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TI Latvia calls for accountability of the participants of the illegal campaign of the People’s party

Illegal campaign leads to irresponsible changes of the party financing system

Transparency International Latvia today has sent a request to people who took part in the election campaign that was organised in advance of the 2006 parliamentary election by “Public for Freedom of Speech” (SVB) – an organisation established by the then chief of staff to the Latvian prime minister, Jurģis Liepnieks – to ask them for their views about the People’s Party’s (TP) proposal to lift campaign spending ceilings in Latvia. The people who appeared in television clips which were part of that campaign, asked voters to vote for the TP, and they thus took political responsibility upon themselves. The individuals took advantage of their professional prestige in doing so. TI Latvia has criticised this campaign from the beginning, arguing that the TP violated campaign finance limitations by allowing Mr Liepnieks to organise the campaign despite his unquestionable affiliation with the party. The views of TI Latvia have fully been upheld by the Senate of the Supreme Court in a ruling on the “lawfulness of the election” at the end of last year. The LVL 506,583 which were spent in the SVB campaign will have to be returned to the national budget. By seeking to lift the campaign spending ceilings, the TP is clearly trying to use its legislative power to avoid that punishment.

In its letter to the campaign participants, TI Latvia refers to the Supreme Court ruling as evidence that Liepnieks was an active member of the TP, chief of staff to Prime Minister Aigars Kalvītis, and organiser of the TP election campaign. By establishing this supposedly non-governmental organisation, his clear aim was to avoid spending limitations. It is safe to predict that the Supreme Court ruling will lead the Corruption Combating and Prevention Bureau (KNAB) to order the TP to transfer the illegally spent sum of money to the national budget. The law says that the KNAB must issue its conclusions about all political parties within one year’s time after the election, irrespective of whether the investigation of a single party has been completed earlier than that.

TI Latvia would like to emphasise that it was very soon after the Supreme Court ruling that the TP asked Parliament to lift any limitations on party spending during election campaigns. Parliament has begun consideration of this proposal, even though it is so very obvious that the TP is simply trying to avoid punishment. If the proposed TP amendments to the law take effect before a court orders the party to repay the money, the party may remain unpunished, because the Latvian system is one in which if an amended law provides for lighter punishment than the previous law, then the lighter terms become retroactive. Any later amendments, too, could significantly improve the positions of the TP, as well as the First Party of Latvia (LPP), which used a similar “non-governmental campaign” in disputing any punishment before the courts.

In its letter, TI Latvia argues that “this was a dishonest and politically irresponsible practice, one which destroys public trust in the government and in those who take political decisions. In international practice, violations of party rules and election financing rules are seen as a classical indicator of political corruption, because it is clear that individuals or groups of individuals wish to take power unlawfully.”

The executive chairperson of TI Latvia, Roberts Putnis, has called on the addresses to state their views about “the TP-initiated amendments to lift campaign spending ceilings, also stating your views about the consequences that these changes would have on the Latvian public and on honesty in politics, because you were directly involved in the campaign.” TI Latvia insists that the people who appeared in the television ads undertook political responsibility by doing so.

TI Latvia has also sent information to the addressees about the campaign system which prevails in Latvia at this time, one which limits party spending to 20 santims per voter (that means that last year, parties were allowed to spend around LVL 280,000 during the 270 days before the election). In an appendix to the letter, TI Latvia declares its arguments in favour of maintaining this system.

TI Latvia's arguments in favour of preserving the existing system of campaign financing:

  • When spending limits are set in election campaigns, this guarantees that the election will be based on democracy and equal principles. This is an important instrument in the battle against political corruption. If parties are not allowed to spend more than a legal limit, that reduces their dependency on a few wealthy donors. Parties no longer need to arm themselves with massive cash resources to pay for expensive advertising campaigns.
  • Spending ceilings encourage politicians to seek other ways of making contact with voters. Parties spend most of their money on broadcast advertising, and limits on spending encourage party dialogue with voters directly, not just through the media. Parties without vast resources can explain their position and hear the views of voters as to their activities. This is very important at this time, because public opinion surveys show that political parties in Latvia are considered to be the most corruption institution in the country.
  • Unless there are spending limitations, oligarchs and parties will be able to buy election results. Before the spending ceilings were introduced in Latvia, it was clear that results could be affected significantly with high-cost campaigns. This is unacceptable, because that does not benefit a democratic election. Instead, it represents the “business plan” of a few wealthy oligarchs to take over political power.

After the 2002 parliamentary election it was found that voters are really quite expensive in Latvia. Parties spent an average of LVL 3.90 per voter. By comparison, parties in France spend LVL 1.10, in Great Britain they spend LVL 0.40, in Sweden the cost is LVL 1.20, and in Austria it is LVL 2.20. There was also a direct correlation between greater spending on advertising and greater voter support – the more the advertising, the higher the support for the relevant party.

  • When parties are dependent on wealthy sponsors, that has a serious effect on the quality of politics. Wealthy sponsors who donate large sums of money to parties usually agree on conditions related to decisions that are of advantage to the sponsor – decision which represent a reward for support in the campaign. Ceilings on campaign spending, in other words, have a direct and permanent influence on further political processes.
  • The amendments proposed by the People’s Party will allow it to escape punishment, and the TP and the LPP are basically taking decisions on repealing their own punishment. This is a massive interest of conflict, and in any other government institution those who engage in it would be punished. Late in 2006, the Supreme Court Senate reviewed a petition from a few small parties which asked that the results of the October election be nullified. One argument was that the two aforementioned “non-governmental” organisations – “Public for Freedom of Speech” and “Toward the Sun” – engaged in vast campaigning while claiming that they were unrelated to the relevant political parties.

The Supreme Court did not nullify the election, but in its ruling it said that the two organisations could by no means be kept apart from the parties which they advertised. “Public for Freedom of Speech” spent more than half a million lats on its campaign, and it is likely that in response to the Supreme Court ruling, the Corruption Prevention and Combating Bureau (KNAB) will order the party to pay that sum to the national budget.

The law says that the KNAB can issue its conclusions about political party spending only when all investigations are complete, and it must do so one year after the election. This means that the KNAB declaration will be made no sooner than in the autumn of this year. The People’s Party proposal to lift the “inconvenient” rules on party spending is already pending in Parliament, and that means that the party may well amend the law before it is punished for the violation that it committed in terms of ignoring spending ceilings in the last election.

The TP can avoid the punishment because the court may hear a demand that it repay the money at a time when the law no longer contains the norm which the party violated. If the amendments take effect before the court orders the party to pay the sum, the party may escape punishment altogether, because Latvian law says that if an amendment contains lighter punishment than the original version of the law, then the lighter punishment becomes retroactive. If the amendments to the law are passed later, too, the People’s Party may improve its chances before the courts. This hurried proposal has nothing to do with improving the party financing system. It is clear that the party is trying to legitimate a violation of law which it committed and to avoid punishment for that illegal behaviour.

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