Political Parties & Their Sources of Income

Yet again, spending, asset, and income reports from the country's political parties will not be subject to adequate scrutiny, leaving the public in the dark on where the parties get their cash and how they spend it. The law requires parties to list every donation worth over 6,000 dinars (about EUR75).

Parliament's Finance Committee, which the 2003 Law on Political Party Financing tasks with checking each report, set up a special working group to handle the job only at the end of September, ordering it to submit a report before October is out. However, since the State Auditing Institution is not operational, the auditing job will be left to experts working for Parliament.

Judging from past experience and expert opinion, the public is unlikely to learn the names of the financiers of the leading parties. It is far more probable that it will only get a breakdown of the figures provided by the parties in their financial reports.

Aside from the fact that 30 days is far from enough for a serious audit of each of the 420 registered parties, it should not be forgotten that the Finance Committee itself consists of politicians reluctant to make life more difficult for themselves. Another interesting phenomenon is that even parties that appear to be at odds have little difficulty agreeing when it comes to financial scrutiny.

All this explains why calls from the non-government sector for expert- backed amendments to the Law on Political Party Financing have encountered scant support from the main parties. None of them favor the introduction of accurate deadlines and real penalties for violators of the law.

Even though just 60 or so parties have sent in reports covering 2006, the others will not be penalized because the law does not specify by when reports have to be submitted. In previous years, the Finance Committee preferred to set April 15 as the due date, but since negotiations on the formation of a cabinet took three months, the Committee did not hold its first meeting before May.

According to last year's working group summary, only three parties sent in all the paperwork required by law. Another 76 provided some of the required documents. Last year, the working group made several suggestions for improving things, among them setting a deadline, since only then could action be taken against transgressors.

The Radical Party's Loan

According to the still unverified tally for 2006, the richest party is the Democratic Party of Serbia, with revenues and assets worth 43,788,535 dinars. In 2004 and 2005, the party reported 23.5 million dinars and 22 million, respectively. Last year's leader, the Serbian Radical Party, reported only 35.2 million dinars, compared with 71.8 million in 2005 and a little over 45 million in 2004. Radical party officials explained that the drop compared with 2005 was caused by payments for a loan taken out ahead of the January 2007 general election. The Democratic Party's income has been steady over the last several years, or 22 million dinars in 2004, a bit over 24 million in 2005, and 27.4 million in 2006.

In 2006, New Serbia reported revenues and assets worth 18.8 million dinars. It failed to file a report in 2005, and its 2004 figures were 6.47 million dinars. Of the other parties represented in Parliament, G17 Plus and the Liberal Democratic Party did not submit any of the required documents. In 2005, G17 Plus reported about 13 million dinars in property and income.

The Serbian Renewal Movement concluded 2006 with 25.2 million dinars in debt, with revenues of 24.4 million and spending worth 49.6 million dinars. The Alliance of Vojvodina Hungarians was also in debt, reporting expenditure worth 5.4 million dinars on 4.96 million dinars in income.

In its report, the Democratic Party of Serbia, led by Prime Minister Vojislav Kostunica, reported ownership of 5.2 million dinars worth of real estate, 22.3 million dinars worth of equipment, and a balance of 12.8 million dinars on its bank account.

The most detailed report came from the Serbian Radical Party, which included four automobiles worth a combined 3.5 million dinars. As for equipment, the party listed air conditioners, a vacuum cleaner, two water heaters, a space heater, and 34 chairs. The Radical party also listed 9.3 million dinars worth of books.

President Boris Tadic's Democratic Party reported 29.8 million dinars worth of debt for posters and advertising in the media in the run up to the January general election, adding that it would cover the obligations during the year with its regular income. It also reported 17 million dinars worth of equipment, almost a third of which had been donated. On the final day of 2006, the party had 10.3 million dinars in its bank account, another 28,712 dinars in its cash box, and no money in either its foreign currency account or reserves.

New Serbia said that 18.2 million dinars of the 18.83 million listed in its report were in its bank account, while the value of equipment accounted for the remainder. However, the party did not name any of its financiers.

The Socialist Party of Serbia, which ran the country during the 1990s, reported 9.6 million dinars worth of assets and income. However, it also lists vast expanses of office space once owned by the Communist Party. Ownership of this property has been contested in court.

Anonymous Benefactors

Only the Democratic Party and Democratic Party of Serbia provided any information on donations worth upwards of 6,000 dinars as required by law. The Law on Political Party Financing requires parties to provided the name and address of every major financier, as well as the exact sum received from him. Only several parties complied in 2006, mostly the two parties mentioned at the beginning of the paragraph.

If the asset reports are anything to go by, other large parties such as the Radical party, Socialist party, and New Serbia did not get a single donation worth over 6,000 dinars in all of 2006. However, G17 Plus reported a combined 1.8 million dinars worth of donations in 2005.

The Democratic Party reported 251 donations worth approximately 17.8 million dinars in all. Its biggest benefactor was a company called Ovation Advertising, which contributed a little over two million dinars. Next on the list was Balkan d.o.o., with 10,000 dinars in contributions.

The party also listed cash gifts from 249 of its members holding various government and party offices. The smallest of these donations was worth 10,000 dinars, while the biggest, 344,800 dinars, was provided by party vice president Dusan Petrovic, who is also the minister of justice. Milan Markovic, the minister of public administration and local government, Finance Ministry Secretary Miodrag Didic, party executive committee chair Marko Djurisic, and party MPs Gordana Comic, Aleksandar Radosavljevic, Anita Beretic, and Vladimir Jovanovic also donated upwards of 300,000 dinars to the organization.

Deputy Prime Minister Bozidar Djelic gave his party 90,000 dinars, as did cabinet ministers Dragan Djilas, Rasim Ljajic, and Slobodan Milosavljevic. Dragoljub Micunovic, another senior official, donated 80,000 dinars.

Meaningless Figures

As for the Democratic Party of Serbia, its benefactors included 57 companies (2.75 million dinars) and 12 individuals (460,326 dinars). The biggest single payment came from Zrenjanin-based Mering. Beo Strit from Zemun contributed 166,500 dinars, while Tami Kompani of Cacak, the Vapa building society of Belgrade, and Kraljevo-based MAT ZUR made donations of 150,000 dinars each.

The party's list of benefactors does not include a single senior party official. The largest payment, worth 100,000 dinars, was made by a man named Zoran Planic from the town of Leposavic.

In addition to reporting financial data to the Finance Committee, every party is required to pay for the publication of its data in the Official Gazette. Only a dozen parties have complied with this requirement to date.

However, until action is taken to ensure the implementation of the law and check the provided information, its usefulness is very limited. Once that is taken care of, the public will stand a chance of learning what business people and special interest groups are behind the leading parties.

The law allows parties to derive financing from both public and private sources. Vladimir Goati, president of Transparency Serbia, told a news conference in early September that parties received an extra 62.7 million dinars (about EUR750,000) from the state in 2006. Goati called on officials to find a way to get this money back. The total sum paid to the parties was, according to his calculations, 547.2 million dinars, whereas they were supposed to receive 484.5 million dinars.

The Law on Political Party Financing states that 0.15 percent of the annual budget, minus taxes and social insurance deductions, is to be distributed to political parties. Each party's share depends on how many people it has in Parliament.

Party financing is no less controversial in Serbia's neighbors. The exception is Bosnia-Herzegovina, where the Election Commission announced that it had collected about EUR350,000 in fines from political parties that had violated the law.

Nothing of the sort will be able to happen in Serbia as long as the country's political parties are in charge of keeping checks on themselves.