In search of transparency: blind date between business and the parties

Seimas hall
DELFI / Domantas Pipas

There are calls in the Seimas to once more establish the right for legal entities to back political powers, but not directly, instead through a blind party support fund so the companies would not know whom their funds are going to. Apparently, this way would create the conditions for businesses to appeal to parties and would reduce corruption. However, both business and party representatives doubt it, writes.

Amendments have been registered to the political party legislation, which, if passed, would allow legal entities to financially support political powers in a way that would prevent businesses from directing funding to specific parties and so that the latter could not expect to receive funds for their actions from a specific entity.

Based on the proposal, the legal entities, which granted the support, would in no way participate in distributing the funding to political parties. They could transfer their support to the Blind Party Support Fund, which would be administered by the Central Electoral Commission. It would distribute the funds obtained from legal entities once every three years. Every time, half of the funds accumulated in the fund would be distributed.

The amendment also outlines safeguards, which will apparently aid in completely removing the influence of legal entities on parties and would prevent the parties from committing to specific backers.

Businesses are prohibited from backing specific political parties in Lithuania since 2012. This ban was established by the proposal of President Dalia Grybauskaitė. She presented the amendments, which ban business donations to parties, based on the argument that this would reduce political corruption and will ensure the transparency of party activities. However, the investigation surrounding the MG Baltic concern and representatives of most major Lithuanian parties, which keep on surfacing new developments, reveals that corruption has hardly declined and it is unlikely whether there is more transparency either.

Reduced corruption

The amendment to the political party law was registered by mixed Seimas group prefect Bronislovas Matelis. According to the MP, the current legal guidelines do too little to encourage transparent activity among parties, do not aid the consistent development of the state political system and parties, them being prevented from growing stronger through constant scandals due to suspect financing.

“By banning legal entities from financially supporting parties, the representatives of influential business groups and individual businessmen do it illegally and political leaders, unwilling to fall behind their competition, seek their own ways to reach those or other businessmen,” the MP explained. He noted that finally all this leads to open corruption schemes and unending scandals because all the dealings between businesses and politicians are held to be illegal, literally selling and buying legislation. B. Matelis is convinced that officers investigating such activities are only able to catch a small part of such deals. As such, the public is left with the impression that the carousel of political corruption cannot be halted and the political image of the whole country suffers due to it, with confidence in parties having reached rock bottom.

“The financing of political parties is also insufficient right now because the state is unable to dedicate enough funds for the situation to change cardinally. If the proposed amendments are passed, they would become a real indicator, which would let the public understand better, what goals the financially strong and influential groups have in constantly seeking to financially back parties,” B. Matelis explained.

According to him, by distributing only 50% of the fund’s content every time, it would be impossible to guess, which party specifically will receive the legal entities’ backing because it would be distributed to a number of parties based on pre-set criteria. Furthermore, the second part of the funds could be granted after three years to leading parties of the time.

B. Matelis is convinced that the three-year term and other limitations are necessary for party leaders and legal entity representatives to be unable to agree on suspect dealings ahead of time because the political circumstances shift greatly over such a period.

Increasing transparency

Vytautas Magnus University professor Lauras Bielinis believes that MP Matelis’ proposal could be a decent initiative in order to make the financing and activities of political parties more transparent. “This way those aiming to grant political parties aid would not know which party will receive the funds. As such by providing funding, it would demonstrate interest in the Lithuanian political system functioning smoothly, rather than supporting a specific party,” the political scientist said.

L. Bielinis believes that if the Seimas back such an initiative, it would be an example of how to make party financing more transparent in an effort to reduce the appearance of political corruption.

“There are numerous forms of political party financing in the world, which prevent funding from reaching the coffers of a specific party. What is being proposed is an acceptable variant, which allows finding extra financing for political parties and prevent or complicate businesses’ chances to influence party activities and politicians’ decisions,” L. Bielinis said.

No need

The president of the Lithuanian Business Confederation Valdas Sutkus stated to Lietuvos Žinios that the proposal from B. Matelis to change the political party law is absurd. “This fund would be empty because businesses would unlikely want or agree to support political parties this way. After all, everyone, who provides funding, knows, whom they want to back. If I am of leftist views, I would want to support the leftists and the opposite applies too. If I like football and provide funding for sports, it means that I want the funding to be directed to football, not another sport, which I may not like,” V. Sutkus explained.

He is left questioning, why business should back political parties, which receive large assignations from the state budget. That said, the current regulations also have flaws according to V. Sutkus. Apparently, it preserves the current political system and prevents new political powers from rising. This is because state funding is assigned based on how many seats the party has in Seimas. As such newly formed political organisations have no access to state funding. As for those in Seimas, they secure not only financing, but also a monopoly position. As such, a new party can only emerge when one of the older parties compromises itself.

“I believe perhaps we should return the possibility for legal entities to back political parties, based on transparency requirements so there would be no dubious support. But this should under no circumstances be the Blind Fund. By paying my taxes I already provide funding with no knowledge, who it will go to and after all some of that money goes to the parties as well,” V. Sutkus stated. He emphasised that the proposal registered in Seimas would be as if voluntary taxation, agreeing to hand over funds so that they would be distributed based on unclear principles.

Would survive without support

Lithuanian Social Democrat Party chairman Gintautas Paluckas told Lietuvos Žinios he doubts whether legal entities should at all be allowed to back political parties. “Let the companies honestly keep paying their taxes to the state budget and it will be their best contribution to state welfare. As for the current political party financing instruments, they are sufficient and suitable, just not completely employed,” he stated.

According to G. Paluckas, parties receive state assignations, their members pay member subscriptions, parties can also encourage people to transfer 1% of their income tax to them. The politician believes that this is an underused opportunity for party financing. It is not widely used because parties are unpopular in Lithuania. As such, the question should arise, why parties do not gather more membership subscription fees or 1% income tax assignations because this costs nothing extra to tax payers. Furthermore, parties already receive millions from tax payers’ pockets.

“Party financing from income tax and member subscription is unused potential. They themselves should take interest and consider how to attract more funding and not hope that it will be provided by a special fund,” G. Paluckas said.

Awaiting expert statements

Seimas Anti-Corruption Commission chairman Vitalijus Gailius assured he cannot say yet whether he agrees with the Blind Party Support Fund. According to him, it is better to wait for the Seimas chancellery jurists statements on whether such a proposal does not oppose current legal regulations.

“The experiences of other countries are very important, thus the Seimas chancellery Investigation Department should explain how it is regulated in other countries and whether they have such funds,” V. Gailius mused.

He believes that only experts, including the Special Investigation Service and Central Electoral Commission could evaluate whether such a novelty as blind party funding from a fund gathered from legal entities’ payments is needed.

Courageous, but raises doubts

Project lead for the Lithuanian branch of Transparency International Rugilė Trumpytė emphasised to Lietuvos Žinios that the proposal from MP B. Matelis is fairly courageous. “He is right in stating that in Lithuania we still know too little about politicians and businesses’ relations, whose interests the politicians represent. However, it is very unsettling to read that legislation is, in the MP’s words, sold in the Seimas. Such a statement is highly concerning due to how the parties act and what they do so that their representatives would pass in Seimas transparently and justifiably,” R. Trumpytė spoke.

She doubted whether the Blind Fund could resolve the issue. This is because it is unclear how the support from the fund could contribute to more transparent decision making and would aid in understanding, what interest groups seek to influence MPs.

“For business and political relations to be more transparent, I would propose for members of Seimas to try themselves to improve confidence in them and publicise, what interest groups they meet with and what offers they receive,” the Lithuanian Transparency International representative urged.

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