Transparency in campaign spending 2014–2015: fifty shades of grey

Political parties likely spent close to HUF 11 billion on their campaigns in 2014 and 2015 at the parliamentary and municipal elections, as well as on the by-elections held in Veszprém and Tapolca. This was the main finding of the civil campaign monitoring study carried out by Átlátszó, K-Monitor, Political Capital and Transparency International Hungary (TI). State support for political parties’ campaigns came to HUF 3.4 billion, while the civil organizations estimate that their expenses totaled some HUF 7.5 billion. The four participating organizations have written an open letter to members of parliament calling on them to fix campaign financing.

Parliamentary elections: governing parties show fourfold overspending

In the past 18 months, the campaign leading up to the parliamentary elections held in the spring of 2014 proved to be the most intensive and most expensive. Of the total HUF 11 billion spent on the four campaigns, around HUF 8 billion went toward the parliamentary elections. The organizations operating the civil campaign monitoring site have earlier already shown that the parliamentary election campaign of the governing parties cost close to HUF 4 billion, Jobbik’s a little more than HUF 1.2 billion and that of left-wing parties close to HUF 1.6 billion. According to the law, one party is allowed to spend no more than HUF 995 million on their campaign, of which maximum HUF 703 million can come from state funding. Strictly speaking, campaign spending of government parties at the parliamentary elections totaled HUF 2.8 billion in itself. However, if we add to this the campaigns conducted by the Civil Unity Forum (CÖF) and the government on behalf of Fidesz – which combined come to around HUF 1.1 billion –, we arrive at the close to HUF 4 billion spending figure for the government side.

According to the civil campaign monitor, parties did not succeed in complying with the legally set campaign spending cap at the by-elections either. The law states that each party can spend up to HUF 5 million on a parliamentary by-election campaign of its candidate. By comparison, the governing Fidesz-KDNP spent HUF 22 million in its campaign in Veszprém and close to HUF 20 million on its candidate in Tapolca. The cost of Jobbik’s campaign in Veszprém was more than HUF 9 million and came to around HUF 14 million in Tapolca. LMP spent HUF 3.3 million on its Veszprém campaign and HUF 2.3 million in Tapolca. The Veszprém campaign of Zoltán Kész cost HUF 8.5 million, while the left-wing party alliance spent HUF 13 million in Tapolca. “Based on the findings of the civil campaign monitor it seems that the governing parties applied the same fourfold rate of overspending at the by-elections that already ‘worked for them’ during the general election campaign,” commented Miklós Ligeti, the legal director of TI Hungary.

State Audit Office could have cracked down – but didn’t

In the declarations filed by the parties that won parliamentary mandates, they said that they honored all legal requirements. For example, Fidesz acknowledged campaign spending of HUF 984 million, the left-wing alliance reported spending of HUF 820 million, while Jobbik said it spent less than HUF 840 million. Only in the case of LMP can we say that the party stayed within the legal limit not just by its own account – the party reported HUF 716 million in spending – but according to the civil campaign monitor as well.

Last June, TI asked in vain the State Audit Office to compare the parties’ accounts with reality. Parliament’s “supreme financial and economic audit organization” interpreted parties’ parliamentary campaign spending only literally, and without examining their actual spending. Thus it is no surprise that according to its report published this March, “the total spending [of parties winning mandates] on campaign activity did not exceed the legally determined limit.”

Sham parties: legalized siphoning of public funds

Another big lesson of the parliamentary elections was that sham parties fueled by the desire to receive campaign funding were able to tap the state budget without punishment. Parties – mostly “business parties” – that were able to set up a national list, together with their candidates, received a total of HUF 4.2 billion in public money, of which they received HUF 3.4 billion in cash. In theory, they were supposed to use this sizable sum on trying to convince voters, but they conducted either no or hardly any visible campaigning. According to the calculations of the civil campaign monitor, the sham parties only spent a combined HUF 320 million on their campaigns. The remaining HUF 4 billion has vanished; the State Audit Office, although it uncovered some formal irregularities, did not find the funds to account for the difference between the reports filed by the “business parties” and the actual cost of their campaigns.

“The regulations of the law on campaign financing, as well as their practical application, both failed during the 2014–2015 election season, thus we have reason to believe that corruption thrived in recent election campaigns,” Miklós Ligeti said, evaluating the situation. The system of campaign financing does not provide an answer to the question of where parties that made it into parliament got the money to spend a total of HUF 7.5 billion on their campaigns, which is more than double the HUF 3.4 billion in campaign funding they received from the state. The four parliamentary parties combined would have been allowed to spend maximum HUF 4 billion on their campaigns, i.e. they exceeded the legal campaign spending cap almost twofold. And in the case of sham parties, even the fate of the close to HUF 4 billion they received from the state remains a mystery.

Government anti-corruption program: removed from reality

It is not much comfort that the anti-corruption organizations that operate the civil campaign monitor predicted all of this beforehand. Political Capital and TI Hungary pointed out already in October 2013 that the law on campaign financing allows for election abuses and the misappropriation of public funds. That was why they called for  a modification of the law; however their proposals fell on deaf ears.

According to the civil groups, the government, despite the negative experiences of the 2014 elections, is unwilling to eliminate the corruption traps created by the law on campaign financing. All that is said in the National Anti-Corruption Program published on May 27 is that in the government’s view, “significant advances have been made in the areas of party financing and campaign financing.” The NGOs believe that the government is using these words to praise the rules on party financing without any ground. In reality, the campaign financing law is a collection of soft rules, thus parties do not even have to break the rules to spend money illegally, from unverified sources, on their campaigns. The situation is compounded by the weak oversight performance of the State Audit Office. Thus overall, campaign corruption in Hungary has been “performing better” for several election cycles now.

“In order to achieve that the 2018 parliamentary election campaign not revolve around sham parties and public money corruption, we have written a letter to members of parliament,” Róbert László pointed out. The election expert of Political Capital said they have asked representatives to amend the act on campaign financing to significantly tighten parties’ reporting requirements, and make public the campaign accounts of parties as well as individual constituency candidates.

Municipal elections: without rules

Parties did not even face the theoretical risk of getting caught in the case of the 2014 municipal elections, since there is no law that regulates spending on municipal campaigns. Thus parties did not break any rules when they spent almost HUF 3 billion on local campaign costs, out of the HUF 11 billion total for the 2014–2015 period. As the civil campaign monitor pointed out already last autumn, Fidesz proved to be the champion of overspending during the municipal campaign as well. The governing party’s local election campaigns cost more than HUF 2 billion, although the party itself paid just HUF 1.1 billion of this amount. The remaining HUF 900 million in campaign spending was made by the government and government-led local municipalities who supported the victory of Fidesz candidates in this manner. The municipal election campaign of the left-wing parties (DK, Együtt, MLP, MSZP, PM) cost HUF 418 million, Jobbik’s came to HUF 280 million, while LMP spent HUF 50 million on the municipal election campaign.

Municipal minimum: fighting corruption locally

In the absence of legal requirements that parties can be held accountable to, in relation to last autumn’s municipal elections the NGOs called on local council and mayoral candidates to join the Municipal Minimum program. The anti-corruption groups urged local candidates to take steps, in case they are elected to office, to ensure easier access to data of public interest and transparency on the municipal government level. Close to 200 people joined the initiative, with local politicians of every parliamentary party to be found among the signatories. Of those who signed, eventually 43 won mandates, including one in the Budapest district of Zugló who was elected mayor. Those who signed the document pledged to take steps within 100 days of their election to office to ensure that the local government made available on its website an electronically searchable version of the local government’s simple, comprehensible budget, as well as the agendas of city council and committee meetings, including submitted proposals and the minutes of the meetings. The pro-transparency politicians also pledged to make public all local government contracts and their summary list, as well as asset declarations of local representatives and other local government officials.

So far 20 city councils have placed the meeting of the pledges on their agenda and 9 local governments have passed comprehensive transparency rules. “The program is a good example that even simple steps can go a long way to achieving transparency on a local level, provided that there is a real will behind it,” said Anita Koncsik, the legal director of K-Monitor. The organizations that developed the municipal minimum program also provided directassistance to the work of local representatives as well as the preparation of transparency plans. “In the future, the program will concentrate on municipalities where inadequate steps have been taken so far,” pointed out Anita Koncsik, adding that they continue to invite any municipalities that are committed to the transparency of local public affairs to join the program.

Investigative journalism on the local level

With its “The Hammer of the Village” series launched in 2013, Átlátszó started mapping out the relationship between local media and the leaders of local governments, the organic continuation of which was the project that probed the anomalies surrounding the municipal elections. The investigative journalists experienced at numerous locations that – regardless of the type of settlement – a given mayor, notary, or other local politician enjoys informal power that goes well beyond the formal powers stemming from their official position. In larger towns, one of the ways this manifests itself is the relationship network that has developed around the given person: generally it is relatives, friends and business associates who control the companies managing the city’s assets and funds.

In the smaller settlements of disadvantaged regions this local phenomenon is complemented by the complete vulnerability of lower-status residents, whose livelihood basically depends on the public works program. The “Vote of the Poor”study prepared under the framework of the four cooperating organization’s joint project states that the public works program can serve as a political weapon in the hands of local and national leaders. The close correlation between the number of public works employees and the exceptional election results of certain political groups (mostly government parties, but on occasion Jobbik and left-wing parties as well) also brings up the suspicion of election abuses.

Original article in Hungarian