First, this is not a single issue related to subsidies, but several related to transparency, integrity and fairness. Until 2018, subsidies were not a hot topic, especially since the parties received a lot of money. Instead, most of the money for financing came from the private sector, which gave rise to numerous scandals and criminal cases for crimes related to illegal financing.

Back in 2018, at the Expert Forum, we drew attention to the negative consequences of the change in legislation regarding the increase in the amount of subventions to parties. The amendments proposed by the PSD at the time led to an exponential increase in the amounts allocated from public funds, from 5-6 million per year in 2015 to 258 million lei per year in 2022. Since then, we have constantly monitored how this money is spent and how transparent the parties and institutions that are supposed to control it are, because this rapid growth has become a wake-up call.

Theoretically, the allocation of public money in itself does not pose a risk, on the contrary, these funds can support cleaner politics and promote the development of both parliamentary and non-parliamentary parties. Most EU or OSCE countries provide public money to political parties (see here for a brief analysis and here for a table of amounts allocated at EU level, page 15). Deductions are made either after the election results (as in Romania), or for reimbursement, or for the campaign (before the campaign, including in the form of credits). Some countries have set conditions according to which parties spend a certain percentage of these funds on the participation of women or youth. International standards (such as the recommendations of the Venice Commission and the OSCE/ODIHR) do recommend the distribution of public funds between parties, but within decent limits so that they do not become the main source of funding and do not affect competition or political participation. Therefore, it is normal for parties to receive money.

However, in Romania, state funding mechanisms have created negative consequences that distort democratic and electoral competition, affect media independence and the right to information. In short, the most important questions are the following:

• Large sums for a small number of parties create political monopolies. In Romania, only six parties receive money, two of them (Pro Romania and Mișcarea Populară) for local results. Small local parties have no chance of getting funds because the allocation mechanism favors large parties – meaning a party has to win 50 district or general council seats to get money, equivalent to the strength of a parliamentary party. In some states, such as the northern ones, there are certain mechanisms through which even smaller parties receive money for their activities.
• The allocated amounts have increased significantly and may increase. As we showed above, in 2022 the parties will receive 258 million (and there is still the possibility of additional allocations due to budget adjustments). If they received a total of 1.2 billion lei from 2006 until now, only in 2022 they received a quarter of the total amount. And if you look at the maximum limits, that is, 0.04% of GDP, then it can even reach half a billion a year. It should be noted that the budget for the year is drawn up on the proposal of the Permanent Electoral Body, which can request up to the maximum amount without a very clear justification. Just because they got 258 million doesn’t mean they can’t get 100 million in 2023 if that’s what they assume they’ll spend.
• In 2021, the parties spent a little more than half of the money received, without being obliged to return the money at the end of the year. Last year, 111 million were spent out of 232 received. In the 2024 election year, several parties will benefit from the big money they will spend on campaigning, risking an impact on electoral competition. AUR, for example, did not spend the money, but did not return it, although it would have been able to ask AEP to stop transferring the money
• PSD and PNL spend most of their money on buying ads without any transparency. Articles, reports, or broadcasts are not labeled as in a campaign, and practically a citizen cannot know what is a purchased advertisement or what is an article written without party support. The risk is even greater if the parties pay to keep some news out of the public or to be distorted. In the first six months of 2022, they spent 75% of the money on buying propaganda, more than in 2021 – 26 million for the PSD and 18 for the PNL
• The parties refuse to publish contracts signed with agencies or service providers. If the law does not require them to publish, it does not mean that they cannot publish them ex officio. The UDR is the only party that publishes data on contracts. The PSD is refusing despite public pressure and the party leaders are hiding behind some wacky excuses like commercial secrets. Party leaders are well aware of the stakes, but refuse to make them public, even in the face of court rulings. Even after the articles published by “Free Europe” in recent years, the PSD has not taken any step in this regard. We may be lucky enough to learn how public money was spent after the Recorder was exposed.
• The published data is not enough. Starting in 2021, AEP publishes monthly costs by category, but no more. The UDR decided to publish the expenses at the General Secretariat level on the Internet. Parties must publish detailed annual reports on income and expenditure, but the law stipulates that they can also publish them in a condensed format. While PNL also publishes them with detailed information, in PSD we only see a condensed format, so we don’t see what the money is being spent on. There are no other obligations regarding transparency, although the parties receive a quarter of a billion lei per year.
• Management mechanisms are weak. The permanent electoral body is supposed to scrutinize how the money is spent, but as its representatives said during the last EFOR debate, it does not scrutinize the content of contracts. That is, no one looks at what content these parties buy. The Court of Auditors checks how subsidies are spent, but the AEP is the only institution that is required to review the documents in detail. We remind you that Mircea Dragić, the former treasurer of the PSD and a supporter of legislative changes related to subsidy limits, was convicted in two criminal cases for illegal spending of subsidies, and several news appeared in the media, according to which DNA investigations were carried out on spending the subsidy
• Although the parties do not spend money, AEP demands even more money in the budget correction without explanation. The reasons, rationale and legal basis are unclear as this question is insultingly refused to be answered on the grounds that it is not public information. In fact, statistically speaking, most of the recent responses from AEP – which we have received, by the way – are sent just for the sake of being sent, and we are denied important information for a variety of reasons.
• The National Broadcasting Council did not respond to this story. Mircea Toma, member of the CNA, asked to flag this news, but met with clear opposition
• The European Commission, the Council of Europe and the OSCE have noted serious problems with media subsidies and independence in recent reports. For example, the latest report of the Parliamentary Assembly of the Council of Europe calls on Romania to “ensure concrete guarantees of editorial independence and introduce legislation that would oblige the disclosure of secret contracts between political parties and the media, on the basis of which public funds are transferred to the press”. The European Commission’s 2022 report on the rule of law concluded that “there is a lack of transparency regarding the distribution of content paid for by political parties outside election campaigns, and journalists’ access to information remains insufficient.” A 2019 report by the OSCE Office for Democratic Institutions and Human Rights (ODIHR) highlights the negative potential of large sums allocated to subsidies, as they unbalance the political balance and participation in the electoral process. It seems that only the presidents of PSD and PNL and AEP do not see this as a problem.
• In recent years, there have been numerous civil society protests against this situation. Recently, at the Expert Forum, we, together with several organizations and more than 700 citizens, appealed to stop surcharges due to corrections. No one bothered to answer us. Last year, also in August, we protested when the Kitsu government secretly allocated money, even though it had promised not to. Last but not least, we protested when Pro Romania, Forța Națională and PPUSL, which did not reach the parliament, tried to get money from subsidies due to exemptions from the Law. Read the whole article and comment on Contributors.ro