Issue link: https://maltatoday.uberflip.com/i/1466806
8 NEWS maltatoday | WEDNESDAY • 4 MAY 2022 BERNARD Grech's frank admission that the Nationalist Party is in debt to the tune of €32 million and a report on newspaper Illum that Labour's media is in debt to the tune of €10 million over unpaid VAT and National Insurance contributions to government, are a stark reminder not just on the precarious state of political party finances but also of Maltese democracy in general. Indebted parties are even more vulner- able to pressures by donors who may ex- pect something in return for their help. And the Opposition's unsustainable fi- nances raises doubts on its ability to scru- tinise the government's relationship with big business without being blackmailed by potential donors who may try to buy its silence. But even when such suspicions are not backed up, the system breeds mistrust and suspicion, which can be exploited to shoot at political adversaries and which ultimately erodes confidence in the elec- toral process. Only this weekend, the Nationalist Party gave former MP Jason Azzopar- di a 24-hour ultimatum to substantiate his allegation that someone had donated money to the PN, in return for the party campaigning for their relative to be given a presidential pardon. This tallied with Grech's previous declarations that he would consider a pardon for Tumas mag- nate Yorgen Fenech, if elected. But instead of backing up this serious allegation, Azzopardi resigned from the party. It remains unclear how the PN could have influenced the granting of a pardon, which is the sole prerogative of the Prime Minister. But even if the ac- cusation is a lie, it feeds on a climate of distrust created by opaque party financ- es, suggesting that the PN is so desperate for cash that it was willing to compromise with the 'mafia'. The question for Jason Azzopardi is: why didn't he resign upon learning of the alleged donation, rather than using this information to lash out at the PN leader now, after he was discarded. Trading in influence or victims of a protection racket? What is sure is that faced with spiralling debts, parties are more likely to pester businesses for donations, in what over the years has become the Maltese, non-vio- lent equivalent to the Italian 'pizzo'. This reality was recently denounced by former Malta Developers Association president Sandro Chetcuti in a recent in- terview with the Times. While denying that parties are conditioned by donations, he suggested that parties regularly pester business-people for donations. "Some- times, it feels like harassment. Some busi- ness-people get embarrassed by their per- sistence." In short, faced by this kind of harass- ment, businesses may fear present and even future exclusion from government contracts, if they do not dig into their pockets. Even Gozitan developer Joe Portell, a beneficiary of Labour's planning policies, confirmed that his companies donate monies to both political parties, even if he suggested that businesses do so respect- fully and willingly. "You can't donate the amounts of money that people think we do. There are laws. But yes, we do help them. Out of respect. And we help both parties," Portelli said. Yet while Portelli and Chetcuti suggest that many businesses give donations, do- nation reports by political parties suggest that this is not the case. At law registered political parties have to present statement of accounts on an annual basis and name corporate or individual donors who do- nate over €7,000, in annual donation re- ports. But donation reports dating prior to 2018 have identified only a handful of donors. In fact previous PN reports have only identified Rabat notary Sam Abela as a PN donor, while the only corporate do- nors named in Labour's reports were Tar- cisio Galea Properties, Attard Bros, Euro- craft, Sea View & Sons, Camland, GAP Holdings, Hal Mann, and BV Formosa. Moreover. donation reports and accounts submitted by political parties for 2019 and 2020 are still not available to the gen- eral public as the Electoral Commission is still reviewing these reports after auditors identified "deficiencies" which required further verification. One reason why so few donors are men- tioned is that businesses are actually giv- ing smaller donations just below the legal requirement. Donations of up to €50 may be made anonymously; those of up to €500 can be kept confidential by the par- ty, however the Commission may request information if it suspects wrongdoing. Donations between €500-€7,000 cannot be received in a confidential manner and must show the donor's name if request- ed. Donations exceeding €7,000 must be registered with the Electoral Commission and be published online. The mother of invention Another reason may be that parties have found ways to circumvent the rules. For although parties are obliged to publish the names of donors who give them more than €7,000, this does not cover commercial arrangements involv- ing companies they own as well as loans made to political parties. It may also be the case that donations are being hived off to the party mediam which is not covered by party financing laws. This issue came to the fore following revelations that donations by the DB Party debts: the case for state Indebted political parties are bad news for democracy as it makes them even more dependent on private donors who expect something in return, or are themselves victims of a sort of protection racket run by political parties. Is it time to consider state funding? asks James Debono