Free and fair elections are the cornerstone of democratic governance and political stability. Political competitiveness is one of the essential signs of a representative democracy, which mainly is determined by political parties’ financial. In Georgia, the issue of political finances is regulated by various legal acts at the legislative level, among them, the Organic Law of Georgia on Political Unions of Citizens and the Election Code.[1]
According to the legislation political parties have equal access to financial resources. Nevertheless, in practice, the ruling party's donations exceed the financial resources of the opposition parties.[2] Taking into consideration the fact that obtaining funding from private sources is a challenge for opposition parties and a large part of their revenues comes from state funding, the real competition is not guaranteed in practice. The issue is also being highlighted by the Office for Democratic Institutions and Human Rights (OSCE/ODIHR), which addressed the need for contributing to a level playing field for parties and candidates.[3]
Last year legislative amendments were made to extend the application of the rules provided for political parties’ finances to a person with declared electoral goals.[5] The changes were also addressed to the definition of a donating legal person,[6] personal data of donors,[7] the threshold for receiving public funding,[8] the rule of determining the amount of public funding,[9] the use of electronic signature,[10] incurring unlawful expenses with the aim of the campaign against a political party,[11] the liability for vote buying,[12] and the definition of prohibited funding.[13]
Despite the positive changes, a number of challenges remain in regulating the financing of political parties, which has been discussed since 2011, including by the Group of States against Corruption (GRECO):[14]
The need to take further measures to prevent the misuse of all types of administrative resources in election campaigns - GRECO indicated that the amount of fines for misuse of administrative resources and other violations of election law was insufficient, therefore not dissuasive, and recommended Georgia to increase the sanctions, which has not been implemented.[15]
The legislation still allows for unlimited campaigning by high-level public officials, which GRECO, as well as OSCE/ODIHR, [16] considered unacceptable. Regarding both this and the above-mentioned issue, the government stated that the Ministry of Justice, together with the SAO and the CEC, had prepared legislative amendments which envisaged the relevant changes,[17] however, article 49 (2) of the Election Code remains unchanged.
In addition, recommendations regarding the use of effective, proportionate and dissuasive sanctions and the increase of limitation period for administrative violations of party and campaign funding regulations are not complied.[18]
The Organic Law of Georgia on Political Unions of Citizens and the Election Code still are not fully aligned with each other. Including, the availability of different sanctions for identical infringements has not been eliminated.[19] The issue of reporting third-party campaign spending is not explicitly regulated and limited enforcement of legislation related to funding, diminish transparency and effectiveness of the campaign finance framework.[20]
In June 2021, the Parliament of Georgia approved legislative amendments limiting the political parties’ funding. In connection with these changes the Venice Commission and OSCE/ODIHR stated in their joint opinion that they were not in line with international standards and were undermining political pluralism.[21] To work in parliament is not the only purpose of a political party,[22] but parties shall receive funding for financial support of party activities and development of the party system.[23] So fa as imposing direct consequences on individual Members of Parliament for their actions would be more proportionate, the Venice Commission and OSCE/ODIHR recommended Georgia to revise the proposed amendments. Despite criticism from international and local organizations, no additional changes were made to the final version of the draft Organic Law on Political Unions of Citizens and only the date of entry into force of these amendments has been extended to February 1, 2022.[24]
As of today, the recommendation regarding providing the State Audit Office with the mandate, the authority, as well as adequate resources[25] also remains unimplemented. The existing practice demonstrates that the State Audit Office is unable to adequately oversee the financing of political parties and election campaigns.[26]
IDFI emphasizes that in order to ensure a healthy electoral environment and, in general, political pluralism, as well as, proper functioning of democratic institutions, it is essential that Georgia adheres to the recommendations of international organizations. It is important to regulate the issue of political party funding comprehensively / in compliance with international standards and ensure in practice effective implementation of relevant norms, as well as, proper monitoring of party finances.
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[1] Also, the Organic Law of Georgia on State Audit Office, General Administrative Code of Georgia, Code of Administrative offences, Order of the Auditor General of the State Audit Office on Regulating Some Issues Related to the Transparency of Political Finances.
[2] Transparency International (TI) Georgia, Georgia’s Political Finance in 2020: Revenues and Expenditures of Political Parties and Financial Oversight, 2021, available at: https://docs.google.com/viewerng/viewer?url=https://transparency.ge/sites/default/files/georgias-political-finance-in-2020_0.pdf; TI Georgia, Georgia National Integrity System Assessment 2020, pp. 136- 139, available at: https://transparency.ge/en/post/georgia-national-integrity-system-assessment-2020.
[3] OSCE/ODIHR, Parliamentary Elections 31 October 2020, Final Report, 5 March 2021, pp. 18 - 19, available at: https://www.osce.org/files/f/documents/1/4/480500.pdf.
[4] The State Audit Office, 2020 Statistics, available at: https://monitoring.sao.ge.
[5] The Organic Law of Georgia on Political Unions of Citizens, article 1, available at: https://matsne.gov.ge/document/view/28324?publication=35.
[6] Ibid, article 25 (2) (b).
[7] Ibid, article 26 (2, 6).
[8] Ibid, article 30 (2).
[9] Ibid, article 30 (3).
[10] Ibid, article 341 (2) (c1).
[11] Ibid, article 342 (2).
[12] Ibid, article 342 (6). see.: Criminal Code of Georgia, article 1641.
[13] Ibid, article 342 (16).
[14] GRECO, Third Evaluation Round, Evaluation Report on Georgia on Transparency of Party Funding, 2011, available at: https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016806c62d3; GRECO, Third Evaluation Round, Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2013, available at: https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016806c62d5; GRECO, Third Evaluation Round, Second Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2015, available at: https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016806c62d8; GRECO, Third Evaluation Round, Addendum to the Second Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2016, available at: https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016806cc315; GRECO, Third Evaluation Round, Second Addendum to the Second Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2018, available at: https://rm.coe.int/third-evaluation-round-second-addendum-to-the-second-compliance-report/168090301e;
[15] Election Code of Georgia, Articles 80, 81, 86, 88, 90, 91, 92.
[16] OSCE/ODIHR, Parliamentary Elections 31 October 2020, Final Report, 5 March 2021, pp. 15 - 16, available at: https://www.osce.org/files/f/documents/1/4/480500.pdf.
[17] GRECO, Third Evaluation Round, Second Addendum to the Second Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2018, para. 25, available at: https://rm.coe.int/third-evaluation-round-second-addendum-to-the-second-compliance-report/168090301e.
[18] GRECO, Third Evaluation Round, Second Addendum to the Second Compliance Report on Georgia “Incriminations (ETS 173 and 191, GPC 2)”, “Transparency of Party Funding”, 2018, para. 33 - 42, available: https://rm.coe.int/third-evaluation-round-second-addendum-to-the-second-compliance-report/168090301e.
[19]The Organic Law of Georgia on Political Unions of Citizens, article 342 (4), the Election Code, article 47(2).
[20] OSCE/ODIHR, , Parliamentary Elections 31 October 2020, Final Report, 5 March 2021, p. 18, available at: https://www.osce.org/files/f/documents/1/4/480500.pdf.
[21] Joint Opinion of Venice Commission and OSCE?ODIHR) on amendments to the election code, the law on political associations of citizens and the rules of procedure of the parliament of Georgia, 30 March 2021, available at: https://www.venice.coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2021)008-e.
[22] Ibid.
[23]The Organic Law of Georgia on Political Unions of Citizens, article 30 (1).
[24] Ibid, articles 30, 391.
[25] GRECO, Third Evaluation Round, Evaluation Report on Georgia on Transparency of Party Funding, 2011, recommendation viii, available at: https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016806c62d3; the Organization for Economic Cooperation and Development (OECD) also indicated within the third round of monitoring that uniform and impartial enforcement of rules on monitoring and supervision of political parties finances during and outside of elections, in particular application of effective and proportionate sanctions was necessary. See.: OECD-ACN, Istanbul Anti-Corruption Action Plan, Third Round of Monitoring, 2013, recommendation 11, available at: https://www.oecd.org/corruption/acn/GEORGIAThirdRoundMonitoringReportENG.pdf?fbclid=IwAR1qBLdSILAe13E1-1SQvYizS-WfmnAe5iMytV-0IS3V2myDMjlvpUP1c-Y.
[26] TI Georgia, Georgia’s Political Finance in 2020: Revenues and Expenditures of Political Parties and Financial Oversight, 2021, available at: https://docs.google.com/viewerng/viewer?url=https://transparency.ge/sites/default/files/georgias-political-finance-in-2020_0.pdf; TI Georgia, Georgia National Integrity System Assessment 2020, pp. 123 – 133, 142 - 143, available at: https://transparency.ge/en/post/georgia-national-integrity-system-assessment-2020; OSCE/ODIHR, Parliamentary Elections 31 October 2020, Final Report, 5 March 2021, pp. 18 - 20, available at: https://www.osce.org/files/f/documents/1/4/480500.pdf; IDFI, Political Donations: Free will or Business Investment?, 2020, available at: https://idfi.ge/en/idfis-research-political-donations.
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This material has been financed by the Swedish International Development Cooperation Agency, Sida. Responsibility for the content rests entirely with the creator. Sida does not necessarily share the expressed views and interpretations.
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