Political parties publish pre-election financial reports
Under the Parliamentary Election Law, all political parties participating in the election should submit their interim campaign financial reports to the Central Election Commission (CEC) and the National Agency for the Prevention of Corruption (NAPC), as well as publish them on their websites no later than on July 15. 21 out of 22 parties that are competing for seats in Verkhovna Rada did this on time.
The reports, available on the CEC website, demonstrate that parties overall raised around UAH 622 million (approx. USD 24 million) for campaigning purposes during the period up to July 10. Almost all of this money, more than 95 percent, was transferred to the election funds from parties’ ordinary accounts. This means that the sources of these funds are unknown both to the regulators and the public. Ukrainian voters will be able to get more detailed information only after the election. The quarterly financial reports of the parties will be published in August and in November 2019 to cover the second and the third quarters of 2019. Hence, the detailed party financial reports covering July will not be available to the public until November 2019. This significantly limits the transparency of campaign finance during the parliamentary elections and prevents Ukrainian voters from making an informed choice based on credible information about financing of election contestants. To remedy this issue, introduction of regular reporting of donations made to both regular and campaign party accounts should be considered.
Furthermore, lack of donations to parties’ election funds from individual persons may be attributed to the unnecessarily complicated procedure for making voluntary contributions to parties and their election funds. Donors are required to visit a bank in person and must fill in a special statement to make a contribution. Such procedure makes effective fundraising by political parties and candidates extremely demanding. IFES has repeatedly pointed out this legal flaw and recommended simplifying the donation procedure by allowing the use of online banking and other instruments that guarantee proper identification of donors.
According to the analysis of the published financial reports by CHESNO Civic Movement, 81 percent of all funds were spent by the parties on purchase of air time or print space, predominantly as advertisements on television. Although the share of money spent on media so far is slightly lower than in the previous parliamentary elections (89 percent), the abundance of advertisement in broadcast media gives wealthy competitors an advantage and suppresses genuine debates on policy and platforms among parties and candidates. Therefore, consideration should be given to restrict political advertising on television, radio and outdoor spaces, as is the case in many European democracies.
The campaign reports are now being analyzed by the CEC. The results of the analyses will be published on the CEC website no later than two days prior to the election day. This extremely short period does not provide voters with enough time to review the results of the analyses before going to their polling stations. If interim reporting is to be maintained in the law, the deadlines for submitting reports and publishing their analyses could be set earlier than they are now.
IFES will continue to follow the parties’ campaign financial reporting as well as the oversight activities by the CEC to facilitate effective implementation of the 2015 Political Finance Reform Law and more transparent campaign financing in Ukraine.