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TI Latvia: People’s Party is Seeking to Avoid Punishment

By proposing an elimination of party spending ceilings, the People’s Party is seeking to avoid punishment and confirming its dependency on moneybags

The proposal of the People’s Party (TP) to eliminate party spending ceilings during election campaigns must be seen as an attempt to legitimise the party’s violations during the 2006 election campaign. During the campaign, the People’s Party used the “Society for Freedom of Speech” organisation to violate the law, exceeding legally defined spending limits by LVL 506,583. This has been recognised in a ruling by the Department of Administrative Cases of the Supreme Court Senate (case No. SA-5/2006). Because of this Supreme Court ruling, it is very likely that the Corruption Prevention and Combating Bureau (KNAB) will rule that the People’s Party must return half a million lats to the national budget. That will not be possible if the amendments take effect before the fine is ordered, because a lesser punishment has reciprocal effect. Even later amendments could significantly improve the People’s Party’s positions in disputing the punishment. This means that the hasty proposals of the People’s Party must be seen not as an attempt to bring order to the party financing system, but rather as an attempt to legitimise its own violations of the law.

The mass media have reported that the TP has begun to negotiate with coalition partners on amendments to the law so as to repeal ceilings on campaign spending. The TP has also proposed a definition of the responsibilities of third parties which campaign on behalf of a party, suggesting that parties be ordered to disclose full information about their donors and that they be banned from accepting anonymous donations.

TI Latvia recalls that the aim of the law on financing political organisations (parties) is to ensure transparency I the finances of political parties, ensuring lawfulness and correspondence to a system of parliamentary democracy. Latvia’s Constitution speaks to equal parliamentary elections. The People’s Party’s proposal to lift the campaign spending ceilings does not satisfy the constitutional principle or the goals of the law, because:

  • The TP proposal to eliminate the campaign spending ceilings will make it impossible to observe the principle of party equality, instead ensuring the hegemony of certain wealthy parties.
  • The amendments would do nothing about the key problem – the dependency of parties on their finance providers; on the contrary, the dependency would become even more significant.
  • If the campaign spending ceilings are lifted, it will not be possible to determine whether parties have observed limits on income, because there will be no registration of what parties spend during campaigns. This means that parties will be free to evade income limitations in all kinds of ways. Supporters will be able to pay for media advertising without the money ending up in the treasury of the party. In that case, limitations on donations to political parties will lose their purpose.

TI Latvia believes that governing political parties must urgently close the loopholes in campaign regulations which have been ignored because of a lack of political will. Certainly the situation which existed before the 9th Saeima election in 2006 should not be repeated next time.

There are numerous things that need to be done to improve the system, but sufficient attention has not been devoted to these:

  • The government must finally approve a law on political campaigning, which has been stuck in Parliament for more than three years now. This law must clearly define campaigning, campaign advertising, the campaign period, and a series of issues which have to do with supervision of election campaigns.
  • TI repeats its call for legal regulations as to the campaigning of third parties. This should be include din the law on campaigning. TI Latvia defines a “third party” as a party which is not and has never been involved with a political organisation (party), its authorised representatives of any candidate for election. “Links” here refer to organisational links (member, founder or employee of a political party) and to financial links (donor). This applies, too, to persons who are defined in the law on conflicts of interest. It would also be important to set sensible campaign spending limitations on third parties without violating the principle of freedom of speech.
  • TI Latvia supports amendments to the code of administrative violations and the criminal law to define the liability of donors to political organisations when they violate rules concerning the amount of financing or limitations on financing, when they donate finances to a party indirectly, and when they violate these requirements repeatedly.
  • Given that parties try very hard to evade spending limitations by using the resources of some wealthy people in Latvia, there is reason to believe that the activities of parties are dependent on the interests of certain sponsors. To reduce the dependence of parties on “moneybags”, there must be a serious discussion about amending the system of party financing. Government-financed political parties are one option. A ban on political media advertising is another – that represents the lion’s share of party spending and thus forces parties to seek finances from wealthy sponsors.

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