Activists: Halving state funding of parties will increase their dependence on shadow funding

“The Parliament has passed a law according to which the amount of funding is calculated based on the living wage (UAH 1,600) rather than on the minimum wage (UAH 3,200). Thus, the Parliament has halved funding of political parties from the state budget from UAH 1 billion down to UAH 500 million. As a result, their dependence on shadow financing has been doubled,” informed Viktor Taran, Head of Eidos Center, during a press briefing at Ukraine Crisis Media Center.

The analysis of the financial declarations of the six political parties revealed that with the introduction of state funding, the share of financing from legal entities and individuals decreased significantly. “The parties that tried to somehow legalize their income began to reduce their incomes [from legal entities and individuals – UCMC] after receiving the state funding. Thus, they did not have to attract any money or open accounts on behalf of straw men,” informed Katerina Davydenko, an analyst at the Center “Eidos.”

The financial declarations showed that political parties spend their money mainly on paying salaries, maintaining offices, and propaganda. “We clearly see that now among their expenses are office and staff expenditures. If an organization receives less money than it needs (and we have already seen their real expenses and balance), that means they will have to find these funds elsewhere,” Viktor Taran noted.

Shadow funding of the parties is the most flagrant violation recorded at the end of 2016, said Serhii Adamenko, editor of the portal “Partiyna Kasa”, an analyst of Eidos Center. “The problem with the party accounts is still there. The law provides that they must open their accounts not only in the central offices but also in all local branches. However, there are parties that have no bank accounts at all. Besides, the parties do not specify the place of residence of their sponsors in violation of the law. Although an increase in political advertising is observed throughout the country, the parties do not specify in their reports who is financing it,” he added.