors from corruption, abuse of resources, etc. The Central election commission, which IS a specialized body may only request presentation of the reports from parties, but it does not have the authority to oversee the fairness of their content, while fiscal bodies does not care about the specific purpose of parties (as non-commercial entities).

References: Law on Political Parties

Peer Review Comments: There is no SPECIAL agency to handle this issue. However, Article 27 of the Law on Political Parties and Socia-Political Organizations says that it is the Fiscal (Tax) Service which is in charge with the verification of parties' sources of income, of their income size, and of the way parties comply with the fiscal legislation.

Controlul asupra surselor de venituri ale partidelor, ale altor organizacii social-politice, asupra mrimii mijloacelor primite de ele _i asupra îndeplinirii cerincelor legislaciei fiscale este exercitat de ctre organele fiscale.

Peer Review Comments: Again, this is an issue to be solved with the new law on financing the political parties, currently under review in the Parliament.

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.

Score:

100

Comments: Politcial financing is one of the less studied and tenebrous field of activities for political parties. Money in politics are in general collected unofficially, with great incentives from the black/hidden economy sources, and large potential for corruption or ambiguous impact on the political process or party-construction work.

References: Coalition 2005, 2007 monitoring reports: www.alegeri.md/en/2007/coalition 2007/;

Political Corruption, IDIS, Cartier Publishing House, 2000 Lilia Carasciuc, director, Trransparency International - Moldova; Interview, June 2007

Peer Review Comments: Given the fact that even a legal framework doesnt exist to regulate campaign contributions, its unlikely physical or moral persons are imposing limits on themselves...

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.

Score:

100

Comments: The main documents regulating today the financial activity of political parties are largely unsatisfactory to the party-building process in Moldova. The law does not prohibit the use and abuse of administrative resources, while weak judiciary has limited operational capability to intervene when blatant violations from the incumbent state officials appear in the electoral and extra-electoral process. Voters are bribed with generous contributions from the state budget, to the benefit of political parties; state officials use media groups controlled by the government, and limited space for the opposition forces hinder pluralistic foundations of the political regime.

References: Law on Political Parties Election Code

Peer Review Comments: Local businesses are ordered to contribute financially - otherwise, they will face control next day from the Fiscal Inspectorate or Economic Police. Foreign investors are also requested to finance various social activities carried out by the Communists' Party. They are not being told the exact amount (as in the case of Moldovan businesses), but it is a common practice among foreign investors to contribute with something, in order to avoid hassle or even harassment.

Peer Review Comments: if no limits in law, no limits in practice.

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.

Score:

100

Comments: Most of the political parties use only a slight piece of official funding (received from the state) to run election activities, and they rely heavily on extra-funding cash-subsidies from uncknown sources of unclear origins. No precedents of conducting effective auditing of the political funding was undertaken in the past, and it is a sensitive issue on the political agenda. Most of the viable/functional political parties expenditures exceeds by dozens of times the 'official allocations' (loans) provided by the state, and the obvious discrepancies jeopardize dramatically the credibility of political parties (amongst the lowest ranks in the public surveys in Moldova).

References: Election Code

Peer Review Comments: During the campaign for the June 2007 local elections, the ruling Communist Party invited known Russian pop star Filip Kirkorov to perform live for voters in Chisinau. The media alleged that Kirkorov was paid about 55,000 euros for his appearance. No one denied the reports, but the CEC and other competent agencies made no enquiries. The fee was obviously quite large for just one single action, while much of the campaign was still ahead. In the case of campaigning parties and blocs, the total amount granted from the state is 40,000 lei and the maximum electoral spending was set at 7.5 million lei (460,000 euros) ([ LINK ], [ LINK ]).

21d: In practice, when necessary, an agency or entity monitoring political financing independently initiates investigations.

Score:

100

Comments: With the sole pioneering experience of IDSI, there were no other precedents in Moldova when the issue of political financing has been addressed by other think-tanks, not to mention here state-agencies specialized in such monitoring. The intersection of election interests and monopolist-ideology of the ruling Comunist party make the whole range of state institutions (CEC, Ministry of Justice, Prosecution) to fight hard to create unequal conditions to the contenders (opposition), rather than creating equality of chances, and transparent governance of the election / political spending.

References: Political Corruption, 2000, edited by IDIS www.viitorul.org

Peer Review Comments: The fact that the Central Election Commission never undertook such actions, and IDIS initiative was a one-time effort, speaks of lack of monitoring in this respect.

21e: In practice, when necessary, an agency or entity monitoring political financing imposes penalties on offenders.

Score:

100

Comments: There are no precedents of imposing penalties for exceeding the limits of financing.

References: Election Code (No.1381-XIII of 21.11.1997) Law on Political Parties (No.718-XII of 17.09.1991)

21f: In practice, contributions to political parties and candidates are audited.

Score:

100

Comments: A report on the spending declared by the political parties and individual candidates for the latest elections (2005, 2007) has been issued by CEC, but it is obviously far from the estimated costs of the campaign, which means that no auditing/control of the reported sources was in fact done by the respective agency.

References: Election Code; Central Election Commission: www.cec.md

Peer Review Comments: Since there were no audits, and CEC reports are far from portraying the reality, score 25 would be inaccurate and generous.

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.

Score:

100

Comments: No disclosure mechanisms have been established for political parties by the Law on Political Parties. Some disclosure rules are included in the Election Code (1997), although they are largely unsatisfactory to allow better accountability and transparent governance of the political formations registered by law.

References: Coalition 2007, Mihai Godea, secretary, director of CONTACT Center: www.contact.md

Peer Review Comments: Last year, the government members, parliament members, and the president disclosed their sources of income, property ownership, and size of welfare. The figures were calculated on the basis of the prices registered more than ten years ago, and according to Soviet methodologies. The reports showed modest incomes and few properties owned by Moldovan politicians. Many journalists (including famous Val Butnaru, Constantin Tanase) described it as a mochery.

22b: In practice, citizens can access the financial records of political parties and candidates within a reasonable time period.

Score:

100

Comments: Citizens cannot access the files for financial/election records of the political parties. These records are never shown, they are never presented officially, and belong to the most unclean/unclear field of responsabilities of the current political leaders currently in Moldova.

References: Political Corruption, IDIS, Cartier House, 2000: www.viitorul.org;

Coalition 2007: www.coalition2007.md

Peer Review Comments: I had published an article concerning the issue last year, and I found the report on the incomes and properties of public persons in the online official gazette, but since then all records published on the web have gone. The financial reports are almost impossible to obtain. And the CEC website does not have any records either.

22c: In practice, citizens can access the financial records of political parties and candidates at a reasonable cost.

Score:

100

Comments: With costs or without costs, applications to review fianancial records of the political parties are never met or addressed by their leaders. It is impossible to hope that one may compare the actual spending of these parties for their party work at the national/territorial level with the official estimates of the spending provided by the state in campaigns.

References: Law on Political Parties (1991) Election Code (1997)