Slovenia's Patchy Transparency 

Slovenia's Patchy Transparency

Though legislation governing party and election-campaign financing was revised two years ago, Slovenia's system is still filled with holes.

The law on party financing was revised following a Constitutional Court ruling that found that one of the law's provisions--which awarded state budget funds to parties with representatives in parliament--was unconstitutional. The new law stipulates that all political parties are eligible for state funds if they receive at least 1 percent of the votes cast and if their candidates competed in at least 66 voting districts. The law has so far resulted in four parties without representatives in parliament becoming eligible for state funds, and in 11 parties that failed to earn 1 percent of the vote in the 2000 elections being denied eligibility.

Ten percent of the state funding is to be split equally among eligible parties, while the remaining 90 percent will be distributed according to voting results. For each vote received in the last parliamentary elections, parties will receive 30 tolars (about $0.08)--an amount that is continually revised based on inflation rates.

The law further limits the annual amount of state budget funds that can be used for party financing to 0.017 percent of GDP. The eight parties with parliamentary representatives will receive approximately $2.5 million this year and $2.6 million next year. The ruling Liberal Democracy of Slovenia (LDS) will be awarded the largest share, approximately $72,000 per month for 2002. The party that gained the fewest votes in last year's elections--the Party of Slovene Youth (SMS)--will receive less than $11,000 per month from the state budget.

All parties are required by law to file a yearly financial report detailing all funds received and expended. Fines for failure to file before the end-of-February deadline range from $4,500 to $22,500.

THE BLACK HOLE

Despite those strict provisions, one big remaining hole ensures that party financing is not completely transparent: Parties are not required to inform the state of the source of all their donations and sponsorships. The parties are only obligated to detail the sources of donations that come from individuals or private companies, and then only if the amount exceeds three times the average monthly salary.

According to a financial statement filed in 2001, the governing LDS--the party most successful in generating donations--received approximately $220,000 in donations from companies and individuals. Two telecommunications companies and one bank were listed among the donors, but the rest of the (unlisted) donations came from an array of small companies, including some that had won pubic tenders from the government the year before. The amount of their donations to the LDS ranged from $3,000 to $75,000.

Despite the lack of transparency, all political parties claim that their finances are handled in strict accordance with the existing legislation. But the reality is quite different. When the Slovenian Court of Audit scrutinized the financing of the 2000 parliamentary election campaign of all the parties that managed to win seats in the assembly, not one received a positive assessment. According to the court, all were given an "opinion with reservations, mostly for not listing all funds received for their campaign."

From time to time, Slovenian media report on shady quid pro quo transactions between parties and their financial contributors. When the Hudournik construction and transport company contributed $11,600 to the 2000 election campaign of the Slovene People's Party (SLS+SKD), the media jumped on the story. Prior to that donation, the media reported, the Health Ministry had granted the same company a tender to operate an emergency helicopter transport system, sparking accusations of vot e-buying. At the time that deal was closed, the Health Ministry was headed by an SLS+SKD politician.

The media put its watchdog pen to paper when it was discovered that private banks were financing the LDS 2000 election campaign. SKB Bank, Slovenia's leading private bank, donated some $7,600 to the party. The president of the bank's board, Cvetka Selsek, was then elected as a municipal councilor in the capital on the LDS ticket.

Presidential candidates are also required by law to file a financial statement detailing the donations and expenditures for their election campaign. The same rules apply, with the donation limit set at three times the average monthly salary. In the run-up to this year's November presidential elections, it remains a mystery who financed the majority of incumbent President Milan Kucan's campaign five years ago.

In 1997, Kucan received some $66,200 in donations from individuals and private companies. Sources were listed for only $6,300 of that amount. Eight candidates ran against Kucan in that election, receiving a total of $630,000 in donations among them. Today, the public is still in the dark as to where the bulk of that money came from. And transparency for the upcoming November elections doesn't look much less holey.

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