Financing law still allows parties to spend large

For decades, Malta’s two major political parties have depended heavily on private donations for financing, opening themselves up to justified accusations of being beholden to contractors and big business.

Donors spent large on untraceable donations to allow them to buy influence in governments and dictate terms to politicians to benefit their special interests.

Tomorrow, legislators will approve a long-awaited party financing law with all parties agreeing that the Bill will guarantee accountability and transparency, and that follows contributions in parliamentary committee meetings even from Green Party representatives.

But the Opposition and Alternattiva Demokratika agree that the law still has a number of flaws, especially on the nature of the regulatory body that will oversee party financing rules.

The three parties all agree that the proposed law is an effective tool to regulate what is a completely unregulated area, but the PN and AD are disappointed that a number of proposals were not approved.

“The bill’s biggest flaw is the proposal to have the Electoral Commission act as the regulatory body,” AD’s deputy leader Carmel Cacopardo told MaltaToday.

“The Electoral Commission is composed of members from the two major parties, so how would one expect the commission to be vigilant on the parties?” Cacopardo asked, suggesting that it should be the Commissioner for Standards in Public Life, together with Parliament’s Standing Committee on Standards in Public Life, to oversee party financing.

Similarly, Nationalist MP Claudio Grech described the Electoral Commission’s role as regulator as an anomaly. “The Commission is made up of the political parties… making the parties in charge of scrutinising themselves. This, in our view, is not only illogical but could lead to partisan recriminations in due course.”

The Opposition proposed the appointment of a Commissioner for Ethical Standards to fulfill this role, appointed by a two-thirds majority of the House.

Grech added that the failure to cap electoral campaign expenditures of parties was a “let down” because the draft law “encourages parties to relentlessly chase funding for their campaigns.”

The PN proposed a cap of €2 million for general elections and €1.3 million for the combined European and local elections, but Grech said “government was adamant not to introduce this cap.”

Justifying the government’s reluctance to introduce such a cap, justice minister Owen Bonnici said: “Once a cap has been introduced on donations by a single source, why should parties be muzzled and prohibited from collecting as much money as they possibly can?”

While welcoming the changes approved, including the prohibition of donations from secretive companies or trusts, Cacopardo expressed disappointment at the law’s failure to make a difference between parties which receive substantial donations and have a professional setup and other parties such as AD which have a yearly turnover of not more than €10,000. 

“The law has a one-size-fits-all approach and it is clear that the Bill is designed on the basis that what is
administratively suitable for the PN and the PL has been deemed to be suitable for all parties,” he said.

Cacopardo also pointed out that state financing was a distant prospect, given that only parties in opposition agree with the idea.

Pointing out that during the previous legislature the Nationalist government was against the idea while Labour was in favour of state financing, he said the roles have now been reversed.

Asked whether the PN would be proposing the introduction of state financing, Grech said the Opposition’s first objective is that of ensuring that when the law comes into force all the necessary procedural and administrative elements are duly put in place to guarantee that the spirit of the law is reflected in its implementation.

“The government has still to table the detailed forms and technical documentation on how the parties are to submit the financial information to the Commission. Invariably, the PN will be coming up with further proposals – based on international best practice – on how we would be further enhancing this new law,” Grech said.