Murphy warns: Party campaign financing system is rife with corruption

(Patria) - Establishing clear responsibilities for the Central Election Commission of BiH (CEC BiH) for overseeing party expenditures, the obligation to use single bank accounts, a ban on cash donations with the obligation to deposit donations into party bank accounts, expanding prohibited sources of financing, and increasing sanctions are some of the proposals to increase transparency in political financing contained in the initiative to amend the law on political financing in BiH.

Proposals for amendments and additions to the Law on Financing of Political Parties were presented at the conference “Integrity of Political Financing in the Region” organized by Transparency International in BiH (TIBiH) in cooperation with the Central Election Commission of BiH today in Sarajevo, and contain recommendations from relevant international institutions such as GRECO, OSCE/ODIHR, and the EU, as well as international standards for increasing the transparency and integrity of political financing.

The initiative contains proposals drafted by the Central Election Commission of BiH based on continuous campaign monitoring and analysis of political party financing conducted by TI BiH during several election cycles, which indicate a large number of abuses and inadequate control mechanisms, as well as mild sanctions for political entities that violate financing laws.

TI BiH also highlighted additional amendments that are necessary to include, primarily related to reporting on the financing and expenditures of independent campaigns of party candidates, financing by “third parties”, i.e., conducting campaigns through intermediaries, and preventing the abuse of public resources for campaign financing.

The conference, organized within the framework of USAID's support to citizens in the fight against corruption, was opened by the US Ambassador to BiH H.E. Michael Murphy, who assessed that the campaign financing system in BiH is marked by corruption because it was designed by politicians who strive to remain in power at all costs.

“The campaign financing system in Bosnia and Herzegovina requires urgent, substantial reforms as part of broader efforts to restore people's faith in the country's democratic institutions, especially as voters prepare to elect their local governments next fall,” stated Ambassador Murphy, adding that he welcomes the recommendations for legislative reforms presented today by TI BiH and the CEC.

The President of the CEC BiH, Suad Arnautović, particularly emphasized the need for harmonization of regulations in the area of financing political parties and election campaigns, given that the existing regulations at all levels of government differently regulate the allocation of funds from the budget and campaign financing.

Ivana Korajlić from TI BiH emphasized that parties have enormous room for non-transparent financing and that they receive and spend much more funds for campaigns than they report, as shown by TI BiH's monitoring which revealed a difference of 1.7 million KM in reported expenditures compared to reality, and that out of 170 companies that donated funds to political entities in 2022, 70 of them received public procurement contracts with government authorities in that year.

“We do not have insight into the individual expenditures of parties, we do not know who they pay and how much, which makes it difficult to track actual campaign costs. Annually, 20 million KM is allocated for financing parties from the budgets of all levels of government without adequate mechanisms for auditing expenditures,” stated Korajlić, adding that the issue of financing political parties has remained outside the authorities' priorities, and expressed hope that this issue will come into the focus of decision-makers in order to prevent the abuse of public resources for campaign financing.

Representatives of relevant institutions from the region also participated in the conference, presenting best practices and procedures for preventing the abuse of public resources during election processes, as well as oversight of political campaign financing.