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Doc. 9077

4 May 2001

Financing of political parties


Political Affairs Committee

Rapporteur: Mrs Vlasta Stepová, Czech Republic, Socialist Group


There is a growing concern of citizens in regards to corruption linked to political parties, political parties’ fading independence and the occurrence of improper influence on political decisions through financial means.

The Political Affairs Committee is proposing that in order to maintain and increase the confidence of citizens in their political systems, Council of Europe member states should adopt legislation regarding the financing of political parties based on the following principles: a reasonable balance between public and private funding, a fair criteria for the distribution of state contributions to parties, strict rules concerning private donations, a threshold on parties’ expenditures linked to election campaigns, complete transparency of accounts, the establishment of an independent audit authority and meaningful sanctions for those who violate the rules.

The Committee of Ministers is invited to adopt “common rules against corruption in the funding of political parties and election campaign” taking into accounts the principles formulated by the Assembly and the guidelines adopted by the Venice Commission in March 2001.

I.       Draft recommendation

1.       There is growing concern of citizens in regards to corruption linked to political parties, political parties’ fading independence and the occurrence of improper influence on political decisions through financial means. The Assembly, stressing that political parties are an essential element of pluralistic democracies, is seriously preoccupied about this situation.

2.       A number of scandals linked to the financing of political parties, in several Council of Europe member states in all parts of Europe, over recent years has demonstrated that this issue must be addressed as a matter of urgency in order to prevent the loss of citizens’ interest in the political life of their respective countries.

3.       In order to maintain and increase the confidence of citizens in their political systems, Council of Europe member states must adopt rules governing the financing of political parties and of electoral campaigns.

4.       The Assembly is of the opinion that the general principles, on which these rules should be based, must be formulated at a European level.

5.       In this connection, the Assembly takes note of the activities of the Council of Europe’s bodies in this field, in particular of the guidelines for financing political parties, adopted by the European Commission for Democracy through Law (the Venice Commission) in March 2001, and of the ongoing work of the Council of Europe’s Working Group on the Funding of Political Parties (GMCF) aimed at formulating recommendations to member states on “common rules against corruption in the funding of political parties and electoral campaigns”.

6.       The conditions in which political parties exercise their activities have changed over recent decades and that nowadays they need substantial financial resources to gain visibility and to obtain political support for their ideas. Therefore, the Assembly considers that the regulation mechanisms must take these realities into account and empower political parties to obtain sufficient resources to carry out their tasks and functions.

7.       The Assembly believes that the rules on financing political parties and on electoral campaigns must be based on the following principles: a reasonable balance between public and private funding, fair criteria for the distribution of state contributions to parties, strict rules concerning private donations, a threshold on parties’ expenditures linked to election campaigns, complete transparency of accounts, the establishment of an independent audit authority and meaningful sanctions for those who violate the rules.

8.       Accordingly, the Assembly considers that:

A.       As regards sources of finance:

i.       states should encourage citizens’ participation in the activities of political parties, including their financial support to parties. It should be accepted that membership fees, traditional and non-controversial sources of finance, are not sufficient to face the ever increasing expense of political competition;

ii.       political parties should receive financial contributions from the state budget in order to prevent dependency on private donors and to guarantee equality of chances between political parties. State financial contributions should, on the one hand, be calculated in ratio to the political support which the parties enjoy, evaluated on objective criteria such as the number of votes cast or the number of parliamentary seats won, and on the other hand enable new parties to enter the political arena and to compete under fair conditions with the more well-established parties;

iii.       state support should not exceed the level strictly necessary to achieve the above objectives, since excessive reliance on state funding can lead to the weakening of links between parties and their electorate;

iv.       besides their financial contributions, states may contribute indirectly to financing political parties based on law, for example by covering the costs of postage and of meeting rooms, by supporting party media, youth organisations and research institutes; and also by granting tax incentives;

v.       together with state funding, private funding is an essential source of finance for political parties. As private financing, in particular donations, creates opportunities for improper influence and corruption, the following rules should apply:

c. strict limitations on donations from legal entities;

d. a legal limit on the maximum sum of donations;

B.       As regards expenditures during election campaigns:

i.       states should impose limits on the maximum expenditure permitted during election campaigns, given that in the absence of an upper threshold on expenditures, there are no limits to the escalation of costs during election campaigns, which is an incentive for parties to intensify their search for funds.

C.       As regards transparency:

i.       financing of political parties must be fully transparent, which requires political parties, in particular:

D.       As regards control:

i.       states should establish independent auditing bodies endowed with sufficient powers to supervise the accounts of political parties and the expenses linked to electoral campaigns.

E.       As regards sanctions:

i.       in the case of a violation of the legislation, political parties should be subject to meaningful sanctions, including the partial or total loss or mandatory reimbursement of state contributions and the imposition of fines. When individual responsibility is established, sanctions should include the annulment of the elected mandate or illegibility.

F.       As regards “third parties”:

i.        the legislation on financing political parties and on electoral campaigns should also apply to entities related to political parties, such as political foundations.

9.       The Assembly therefore recommends that the Committee of Ministers:

i.        adopt “common rules against corruption in the funding of political parties and electoral campaigns”, taking into account the work of the Multidisciplinary Group on Corruption (GMC) pursuant a proposal of its Working Group on the Funding of Political Parties (GMCF), the above-formulated principles, as well as the guidelines adopted by the European Commission for Democracy Through Law (The Venice Commission) in March 2001;

ii.       invite member states to adopt legislation on financing political parties and electoral campaigns based on the above-formulated principles reflected in Council of Europe guidelines.

II.       Explanatory memorandum by the Rapporteur

1.       Introduction

1.       The relatively recent series of scandals linked to the financing of political parties has highlighted the need for some form of regulation to prevent the erosion of citizens' confidence in parties and, indirectly, in the functioning of democratic systems.

2.       Many countries have established or are currently drawing up rules on this subject aimed at increasing, and in some cases restoring, public confidence in political parties.

3.       The need for rules governing the financing of political parties is also perceived at the European level. The Council of Europe has been actively engaged in this field, particularly through its Venice Commission and the Working Group on the Funding of Political Parties (GMCF). The latter's activities will, I hope, culminate shortly in the adoption of recommendations to Council of Europe member states on "common rules against corruption in the funding of political parties and electoral campaigns". Although these would not be legally binding, they would be the first pan-European instrument on the subject.

4.       Similarly, the Commission of the European Union has submitted a proposal for a Council Regulation on the statute and financing of European political parties.

5.       So that its discussions would be based on solid foundations, the Political Affairs Committee commissioned a comparative study of this subject. It has been prepared by Professor J.A. Frowein, Director of the Max Planck Institute for Comparative Public Law and International Law (Heidelberg, Germany), and Dr Roland Bank, guest researcher at the Institute. I wish to thank these two distinguished academics for their excellent study, which itself represents an explanatory memorandum to the Committee's draft recommendation and therefore appears as Appendix 1 to this report.

6.       In drawing up the draft recommendation, I have also referred to the work of the Venice Commission, namely the "guidelines for financing political parties" which it adopted in March 2001, and the work of the GMCF. I particularly wish to thank Mr de Vel, Director General of Legal Affairs, and the members of his secretariat, for their excellent support and co-operation.

2.       Political Affairs Committee hearing in Paris on 13 March 2001

7.       In order to seek out the views of other experts on the subject, as well as of its members, the Committee organised a hearing in Paris on 13 March 2001. The participants were:

-       Mr Roland Bank, Max-Planck-Institute, Heidelberg

-       Mr Yves-Marie Doublet, Ecole Nationale d’Administration (ENA), Paris

-       Professor Keith Ewing, Cambridge University

-       Mr Robert Fremr, High Court Judge, Czech Republic

-       Mr Jean-Christophe Geiser, Lawyer, Federal Office of Justice, Berne

-       Mr Jacques Robert, member of the Venice Commission

Mr de VEL, the Council of Europe's Director General of Legal Affairs, also participated.

8.       I wish to offer my sincere thanks to all those taking part for their contributions to the debate, from which I have drawn inspiration in preparing the draft recommendation. The report of the hearing (AS/Pol (2001) 14) may be obtained from the secretariat of the Political Affairs Committee of the Parliamentary Assembly.

9.       At the hearing, the experts answered a series of questions under three headings, which in my view encapsulate the problem:

i.       Is the financing of political parties a problem for society as a whole? (Is it currently a problem? Does it require an urgent response? Is it a problem common to all European countries, east and west?);

ii.       What are the current models for funding political parties? (What is the ideal model to recommend - public or private financing or a mixture of the two, and if the latter in what proportions? What are the advantages, disadvantages and dangers of the various options?);

iii.       What are the rules governing the financing of political parties? (Should such rules be drawn up? How binding should they be? Should the Council of Europe draw up common guidelines? Who could contribute to the preparation of Europe-wide rules?)

10.       Based on the experts' replies and the discussions that followed, the following conclusions may be put forward:

Question 1:

11.       For a very long time, political parties operated without any rules governing their financing. It was about twenty years ago that countries started to draw up precise rules on the subject. Under the impulse of recent scandals, party financing has now become a live and serious issue. It has direct implications for relations between the public and their political representatives and as such raises the fundamental issue of citizens' confidence in their political institutions. One of the most obvious undesirable side-effects has been the dwindling turnout at elections.

12.       It has to be recognised that in current circumstances political parties need cash in order to operate, particularly if they are to get their ideas across to voters via the media.

13.       Effective legislation is needed to impose a certain amount of discipline on party funding, thereby restoring public confidence in the party system. It is also important from an economic standpoint, since it helps indirectly to control the media market. In the absence of any limits, party public relations costs spiral out of control. Regulation also ensures a more level playing field for parties.

14.       The two main areas that require regulation are private donations and party spending, particularly on the media.

15.       Regulating party financing is only one means of "cleaning up" public life. Other aspects of this might include rules governing the financing of election campaigns, a more clearly defined status for elected members, the functioning of the judicial system and a healthy local democracy. Legislation on money laundering and on excessive media concentration can also make a contribution.

Question 2:

16.       There is no ideal model for the financing of political parties. However, the system that seems to operate the best is one based on a reasonable balance between public and private funding. The balance though must be sought individually for each country. There are no precise, generally applicable formulas on the ideal ratio between the two sources.

17.       Public financing is particularly necessary for:

-       ensuring that parties have enough money to operate;

-        limiting inappropriate private influences;

-       helping to place parties on an equal footing.

18.       Public party financing is thus a source of stability, but it must not serve to fossilise the political system and lead to party dependence on the state. It may be direct or indirect, but must be confined to parties that respect democracy and the constitutional order.

19.       Private financing must be subject to a ceiling, tax deductible and totally transparent.

Question 3:

20.       The relevant rules should be based on the following principles:

-       mixed (public and private) sources of funding;

-       limits on spending, including election expenditure, and the level of donations;

-       a ban or very strict limits on company donations;

-       donations to be tax deductible;

-       measures to ensure transparency concerning both party accounts and the identity of donors;

-       independent monitoring machinery;

-       the application of these rules to "third parties" linked to political parties.

21.       In principle, party funding from foreign sources should be prohibited. In certain specific cases, though, external financing may help to strengthen democracy. Consideration should be given to lifting the ban on foreign donations in the case of parties representing national minorities.

22.       Independent bodies must be given responsibility for overseeing party financing. These might be:

-       political bodies (made up of political representatives);

-       administrative bodies (on the lines of audit or electoral commissions, for example).

23.       Contravention of the rules may be liable to administrative or criminal penalties. They may be imposed on the parties concerned or on the persons individually responsible.

24.       It will not be easy to draw up common pan-European rules on this subject, given that each country has its own particular circumstances. However, such rules are desirable, so long as they are applied flexibly in the different countries and regularly updated. The Council of Europe should adopt non-binding rules on party financing.

3.       Conclusion

25.       Political parties have to recognise that the adoption of precise rules on financing is essential at our democratic systems' current stage of development. The parties themselves have a vital interest in the existence of such rules, since although some of them may be seduced by the opportunities that legal uncertainty offers, in the medium to long-term such an irresponsible policy would be fatal to them. I therefore call on the sense of responsibility of Parliamentary Assembly colleagues and invite them to vote for the draft recommendation and take active steps to ensure that legislation based on the principles it contains is enacted in their respective countries.

Reporting committee : Political Affairs Committee

Reference to committee : Doc 8470, Reference No. 2415, 20.09.99

Draft recommendation adopted by the committee on 4 April 2001 with 2 abstentions

Members of the committee : Mr Davis (Chairman), Mr Baumel (Vice-Chairman), Mr Toshev (Vice-Chairman), MM Adamia, Aliyev (alternate : Mr Seyidov), Arzilli, Atkinson (alternate : Mrs Jones), Mrs Bakoyianni (alternate : Mr Liapis), MM Bársony, Behrendt, Berceanu, Bergqvist, Bianchi (alternate : Mr Rigo), Björck, Blaauw, Bühler, Cekuolis (alternate : Mr Olekas), Clerfayt, Daly, Demetriou, Derycke, Diaz de Mera (alternate : Mr Sole Tura), Dokle, Dreyfus-Schmidt, Mrs Durrieu (alternate : Mr Lemoine), Mr Evangelisti (alternate : Mr Brunetti), Mrs Feric-Vac, Mr Frey, Mrs Fyfe (alternate : Lord Judd), MM Gjellerod, Glesener, Gligoroski, Gross, Gül, Hornues, Hrebenciuc, Irtemçelik, Ivanenko, Iwinski, Jakic, Karpov, Mrs Kautto, MM Kirilov, Kotsonis, Krzaklewski, Martinez-Casan (alternate : Mr Puche), Medeiros Ferreira, Meier, Mota Amaral, Mutman, Mrs Nemcova, Mr Neuwirth, Mrs Ojuland, MM Oliynyk, Palmitjavila Ribo, Prisacaru, Prusak, de Puig, Mrs Ragnarsdottir, MM Rogozin, Schieder, Schloten, Selva (alternate : Mr Turini), Spindelegger, Mrs Squarcialupi, Mrs Stepová, MM Surjan, Taylor, Thoresen, Timmermans (alternate : Mrs Zwerver), Udovenko, Vakilov, Vella, Weiss, Wielowieyski, Zuiganov.

N.B. The names of the members who took part in the meeting are printed in italics

Secretaries of the committee : Mr Perin, Mrs Ruotanen, Mr Sich, Mrs Hügel


Financing of Political Parties in Comparative Perspective

Study submitted at the Committee’s request by

Prof. Dr. Dres. H.C. J.A. FROWEIN, Director, and

Dr Roland BANK, Research Fellow

(Max-Planck-Institute for Comparative Public Law and International Law, Heidelberg)


I. Introduction

II. Private sources from within the party

1.       Contributions by members

2.       Contributions by members of parliament: ”party taxes”

III. Private sources outside the party: donations

1.       Maximum threshold

2.       Further qualification of donors or donations

IV.        State funding

V.        Transparency, control, sanctions

VI.        Concluding observations

* *

I.       Introduction

1.       The traditional model of political party living completely or to a large extent on the regular contributions of their members does not apply anymore in practice. The importance of other sources of income has increased enormously. These developments in turn have created new opportunities for potential influence on the part of those willing to give money to a political party. This is the context in which both a growing concern among citizens about corruption and fading independence of political parties as well as a number of political scandals in European party systems has to be analysed. It is against this background that the Political Affairs Committee of the Parliamentary Assembly of the Council of Europe has commissioned this study.

2.       Of course, the problems described above trigger the question for ways to secure on the one hand an up-to-date financing of political parties which must be in a position to build a forum for political discussion and activity in the life of a society and on the other to eliminate the loopholes for improper influence as far as possible. This comparative analysis provides an overview of the approaches adopted in this respect in 10 different European countries.1 The countries selected for the purpose of this comparative analysis are Austria, Belgium, Czech Republic, Denmark, France, Germany, Italy, the Netherlands, Russian Federation, Spain, Switzerland, and the United Kingdom.2

3.       For the purpose of this report a narrow interpretation of the ”financing of political parties” will be applied in a way excluding from the scope of analysis forms of financing of independent organisations or bodies such as political foundations.

II.        Private sources from within the party

1.        Contributions by members

4.       Regular membership or affiliation fees generally can be regarded as the most democratic and unproblematic form of financing: they guarantee a certain influence of party members on official party politics without allowing single financially powerful persons or groups too much influence.

5.       However, a shrinking percentage of contributions by members in relation to the overall budget has been diminishing this function since several years.3 The most important factor limiting the significance of membership contributions as a source of income is often a primary reliance on public funding. As examples, we may look at Belgium where membership contributions make up less than 10 % of every party’s income, sometimes even less than 1 %.4 In Spain also, the balance has shifted towards public funding, which constitutes 90% of the declared income of political parties (with the exception of the Izquierda Unida Coalition which receives 30% of its income from private sources).5

6.       But also in cases where there is no public funding, sometimes the importance of membership contributions has been diminishing quite dramatically: for instance, the percentage of the British Labour Party’s affiliation fees in the party’s overall annual income dropped from more than 50 % in 1992 to roughly 25 % in 1997.6 This drop has been explained by a loss of party members,7 which as such could be seen as a democratic expression of members’ discontent with the Party’s performance. But since the increase in donations was much bigger than the loss of income from affiliation fees, the drop additionally may have to be explained with the ”arms race” in general spending, in particular with regard to election expenditure, that has also been observed.8 In contrast to that, membership fees constitute the main and sometimes the sole (in the case of local sections of parties) source of political parties’ income in Switzerland9 and in the Netherlands.10

7.       The exact amount of membership fees to be levied is regulated by the parties themselves,11 depending on how much emphasis a party puts on membership contributions. Often, parties fix a minimum contribution and apply a system of progressive contribution rates according to the income of the individual member or, at least, provide for a reduced fee for certain low income groups. For instance, political parties in Germany apply a progression rate between minimum and maximum fees according to the income of the member: usually 3 to 4 DM are levied as a monthly minimum and between 30 (CSU) and 440 (SPD) DM as a maximum.12 However, on average some DM 150 are paid by each member per year since the varying sums of membership obligations are equalised to a significant extent by varying moral of payment and sincerity in declaring the true income for membership purposes.13

8.       It is also a question of a party’s statute whether and how membership fees are distributed between the central organisation and decentralised part on the Land, regional or local level. Depending on the distribution of competencies within a party’s system this can also mean that the same party levies different membership fees in different regions.14 Sometimes, party membership includes the obligation to pay different amounts to different parts or sub-organisations of a party.15

9.       It has to be kept in mind that membership fees sometimes do not constitute a pure source of private funding if they are encouraged by tax privileges for the members. This aspect will be discussed below.

2.        Contributions by members of parliament: ”party taxes”

10.       Contributions by members of parliament, sometimes also called ”party taxes”, seem to constitute a widespread source of income for parties in European states. Members of parliament pay a certain amount of their diet as a parliamentarian to the party which they represent. Arrangements of this sort are frequently laid down in the parties’ statutes and provide for voluntary16 or mandatory17 payments by members of parliament.18 Sometimes, the concept of ”party taxes” is not confined to members of parliament but also applies to high ranking civil servants or judges who owe their position to a certain party.19

11.       As far as can be seen there are no provisions in the states examined here which prohibit such arrangements. In the Russian Federation, there is even a law excluding parliamentarians from the restrictions imposed in this respect by virtue of the law on civil servants.20

12.       It may be discussed whether this type of source is private or rather a disguised form of public funding at least if the contribution is mandatory for members of parliament of a certain party. This is all the more so, if ”party taxes” constitute a widespread practice and therefore will be taken into account by most parliamentarians when fixing their own diets.

13.       Moreover, this practice is problematic in a very fundamental respect as can be demonstrated by the critical discussion in Germany. It may be open to doubt whether this form of financing is compatible with the idea of a free mandate (Art. 38 I 2 of the Basic Law). Moreover, it may be asked whether it violates Art. 48 III 1 of the Basic Law which shall serve to secure the independence of the deputies through the payment of an adequate sum of money.21 If parliamentarians are paying a significant amount of money to their party only two conclusions are possible: either their independence is endangered or the amount of money paid to them is significantly higher than necessary. A prohibition of such practices is enshrined in the Law on Members of Parliament in Lower Saxony which expressly provides that parliamentarians may not give any donations with a view to their mandate.22

3.       Profits of party-owned companies

14.       Since classical forms of party-owned business, in particular, publishers, newspapers and maybe cinemas, are usually no longer profitable areas, political parties may be tempted to venture in other areas which are more economically attractive. In Austria, for instance, political parties have developed commercial activities in areas such as marketing, shopping centres, and house construction through companies owned or shared by them.23

15.       Such practices have given rise to suspicions of corruption: it is evident that certain economic activities such as house construction may very well profit from favourable political decisions. Therefore, it is clear that economic activities which have nothing to do with the parties’ general function of transmitting the people’s will into the (parliamentary) political debate are highly problematic.

16.       However, legal restrictions on commercial activities of political parties are rare. The most far-reaching provision countering any tendency to earn money from commercial enterprises has been applied for a short period in the Czech Republic where political parties were neither allowed to become commercially active under their name nor are allowed to participate in a legal entity even if the commercial activities pertain to the classical fields such as publishing.24 However, the law has been amended again and now allows for commercial activities in limited fields such as publishing, culture, or the production of promotion objects.25 In the Russian Federation, commercial activities of parties are only admissible in as far as they are covered by the object and purpose of the party.26 This could be read as to exclude any activities not directly serving the transmission of opinions into political and parliamentary debate.

III.       Private sources from outside the party: donations

17.       Donations have become a very important source of income for political parties in most European countries. One advantage of this source of income from the viewpoint of parties is that it allows for a certain flexibility: In contrast to public funding or membership fees which are more or less fixed or depending on the performance of a party in elections the money obtained through donations seems to be more open to a party’s own endeavours in the financial field, in particular, by way of fundraising. This, however, is exactly the point giving rise to significant public concern and distrust into party financing. For instance, granting access to political leaders in fundraising dinners raises suspicions that political influence can be bought. And, the more money a party manages to raise from private donors the more it will become dependent on them.

18.       Whereas a number of countries (for instance, Austria, Switzerland, Netherlands, Czech Republic, Denmark and currently also the United Kingdom) apparently do not impose any limitations, others try to limit the possibility of improper influence through certain restrictions. There are two basic approaches in which some of these concerns are addressed apart from external control and transparency efforts which will be discussed later on in the report. One is to impose restrictions on the amount of donations. The other is to impose certain conditions on the qualification of donors or donations.

1.       Maximum threshold

19.       Maximum thresholds have been adopted in France (50.000 FF per year and donor27 and 30.000 FF for election campaigns28), Belgium (20.000 BEF per year and donor to the same party and an aggregate of 80.000 BEF to all parties) and Spain (10.000.000 PTS per year and donor).29

2.       Further qualification of donors or donations

a)        Permissible or impermissible donors or donations

20.       A good example of detailed regulation on the qualification of donors is the new Political Parties, Elections and Referendums Bill in the United Kingdom which is currently (as of July 2000) pending before the House of Lords and tries to settle the presently almost completely unrestrained legal situation of party financing. The new bill shall restrict the acceptance of donations to those coming from ”permissible donors” and where the identity of the donors is known.30 ”Permissible donors” include individuals registered in an electoral register in the United Kingdom; companies registered in the United Kingdom or elsewhere in the EU if carrying out business in the United Kingdom; registered political parties; trade unions; registered friendly societies; and unincorporated associations carrying out business or other activities and having its main office in the United Kingdom.31 Foreign funding is thereby prohibited.32 If a party receives a donation not fulfilling the mentioned requirements it will be obliged under the new Act to return the donation if possible or send it to the Electoral Commission.33

21.       In contrast to this positive list of permissible donors the German Law on Political Parties chooses a negative approach by enlisting the ”impermissible” donors: political foundations and parliamentary groups; corporate bodies or associations which are exclusively and directly created and working for non-profit, charitable or church purposes; and anonymous donors in cases where the donation exceeds DM 1,000 or “fake” donors who are obviously merely passing on the donations of third parties not named. Moreover donations of more than DM 1,000 are qualified as impermissible if they come from outside German jurisdiction unless they stem directly from the assets of a German as defined by the Basic Law (see Art. 116 (1) and (2) Basic Law), a citizen of the European Union, or of a business enterprise whose shares are owned to more than 50% by Germans as defined by the Basic Law. Donations to parties of national minorities, by that political party’s parliamentary group in the European Parliament or by a foreign member of the European Parliament are exempt from the prohibition of foreign donations. Finally, donations from professional organisations which had obtained the money with the proviso to pass it on to a political party or such donations which are clearly made in the expectation of some specific economic or political advantage are forbidden.34 If a donation is inadmissible, it has to be passed on immediately to the presidency of the German Bundestag.35

b)        Donations from abroad

22.       Provisions limiting the possibility of donations from abroad have also been adopted by other states. For instance, in France, any contributions from abroad are impermissible.36 In Spain, donations to political parties by other states or other public foreign organs are forbidden, with the exception of subsidies given by the European Parliament.37 Similarly, donations for elections by foreign individuals, institutions or states are forbidden with the exception of subsidies given by the European Community for the elections to the European Parliament.38 The Basque Country has a special regulation prohibiting donations from foreign persons or entities or from persons who do not reside in the Basque Autonomous Community.39

c)        The danger of improper influence through powerful groups

23.       With a view to the danger of improper political influence on the part of financially powerful donors a situation in which donations do not go directly to the party but via associations which bundle a big number and high volume of donations is highly problematic. This has been reported from Austria where donations usually seem to be made through associations such as the Vereinigung Österreichischer Industrieller or trade unions.40 The danger of increasing improper influence on the part of an association which pools donations with the aim to pass them on to a political party seems to be exactly the ratio underpinning the German prohibition of such procedure on the part of professional associations which has been outlined above. In contrast, trade unions and employers associations in Denmark are allowed to give money collected from their members to political parties; however, they must provide for the possibility that any member may opt out of the scheme.41

24.       A particular interest in influencing political parties may arise on the part of enterprises, for instance, if they are competing for contracts with the State.

25.       An interesting provision is likely to be applied in this respect in the UK after the future adoption of the Political Parties, Elections and Referendums Bill with regard to donations stemming from companies: Such donations are prohibited unless approved in advance by the company in a general meeting. Therefore, the action to be taken by directors or managers in this respect will be made subject to approval on a broader base depending, of course, on the statutes of the company in question. In case of a violation of this provision, the company must have a statutory right to recover the amount of the donation or expenditure jointly and collectively from the directors of the company.42

26.       In Italy also, public enterprises, companies with more than 20 % shares controlled by the State and institutions of public administration are not permitted as donors to parties.43 This rule, however, seems to aim at avoiding a concealed form of public funding which would open wide ranging opportunities for exerting influence on the part of the executive. All other companies may only give donations legally if the decision for the donation has been made by the responsible organ of the company and is clearly set out in the company’s annual balance.

27.       A provision limiting the possible temptations arising from competition for public contracts has been adopted in Spain where donations made by public enterprises or by private ones which are contracting with the State have been forbidden.44 The most far-reaching provisions in this respect apply in France45 and Belgium46 where only natural persons are permissible donors while legal entities and therefore most companies are excluded.

d)        Anonymous donations

28.       In general, it seems sensible to adopt provisions against anonymous donations while keeping the administrative burden proportionate by excluding low value donations from the parties’ obligation to refuse anonymous donations as it is done in Germany and also foreseen in the new law project in Britain. More complicated provisions have been adopted in Spain. Anonymous donations shall not exceed 5% of the amount awarded to the party in the General Budget of the State. This implies that a party with no awarded amount (for example parties without representation in the Cortes Generales) may not receive any anonymous donations.47 These provisions give rise to criticism. First of all, the 5 % threshold may allow for a substantial contribution from anonymous donors which may run contrary to the aim of transparency. Moreover, the differentiation between parties with public funding and those with respect to private donations is less than convincing and may even be considered to run contrary to the equality of chances for political parties.

e)        Donations for election campaigns

29.       Particular provisions may apply to donations for election campaigns. For example, in France, there are special requirements on calls for donations which may only contain the technical information necessary for the transfer of money.48

30.       Detailed regulations in this field have also been adopted in the Russian Federation, however, without being integrated in a general concept of regulating party financing which is still lacking. By virtue of the rules on the financing of election campaigns, banning donations on the part of public institutions and legal persons with more than 30 % of public shareholders inhibits concealed public funding. In addition to that, anonymous donations and donations from charitable organisations are prohibited. With a view to impeding influence from abroad not only donations by foreigners or stateless persons are excluded but also by a Russian legal person if more than 30 % of its capital is controlled by foreigners. Moreover, donations by international organisations or movements are excluded.49

31.       An interesting provision concerns donations by legal persons which may only be accepted if the donor has been registered at least a year before the date of the election. Thereby, the concealment of a donation’s true source by way of founding companies for solely this purpose is made more difficult.

IV.       State funding

1.       Direct funding

a)       Of the parties as such

32.       Whereas in some countries direct public funding has become the main source of income for political parties other states still completely reject the concept. In particular, Switzerland and the United Kingdom (with the exception of Northern Ireland)50 do not provide any subsidies to political

parties. In the United Kingdom, the possibility of introducing some form of public funding has been intensively discussed with a view to the elaboration of the new Political Parties, Elections and Referendums Bill, but was finally rejected apart from setting aside a modest sum of 2 million Pounds a year for so called policy development grants in order to allow parties the financing of policy research.51 One argument forwarded against public funding was that the taxpayer should not be forced to support parties financially which he or she does not approve politically. Moreover, it was said that public funding would contribute to ossify the present party system by making it harder for new parties to establish themselves. Public funding was also regarded as increasing the distance between the political elite and the citizen who is to be represented.52

33.       After a number of corruption scandals the Italian people had clearly expressed its will (by 90.1 % in the respective referendum)53 to completely abolish public funding for political parties. Despite this clear vote the Italian legislator introduced a ”voluntary” contribution which allowed the tax payer to devise some 4 per mil of his income tax to political parties.54 Since a sum was specified in the general budget in advance it can hardly be said that the system was truly ”voluntary”.55 After disputes about the possibility of adopting such a system after the referendum56 a subsequent law expressly reintroduced public funding of political parties, however, restricted to financing of election campaigns (see below).57

34.       On the other hand, there are also good arguments in favour of State funding which have motivated the majority of states to devise a scheme of public expenditure in favour of political parties. In particular, a substantial funding on the part of the State can guarantee equality of chances for political parties and sufficient independence from private donors.

35.       Two variations of public funding are applied in practice which are often combined with one another: a certain lump sum on the one hand and a specific amount paid per each vote obtained in elections on the other hand. Details of the regulations adopted are often highly sophisticated and complex.

36.       A lump sum (”Sockelbetrag”) is not necessarily granted in complete independence from electoral success or failure. Sometimes, it is conditional to a certain threshold of electoral success: for instance, in Austria, all parties with at least 5 members of parliament receive a lump sum.58 In Belgium, political parties only qualify for a lump sum if they are represented in both houses of parliament.59 Similarly, parties in the Netherlands only receive subsidies if at least one candidate has been elected into one of the two chambers of parliament; moreover, a party must have more than 1000 members paying a minimum fee of 25 Dfl in order to qualify for public funding.60

37.       A slightly modified approach is applied in the Czech Republic where parties receive a lump sum which is variable according to the percentage of votes obtained in general elections: lump sums are only paid if a minimum of 3 % of votes was obtained and are increased for every 0.1 % of votes between 3 and 5 % of votes obtained. If more than 5 % were obtained the lump sum remains at the same level.61

38.       In other cases, a party can only qualify for this kind of funding if it has demonstrated a broad support among citizens: in France, the payment of the lump sum is dependent on two requirements: first of all, the party in question must not have qualified for public funding based on the results achieved in elections; moreover, it must have obtained donations from a substantial number of supporters (10.000 natural persons as donors from an overall of at least 30 Départements having given at least 1 million FF to the party).62

39.       Whereas generally speaking a system providing for a lump sum is favourable for smaller parties which receive relatively more than in a system with an exclusive ”success” approach it must not be overlooked that it sometimes may provide opportunities for manipulation by the bigger parties. This was to be observed in Austria where the lump sum first was pushed up from 4 million AS in 1975 to 14 million AS in 1985 and then reduced to 3 million AS in 1987 when the Green Party entered parliament with 8 deputies.63 This experience shows the necessity for the possibility of a neutral review with a view to guaranteeing the equality of chances.

40.       Of course, certain privileges for smaller parties can also be accommodated in systems linking public funding exclusively to the success in elections. A viable solution in this respect has been adopted in Germany where parties receive a higher sum (DM 1.30) for the first 5 Million votes obtained in federal, European and Land elections than for the rest of the votes (DM 1).64

41.       The ”success” approach further differentiates between funding according to votes (for instance, Belgium65 or Denmark66) or parliamentary seats (for instance, the Netherlands)67. The Czech Republic68 and France69 apply a system in which a specific sum is devised both for votes and parliamentary seats. In the French model, financing according to votes obtained is only possible if candidates have been presented in at least 50 constituencies or if the party qualifies for a lump sum. Regarding the funding according to the seats obtained all deputies have to declare their affiliation at a specific time; money is distributed to the parties according to this declaration of affiliation. Alternatively, the sum accorded to one party can be defined as proportionate of the overall sum reserved for public funding of political parties (Austria). Moreover, the sum transferred to a political party may be diminished by the amount of subsidies accorded but not used by the party in the foregoing year.70

42.       A specific form of public funding which is complementary to the funding linked to the success in elections is applied in Germany: political parties also receive DM 0.50 public subsidies for every 1 DM of membership fee collected or private donation obtained. In order to favour smaller donors, only up to DM 6,000 per person will be taken into account. Moreover, provision is made that a splintering up of the party system into very small groups is not supported by public funding through conditionality of funding on a minimum success in elections: at least 0.5% of votes must have been obtained in federal or European elections, 1.0 % in Land elections; in the absence of a list, at least 10 % in the constituency.71 In contrast to that, a requirement of a minimum success of at least 1000 votes in a general election even in a small country as Denmark does not seem to constitute a sufficient threshold for countering the splintering of the system into mini-parties.72

43.       A maximum of public funding has been imposed in Germany: Since the new law adopted in 1994 has entered into force both a relative (public funding must not exceed the sum of other funding)73 and absolute (230 Million DM per year – increased in 1998 to 245 million DM)74 maximum of public funding applies.

44.       Sometimes aims other than merely supporting the parties as the central elements of a political system may be fostered by way of party financing. This can be seen in France where public funding of political parties has been made a tool in encouraging the representation of women on party lists. The law on the women’s access to political mandates prescribes that 50 % of candidates on a list must be women. A non-observance of this provision is sanctioned by a reduction of public funding in ratio to the actual percentage of women on the list.75

b)        Of parliamentary work

45.       Funding of parliamentary work of factions and groups exists in a number of countries76 and sometimes is also divided into a lump sum and a sum paid per seat (Denmark).77 Although means granted under this heading will usually not go to the parties’ accounts, they concern political activities which cannot easily be separated from activities carried out by the party as such. Since the parliamentary work constitutes one of the most visible political activities of a party it seems appropriate to regard the funding of parliamentary work as a source of financing political parties as well.

46.       Particular provisions apply in the United Kingdom where only parliamentary work of opposition parties is financed through specific funding (so called ”Short money” in the House of Commons, ”Cranborne money” in the House of Lords). The purpose of this money is to assist opposition parties in carrying out their parliamentary duties, in particular that of holding the government of the day to account. The money is used to provide research assistance for

Front Bench spokesmen, assistance in the Opposition Whips' office and office staff for the Leader of the Opposition.78

c)        Of other specific activities

47.       Funding of specific activities of political parties other than those in direct connection with election or referendum campaigns can pertain to, for instance, specific funds supporting the print media run by parties (Austria);79 radio and television broadcasting by financial support and / or the division of broadcasting time (Belgium,80 Netherlands81); political scientific institutes (Netherlands)82; or political youth organisations (Netherlands)83. The majority of states examined here do not provide for any subsidies in this field at all.84

2.       Financing of election campaigns

a)        Approaches in general

48.       In addition to those means granted according to the electoral success on a yearly basis, additional subsidies are often accorded especially for election campaigns. The amount granted to each party usually varies depending on the success in the elections. As far as there is a reimbursement of election expenditure either a certain sum is set out for an entire election which is distributed proportionally (for instance, in Austria85) or a specified sum is reimbursed for each vote obtained. An exceptional system is applied in France where a lump sum of half the maximum expenditure defined by law is reimbursed from public sources, limited, however, by the amount of actual expenditures.86

49.       In those countries such as the United Kingdom or Switzerland87 (with the exception of certain cantons) which are generally sceptical vis-à-vis public funding of political parties also election campaigns are hardly supported with public means. In the United Kingdom, there are only provisions granting free postage for promotion material in parliamentary and European elections and free meeting rooms for parliamentary, European and local elections.

50.       In Italy, reimbursement of election expenditure for general, European and regional elections as well as referenda has become the only source of public funding.88 An application has to be submitted within 10 days after the expiry of the deadline for submitting a list of candidates. A specific fund is created for each of the bodies consisting of 4,000 Lire for each person entitled to participate in an election (reduced sum of 3,600 for European elections). The payment of the sum is stretched over the entire legislative period: parties receive 40 % of the sum in the first year and 15 % in each of the following four years. The money will be distributed according to the proportional distribution of seats in the respective body subject to a certain minimum success in elections (see below). A different system is applied for the distribution of the fund for elections to the senate which is distributed regionally. Sub-funds are created for each region according to the number of inhabitants where the subsidies are distributed proportionally to the results achieved by the parties again subject to a minimum of success.

51.       In Spain, the State covers all declared electoral costs of political parties, federations, coalitions of groups of voters (in national and municipal elections, as well as for the European Parliament). This declaration of costs is supervised by the Tribunal de Cuentas, which also defines the permitted amount for each party. In case of two or more concurrent elections, the political parties and/or groups shall receive an additional amount of 25% of the costs of the elections for the Cortes Generales.

52.       The general elections subsidy is calculated taking into account both the amount of seats obtained in the representative body and the amount of votes. For example, the amount of general public funding for the national elections is two million pesetas per seat obtained in Congress or Senate and 75 pesetas per vote obtained for Congress or 30 pesetas for vote obtained for the Senate, with the condition that at least one candidate of the political group got a seat.

53.       The maximum sum of public funding of an election campaign at national level in Spain is 40 pesetas per citizens entitled to vote in an electoral district.89 In the municipal level the factor is 12 pesetas and for the elections to the European Parliament 20 pesetas.90

54.       In addition to this funding in accordance with election success, Spanish law also contains detailed provisions on the financing of promotion during election campaigns. There are special tariffs for the usage of the public mail system by parties and other political groups during elections91 which is combined with a public reimbursement of mailing costs of 20 pesetas per voting citizen in the electoral district in question.92 Under the condition is that the party is represented in one of the chambers of parliament. Moreover, political parties, coalitions, federations or groups of voters are accorded free broadcasting time for electoral publicity in public radio and television. The time accorded by an electoral board varies depending on the number of votes received by the party in the electoral area in question or of the Congress of Deputies if the election is national.93 The electoral board shall also allot time in private television broadcasting, which work with concession from the State, under the same terms.94 Moreover, public funding is provided for putting up posters and distributing other propaganda through the press as well as private radio stations. Sums provided, however, do not exceed a specified percentage (25 % for posters etc.95 and 20 % for press and private radio96) of the maximum sum of public funding.

55.       A particular approach has been adopted in the Russian Federation. The law on elections provides that each political group shall establish a fund for election purposes as the sole immediate source of financing election campaigns.97 The means deposited in this fund shall be kept in a separate account; they shall only consist of the political group’s own resources up to a maximum of 100.000 minimum wages, means accorded by the central election commission and donations by natural (150 minimum wages maximum per donor) or legal persons (20.000 minimum wages maximum per donor).98 Moreover, candidates can be freed from working obligations and receive some 10 minimum wages from the electoral commission.99

b)       Maximum limitations on spending

56.       Sometimes there are strict impositions on how much a party is allowed to spend during an election campaign.100 In the United Kingdom, while there is little regulation of party income and almost no public funding on the one hand, limitations are imposed on possible campaign and election expenditure in order to avoid parties’ ”buying” of votes through huge election budgets: a maximum of 30.000 Pounds in each contested constituency applies in a general election (a party contesting in each constituency of Great Britain may therefore incur expenditures of 19.230.000 Pounds).101

57.       Election campaign expenditure is also limited in Belgium where maximum sums have been set of for spending by one political party (40.000.000 BEF) and by particular candidates. Also in France, a maximum sum is fixed depending on the number of inhabitants in a constituency. In national elections, a lump sum of maximum expenditure of 250.000 FF is set out per candidate which is increased by 1 FF per inhabitant of the constituency.102 In the Russian Federation, campaign expenditure for each election association is limited to 250.000 minimum wages.103

c)        Minimum level of electoral success as a condition for public funding

58.       If there is any public funding it should guarantee the equal chances for all political parties. It may give rise to criticism if funding is conditional on quite significant levels of success in elections, as for instance, in the Swiss cantons of Fribourg and Genève (5 % of votes in proportional elections, 20 % in case of majority voting).104 Similarly, in Italy, parties will only receive funding if they either have obtained 4 % of the votes or one of their candidates won a direct mandate and the party achieved at least 1 % of the votes. In this context, candidates will have to declare their affiliation with a certain party or political movement for the purpose of devising public money according to the electoral success.105 Minimum requirements in elections for the Senate are 5 % of valid votes or one direct mandate.106 Parties and lists of linguistic minorities are exempt from these requirements.107

59.       Also the threshold of 3 % imposed in the Czech Republic constitutes a significant hurdle for smaller parties.108 In contrast, 5 % of votes obtained by a candidate in a constituency as a threshold for qualifying for reimbursement in France seems adequate.109

60.       If a certain minimum electoral success is not achieved by a political group in the Russian Federation (2 % of votes cast for a list or 3 % in case of majority systems) all means of public funding including compensation for free broadcasting time have to be returned to the central election commission. Also donations which have not been used have to be returned to the donors.110

d)        Spending of public subsidies requirements for election campaigns

61.       Specific requirements with regard to the spending of money obtained from public sources as a reimbursement of election expenditure may pertain, in particular, to the promotion of women’s participation in political life. In Italy, for instance, 5 % of the means obtained must be spent in this respect; the use of the money must be expressly laid out in the annual balance report.111

3.       Tax privileges (indirect funding)

62.       Tax privileges for donations and membership fees constitute a mixed type of funding: they encourage private financing through public means. Political parties do not benefit directly from the tax relief accorded to their members and donors but indirectly since this will increase the readiness of citizens to give money to parties.

63.       Several countries have adopted an approach encouraging private donors and party members by offering the possibility to deduct the sum given to the party from their income for tax purposes or directly to a certain extent from their tax. For instance, in Italy private donors may deduce 19 % of a donation between 100.000 and 200.000 Lire from their tax whereas membership fees do not seem to range among privileged issues.112 In France, private donors may deduce 50 % of a donation from their income.113

64.       Special rules may apply to donations from legal persons if they are allowed at all. Italy applies differentiated provisions in this respect with a view to which companies qualify for tax privileges. In particular, only companies with their seat in Italy and without any ownership on part of the State may benefit from the full percentage of tax relief.114 Moreover, companies may only deduce donations from their taxes if in the year preceding the donation they indeed paid taxes.115

65.       Whereas in Switzerland on the federal level and in most of the cantons there are no tax-privileges, certain cantons constitute notable exceptions in this respect. In some of those cantons, privileges only apply if the donated sum is of a minimum amount or percentage of the overall income (f.e. 1% in Basel-Land). Sometimes, donations are privileged by tax relief to a very important extent: in the canton of Schaffhausen up to 30 % of the overall income can be deduced as donations to political parties.116

66.       Developments in Germany demonstrate problems arising from tax privileges with a view to the equality of chances for political parties. Already in 1957, the German Bundesverfassungsgericht (Constitutional Court) ruled that the limitation of tax-privileges to political parties which are represented in federal or a Land parliament violated the principle of equal opportunities for political parties.117 The same verdict was made by the court in 1958 when it declared that a tax privilege equally accorded to all parties and donors was unconstitutional since recipients of high incomes and those parties usually attracted from these group of voters benefited of this rule more than others.118 After the maximum amount of donations qualifying for tax relief had been fixed on a moderate level (600 DM for single persons) as a consequence of this judgment it took until the eighties until the legislator made another attempt to widen tax privileges. Having tripled the maximum sum for tax relief in 1980 the legislator raised the limitations on reducible tax amounts to 5 % of personal income in 1984 thereby giving up the idea of an absolute threshold. This provision was combined with privileges for small donations which were made deducible to 50 % from the tax-bill as in contrast to deduction from the income. Moreover, an equal opportunities compensation directly paid by the State to those parties with little income from donation was introduced. This model was largely accepted by the Bundesverfassungsgericht, with the exception of the 5 % clause. The court indicated that an absolute limit of 100.000 DM would be acceptable.119

67.       The new rules which entered into force 1989 provided for 60.000 DM maximum sum of reduction for single persons. In 1992, the Bundesverfassungsgericht ruled that this situation violated in several respects the principle of equal opportunities and the right of citizens to equal participation in the political process. It pointed out that the latter is only guaranteed if tax privileges remain within a sphere which can easily be used by persons with an average income;120 this sphere was taxed at 1.200 DM for a single person per year.

68.       Currently, a limit of DM 3.000 for single persons which can be deduced from the income121 and another DM 3.000 for single persons of which 50 % can be deduced from the tax122 applies. Therefore, an overall maximum sum of DM 6.000 of donations may benefit from tax relief. It may be doubted whether this sum is within the limits envisaged by the Bundesverfassungsgericht in its decision of 1992.

69.       In a number of other states donations and membership fees do not benefit from any tax relief scheme.123 In the course of the recent efforts in the United Kingdom for reforming the system of party financing a tax relief for up to 500 Pounds has been recommended by the Committee on Standards in Public Life. However, this recommendation was rejected by the Government and was not included in the new bill on financing of political parties. The Government’s rejection was based on the argument that, in principle, there should not be any form of State aid and that it was too expensive to warrant serious consideration in times of limited budgetary room for manoeuvre.124

V.       Transparency, control, sanctions

70.       One of the central questions of party financing is how the provisions set out above can be controlled and how public trust in the parties and the political system can be fostered by transparency. Important elements in this respect are rules setting out parties’ obligations to publish their finances and subject themselves to independent scrutiny. Finally, in case of evasion of obligations or other attempts of fraud clear sanctions should be provided for.

1.        Rules on book-keeping and publicity principle

a)        General requirements, in particular, obligations to publish financial reports

71.       Usually, political parties are obliged to give some public accountability by submitting reports on their finances of the last year. Whereas a general obligation of that sort is widespread provisions as to what exactly has to be reported in detail, the authority to which a report has to be submitted and whether and how the report has to be published vary widely. A situation like in Switzerland or in some Austrian states, where there is no obligation of political parties to report on their income and expenses clearly remains the exception.

72.       In Germany, the obligation of political parties to give a public account of their finances is even enshrined in the Constitution (Art. 21 I 4 Basic Law). Reports have to include not only sources of income and overall budgetary volume but also expenses and property on all levels of the party structure. The idea is that an average citizen can inform him- or herself through specific reports edited by the administration of parliament and / or the president of parliament.

73.       Generally speaking, parties have to give an account of their income and expenses. Frequently, the sources and expenditures to be specified are qualified by law. For instance, in Austria, funding received according to the law on political parties, membership fees, donations, contributions by persons holding a mandate for the party, profits from party companies, profits from property, loans, services, other income must be specified.125 Of course, other provisions apply on the level of the Länder: in some of the Länder no obligations for giving account of income and expenses exist whereas in others obligations vary from far-reaching obligations to publish the use of public funds as well as the sorts of income and expenses (Salzburg) to the obligation to keep books on the use of public funds (Oberösterreich) which is sometimes restricted to those parties represented in the Landtag (Burgenland, Kärnten, Niederösterreich, Tirol).126

74.       Detailed provisions apply in Italy where annexed to the law forms are set out which have to be filled in by the parties. The report must be accompanied by the balance of those companies in which the parties hold any shares – also if via trustees or other persons.127

75.       Publication requirements have to strike a balance between the need for providing a full picture of a party’s financing and accessibility for the ordinary citizen. These requirements are reflected in a number of provisions in various countries. For instance, in Italy, where the report will be published in full length in the Gazzetta Ufficiale while at the same time it has to be published in a shortened version in two newspapers, one of which must have national distribution.128 In France, the reports on the parties‘ bank accounts have to be published in full in the Journal officiel129 whereas the reports on expenditures in election campaigns will be published by the Commission on financing of election campaigns in a simplified version.130 In Belgium, a summary of the financial report is published in the official journal whereas the complete reports are contained in parliamentary documents. A mere obligation to make the report accessible in the parliamentary office as applying in the Czech Republic131 implies problems with regard to accessibility for the ordinary citizen, in particular, if not living near the parliament’s building.

76.       Interesting additional requirements are foreseen in the new bill to be adopted in the United Kingdom: according to this bill parties must adopt a scheme of their financial structure and lay it open to the Electoral Commission upon registration which will decide whether the proposed scheme properly reflects the organisation of the party.132 This includes a review of the position accorded to affiliated or associated bodies with an independent existence including the possibility that these bodies sometimes may rather have to be regarded as donors to the party rather than constituent parts of the party apparatus.133

77.       In France, specific provisions have been designed in order to secure transparency by some formal requirements. In particular, parties have to administrate the private donations received through a financing association or a trustee through one single account.134 With regard to campaign financing the candidates are required to keep books and submit a final account about their expenses to the local prefecture which will forward the report to the Commission on financing of election campaigns.135 Moreover, donations of more than 1000 FF have to be given by cheque.136 Similarly, all political groups competing in elections in Spain have to name an electoral administrator responsible for bookkeeping of campaign finances and directly responsible to the control institutions. An additional control is also created by the obligation to keep different bank accounts for campaign and permanent party funding.137

78.       Far-reaching control provisions have been adopted in the Russian Federation with a view to campaign financing. Not only the acceptance of donations and their use must be documented by the election associations but also the bank keeping their accounts has to transmit information on all financial operations of the election association of more than 2000 minimum wages, legal persons having donated more than 1000 minimum wages (reduced numbers apply to single candidates), the number of natural persons having donated more than 50 minimum wages and the overall sum of income and expenses to the central election commission on a weekly basis. The commission will then forward the information every fortnight to the mass media.138 Moreover, election associations and single candidates are obliged to give to the central election commission a comprehensive account of their finances three times during an election period: upon registration, 10 days before and 30 days after the election.139

79.       Reporting obligations for persons or institutions other than the parties themselves seem to be the exception. In addition to the example of the Russian Federation mentioned above, Spain has also adopted provisions in this respect. In particular, banks and such companies which have entered into contracts with political parties of more than a million Pesetas have to submit information to the Tribunal de Cuentas.140

b)        Publication of donations and donors

80.       In most of the states examined here provisions pertaining to the publication of donations and donors have been adopted although sometimes only quite recently: for instance, until the middle of the 1990’s, in Denmark it used to be regarded as part of the principle of secret voting that citizens must be able to express their political opinion anonymously, also by way of donations.141 The big issue is, of course, where the threshold is to be fixed above which donations and donors have to be published.

81.       In Germany, this question has been pending several times before the Bundesverfassungsgericht because the obligation to publish the names of big donors has been regarded as one of the traits of parties’ obligation to give public account of their finances.142 The German law on political parties started in 1967 from 20.000 DM as a threshold for publication obligations. This threshold was raised in 1988 to 40.000 DM which was subsequently overturned by the Bundesverfassungsgericht as a violation of the system envisaged in Art. 21 I 4 GG of the basic law.143 As a consequence of this judgment a 20.000 DM threshold has been adopted incurring an obligation to publish the overall amount of donations by this donor, his/her name and address. This threshold has been criticised for being too high.144 On the other hand, it must be kept in mind that the threshold should not be too low neither in order not to inflate the reports which could endanger transparency and accessibility.145

82.       Italian law provides for a threshold of about 12 million Lire including non-monetary support in one year146 beyond which donor and recipient have to declare the donation to the president of the chamber of deputies within three months of the receipt of the donation. In the Czech Republic the donor’s name, address and identity number must be set out in the annual report in case of a donation of more than 100.000 Kc (about 18 DM).147

83.       The new British bill provides for a differentiated approach to the threshold question. Moreover, it varies the reporting requirements according to the sensitivity of the period in question. To the present day, there has been no obligation to publish private donors in the United Kingdom. Labour publishes voluntarily the names of those who gave more than 5.000 Pounds in a year but without specifying the sum of the donation. The new bill foresees the publication of donor and sum on a quarterly basis in cases where an absolute or aggregate amount of more than 5.000 Pounds has been donated. If more money is donated by the same donor in the same year any sum exceeding 1.000 Pounds (absolute or aggregate) must be recorded. Smaller numbers apply if the donation is given to an ”accounting unit” of a party (which probably covers constituency or regional organisations of a party) where every donation of more than 1.000 Pounds must be recorded. To comply with these requirements political parties will need to keep records of all donations received and accepted above the de minimis level of 200 Pounds.148 During a parliamentary general election period, donation reports will have to be submitted weekly.149

84.       Certain obligations are also to be imposed on the donor: In order to avoid evasion of reporting requirements by giving a donation in numerous small parts below the 200 Pounds threshold, the donor is required to report to the Electoral Commission if the overall sum exceeds 5.000 Pounds. Donations by companies of more than an aggregate of 200 Pounds must be disclosed in the director’s report.150

85.       Moreover, it has been suggested by Labour that all donations and donors of more than 50 Pounds should be communicated without being publicised to the Electoral Commission to be established under the future act. A provision of this sort already exists in Belgium where donors having given more than 5.000 BEF are disclosed to a commission.151 In the UK, however, this proposal has been rejected by the Committee on Standards in Public Life as too intrusive and administratively burdensome.152

86.       Although there is no obligation to publish the name of donors in Spain, there is a certain control with regard to donations for election campaigns. The parties must keep information on the name, address and identity number of the donor to which the control bodies must have access at any time.153

87.       One may wonder about the usefulness of a provision as it is currently applied in Austria obliging parties to publish all donations beyond a certain sum (100.000 ÖS) without having to provide any more details about the donor other than grouping him/her into a category such as natural person, company, association etc.154 Another peculiar provision applies in Denmark where those parties not entitled to public funding are also exempt from submitting reports on the private donations obtained.155 Moreover, the Danish provisions obliging parties to publish the overall amount of anonymous donations as well as each anonymous donation beyond a certain sum156 may hardly counter the negative repercussions of anonymous donations on transparency.

2.        Institutions exercising control

88.       The standing of the institution entrusted with controlling the parties in their financing performance clearly has an impact on the effectiveness of control as well as on the public confidence in the procedures. In most states examined here, reports submitted by the parties will be subjected to some review by an external body although the degree of independence varies greatly.

89.       In some countries, official auditors review the financial reports and balances. This has got the advantage that these persons are well trained in examining complex financial transactions and accounts. On the other hand, there is the question how they are picked. In Austria, the auditors for reviewing the parties’ reports are appointed by the minister of finance from a list of 5 persons suggested by the parties themselves.157 In Germany, auditors with very close links to the party to be reviewed (such as members of the presidency or a commission of the party, or employees) must not be appointed as auditors for the financial report of the party.158 In Italy, the position of the auditors who are working in a committee of five (collegio di revisori) is reinforced since they are appointed for an entire legislative period.159

90.       In the UK, special bodies for monitoring party financing, the Electoral Commission and the Speaker’s Committee, will be created and established by the future Political Parties, Elections and Referendums Act.

91.       The Electoral Commission is independent of any government department and will report directly to Parliament. Commissioners will be appointed by Her Majesty on the presentation of an Address from the House of Commons and will enjoy substantial security of tenure: they will be appointed for up to 10 years with the possibility of reappointment. A removal from office is therefore only possible on an address of the House of Commons to that effect which can only be made if the Speaker’s Committee has decided that one of the grounds for removal is fulfilled.160

92.       The Electoral Commission has got the function of receiving accounts, reports of disclosable donations and returns as to election expenses from political parties and a duty to monitor compliance – but not to mount criminal prosecutions. It has got the power to require registered political parties to provide information to the Commission relating to their financial affairs. Moreover, a person authorised by the Commission may also enter the premises of a party to inspect their financial records.161

93.       The Speaker’s Committee which is composed of the Speaker of the House of Commons, the Home Secretary, the Minister for Local Government, the Chairman of the Home Affairs Select Committee and five Members of the House of Commons appointed by the Speaker has general oversight of the exercise of the Commission’s functions and, in particular, responsibility for approving its budget and five-year corporate plan. Both Commission and Committee are required to report annually to the House on their performance.

94.       Whereas the Commission seems to provide for sufficient independence of Commissioners it is not evident why itself is being controlled by a body composed of members of the government and of parliament which cannot be considered independent.

95.       In the Belgian system, the controlling commission (Commission de controle des dépenses électorales engagées pour les élections des Chambres fédérales, ainsi qu'au financement et à la comptabilité ouverte des partis politiques) is composed of an equal number of members of the House of Representatives and the Senate and thereby gives rise to doubts as to the independence as an institution of control. Similarly, a control body composed of representatives of different executive branches and institutions as it is established at the central election commission as well as at election commissions in the subjects and the constituencies in the Russian Federation162 does not provide for sufficient independence.

96.       In contrast, the French Commission nationale des comptes de campagne et des financements politiques which is responsible for monitoring the financing both of parties in general as well as election campaigns is composed of nine members – (three members each of the Conseil d'Etat, Cour de Cassation and court of auditors) – appointed for five years. Such a composition leaves little room for doubts about the independence of the Commission’s members.

97.       A tribunal is endowed with the task of supervising financial performance of Spanish parties both generally and in the course of election campaigns.163 The Tribunal de Cuentas has the power to ask the parties for information about the source of donations. However, it is not obliged to publish this information in its report. Moreover, the transparency of the general party finances suffers, as a rule, from huge delays in publication are the rule since the final report is published only after the commission of parliament in charge has adopted its conclusions. For example, in 1997 only the Reports until the year 1989 had been published.164

3.        Sanctions for violations

98.       The existence and effective imposition of sanctions can play an important role in discouraging parties or party members from attempting to evade the rules of public accountability and transparency or limiting the freedom of parties with regard to their sources of income.165

a)        Evasion of restrictions on donations

99.       Possible sanctions in this field are the forfeiture of donations, fines or prison sentences, withdrawal of a certain status, or deprivation of public funding. Sanctions can be directed both against the party as such as well as against the individual party member etc. personally involved in the situation.

100.       In the United Kingdom, in case of the acceptance of donations from an impermissible source or an unidentified donor the future Electoral Commission will be in a position to apply to a court to order the forfeiture of donations; any sums forfeited shall be paid into the Consolidated Fund.166 Moreover, the evasion of restrictions on donations is to be made a criminal offence for any person knowingly to participate in an arrangement or to withhold information or supply false information, so as to evade the restrictions on the sources of donations.167

101.       Harsh punishments are foreseen in Italy for the acceptance of impermissible donations: the penalty is 6 months to 4 years imprisonment and a fine up to three times the sum that was illegally accepted. Moreover, public funding will be reduced by a sum double the amount of money illegally accepted168 or not properly reported.169 If the declaration of a donation beyond the permissible maximum amount is omitted this may be punished with a fine amounting to a sum of 2 to 6 times of the undeclared sum. In addition to that, the person involved may be disqualified from the exercise of public functions.170

102.       Similarly, a party having accepted illegal donations or not having published a donation according to the law in Germany will have to transfer the respective donation to the presidency of the Bundestag and will be punished with a reduction of public funding for the next year of twice the sum of the respective donation.

103.       Instead of linking the amount of the possible fine to the sum of the donation provisions in France for violating rules on the maximum limitation of donations and on the procedures to be observed foresee a range between 360 and 15.000 FF.171 The disadvantage of this provision is that it does not allow for sufficient flexibility regarding penalties in the case of illegal big donations, in particular, having in mind the admissible maximum of 50.000 FF. However, in addition to the fine the recognition as a financing association is withdrawn which means that the party will not get any public funding for votes obtained in the region in question.172 Moreover, public funding for the next year will be withheld if a party has accepted donations in any other way than through the prescribed trustee or financing association.173

b)        Violation of reporting requirements

104.       Civil penalties are to be imposed in the United Kingdom after the future adoption of the Political Parties, Elections and Referendums Bill in case of violation of reporting requirements (varying according to the time of delay between 500 and 5000 Pounds).174 Moreover, there are specific criminal offences to alter, suppress, destroy etc. of documents or records relating to the financial affairs.175

105.       If a balance or financial report is not submitted properly public funding may often be withheld until the shortcomings of the report have been remedied. Provisions of this sort apply, for instance in Italy,176 France,177, Germany,178 or the Czech Republic.179

c)        Violations of provisions concerning campaign financing

106.       Similar rules apply with regard to violations of obligations in the financing of election campaigns.

107.       For instance, if the French Commission on financing of elections detects irregularities in reporting performance (balances not presented in time or not in accordance with the legal requirements) or spending that was beyond the maximum limit, it is obliged to transfer the case to the electoral court. Moreover, usually the case will also be transferred to the public prosecutor.180

108.       If a candidate has spent more money than admissible he or she will have to pay the equivalent of the sum exceeding the maximum threshold to the State.181 In addition to that, no public funding will be afforded to the respective candidate. The same sanction applies if the candidate failed to comply with an eventual obligation to declare his financial situation.182

109.       In Spain, the main sanction imposed on parties by the Tribunal de Cuentas is the reduction of the subsidy to be paid for campaign expenses. The Tribunal would also inform the relevant authorities if there is conduct which could be criminally punishable. Moreover, bookkeeping fraud or irregularities or a misappropriation of funds can be punished with prison (pena de prisión menor) or a fine of 30.000 to 300.000 pesetas.183 In case of the intention of personal enrichment the prison sentence may be increased (prisión mayor).

110.       In the Russian Federation, violations of the obligation to pay back election subsidies will lead to the forfeiture of claims for public funding including free broadcasting time in the next elections.184 The use of illegal means or donations may be punished with a fine of three times the amount illegally used.185 A violation of reporting obligations may be fined with 10 to 50 minimum wages.186 Moreover, violations of the provisions on the financing of election campaigns may lead to the withdrawal of the admission to the elections and the invalidation of the election result.187

VI.        Concluding observations

111.       Most of the states examined here have taken substantial legislative activities throughout the recent years, not uncommonly in connection with or as a reaction to scandals of corruption or other improper influence on political decisions through financial means. The fact that such an old and traditional democracy as the United Kingdom is approaching legalistic intervention in a sphere,

which had so far been almost completely unregulated may well be regarded as a preliminary climax of these developments.

112.       The analysis has demonstrated that the old type of party financing – the funding exclusively or at least in most part through membership fees – can hardly be applied in practice anymore. Despite its fundamentally democratic character and far-reaching exclusion of opportunities for improper influence eventually to be exerted on a monetary basis, a financing primarily based on party members is also no longer an adequate solution to counter the temptations of other possible sources of party income: modern democratic systems depend on a strong visibility of parties in the political debate. To this end, political parties need substantial financial means to present their views in a recognisable way which can compete with an enormous flood of other information purported through modern media.

113.       All other approaches – the financing of political parties through private contributions other than membership fees either from within or outside the party system and the various approaches relying on public funding – are not without problems.

a)       Contributions by parliamentarians to their party deduced from their allowances may constitute a concealed form of public funding and are not easily reconcilable with the supposed independence of members of parliament and the exercise of a free mandate - at least in cases in which the payment constitutes a statutory or de-facto obligation.

b)        Other private sources – be it in the form of profits from party owned companies or donations – go along with the danger that inappropriate links are construed between donating money and specific political contents or decisions. In this context, it must be emphasised that the mere impression of misuse may erode public confidence in the political system and thereby constitute a danger to democracy.

c)        On the other hand, while putting more emphasis on public funding may, of course, limit the potential influence of private individuals or companies, it increases the dependence of political parties from the State. This in turn may encourage political parties to rely too much on public money while at the same time loosing sight of the interests of those whom the parties are supposed to represent. Moreover, if public funding is provided to political parties due regard must be given to the equality of chances, not only for established parties but also for new political movements.

114.       In order to evaluate whether a particular system strikes a fair balance between the concurring interests it must be examined in its entirety. For instance, the problems going along with a complete reliance on private sources may to some extent be countered through the adoption of a maximum limit of admissible expenditure as can be seen by the example of the United Kingdom. Of course, the potential chilling effect of such a maximum limit on political parties’ thirst for money is limited by the fact that the overall sum required for running a meaningful national election campaign in a big country will be quite substantial and therefore the threshold imposed will have to be quite high. This may leave more room than desirable for eventual influence through financial transactions.

115.       The best solution probably lies in a wealthy mix of different sources of income while at the same time imposing strict limitations on certain sources as well as providing for complete transparency of parties’ finances with a view to avoiding any potential influence of money on policy. In this respect, it may come as a surprise that maximum limitations on private donations are only imposed in three of the countries examined in this report.

116.       It goes without saying that any limitations imposed on political parties and their financial sources will only work with strong mechanisms of control and sanctions for eventual violations. Therefore, control bodies should be composed of independent members and be provided with sufficient means - both with a view to financial equipment and procedural powers (including search powers) - for effectively exercising their function.

1 The information contained in this report is mainly based on material available at the Max-Planck-Institute for Comparative Public Law and International Law in Heidelberg. It cannot therefore be excluded that certain recent amendments in single countries are not properly reflected.

2 The authors wish to thank the following persons for providing information on specific countries: Tigran Beknazar (Russian Federation), Pia Carazo (Spain), Mahulena Hofmann (Czech Republic), Karin Oellers-Frahm (Italy), Fredrik Thomas (Denmark), Brecht Vandenberghe (Belgium, the Netherlands), Christian Walter (France).

3 D. Schefold, Parteienfinanzierung im europäischen Vergleich, in: D. Tsatsos (ed.), Parteienfinanzierung im europäischen Vergleich, 1992, 481 (510).

4 In 1999, the Green Party (ECOLO) had an income of 169.410.558 BEF and levied 1.045.910 membership fees. Source: DOC 50 0671 (Chambre) 2.447/1 (Sénat).

5 F. Balaguer Callejón, La financiación de partidos políticos en España, Nomos 4 (1999), 29. For further references see S. Hofmann, Parteienfinanzierung im Autonomiestaat Spanien, 1998, 127-129. See also D. Schefold, Parteifinanzierung im europäischen Vergleich – Rechtsvergleichende Auswertung, D.T. Tsatsos (ed.), Parteienfinanzierung im europäischen Vergleich, 1992, 481 (510), who concludes that in general less than a quarter of a party’s income stems from membership fees.

6 Fifth Report of the Committee on Standards in Public Life, The Funding of Political Parties in the United Kingdom, 1998, Vol. 1 (Cm 4057-I), 30.

7 Ibid., 32 (quoting M. Pinto-Duschinsky).

8 Ibid., 42 et seq.

9 T. Drysch, Parteienfinanzierung – Österreich, Schweiz, Bundesrepublik Deutschland, 1998, 73.

10 Cf. D.J. Elzinga, Parteienfinanzierung in den Niederlanden, in: D.T. Tsatsos (ed.), 333 (355)

11 The possibility of political parties to raise membership fees is usually not legally restrained but sometimes is expressly allowed, for instance by way of reference to associations in general (cf. K. Oellers-Frahm, Kandidatenaufstellung und Wahlprüfung in Italien, in R. Wolfrum/G. Schuster, Verfahren der Kandidatenaufstellung und der Wahlprüfung im europäischen Vergleich, 1994, 131 with further references) or by express provisions (for instance, in Spain in Art. 2 para. 2 of the Ley Orgánica 3/1987 sobre la Financiación de los Partidos Políticos (LOFPP)).

12 Drysch, 76.

13 Drysch, 77.

14 For instance, the Austrian Österreichische Volkspartei (ÖVP) is organised in Land organisations which levy fees on the Land level varying from one Land to the other, cf. Drysch, 72 et seq.

15 For instance, the French PS (Parti socialiste) claims fees for the section (which may be a regional or a professional sub-organisation of the party, cf. Art. 3.1. of the statute of the PS) and one for the central party organisation (Art. 2.5. of the statute).

16 Cf. for instance, the Statute of the Partito Democratico della Sinistra (Italy).

17 This is reported, for instance, from Austria and Switzerland, cf. Drysch, 89, 91.

18 Numbers on the situation in Belgium are given in the DOC 50 0671/002 (Chambre) 2-447/2 (Sénat).

19 This is reported from Switzerland, cf. Drysch 91.

20 Cf. Art. 11 (1) no.12 Law on Civil Servants of 31.7.1995 and the 1999 amendment (Russian Federation).

21 Parteienfinanzierungskommission 1993, BT-Drs. 12/4425, 30. Cf. also H. H. von Arnim, Die Partei, der Abgeordnete und das Geld, 315 f.

22 Section 27 (2) Niedersächsisches Abgeordnetengesetz: ”Abgeordnete dürfen niemandem Zuwendungen mit Rücksicht auf ihr Mandat machen.”

23 Drysch, 94 f.

24 Art. 17 Law on Political Parties, amendment Law No. 117/1994 Coll (Czech Republic).

25 Art. 17 Law on Political Parties, amendment Law No. 322/1996 Coll (Czech Republic).

26 Art. 117 no. 1 (2) Civil Law 1994, Art. 37 (1) Federal Law on Societal Associations of 19.5.1995 (in the version of 18.7.1998) (Russian Federation). In the absence of a law on political parties the latter law is applied.

27 Art. 11-4 loi n° 88-227 du 11 mars 1988 relative à la transparence finançière de la vie politique (France).

28 Art. 52-8 Code électoral (France).

29 Section 4 (3) LOFPP (Spain).

30 Section 49 (1) of the Political Parties, Elections and Referndums Bill (pending in the House of Lords as of 10 July 2000) (United Kingdom).

31 Section 49 (2) Political Parties, Elections and Referendums Bill (United Kingdom).

32 Exception: Section 50, subsections (3) and (4) Political Parties, Elections and Referendums Bill (concerning the financing of expenses for an overseas visit by a party official) (United Kingdom).

33 Section 52 (1) Political Parties, Elections and Referendums Bill (United Kingdom).

34 Section 25 (1) Law on Political Parties (Parteiengesetz) (Germany).

35 Section 25 (3) Law on Political Parties (Parteiengesetz) (Germany).

36 Art. 11-4 (5) Loi n° 88-227 du 11 mars 1988 relative à la transparence finançière de la vie politique; Art. 52-8 (4) Code électoral (France).

37 Art. 5 LOFPP (Spain).

38 Art. 128 Ley Orgánica 5/1985 del Régimen Electoral General (LOREG) (Spain).

39 Article 145 of the Electoral Law of the Basque Country.

40 Drysch, 77.

41 Section 1, 2 Law on private donations to political parties, Lov 1990-06-30 nr. 404 (Denmark).

42 Section 132 and Schedule 18 Political Parties, Elections and Referendums Bill (United Kingdom).

43 La Legge No. 195 of 2 Maggio 1974 (Italy).

44 Section 4 (3) LOFFP (Spain).

45 Art. 11-4 Loi relative à la transparence finançière de la vie politique (France).

46 Art. 7  Loi du 19 novembre 1998 (M.B. 10 Décembre 1998, p. 39435); this article changes art. 16 bis. of loi du 4 juillet 1989 (M.B. 4-08-2000) (Belgium).

47 Art. 4 (3) LOFPP (Spain).

48 Art. 52-8 Code électoral (France).

49 Art. 62 (6) Election law (Russian Federation).

50 Special provisions have been adopted with a view to Northern Ireland where the Northern Ireland Assembly Commission may make payments to political parties for the purpose of assistng memebers of the Assembly to perform their duties. Cf. Financial Assistance for Political Parties Act (Northern Ireland) 2000.

51 Section 11 Political Parties, Elections and Referendums Bill (United Kingdom).

52 Cf. Fifth Report of the Committee on Standards in Public Life, The Funding of Political Parties in the United Kingdom, 91 et seq. (paras. 7.19 – 7.23).

53 T. E. Frosini, Finanziamento dei partiti e corruzione: brevi note sul caso italiano, in P. Ridola, Finanziamento della politica ed egualianza delle chances, Nomos 4 (1999) 77 et seq., 82.

54 Art. 1 Legge 2/1997 (Italy). Cf. F. Lanchester, Das Gesetz zur freiwilligen Finanzierung von Parteien und politischen Bewegungen in Italien, Jahrbuch des öffentlichen Rechts 46 (1998), 475 ff, 479.

55 Cf. G. Troccoli, La Legge 2 Gennaio 1997, No. 2 ed il finanziamento dei partiti, Rassegna Parlamentare 39 (1997), 615 et seq., 644 et seq.

56 A law was introduced setting out a sum of 110 Billion Lira for public funding of political parties (Legge 146/1998 (Disposizioni per la semplificazione e la razionalizzazione del sistema tributario e per il funzionamento dell’Amminisatrazione finanziaria, nonché disposizioni varie di carattere finanziario)), refused by the President of the Republic but adopted in the same form again. Frosini, op. cit. Anm. 5, 84.

57 Legge 157/1999, Nuove norme in materia di rimborso delle spese per consultazioni elettorali e referendarie e abrogazione delle disposizioni concernenti la contribuzione volontaria ai movimenti e partiti politici (Italy).

58 Section 2 (2) (a) Law on Political Parties (Parteiengesetz): 3 million ÖS (Austria).

59 Art. 15, 16 Loi de 04-07-1989, M.B. 20-07-1989 (Belgium).

60 Art. 2 Wet van 17 mei 1999, houdende regeling van de subsidiering van politieke partijen, Stb. 1999, 257 (Netherlands).

61 Art. 20 (4), (6) Law on Political Parties and Political Movements, Nr. 118/1994 Coll. (Czech Republic).

62 Art. 9-1 (1) Loi relative à la transparence finançière de la vie politique (France).

63 Drysch, 98 f.

64 Section 18 (3) Law on Political Parties (Parteiengesetz) (Germany).

65 See art. 15 de la loi de 04-07-1989, M.B. 20-07-1989 (Belgium). The amount is for each party represented in both houses of Parliament 50 BEF for each vote obtained during the last elections for the Senat and the House of Representatives (Art. 16).

66 Cf. Section 2 (1) Law on the financing of political parties (Denmark). Each party which has taken part in the most recent elections to the Folketing is entitled to receive public funding. For the year 2000 the sum was 21.75 Dkr (about DM 5.50) per vote, cf. information on the homepage,, visited on 5 July 2000 (“offentlig partistøtte”).

67 24.575 guilders for each "Kamer" chair, Art. 6 Wet van 17 mei 1999, houdende regeling van de subsidiering van politieke partijen, Stb. 1999, 257 (recently increased, Staatsblad 475 v. 6.10.99) (Netherlands).

68 Art. 20 (5), (7) and (8) of the amended Law on Political Parties and Political Movements, Nr. 118/1994 Coll. (Czech Republic); Art. 85, Law on Election to the Parliament of the Czech Republic Nr. 247/1995 with amendments, Coll. Nr. 65 of 30 October 1995, pos. 247.

69 Art. 9-1 and 9-3 to 5 Loi relative à la transparence finançière de la vie politique (France).

70 Pade, Footnote 7.

71 Section 18 (3), (4) Law on Political Parties (Parteiengesetz) (Germany).

72 Cf. Section 2 (2) and (3) Law on the financing of political parties (Denmark).

73 Section 18 (5) Law on Political Parties (Parteiengesetz) (Germany).

74 Section 18 (2) Law on Political Parties (Parteiengesetz) (Germany).

75 Loi n° 2000-493 du 6 juin 2000 tendant à favoriser l’égal accès des femmes et des hommes aux mandats èlectoraux et fonctions électives (1); Art. 9-1 Code électoral; this provision has been declared constitutional by the Conseil constitutionnel, decision of 6 July 2000 (No 2000-431 DC) (France).

76 The amounts awarded in Belgium are published in DOC 50 0671/001 (Chambre) 2-447/1 (Sénat). In Spain, Article 34 of the Internal Regulation of the Senate as well Article 28 of the Internal Regulation of Congress provides for the awarding of subsidies to these parliamentary groups. This is done by giving the parliamentary groups two different subsidies, one according to the number of members of the group and the other being a fixed rate equal for all groups. All autonomous communities have regulations regarding subsidies to parliamentary groups. This is also true in the case of city and provincial parliaments. Most of the regulations of the autonomous communities are similar to the ones for Congress and the Senate. Only the regulations of Castilla-La Mancha state the absolute amount to be distributed. Andalucía, Aragón, Baleares, Navarra, Asturias, La Rioja and Valencia provide additional means for a special financial treatment of mixed parliamentary groups.

77 Section 3 Law on the financing of political parties (Lov 1995-08-21 nr 704) (Denmark). Cf. also H. Zahle, Institutioner og regulering, Dansk forfatningsret 1 (2nd edition 1995), 154. Lump sum for each group or faction: 203.000 Dkr per month (about 50.000 DM); per mandate: 32.000 Dkr per month (about 8.000 DM). Folketingstidende 1996-97, årbog og registre, 6. Partier. C. Tilskud til folketingsgrupperne m.m., 50 et seq.

78 The sums available have recently been increased, cf. The Funding of Political Parties in the United Kingdom, The Government's proposals for legislation in response to the Fifth Report of the Committee on Standards in Public Life, Presented to Parliament by the Secretary of State for the Home Department by Command of Her Majesty, July 1999, 6.6 et seq.

79 Drysch, 104.

80 The Flemish government has divised 72 million BEF for television broadcasting of political parties (28 janvier 2000- Arreté du Gouvernement flamant fixand la subventionpour l'année budgetaire 2000en faveur des associations philosophiques et politiques agréés pour assurer des programmes de télévision, M.B. 2000-02-23) as well as a certain amount of time (28 janvier 2000, Arreté du Gouvernement flamant fixand le temps d'émission attribué pour l'année civile 2000 aux associations philosophiques et politiques agréées pour assurer des programmes de télévision, M.B. 23-02-2000). For the French speaking part, see loi du 16 juillet 1973 garantissant la protection des tendances idéologiques et philosophiques, dite la loi du Pacte Culturel, M.B. 16-10-1973 (Belgium).

81 The State finances media time for political parties. The Commission for the media reserves time for political parties on public television if they obtained one chair in one of the chambers (cf. Mediawet, Art.39g, Stb. 1994, 386 geweizigd door art. 19 Wet subsidiering politieke partijen) (Netherlands).

82 On the basis of a subsidy agreement with a scientific institute. The amount granted depends on the number of parliamentary seats. Art. 3, 6 Wet van 17 mei 1999, houdende regeling van de subsidiering van politieke partijen, Stb. 1999, 257 (Netherlands).

83 Art. 3 Wet van 17 mei 1999, houdende regeling van de subsidiering van politieke partijen, Stb. 1999, 257 (Netherlands).

84 Cf. for instance, with a view to the (fruitless) discussions in Italy, Troccoli, op. cit. Anm. 7, 663 et seq.

85 20 öS per person entitled to vote are designated as an overall sum which is then distributed proportionally according to percentage of votes obtained, § 2a Law on Political Parties (Austria). Cf. also Drysch, 102.

86 Art. 52-11-1 Code électoral (France).

87 In Switzerland, there is not even a reserved and free time on television for broadcasting, cf. Drysch, 118.

88 Legge 157/1999 (Italy).

89 Art. 175 (2) LOREG (Spain).

90 Art. 193 (2) and 227 (2) LOREG (Spain).

91 Article 59 LOREG (Spain).

92 Art. 175 (3) LOREG (Spain).

93 Articles 60 to 67 of the LOREG. Regarding municipal elections cf. Ley Orgánica 14/1995 de Publicidad Electoral en Emisoras de Televisión Local por Ondas Terrestres and Ley Orgánica 10/1991 de Publicidad Electoral en Emisoras Municipales de Radiodifusión Sonora (Spain).

94 Ley Orgánica 2/1988 Reguladora de la Publicidad Electoral en Emisoras de Televisión Privada (Spain).

95 Art. 55 LOREG (Spain).

96 Art. 58 LOREG (Spain).

97 Cf. Art. 62, 63 Law on elections (Russian Federation).

98 Art. 62 (4) Law on elections (Russian Federation). In the elections to the Duma 1999 the maximum of own resources of the parties were fixed at 16.698.000 Rubel (according to the exchange rate of 2.8.1999 - 1.263.086 DM), donations by natural persons at 25.047 Rubel (1.895 DM) and juristic persons at 3.339.600 Rubel (252.617 DM). An overall limit of campaign expenditure was fixed at 41.475.000 Rubel (3.137.291 DM). However, public means transferred to political groups for election purposes were not more than 220.000 Rubel (16.641 DM) which demonstrates the limited significance of public funding in this system.

99 Art. 48 (1) Law on elections (Russian Federation).

100 The limitation of expenditures must be compatible with the freedom of expression as protected under Art. 10 of the European Convention of Human Rights, in particular with a view to being necessary in a democratic society“. This was highlighted by the European Court of Human Rights in the case Bowman v. the United Kingdom, judgment of 19.2.1998, para. 41 et seq. The case concerned, however, the limitation of 5 British Pounds imposed by law on expenses incurred by a person who was not running for election but had presented the candidates’ views (in this case on abortion) by distributing a high number of leaflets. The Court found a violation of Art. 10 by fourteen votes to six.

101 Section 74 and Schedule 8 Political Parties, Elections and Referendums Bill (United Kingdom).

102 Art. 52-11 Code électoral (France).

103 Art. 62 (5) Law on elections (Russian Federation).

104 Drysch, 121.

105 This has been criticised for unneccessarily limiting the political freedom of the candidates and ignoring political developments after the election: the declaration of affiliation is made for the entire legislative period irrespective of whether a deputy, for instance, changes the party. Cf. in particular Troccoli, op. cit. Anm. 7, 655 et seq.

106 Those candidates not linked to a party receive their share of the fund if they were directly elected or achieved at least 15 % of the votes. Cf. Art. 6 Legge 23 Febbraio 1995, No. 43 (Italy).

107 Art. 9 Legge 515/1993 (Italy).

108 Art. 85 Law on Election to the Parliament of the Czech Republic Nr. 247/1995 Coll. with amendments. Article 17 (3) of Law on Political Parties and Political Movements, Nr. 424/1991 Coll. with amendments, generally stipulates that the parties and movements can be financially supported through financing of the election costs from the state budget.

109 Art. 52-11 Code électoral (France).

110 Art. 67 (4), (5), (9), (10) Law on elections (Russian Federation).

111 Art. 4 Legge 157/1999 (Italy).

112 Art. 13-bis (1-bis) and 10 et seq. Legge 917/1986 (Italy).

113 Art. 200-2 and -1 Code général des impôts (France).

114 Cf. Art. 91-bis and 87 (a) and (b) Legge 917/1986 (Italy).

115 Art. 7 Legge No. 2/1999 (Italy). Cf. Troccoli, op. cit. Anm. 7, 638.

116 Drysch, 84.

117 BverfGE (Entscheidungen des Bundesverfassungsgerichts) 6, 273 (279 et seq.).

118 BVerfGE 8, 51 (63 et seq.).

119 BVerfGE 73, 40 (70 et seq., 85 et seq.). For criticism, see in particular the dissenting votes of judges Böckenförde and Mahrenholz.

120 BVerfGE 85, 264 (313).

121 Section 10 b (2) Law on Income Taxes (Einkommenssteuergesetz) (Germany).

122 Section 34 g Law on Income Taxes (Einkommenssteuergesetz) (Germany).

123 For instance, Belgium, Czech Republic (donations to political parties are not mentioned as qualifying for tax relief, Art. 15 (8) Law no. 586/1992 Coll.), Russian Federation.

124 The Funding of Political Parties in the United Kingdom, The Government's proposals for legislation in response to the Fifth Report of the Committee on Standards in Public Life, Presented to Parliament by the Secretary of State for the Home Department by Command of Her Majesty July 1999, para. 6.3.

125 Drysch, 135.

126 Drysch, 137. Art. 8 (13) Legge 2/1997 (Italy).

127 Art. 8 (4) Legge 2/1997 (Italy).

128 Art. 8 (13) Legge 2/1997 (Italy).

129 Art. 11-7 Loi relative à la transparence finançière de la vie politique (France).

130 Art. 52-12 Code électoral (France).

131 Art. 18 (2) Law Nr. 322/1996 Coll. (Czech Repulic).

132 Section 23 Political Parties, Elections and Referendums Bill (United Kingdom).

133 Political Parties, Elections and Referendums Bill, Explanatory Notes, para. 65.

134 Art. 11-1 (2) and 11-2 (2) Loi relative à la transparence finançière de la vie politique (France).

135 Art. 52-12 Code électoral (France).

136 Art. 11-4 Loi relative à la transparence finançière de la vie politique (France).

137 S. Hofmann, Parteienfinanzierung im Autonomiestaat Spanien, 1998, 141.

138 Art. 66 Law on elections (Russian Federation).

139 Art. 66 (2) Law on elections (Russian Federation).

140 Art. 133 (3) and (5) LOREG.

141 Cf. A. B. Pade in Karnovs lovsamling, Karnov 1998, Vol. 1 (1998), 64 et seq., Commentary of the Law on Financing of Political Parties, Fn. 3.

142 BVerfGE 20, 56 (106); 24, 300 (356); 85, 264.

143 BVerfGE 85, 264 (318 et seq.)

144 C. Landfried, Parteifinanzen und politische Macht, 1994 (2nd edition), 305.

145 Landfried, 305.

146 Art. 4 (3) Legge 659 /1981 (Italy). The sum of originally 5 million Lire has been constantly adopted to inflation through ministerial decrees.

147 Art. 18 (1) (d) Law Nr. 117/1994 Coll. (Czech Republic).

148 Section 57 Political Parties, Elections and Referendums Bill (United Kingdom).

149 Section 58 Political Parties, Elections and Referendums Bill (United Kingdom).

150 Section 133 Political Parties, Elections and Referendums Bill (United Kingdom).

151 See 10 décembre 1998 - Arreté royal fixant les modalités d'enregistrement de l'identité des personnes physiques effectuant des dons de 5000 BEF et de plus à des partis politques et à leurs components, à des listes, à des candidats et à des mandataires politiques, et déterminant les facilités du dépot des selevés annuels y relatifs, M.B. 23décembre 1998 (Belgium).

152 Committee on Standards in Public Life, 51.

153 Art. 132 (2) LOREG (Spain).

154 Drysch, 81. A former law pushed through by the SPÖ ordering the publication of all donations of more than 30.000 öS with name and address of the donor was suspended soon after entry into force and later on replaced.

155 Section 7 a (2) Law on Financing of Political Parties (Denmark).

156 Section 3 (2) Law on Donations to Political Parties (Denmark). Cf. also Pade, Fn. 11.

157 Drysch, 134.

158 Section 31 (1) Law on Political Parties (Parteiengesetz) (Germany).

159 Art. 8 (12), (14) Legge 2/1997 (Italy).

160 Grounds for removal are enumerated in paragraph 3 (5) of Schedule 1 Political Parties, Elections and Referendums Bill: “No motion shall be made for such an Address unless the Speaker's Committee has presented a report to the House of Commons stating that the Committee is satisfied that one or more of the following grounds is made out in the case of the Electoral Commissioner in question-

(a) he has failed to discharge the functions of his office for a continuous period of at least 3 months;

(b) he has failed to comply with the terms of his appointment;

(c) he has been convicted of a criminal offence;

(d) he is an undischarged bankrupt or his estate has been sequestrated in Scotland and he has not been discharged;

(e) he has made an arrangement or composition contract with, or has granted a trust deed for, his creditors; and

(f) he is otherwise unfit to hold his office or unable to carry out its functions.”

161 Section 136 Political Parties, Elections and Referendums Bill (United Kingdom).

162 Art. 69 Law on Elections (Russian Federation).

163 The Junta Electoral Central and its subordinated Juntas Electorales Provinciales and Juntas Electorales de Zona are also in charge of supervising and controlling electoral expenses in the period before the elections. After the elections this task is continued by the Tribunal de Cuentas. The Junta Electoral Central is a permanent body composed of eight judges members of the Tribunal Supremo, plus five Professors of law, sociology or political science. The members are elected by the national congress. Autonomous Communities may also create Juntas Electorales for parliamentary elections. One of the main tasks of the Juntas is the distribution of television and media time (as well as many other duties regarding election proceedings and fairness). In practice the Junta Electoral Central has stepped back in its control task of party expenses during elections and left most of it to the Tribunal de Cuentas.

164 Hofmann, 152.

165 It is also possible that a violation of certain fundamental values of a democracy by a party incurs sanctions by way of fines or reduction of public funding. For instance, in Belgium parties not respecting the European Convention on Human Rights may be sentenced by the Conseil d’Etat to a fine or to suspension of for three to twelve months. Cf. 12 février 1999. - Loi insérant un article 15ter dans la loi du 4 juillet 1989 relative à la limitation et au controle des dépenses électorales engagées pour les élections des Chambres fédérales, ainsi qu'au financement at à la comptabilité ouverte des partis politiques et un article 16 bis dans les loi sur le Conseil d'Etat, coordonnées le 12 janvier 1973, M.B. 1999-03-18 (Belgium).

166 Sections 53-55 Political Parties, Elections and Referendums Bill (United Kingdom).

167 Section 56 Political Parties, Elections and Referendums Bill (United Kingdom).

168 Art. 7 (3) Legge 195/1974; Art. 4 (1), (2) Legge 659/1981; Art. 3 Legge 22/1982 (Italy).

169 Art. 4 (12) Legge 659/1981 (Italy).

170 Art. 4 (6) Legge 659/1981 (Italy).

171 Art. 11-5 Loi relative à la transparence financière de la vie politique (France).

172 Art. 11-6 Loi relative à la transparence financière de la vie politique (France).

173 Art. 11-8 Loi relative à la transparence financière de la vie politique (France).

174 Section 137 Political Parties, Elections and Referendums Bill (United Kingdom).

175 Section 138 Political Parties, Elections and Referendums Bill (United Kingdom).

176 Art. 4 (16) Legge 659/1981 and Art. 8 Legge 157/1999.

177 Art. 11-7 (2) Loi relative à la transparence financière de la vie politique (France).

178 Section 23 (4) Law on Political Parties (Parteiengesetz) (Germany).

179 Art. 20 (3) Law No. 117/1994 Coll (Czech Republic).

180 Art. 52-15 (2), (3) 3 Code électoral (France).

181 Art. 52-15 (6) Code électoral (France).

182 Art. 52-11 (1) Code électoral (France). This may be the case for members of the government, deputies of the European Parliament, presidents of certain regional representative bodies, or mayors of bigger towns, Art. 1 and 2 loi relative à la transparence financiere de la vie politique (France).

183 Art. 149 LOREG (Spain).

184 Art. 67 (19) Law on elections (Russian Federation).

185 Art. 40.18.

186 Art. 40.17 Amendment Law to the Law on Infringements of Order of 1.12.1999 (Russian Federation).

187 Art. 80, 83 Law on elections (Russian Federation).