Party Financing

Levan Bezhashvili: We will not and cannot restrict civil activity


Amendments to the Organic Law of Georgia on Political Union of Citizens, enacted in late-December 2011, impose a number of new regulations affecting political activity in Georgia. Among the changes: tougher restrictions have been established on party financing; the Chamber of Control is now responsible for monitoring party financing instead of the Central Election Commission. Especially controversial are restrictions on party funding which may apply in certain cases to natural and legal persons directly or indirectly “related” to political parties. That latter regulation touched off a firestorm not only among opposition political parties but also a segment of civil society and media too. What exactly are the criteria for identifying such related persons? Do the new regulations restrict freedom of expression and civil activity? Under what circumstances may a media organization become an object of monitoring? These and other issues were discussed in a Tabula interview with Chamber of Control Chairman Levan Bezhashvili.

- Restrictions provided in the Law of Georgia on Political Union of Citizens for political parties may also apply to natural and legal persons in certain cases. In addition to general definitions provided in the Law, do you have any concrete criteria for identifying “a related person”? What sort of relations does it imply?

A key criterion for identifying a natural and/or legal person as a politically related person, and thus subject to the restrictions of the Law, is content of their activity and, at the same time, the relation of money spent on that activity for political goals and objectives. That is the most important test. There are other criteria as well – those established by the law and international practice. The key criterion is defined in Article 261 of the Law: in addition to the fact that those organizations and subjects whose financial activity is directly linked to the implementation of political goals and objectives are regarded as persons directly or indirectly related to political parties, they must also be bypassing established restrictions in their activity. For example, a commercial legal entity may prepare propaganda material for a political subject. That legal entity is prohibited from making a contribution to a political party. However, to bypass the Law, it could print such material which would not be reflected in financial accounts of a political party. That would become a subject of monitoring and, in such a case, we would act in accordance with the Law.

Under the Law, related persons could be those persons who call for the support of concrete political subjects. The main criterion for evaluation must be a financial link between concrete calls and the financial activity.

- According to Article 261 of the Law, the restrictions specified in this Article cannot be applied against freedom of expression and civil activity. Where is the line drawn?

The Law clearly explains that the established regulations and activity of a monitoring entity must not restrict freedom of expression and other constitutional rights. The criterion is the link of financial activity with calls and actions. We will not and cannot restrict civil activity by itself. Non-governmental organizations today are actively involved in the political life of the country. This Law does not apply to them, naturally.

If any organization supports a political subject, such an organization is not restricted. But if that organization finances a propaganda campaign, pays salaries to politically active people or members of a political party, the restrictions of the Law will apply. They will be obliged to observe established rules of financing.

The aim of the Law is to regulate finances related to politics, to prevent adverse effect of excess money rather than the restriction of freedom of expression of any non-governmental organization or individual person. It deals with the containment of financial activity within certain limits.

A monitoring body, in general, must be effective. It must have access to every financial transaction in order to study the relation of that transaction with a political activity. The priority for us is the financial activity of political parties. The issue of monitoring other subjects comes after that – if it turns out that their finances are directly or indirectly related to goals and objectives of separate political parties.

The uproar among some non-governmental organizations is incomprehensible; they interpret the Law wrongly. For example, they say that if a relation of a natural or legal person to political activity is established, the Law will prohibit them from receiving income exceeding GEL sixty thousand a year, or to take on a loan, etcetera. The monitoring service of the Chamber of Control interprets the Law in a much more liberal way. We believe that the right of natural and legal persons to act in a free entrepreneurial environment and to receive income must be protected in any case. The law defends the right to property and our mandate does not, naturally, imply the restriction of that right. Nor does it apply to traditional activity of non-governmental organizations which have their own projects for the development of the civil sector, political, democratic system in the country.

- You have recently requested financial information from the non-governmental organization New Generation - New Initiative. You explained that you inspected that NGO not because of its association with political persons, but because the information about its financial activity was not available otherwise. Why must that information be available? Is similar information of other organizations available?

We receive information on financial activity of any organization from various sources. Many non-governmental organizations have their financial information available even on their websites. Others publish that information in the press. In the case of New Generation - New Initiative. We failed to secure such information.

- Was it necessary for that information to be available? What was the ground for inspection?

Separate political persons have also been associated with that organization. There are other non-governmental organizations whose activities are also associated with politicians. We are more or less aware of their financial activity. We have information from various legal, public sources. A letter was sent to New Generation - New Initiative, requesting such information. It was established that their financial activity had nothing to do with political subjects.

- Is a fact that if this or that politician had links with an organization at some earlier time that constitutes sufficient ground and evidence to inquire into their finances?

No, it is not. There must be other grounds as well, suppositions and substantiated doubts.

- What was that “other ground” in the case of New Generation - New Initiative except for the fact that you did not have access to its financial information?

First and foremost was that we did not have information on their financial activity.

- Do you have similar information about all other NGOs? There are up to ten thousand NGOs registered in the country.

Yes, we have. For example, the Georgian Young Lawyers’ Association has such information published on its website. We are talking here about main actors who actively receive funding and implement projects.

- You requested financial information from the Republican Institute Georgia as well. You explained that the Republican Institute is associated with the Republican Party. It is a worldwide practice that institutes affiliated with various political parties exist – for example, the U.S. National Democratic Institute (NDI), the International Republican Institute (IRI), the Konrad Adenauer Foundation (KAS), etcetera. Will any restriction be imposed on the Republican Institute Georgia?

The Republican Institute is controlled by the Republican Party. According to Article 32 of the Law, a political party shall submit, along with an annual financial declaration, the information about legal persons subordinated to it. They had to do that before 1 February. That organization falls under the definition of Article 261 and regulations envisaged in the Law in the area of financing apply to it.

You noted correctly that political parties have such institutions worldwide. Naturally, the Republican Institute has the right to carry out civil activity, conduct surveys, etcetera. This is not restricted by the Law. We talk about the regulation which deals with the receipt of revenues, origin of those revenues, expenditure which must not be linked to party activity either. According to financial documentation, they were less involved in research activity. They had just a few large transactions and the money received was spent within the period of nearly two weeks.

- Will they be allowed to receive international grants?

The Law regulates that area as well. According to them, the Republican Institute is subject to the same restrictions as any political party. A political party can receive contributions from international organizations for the aim of conducting lectures, seminars and other public events. That money must be spent on such activities alone.

- Is it not possible to use lectures and seminars for political aims?

The Law provides for such an exception – when a lecture is about how to mobilize public finances, how to monitor election process, and issues like that.

- Let us discuss such a situation. Say, a politically active person purchases certain goods or services. Those who receive money for supplying goods or services use that money for political activity, for instance, they contribute that money to a political party. Would purchasers of those goods or services be considered “related” persons?

Some schemes in international practice prohibit legal persons to contribute finances. Consequently, these legal persons give funding to natural persons who, in turn, fund political subjects. If it is established that that has been done to indirectly bankroll a political subject, bypassing the law, corresponding sanctions will be imposed. Legal persons are not allowed to finance a political party, only natural persons can.

- I also meant natural persons, for example, if their salaries are increased and they make a contribution…

Political parties supply information within three days after receiving a contribution. Our services study each transaction. We have the right to ask a contributor to provide information about the origin of a contribution and, based on received information, to discuss how real it is.

In general, it is difficult to model such situations. The Chamber of Control is requested to draw up certain guidelines, although that is not an easy task. It is impossible to predict every sort of situation. We actively work and will work with the non-governmental sector in order to be able to comment on separate provisions. The society must know what is prohibited and what is not prohibited – with concrete examples and comments. However, we reserve the right to act in concrete situations in accordance with concrete circumstances.

- In what cases may a media organization become an object of your monitoring? A practice in Western countries is that some media openly advocate for or openly oppose a candidate. Will such an activity ensure restriction of media? Or will it become a ground for suspicion on your part?

Our monitoring service will not deal with financial activity or editorial independence of media. We had cases when one active political subject transferred finances to media outlets. Even though the price of service purchased by that subject exceeded the market price, we did not approach those media organizations to inquire how that money was spent. Monitoring will only note that finances to media outlets were transferred by political subjects. How these finances are spent does not fall within our interest.

As regards calls, freedom of expression, we do not deal with that either. Nor does the Law provide for any restrictions. We only deal with a link of finances to the implementation of political aims and objectives of political subjects. Our monitoring service will get involved only if such facts are established. We talk about confining such finances within certain regulations. That is envisaged by the Law of Georgia on Political Union of Citizens.

If we see that a TV channel hires an unusually high number of employees who, instead of performing journalistic work, engage in political propaganda; if we see that they engage in the election campaign of a political party – in that case, the link of finances with a political activity will be obvious and the monitoring will step in. We are not talking here about a one-off activity but about campaign-type activity. A media outlet itself cannot be a subject of monitoring. Their activity is protected.


This article first appeared in Tabula Georgian Issue # 88, published 20 February 2012.



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