Party financing law urgently needs an update

The aim of any party financing law is to introduce transparency, by ensuring that the general public knows precisely who is making substantial donations to political parties. In this way, the public will be in a position to accurately assess whether political parties – especially, those in government - are according any preferential treatment to any of their donors.

For example: if the identity of political party-donors were common knowledge, the general public would easily be able to make connections between how much money those individuals are contributing to political parties; and how many planning permits, or ‘direct orders’, they may be benefitting from themselves.

Moreover, the publication of such lists would also make the donors expect more scrutiny. In theory, it should act as a deterrent against donations meant to secure present or future favours.     

This was, in fact, the declared aim of the party financing law introduced by the newly elected Labour government in 2013 - after years of procrastination by the Gonzi administration, and constant rebukes by the Council of Europe’s GRECO. But while the law drafted by former MP Franco Debono – who himself had struggled with the inertia of the Gonzi administration on such a vital matter - represented an important step forward: the ‘proof of the pudding’ is, as they say, ‘in the eating’.

In this case, the donation reports that have been published so far leave very little for the public to actually digest.  The report for 2019, for example – published only now by Malta’s Electoral Commission, three years later - fails to publicly identify a single donor to either party: notwithstanding that both declared sums of well over 1 million that year.

This is because, by law, parties are only obliged to publish the source of any donations above €7,000: and - provided that both parties are being entirely truthful, in their declarations - it would seem that all donations received by the political parties in Malta, throughout the year of the MEP election, were under this threshold.  

Likewise, previous reports had only ever revealed a handful of corporate and individual donors, on the same basis.   

But both major parties declared a considerable amount of money from individuals and companies whose donations exceeded €500 but stayed below €7,000: implying the source will only be known to the Electoral Commission but not to the public.  

In 2019, for instance, Labour declared €326,510 from 138 different donations of over €500: an average of €2,366 each. The PN received 333 such donations, totalling €775,298 – an average of €2,328, per donation.  

All this amounts to a clear indication, that the law introduced in 2013 – while well-intentioned - needs an urgent update. As such, lowering the threshold, by making it compulsory on parties to declare to the public the source of any donation over E500, could be a step in the right in the right direction.  

Malta also urgently needs a legal framework to regulate donations to individual candidates: made not just during the electoral campaign, but from the moment they register an interest in contesting. Moreover, it is essential that party financing laws also take into account funds channelled towards media companies owned by both parties: especially those which are craftily disguised as ‘advertisements’.  

But for this to happen, much depends on the will of the Commission to pursue any irregularity, without fear or favour.  And this also depends on creating a legal set-up to enable the Commission to take a more pro-active role. 

In this sense, the commission needs to follow the modus operandi of other respected national institutions like the National Audit Office and the Ombudsman: who have over the years  earned their respect by speaking truth to power.      

As things stand today, however, this does not seem to be happening. An investigation by the Commission into a donation by the DB group to the PN’s media company, was brought to a halt after the Constitutional Court declared that the Electoral Commission had breached the Constitution and the European Convention - including the right to a fair hearing - by acting as investigator, prosecutor and judge.  Yet this judgement was not followed up by legal changes to remedy the situation.  

The Commission also needs to beef up its communication with the public. Digitalisation of financing records, including candidate expenditures during election, should be the norm to foster transparency and enable scrutiny by journalists and the public.   

Ultimately this is another reminder on the need for a Second Republic, to be brought about by changes ushered in by a national convention or assembly which is not monopolised by the two major parties.  

Expecting political parties to regulate themselves, in this matter, is unfortunately nothing but wishful thinking. We should not forget that in the last general election, one fifth of all registered voters (over 69,000) did not vote for either the PN or PL; and one reason may well be that they think that their own vote does not count, when compared to that of party donors.

This fact, alone, should reinforce the urgency for a reform of party-financing laws: if nothing else, to prevent further erosion of public trust in the system.