The time has now come for a long-overdue law which would regulate private financial contributions to political parties, and subject these parties to the same laws that hold good for the rest of us.
Details of the workings of the parliamentary select committee on the strengthening of democracy have so far been scant. If our legislators are really intent on securing a lasting change in the way our democracy functions, it is high time that the Select Committee sees some more debate on party financing, and a blueprint for future reform.
“No political party can survive without donations,” former PN secretary-general Joe Saliba had told the press, revealing the extent of the crisis in which democracy finds itself in Malta.
What we are dealing with over here is an increasingly untenable situation, whereby local building contractors make secret donations to the same two parties which have dominated the country’s power structures for the past 40 years. But while companies are governed by strict financial laws, regulated by the Malta Financial Services Authority, which compel them (among other things) to regularly publish their accounts, these secret donations are somehow exempt from inspection by the Tax Compliant Unit. So are building contractors free to make undeclared contributions, so long as the recipient is a political party? And doesn’t this fall foul of Malta’s anti-money laundering laws?
The Council of Europe has investigated Malta’s system, or rather lack of legislation on party financing. The findings by the CoE commission, which conducted meetings in the past years with most party secretary-generals, reveal a system in which political parties are practically exempt from reporting their financials to the public, enjoy tax credits as NGOs, and lack any auditing obligations and declaration of donations. Taxpayers already fund an undeclared spend of €100,000 for both political sides of the House. Coupled with the scant declarations of electoral candidates at the end of the elections on their political donors, the Maltese party system is the antithesis of the European political ethic.
With such an obscure set-up, Maltese politics is at the mercy of hidden agendas. Back in 2007, this newspaper put the question to some of the island’s most prominent members of the construction industry. Where they funding political parties? It turned out that apart from the entrepreneurs whose economic prospects had already been intimately tied to the fortunes of their political party, others preferred to fund both parties. How many more business lobbies enjoy the favour of the political parties and bank on the favourable legislation for them to increase their wealth? How many commercial interests held by both entrepreneurs and MPs serve to create binding ties between the political class and capital?
Such questions would be answered by a proper system of financial accounting standards for political parties, a legally-binding code for declaring private donations, and a system of party financing from taxpayers’ money. It would create a standard for a completely transparent system into the way political parties are funded by private donors, businesspeople, and other special-interest lobbies.
Most importantly, it would truly strengthen our democracy. Taxpaying citizens are already entitled to demand information on the way their monies get spent, both through the function of their MPs, and through the sterling work carried out by the Auditor General. Thanks to the auditor’s verification of public monies, taxpayers can learn how their money has been spent by government ministries, but also whether private interests have been served in breach of tendering and procurement regulations.
It is this rationale that underlines the need to know who is financing political parties. It is paramount for taxpayers to know whether parties are crafting legislation that serves private interests. Episodes of government ministers holidaying with business magnates from economic sectors that fall directly under their stewardship, is sure enough a sign that such business should not be the order of the day. An urgent overhaul of our legal safeguards against conflicts of interest and for the divulging of party donations, is now needed more than ever.
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