‘Golos’: Transparency in financial statements of candidates did not improve

by Natalya Tikhonova

The experts of movement advocating for voters’ rights ‘Golos’ and ‘Transparency International Russia’ claim that it is extremely intricate to understand who stands behind one or another candidate. They have analysed the transparency of political financing in the last Election to the State Duma to prepare an analytical report.

As the experts reported, the primary hindrance to financial transparency has become contradiction between the provisions of Law ‘On Election to the State Duma of Federal Assembly of Russian Federation’ and the Federal Law No. 67. Notably, the obligation of candidates and political parties to disclose the funding sources was tightened, as the lower threshold of sponsorship payments was raised from 25 thousand to 200 thousand rubles. The regional election commissions are responsible for the publication of financial statements of candidates nominated in single-member constituencies, therefore, only the incomplete information is available to the public.

In addition, there is no regulatory framework to prevent shadow financing, where candidates use shell companies to finance their political campaign.

The third issue concerns transparency of donations raised by non-profit organizations. Thus, NGOs are not obliged to disclose their donors to the public.

The movement advocating for voter’s rights ‘Golos’ has shared possible solutions to the above-mentioned problems.

1. The conflicting provisions should be reconciled to ensure greater transparency of political financing. First, the paragraph 10.2 of Article of the Federal Law No. 20 should be amended by provisioning obligation to disclose information on the legal entities who donated more than 25 thousand rubles.
2. To apply equal standards to the disclosure of all political financing sources, while making all financial statements of regional party offices and candidates in single-member in the Election to the State Duma available to the public on the website of Central Election Commission, including the mandatory publication of VAT Identification Number of donors, in case of legal entity. In the future, the possibility to make the financial statement available on the SAS ‘Elections’ system under equal terms regardless of type of elections.
3. To introduce the concept of ‘beneficial owner’ (‘ultimate owner’) of company within the national legal framework to prevent foreign individuals or state-owned companies to finance election campaigns in Russia.
4. To put non-profit organizations which provide financial support to political parties or candidates under obligation to disclose the information on their donors to the public (the name of a company or an individual, VAT Identification Number, region, the donation amount). Such reports should be made available to the public on the website of Ministry of Justice of the Russian Federation.

The full text of analytical report ‘Transparency of Political Financing: 2016 Election to the State Duma’ is available via the link to Google Docs or in PDF. The report was prepared in cooperation with ‘Transparency International Russia’.

Media on the report:

• Dozens of ‘intransparent’ NGOs offer financial support for the Parliamentary Election Campaign – ‘Vedomosti’
• Anonymous elections: how ‘United Russia’ classified half of its sources of 2016 campaign funds – ‘Dozhd’ (the full text is available only for subscribers)
• Please, do not trouble intermediaries – RFE / RL