Corruption Scandal Fuels Calls for Strict Party Funding Rules

Malaga, Spain – The corruption scandal enveloping the governing conservative People’s Party in Spain and its leader, Prime Minister Mariano Rajoy, calls into question the funding model for political parties and points towards the need for strict controls, experts say.

Spain’s political leaders enjoy absolute impunity,” said lawyer José Cosín, the author of the book “Mafia y corrupción” (Mafia and Corruption), published in 2008, which describes the relationships between organised crime, money laundering and political corruption that were in evidence even then.

Cosín told IPS that in Spain today, “many judges are politicised, and the courts lack the means to investigate political parties.”

Law 8/2007 on the financing of political parties states that they are private associations with a mixed revenue system, collecting on the one hand public funds, in proportion to their representation in parliament, and on the other hand private contributions from individuals and corporations – excluding those that provide goods or services for public entities – which must not exceed reasonable limits.

Illegal financing of political parties is an administrative offence rather than a crime under Spain’s criminal code, although payment of bribes to obtain a public service contract is a crime.

In 2008 the political parties received a total of 299.5 million euros (398.7 million dollars) in public subsidies for day-to-day operations and election expenses, 44.7 million euros (59.5 million dollars) in membership fees and contributions from supporters, and 6.4 million euros (8.5 million dollars) in donations, according to the latest Court of Audit report.

The fact that the Court of Audit, the supreme body exercising oversight over the accounts of political parties, has a five year backlog means that the statute of limitations may have lapsed on any financial irregularities, since investigations must be initiated within four years, according to the current law on financing of political parties, which reformed the 2007 law in October 2012.

Rajoy announced a wide set of measures to fight corruption, like a draft law on transparency, access to public information, and good governance, that “will be approved by the end of the year,” he promised in his appearance before parliament Aug. 1 to respond to accusations against himself and the People’s Party (PP).

He refused to step down, as the opposition is demanding, and denied any connection with the scandal unleashed by Luis Bárcenas, a PP finance manager and treasurer for over two decades.

Bárcenas told a judge he accepted millions in cash donations from construction firms, some of which he said he gave to senior PP officials, Rajoy included, in the form of bonuses. He has been in jail since June, under investigation for fraud, money laundering and tax evasion.

The Rajoy administration’s “national democratic regeneration plan”, to be presented in September, would make illegal financing a criminal offence under the law, and reform the criminal procedure act to speed up trials.

“I am convinced that these changes to penalties, deadlines and procedures will end the sensation of impunity that is irritating Spanish society,” Rajoy told parliament.

In Spain, which is suffering from harsh spending cuts due to the severe crisis and where unemployment has soared to nearly 27 percent, political parties are widely seen as the most corrupt institutions.

Transparency International’s Global Corruption Barometer, published Jul. 9, found the perception of corruption in Spain’s political parties was 4.4 on a scale of 5.

“The lack of transparency in political parties’ accounts has paved the way for cases like that of Bárcenas,” Carmen Molina, spokeswoman for the Green party EQUO in the southern Spanish city of Málaga, told IPS.

In her view, Rajoy’s promises are not enough. “Citizens are fed up because politicians do not do what they say, no progress is being made and no drastic measures are being taken to end corruption.”

She advocated wider reforms, including changes in the election law, which she said favours a two-party system – of the PP and the opposition centre-left Spanish Socialist Workers’ Party (PSOE) – which works against the interests of minority parties.

José Luis Centella, congressional spokesperson for the Plural Left party, is in favour of strict controls to ensure transparency and avoid illegal funding. At the same time he believes the Court of Audit “is deeply constrained and has few resources” to carry out its work.

Cosín said that today “we don’t know for sure how much money is given to political parties and what they do with it.”

He said the draft law on transparency, approved by the Council of Ministers on Jul. 12, 2012, is “inadequate” and violates the right of access to information, because it provides for what is known as “negative administrative silence” – in other words, a lack of response from a government body implies that the request for information is refused.

“Government agencies should be compelled to answer, because the right to information is basic,” he said.

Centella told IPS that the Plural Left party supports public financing of political parties, “to reduce as much as possible the acceptance of private contributions” apart from membership dues, “because there is a greater risk of influence peddling with private donations.”

The law on party funding approved in October 2012 stipulates that the Court of Audit must be notified of private donations larger than 50,000 euros (66,000 dollars), or any real estate, within three months. Infringement of these rules draws a fine of twice the value of the irregularly received contribution.

The same law sets a limit of 100,000 euros (133,000 dollars) a year on debt forgiveness from credit agencies to the parties.

Centella was critical of the spiralling costs of elections in spite of the economic debacle. He said political campaigns seem to pursue “the sale of a product” rather than “a debate of ideas,” leading to “costs in the millions” that encourage illegal political funding.

The Court of Audit reported that during the last general elections, in November 2011, election expenses amounted to more than 62 million euros (83 million dollars), with the PP and PSOE together accounting for 41.6 million euros (55 million dollars).

However, Centella believes the true figures to be higher, and he is calling for “greater plurality” so that small parties can, for example, advertise on public television during election campaigns.