MPs can still spend budget funds and do not report. Should COVID-19 still be blamed for this?

by Anton Marchuk, originally published at Liga.net

In spring 2020, Members of Parliament allowed parties not to submit their reports to the NACP while the quarantine goes on. This norm is still valid. It is quite convenient for them.

Yesterday, the Parliament considered draft law No.5253-1, which had to improve the legislation on financing of political parties. Transparency of party finances is one of key safeguards against political corruption and work of parties in interests of oligarchs.

However, during finalization of the draft law in the Verkhovna Rada, Members of Parliament prepared several unpleasant surprises. The taxpayers, who finance parties, will no longer be able to control how and for what cosmic sums of money are spent. Only this year parties will receive about 700 million UAH, and it is planned to allocate another 900 million UAH next year.

Firstly, Members of Parliament changed the requirement to submit reports on financial obligations of political parties, and supported the amendment of Member of Parliament from the party Opposition Platform For Life Oleksander Puzanov. Thus, parties should submit reports only about loans, credits, etc., which are due for payments, and the party has failed to meet its obligations. In practice, this poses significant risks to the “shadow” financing of parties by oligarchs or other stakeholders.

The civil law stipulates that loan agreements may not set clear repayment period. And in that case the party may not repay funds until “the claim is made” (and which, in general, may not occur until the lender wants to).

Funds from these “financial commitments” can be used to explain parties’ excessive spending on political advertising or other expenses. In this way, unlimited amounts from third parties can be credited to the party’s accounts.

And the most important fact that the public will not know about such “financial commitments”, because they could not be reflected in reports for years.

Another disadvantage is that the law adopted yesterday does not solve the problem of non-submission of financial reports by political parties. The fact is that in spring 2020, Members of Parliament allowed parties not to submit their reports to the NACP while the quarantine goes on due to the coronavirus pandemic. This norm is completely unjustified, especially after the introduction of electronic register of the NACP for party reports and their online submission.

During yesterday’s voting, the Parliament did not solve the problem by introducing contradictory norms. On the one hand, Members of Parliament obliged parties to submit all that reports that had not been submitted before the period of pandemic. On the other hand, the norm remained in force which allows not to submit report to the party during the quarantine – the Parliament did not support the amendment of Oleksandra Ustinova, which eliminates this contradiction.

Ideally, due to such contradiction, parties will submit previously unsubmitted reports during last 1.5 years and … may not submit them again for next quarters. In the worst case parties will not submit anything at all based on more favorable current norm.

In order for parties to finally start reporting, it is necessary to exclude the norm, which allows parties to submit reports throughout the quarantine. The public has been demanding the last year.

Meanwhile, parliamentary parties have continued to receive state funding for their activities all this time, namely, taxpayers’ funds from the budget. 

Since the law has already been adopted in general, there is only one way to resolve contradictory provisions, namely, to veto the law by the President and to submit proposals to the Verkhovna Rada with necessary amendments. If the President advocates real de-oligarchization, he must use veto to limit oligarchs’ influence on parties.

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