Issue link: https://maltatoday.uberflip.com/i/1466806
9 NEWS maltatoday | WEDNESDAY • 4 MAY 2022 Group to the PN were disguised as Net TV advertising. This prompted the Elec- toral Commission to appoint an investiga- tive board to probe all the cases of alleged breaches of the law. But this investigation was brought to a halt after the Constitu- tional Court declared that by acting as investigator, prosecutor and judge, the Electoral Commission breaches the Con- stitution and the European Convention, including the right to a fair hearing. News that Bernard Grech's own head of secretariat had relinquished his polit- ical post to join the DB Group as direc- tor has once again thrown a spotlight on the proximity between the party and the commercial group which it had criticised in the past. When quizzed on this move by Andrew Azzopardi on 103FM, Bernard Grech seemed indifferent to the move, saying Bezzina had "made his choice". "The party was vociferous about its (db Group) project and this will continue. Po- litical consistency will remain my trade- mark. I will accept donations from any- one, except the corrupt or criminals, but donations will not stop me from taking positions in favour or against," he said. In short, Grech expects the public to trust his party in making a distinction between "corrupt" business groups and legitimate ones. Commercialising party assets Moreover, to address their financial shortcomings parties are also being forced to commercialise their properties, thus becoming actors in the property market, which they should be regulating in the first place. For how can parties ar- gue for a revision of local plans and possi- bly lower building heights in certain areas if they stand to gain from policies which maximise the price of their properties? For example, the Planning Authority is still considering a zoning application pre- sented in 2018 by the Fino Group which foresees the application of the Floor Area Ratio mechanism for Australia Hall which it had previously bought from Labour for €582,000. The PN also contends that La- bour benefits from an unfair advantage, thanks to a decision by the Labour gov- ernment in 1979 which offered the Raffles and Australia Hall as compensation for the loss of a printing press in Marsa. Still, by using their assets to create a steady revenue stream parties could be- come more self reliant and less dependent on donations. At face value Labour's deal with a company to use the Raffles prop- erty as a child care centre in return for an annual ground rent of €220,000 falls in this category. But there are also risks in political par- ties turning in to business operators. For this also raises questions on whether commercial transactions involving polit- ical parties deserve extra scrutiny in view of the risk that these could be a way to cir- cumvent party financing laws. A favoura- ble property deal may well be an alterna- tive to a direct donation. Loan schemes like the PN's opaque ċedoli scheme introduced by former PN leader Simon Busuttil could be another way to circumvent the rules. Through this scheme the party entered into a pri- vate agreement with individuals who lend it €10,000 for 10 years against an interest payment of 4%. The scheme affords ano- nymity to lenders and has been criticised for going against the spirit of the political party financing law, that makes it incum- bent on parties to publish the names of individuals who donate €7,000 or more. Need for a firewall It is only natural that the public recoils at any suggestion of the state bailing out political parties by introducing a state fi- nancing system, especially in the absence of public trust in the state's ability to en- force any conditions on the way this mon- ey is spent. Fearing a public backlash political par- ties have not been keen on state financing. Former Prime Minister Lawrence Gonzi had himself ruled out any state funding of political parties in 2011 at a time when the party was suffering a backlash after increasing the salary of MPs, by stealth. Understandably from the opposition, Labour did not press on this issue, prefer- ring to focus on improving its image as a business-friendly party and thus indirect- ly benefitting from more private dona- tions. Yet this may well have contributed to an incestuous relationship with some business groups, which returned to haunt Labour after Joseph Muscat was forced to resign following the arraignment of Yorgen Fenech over the assassination of Daphne Caruana Galizia. It was only when the shit hit the fan after the 2013 defeat that the PN started calling for state funding, in what many saw as a desperate attempt to get bailed out by the State. In fact the demand was shot down by then justice minister Owen Bonnici, who argued that "political parties first need to prove that they are committed to transparent management of their funds by adhering to the new financing law." Ironically over the past years, parties have failed to secure public trust by show- ing any such commitment for transparent management of funds, making it even more difficult to make a case for state funding. So paradoxically, while the poor finan- cials of political parties make the case for state funding, a more urgent matter due to the increased dependence on private donors and deals with commercial oper- ators entrusted with party assets, it also makes it harder for any politician to make a strong case for state financing. Yet revelations by MaltaToday that par- ty media houses owe €4.75 million in dues to utility bills company ARMS suggests that parties are already benefitting from a form of state assistance, which at the very least results in an uneven playing field where parties are treated with kid gloves. But there is a reason why mature de- mocracies like Germany have for decades implemented a state financing mecha- nism through which parties are paid by the state for every vote they get in a gen- eral election. In this way political parties will not have to beg for money in tele- thons, which may well be charades aimed at disguising more substantial donations and back-room dealings. Parties may also be required to scale down media operations to match the limited funding they get from the state. Closing down partisan TV stations, which have become a burden on political par- ties, may well be a blessing in helping re- duce partisan tension in the country. Ultimately, we have to realise that de- mocracy comes at a price and we have to start paying for it, or else obscure and sinister forces may end up paying for it instead. The question we must face is: do you prefer political parties to be financed from your taxes or by people, including shady characters, who expect a return on their investments? state funding