Due to imprecise legal provisions, political parties in Montenegro do not show all donations and contributions in election campaigns in order to avoid exceeding the maximum allowed amount on paper.
This was confirmed by the experts of the OSCE Office for Democratic Institutions and Human Rights (ODIHR) in the Draft Opinion on the Law on the Financing of Political Entities and Election Campaigns, as well as the Agency for the Prevention of Corruption (ASK).
The "Vijesti" source says that past practice has shown that parties allocate much more for election campaigns than the law allows, which is why they often transfer money to and from accounts for the regular work of the party, and don't show donations and contributions in reports on expenses and contributions in the campaign.
ASK told "Vijesti" that special attention will be paid to attempts to circumvent the prescribed limit of expenses in the campaign, because this is "a risk that was present in some election campaigns, including the elections in the capital city".
They state that, when it comes to regular work and election campaigns since 2016, the data in the possession of the Agency shows a trend of reducing the amount that parties receive from private sources, despite the fact that the latest amendments to the Law increased the limit for contributions to a maximum of 5.000 (for a natural person ) and 20.000 euros (for a legal entity), while the amount of membership fees has changed slightly.
"At the same time, there is a noticeable increase in the financing of political entities from their own sources," said the KAS, to which political entities (participants in elections) are obliged to submit reports on campaign expenses, as well as annual reports on the financing of regular work.
According to the existing Law on Financing of Political Entities and Election Campaigns, political entities can acquire funds for regular work and election campaigns from public and private sources. Public sources are the budget of the state and local self-governments, while private sources are: membership fees, contributions, legacies and borrowing from banks and other financial institutions in Montenegro. 0,25 percent of the current budget (excluding capital and budget funds) is allocated for election campaign expenses.
ASK explains that as the dominant form of financing the election campaign, parties use funds from public sources and funds transferred from the regular account to the election account. Parties must open a separate giro campaign account for each election.
"According to the data we have at this moment, in 2024 the planned amount for financing the regular work of all political subjects from public sources is EUR 11.736.830, while the total limit of expenses for elections in the capital per political subject is of 149.431 euros", they said.
The elections in the capital are scheduled for September 29, and 13 coalitions and parties will participate. The Election Commission of the Capital City confirmed all 13 election lists.
Parties spend more on campaigns than the law allows
The "Vijesti" source says that one of the examples of bypassing the prescribed campaign spending limit is when the coalition for the future of Nikšić, on the eve of the local elections in Nikšić in March 2021, leased about 20 business premises in that city. That coalition, i.e. its members, in their reports presented the cost of the lease as an expense for the regular work of the parties, although, the source recalls, everyone knew that it was for the campaign.
One of the examples is the monetary contribution of the Tivat company "Symphony", which paid 20.000 euros to the Europe Now Movement (PES) on October 6, 2022, on the eve of the local elections in Tivat and 12 other Montenegrin municipalities. PES did not show that amount in the report on expenses and contributions in the campaign, but in the annual work report for 2022.
PES did not answer the questions of "Vijesti" whether the financial contribution of the company was a contribution to the campaign for the local elections in Tivat and, if so, why it was not recorded in the reports on contributions to the campaign. The company from Tivat did not respond to "Vijesti" either, whether it was a contribution to the campaign for the local elections.
However, KAS does not have control mechanisms, which was also pointed out by ODIHR representatives who presented the Draft Opinion on the Law on Financing of Political Entities and Election Campaigns in the Parliament yesterday and announced the final opinion in a few weeks.
The Law on the Financing of Political Entities and Election Campaigns was adopted at the end of 2019. In the framework of the Parliamentary Committee for Comprehensive Electoral Reform, a working group was formed at the end of June to draft a new act. It is attended by representatives of all parties and clubs of deputies that are represented in the Committee, as well as representatives of the academic community and the non-governmental (NGO) sector. A qualified majority is not required to amend the current law or adopt a new one.
ODIHR experts believe that KAS lacks full investigative powers and direct access to certain databases. "Without sufficient investigative powers, including on-site inspection, it may be a challenge for any oversight body to effectively detect illegal sources of funding for political parties or campaigns," they said.
One of ODIHR's recommendations is to define membership fees and sponsorships in the law as contributions, in order to prevent their use for the purpose of avoiding the maximum allowed amount of donations.
ASK says that it is an international standard that is prescribed in a certain number of countries, but for which a high risk was not recognized in the previous period in Montenegro.
"Certainly, what was said before does not mean that this recommendation should not be carefully considered and the appropriate norms that will be applicable in Montenegro should also be prescribed," they said.
They add that sponsorships in the context of the recommendations given in the analysis imply that any activity that is subject to this term must be viewed as a contribution, non-monetary contribution or campaign led by third parties.
"The current law does not define a campaign led by third parties, and that segment needs to be given special attention when amending the law," they assessed.
The challenge is to accurately and precisely determine the costs of media advertising
Program director of NGO Uzor Marko Pejović considers that there is a problem that the current legal solution, apart from the prohibition of giving or receiving contributions through third parties, does not regulate the participation of third parties in the campaign.
Among other things, the ODIHR recommended that the law provide for appropriate and proportionate restrictions on campaign financing from third parties, "including the application of the same restrictions as for political parties and reporting obligations for third parties to prevent possible attempts to avoid restrictions" . They believe that funding rules should enable fair competition and ensure transparency of funding of political parties, candidates and third parties associated with political parties or candidates.
The law, Pejović points out, does not even regulate advertising through media that are not considered providers of audiovisual media services according to the Law on Electronic Media, which prevents adequate supervision and implementation of measures to control the financing of political subjects and election campaigns.
"Additionally, bearing in mind that the costs of the election campaign include advertising videos and advertising material, media representation, ads and publications, it is also important to emphasize the challenges in supervision related to media advertising on social networks and the 'online' space, i.e. on the impossibility of accurately and precisely determining the real costs of the campaign,'' he said.
Pejović supports the ODIHR's recommendation regarding the powers of the KAS, so that through investigative and inspection powers and direct access to the necessary databases for more efficient supervision of the financing of political parties and campaigns, they can carry out control.
He believes that this is particularly important because of the provision that companies and entrepreneurs and related legal and natural persons, who on the basis of a contract performed activities of public interest or concluded a contract in the public procurement procedure, cannot make contributions to political entities two years before conclusion of those contracts, during the business relationship, as well as two years after the termination of that business relationship.
It indicates that this provision is almost impossible to implement in practice, due to the lack of adequate electronic systems and databases, which would allow KAS to cross-check the donor with the database of public procurement contractors.
"This particularly applies to related legal and natural persons, because there are no databases available to the Agency, which refer to these persons," he warned.
KAS also agrees with ODIHR's opinion that the Agency should be given greater powers by law, but also "prescribe clear and unambiguous rules and competencies of various institutions that are involved in the control of the financing of political entities and election campaigns".
There are too many parties for all of them to receive money from the budget
One of the recommendations of the ODIHR is to consider expanding the right to funding from the budget, so that parties that are not represented in the state parliament or local assemblies are included.
Pejović believes that at the moment it is not a desirable solution for Montenegro, due to the constant trend of forming new political subjects whose election results are significantly below the census threshold, and it opens up space for a potential negative tendency to form new political subjects whose main motive would be the acquisition of profit, and not a real contribution to political pluralism.
He also believes that the recommendation related to the possibility of allowing certain foreign donations to parties "opens the way to the legalization of unused foreign influence that can be used precisely to finance the election campaign and create the election result, and to formally show that the work of the political entity is financed with that money ''.
"Montenegro has been under the attack of malignant foreign influences for a long time, especially in the electoral process. The reports of domestic and international organizations very clearly point out that problem, especially when it comes to the financing of election campaigns and political entities,'' he warned.
The essence of the amendment of the Law is to prevent the cause
ASK believes that the essence of amending the Act should be the prevention of the causes, not the resolution of the consequences.
"In particular, it is necessary to introduce clear rules regarding the duration of the election campaign, to specify the rules of donations to political entities and expenses in the election campaign (eg, distinguishing the expenses of regular work and election campaign), to specify deadlines for reporting and to introduce clear rules, prohibitions and restrictions when it is a campaign carried out by political subjects and other persons", they said.
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