Financing of parties during 2011 Data from financial reports of political parties for 2011.

Transparency Serbia12 June 2012

What does the obligation consist of?

• Submitting of annual financial report to the Anticorruption Agency by 15 April 2012 (this year by 17 April), in prescribed form, which contains data on donations and membership fees larger than the average salary, provided goods or services that weren’t charged by real market price, and data on property of political subject

• Publishing of reports on party webs sites and submitting to Official Gazette for publishing in eight days’ deadline (this year by 25 April 2012)

Who has the obligation?

• Each political party that was registered in 2011 (85 political parties that were enlisted in earlier years or during 2011)

• Each coalition or citizens’ group that had representatives in 2011 in Republic Assembly, Vojvodina, city or municipality (there is no register, on the basis of local elections’ results from 2008 can be assumed that the least 80 citizens’ groups had such obligation)

Who respected obligation of reporting?

• The Anticorruption Agency web page published 48 annual financial reports, on the basis of which can be concluded that reports were delivered by ¼ obligatory entities, but among them are most important political subjects (those that were represented in National Assembly).

• Obligation was fulfilled by 46 from 85 registered political parties and only two citizens’ groups

Who fulfilled obligation of publishing in the Official Gazette (data by 7 May)?• Jedinstvena Srbija – delivered on 12.04.2012 and annexes 3.5.2012.• Zajedno za Šumadiju – delivered on 18.4.2012.• Liga socijaldemokrata Vojvodine – delivered on 19.4.2012. • Demokratska stranka – delivered on 19.4.2012. • Pokret snaga Srbije BK – delivered on 20.4.2012.• Ujedinjena seljačka stranka – delivered on 25.4.2012. • Savez vojvođanskih Mađara – delivered on 24.4.2012.• Demokratski savez Hrvata u Vojvodini – delivered on 24.4.2012.• Demokratska stranka Srbije – delivered on 24.4.2012.• Srpska napredna stranka – delilvered on 25.4.2012. • Liberalno demokratska partija – delivered on 25.4.2012.

Who hasn’t fullfiled obligation of publishing in party web page?

• From 18 largest political parties whose web pages were checked, in web pages of SPS, PUPS, SPO, NS and SDU, these annual financial reports we couldn’t find even by 7th of June 2012

Correlation between incomes and expenditures

Party

Status at the end of 2011

DS 695.709SNS 2.235.527DSS -1.785.462SPS -63.030.952

G17 plus 37.902.212SRS 52.278.839LDP 4.625.380

PUPS -414.205LSV -6.910.378NS -8.056.905

SPO 18.680SDPS -1.606.604

JS -5.031.067SVM 158.143SDU -11.166.119PSS 446.497

Total 359.295

Correlation between incomes and expenditures

• With most of 18 monitored political parties status of incomes and expenditures is shown as balanced. Exceptions: SRS (with presented 52 millions of plus), G17Plus (with positive 37,9 million of RDS), as well as SPS with minus of 63 million RSD

• More significant positive balance: LDP (4,6 million) and SNS (2,2 million of RSD)

• Significant deficiency of assets with several entities: SDU (-11,1 million), NS (-8 million), LSV (-6,9 million), JS (-5 million) and DSS (-1,7 million).

Table: status of finances at the end of 2011 in the reports of parties

PartyStatus at the end of 2011

DS 695.709

SNS 2.235.527

DSS -1.785.462

SPS -63.030.952

G17 plus 37.902.212

SRS 52.278.839

LDP 4.625.380

PUPS -414.205

LSV -6.910.378

NS -8.056.905

SPO 18.680

SDPS -1.606.604

JS -5.031.067

SVM 158.143

SDU -11.166.119

PSS 446.497

Total 359.295

Assets that could have been used for the campaign 2012

• SRS – 15,6 million of RSD• G17 Plus – 37,9 million of RSD• SNS – 2,2 million of RSD• DS – 700 million of RSD• PSS – 450 million of RSD• SVM – 160 million of RSD• Total – maximum of half million EUR

Structure of incomes and expenditures for 2011

Structure of incomes in annual party reports

Structure of incomes – membership fees

• Main budget income (around 70%)• Membership fees – average member of party

donated in 2011 around 100 RSD from membership fees

• Significant source of incomes in DS, G17 Plus, SPS, LSV

• Membership fees were not collected in LDP, JS, SVM, SDU, PSS, while in symbolic amounts were collected by NS and SDPS

Structure of incomes - donations• Total collected 111 million of RSD, 30% goes for firms.

Almost half of collected donations from physical persons was reported by Demokratska stranka (around 37.5 million of RSD), double the less than СНС (16,5 million of RSD), and in other parties, this source of incomes is significant with G17 Plus (8,7 million), SPS (4,8 million), SDPS (2,4), SVM (2,2), JS (1,5), PUPS (almost a million) and PSS (around 600 thousand). Donations from physical persons were not collected/reported by SRS, LSV, SPO and SDU, while they can be found in the reports of LDP and NS only in symbolic amounts

Donations from legal entities• When it comes to donations of legal entities, 90% of

total amount goes in almost equal amounts to DS, G17Plus and SPS (between 10 and 11 million of RSD), while with other parties they create slightly more significant income only with SDPS (2,3 million of RSD). However, it is important to notice that, if it would be judged according to official reports of political parties, there is no fear that the interests of legal entities will influence party politics, since this source is less than 4% of the value of reported incomes, and that even with parties who reported largest amounts it doesn’t exceed 15% of total incomes.

Incomes from property• Significant only with SPS (21,7 million of RSD),

which is most lightly consequence of renting of property from former Communist Alliance that this party dispose with. Finally, in the column „other incomes“ which is not specified in more details, could be found more significant amounts with SRS (14,2 million of RSD), DS (2,2) and SPS (2,6). It seems that, even in some of the cases, it is most lightly wrong recording of incomes – presenting of interest to bank deposits in wrong place

Comparative presentation of total incomes and expenditures in 2011

Comparison between budget incomes and total expenses

Political party Covering of expenses with budget subsidies %

DS 60.83SNS 9.12DSS 91.50SPS 22.28

ГG17 Plus 92.05SRS 127.24LDP 115.30PUPS 87.19LSV 65.50NS 76.52SPO 82.12SDPS 4.25JS 68.69SVM 88.66SDU 50.00PSS 34.53

total 71.98

Budget and other party incomes in 2011

Correlation between budget and total expenditures in 2011

Consequences of budget subsidies increase

• Law on Financing of Political Activities introduced changes of parameters for determining money that will be donated to political parties for their regular work - amount which parties receive is in practice significantly higher. This increase is in direct contradiction with recommendations of Venice commission and ODIHR

• From the budget of the Republic of Serbia will be disbursed for financing of regular work around 9 million of EUR, and from budget of APV, cities and municipalities around 1 and 1,5 million of EUR, while in 2013, if the budgets remain in similar level, republic budget subsidies will be around 12 million of EUR and from the budget of APV, cities and municipalities around 2,5 million of EUR, while in 2011 for this purpose was disbursed less than 7 million

Consequences of increased budget subsidies

• Parliamentary political parties will in total, already in 2012 receive from budget 106% of total expenditures, and in 2013 around 144% from total expenses for financing of their regular work;

• Under condition that current party reports are credible, parties will have the possibility: – To significantly increase on tax payers expense scope and price of their

activities in non election period (e.g. to hire more personnel or to increase their salaries, rent or buy more expensive premises for work and equipment, increase number of publications they distribute and rallies to be organized etc.)

– To completely terminate charging of membership fees or collecting of donations, or to decrease „party tax“ that is being charged to persons elected to official post

– To repay debts from election campaign or to collect money for the new one (which would be contrary to provision of the Law – to specifically relocate budget subsidies for financing of regular work or for covering of election campaign expenses)

Conclusion related to budget subsidies

• In general level (for all parties), conclusion could be that things are wrong in two ways – either party reports significantly deviate from real state or the budget subsidies for parties are too high or seriously violate international standards of good practice according to which financing from private of public sources should be balanced

• Situation of each individual party can significantly differ, regarding the number of won mandates, diversity of party infrastructure, scope of activities, debts from previous period, status (opposition or authorities) etc.

Structure of expenditures total

Structure of expenditures by parties

Expenses from the reports

PartyUtilities and

regular expenses

Expenses of commercial material and publications

Expenses of public events

Obligations on the basis of salaries

Obligations on the basis of contracts

Expenses of professional education,

international cooperation and

work with members

Other expenses

Total expenses

DS 109.950.142 736.351 74.093.152 361.440 8.717.216 64.046.079 257.904.380SNS 10.244.371 114.899 1.677.030 7.019.776 385.390 2.207.929 21.649.395DSS 26.148.599 2.847.220 1.377.035 23.750.988 743.155 8.928.181 63.795.178SPS 38.509.721 1.372.547 8.227.287 42.285.525 1.182.436 47.184.332 138.761.848

G17 Plus 29.414.035 2.995.243 6.146.676 22.657.393 318.821 61.532.168SRS 18.768.143 3.719.555 1.964.157 40.360.078 15.132.648 23.579.271 30.819.798 134.343.650LDP 20.048.642 2.086.415 5.761.291 609.192 541.635 534.989 444.472 30.026.636PUPS 17.413.331 615.367 309.927 7.811.713 54.997 26.205.335LSV 8.651.897 11.527.427 1.480.951 2.593.760 485.182 4.677.345 29.416.562NS 13.624.090 3.730.867 7.169.497 5.950.238 496.709 8.520.237 39.491.638SPO 11.012.556 884.503 3.275.206 6.715.691 21.887.956SDPS 3.127.556 595.120 2.128.769 728.294 6.579.739JS 10.723.996 262.276 1.170.464 1.330.933 7.076.177 569.838 21.133.684SVM 2.104.664 3.112.534 1.217.880 5.511.434 1.133.885 1.729.116 6.062.016 20.871.529SDU 7.255.748 197.457 836.797 2.596.638 279.479 11.166.119 22.332.238PSS 208.933 345.396 554.329

Total 327.206.424 34.797.781 38.630.964 231.002.766 28.074.668 45.086.229 191.687.433 896.486.265

About certain types of expenses• Most confusing data is that besides very detailed reporting form

significant part of expenditures ended up in „other expenses“ which were not specified (191,7 million of RSD, or more than 20% of total expenditures) even besides detailed form

• Assumptions: expenses of public opinion research, paying of old debts, purchasing of equipment...

• In „other expenses“ highest maximum amounts could be found in the reports of DS (64 million), SPS (47,1 million), G17Plus (30 million). This form of expenses is strikingly large with SDU (where with 11,1 million makes half of total expenditures), with DSS (8,9 million), NS (8,5), as well as with SVM (6 million or 30% of total expenditures), SPO (6,7 million or around 30% of total expenditures) and LSV (4,7 million of RSD).

Utilities and regular expenses• Total of 327,2 million of RSD (more than 3 million EUR or more than 35% of total

expenditures reported). With this expenses one should have in mind that political parties, on the basis of Law and decisions of municipalities very often get privileged conditions of renting premises owned by the cities and municipalities and that such right is most often ceded to those parties presented in municipalities, so that real value of these expenses is significantly higher.

• When it comes to absolute amounts, most money for this purpose was allocated by the DS – around 110 million of RSD or one third of presented by monitored parties. These expenses were significant with SPS (38,5 million), G17 Plus (29,4), DSS (26,1), LDP (20), SRS (18,7), PUPS (17,4), NS (13,6), SPO (11), JS (10,7), SNS (10,2), LSV (8,6) and SDU (7,2 million of RSD).

• Data are surprising, because it could be reasonably expected that this table reflects development of party infrastructure (number of functional regional, city, municipality and local boards), although comparison can not be performed directly, because it is possible that parties with the same number of boards have rented business premises of various size and quality, that spend more or less to heating and telephone etc.

Salaries of employees• 231 million of reported expenditures or around ¼ total expenses• Small number of people is employed in political parties (probably between

50 and 100 even among larger parties) or that salaries are not especially high

• Expenses for salaries is significant in DS (74 million of RSD), SPS and SRS (over 40 million of RSD), DSS and G17 Plus (over 20 million of RSD), slightly less in SNS (7 million), and considering amount of total expenditures, very important with NS, SVM (over 5 million of RSD), and slightly less with SPO and LSV (around 3 million).

• Only some of the parties besides salaries paid also by contracts. This expense is extremely high with SRS (15,1 million of RSD) and PUPS (7,8 million of RSD, where it represents probably exchange for expenses of employees which are zero), very high in relation to total expenses with SDU (2,6 million of RSD) and important with SVM (1,3 million), while half of observed parties doesn’t have it at all.

Obligatory expenditures from public sources

• To fluid category „expenses of professional education, international cooperation and work with members“, parties in total spent 45 million of RSD, out of which Serbian Radical Party more than half of total amount.

• SRS reported in this column expenses of printing of its publications and books; high amount is also with DS (8,7 million) and with JS (7 million), while with other parties is several time smaller (e.g. 1,1 million with SPS, 1,7 million with SVM and less than million with DSS, LDP, LSV and SNS, while NS, SPO, SDPS and PSS haven’t reported anything in this column)

• Expenses in this category are of various nature. With JS most of the expenditures went to „organized visits of party members to Jagodina“, with DS to „professional education“ and membership in international parties’ association, while in report of SVM half of presented amount goes to „sitting of party presidency“

• This category of expenditures is interesting because there is legally established obligation that the least 5% of money that political party receives from the budget is to be spent for these purposes in annual level. This legal obligation managed to fulfill JS, SNS, SRS and DS

Public event expenses• Public events expenses were in total 38,6 million of RSD. Out of which was

paid the most by the SPS (8,2 million of RSD), then NS (7,2 million), G17 Plus (6,1 million), LDP (5,7 million), SDPS (2,1 million), SRS (1,9 million), SNS (1,6 million), and LSV, DSS, JS and SVM between 1 and 1,5 million of RSD, and non of the expenses of this kind were reported by DS, SPO, SDU and PSS.

• SPS: expenses of renting „for other forms of public events“ were most of the expense (less than 7 million of RSD), and travel expenses around million. With NS in renting of premises 1,2 million, travel expenses with 3,3 and the rest 2,5 million in this category. With SNS, which, among other, along with coalition partners organized two large rallies in Belgrade center (in February and April 2011) for the organization of rallies reported total of 324 thousand RSD, and for „other types of public expenses“ (besides assemblies, conventions, rallies, forums, press conferences) 1,3 million. SRS reported for rally organization 1,8 million of RSD, out of which less than 600 thousand goes to premises renting.

Advertising material and publications

• With this expenses convincingly leads LSV (with 11,5 million), over 3 million of expenses was reported by SVM, NS and SRS, over 2 million DSS, G 17 Plus and LDP, over a million SPS, and all the others less than that. LSV allocated the most for printing of brochures, leaflets and other material, then for its distribution (over 3 million of RSD) and for the design and printing of materials (2,4 million).

Comparing with the reports from previous years

• Comparing is hard because of different form of reporting• Almost the same level of incomes and expenditures of parties as well as in 2011

– 820,4 million of RSD of expenditures and 892 million of RSD in incomes (in 2011 incomes and expenditures are around 896 million of RSD)

• Incomes from membership fees decreased comparing to previous years – in 2009 were 121,4 million of RSD, following year 154,3 million, and in 2011 just 97 million of RSD. In DS collecting of membership fees was cut to half, while with other parties, generally speaking, reached an increase (from 25 million in 2009 and 35 million in 2010 to around 45 million of RSD in 2011). In that increase G17 Plus participated the most (almost triple as much incomes from membership fees then in 2010); SPS, SRS and LSV record significant drop comparing to previous year, and SNS for the first time reported incomes on this ground in 2011

• Expenses of paid salaries with taxes in 2009 were 195 million of RSD, in 2010 -219,5 million of RSD and in 2011 - 231 милион.

About project

• This text was made as part of the project of the organization Transparency Serbia Monitoring of election campaign financing, which is supported by International Foundation for Electoral Systems (IFES) and USAID and regional project CRINIS of the Western Balkans, implemented by Transparency International. Stated opinions do not necessarily represent donors opinions.