Open letter to the members of the Inter-ministerial working group for amendments to the Law on political party financing of Bosnia and Herzegovina

As organizations with many years of experience in monitoring and analyzing the legal framework, as well as the implementation of laws in the area of financing political parties, TI BIH and OSF believe that if the proposed Law would be adopted, another opportunity for its improvement will be missed, particularly in terms of solutions that should reduce the chances of Law violation and in raising the level of transparency of political parties.

The draft of the Law on financing political parties in Bosnia and Herzegovina increased the limits on donations made by legal and private persons, where in case of legal persons, taking into account the statistical data on average salaries, the limits on donations were raised almost four times. We believe that increasing the limit on donations could lead to even greater influence of donors on the work of political parties, reminding that all international principles and guidelines suggest a decrease of possible improper influences on political parties and the decisions made by them.

On the other hand, while the current Law on political party financing completely forbids donations of private companies that perform services under contracts with Government, the new draft of the Law is allowing political parties to receive such donations, under condition that the value of the contract with the Government is not exceding 10.000 BAM within one year.  We believe that the first solution would be more appropriate, particularly having in mind the possibility that on the basis of donations to political parties, private companies can have a privileged position during public contracting, which is one of the most harmful forms of corruption.

Also, many of the recommendations that were submitted to the Inter-ministerial working group by the OSCE mission, as well as the recommendations from GRECO, were not taken into consideration. One of their recommendations is to introduce the obligation of making transactions through a single bank account, something which is not mentioned in the draft of the Law.

As a reminder, the OSCE mission also warned that it is necessary to define in detail the permitted purposes of expenditure of public budget funds, in connection with which TI BIH and OSF submitted concrete proposals which would strengthen the role of the Audit Service of Central Electoral Commission.  Previous practice has shown that when auditing financial reports of political parties, the focus is set on their income, while too little attention is put on the expenses. Having in mind the fact that according to Central Electoral Commission about 80% of the political parties’ income comes from subventions from budgets of various levels of government in Bosnia and Herzegovina, it is necessary to pay much more attention on the ways of spending tax payers’ funds. If the new draft of the Law gets adopted in its present form, this issue will remain unresolved, and citizens will again have no chance to monitor expenditure of budget funds.

According to GRECO recommendations, as well as our proposals made, it is necessary to determine sanctions which would be effective and which would be proportional to possible gains made by violating the law.  Unfortunately in the new draft of the Law, the sanctions are too low, and not proportionate to the possible gain from the abuse of the Law, while they at the same time exclude any other sanctions than fines. We believe that it is necessary to increase the amount and scope of the sanctions in order to motivate political parties to respect the norms prescribed by the Law, otherwise neither sanctions nor monitoring over the parties will have an effect.

In the end, again taking into consideration the recommendations made by the GRECO, OSCE and our proposals, we think it is necessary to define in more detail the provisions regarding the transparency of financial reports of political parties. According to the new Law proposal, financial reports will be published by the Central Electoral Commission and political parties, however it remains unspecified whether the complete reports will be published or just their parts, as it was the case so far.  We think it is of great importance to have a complete overview of the funding of political parties, including the names of donors and the amounts of donations, as well as the expenditure of public funds, which would give citizens and professionals the chance to monitor the parties they vote for.

We sincerely hope that the members of the Inter-ministerial working group will take into consideration all given comments and submitted proposals, and that they will efficiently use the  opportunity for a real enhance of accountability and transparency of political party financing in Bosnia and Herzegovina, as well as the oversight of their financing.