European Western Balkans

The lack of transparency in the financing of political parties remains a problem in BiH

Željko Komšić, Milorad Dodik and Šefik Džaferović; Photo: Presidency of BiH

Even this election process in Bosnia and Herzegovina did not bring about a more transparent process of financing political parties. The citizens in Bosnia and Herzegovina were mostly deprived of information from which funds the political parties financed their pre-election activities.

According to the report of the Group of Countries Against Corruption (GRECO), only one recommendation was fulfilled regarding the publication of information on the finances of political entities participating in the electoral process.

GRECO pointed out that the domestic authorities proposed only partial solutions that do not meet European standards.

“Political parties were obliged to keep records of membership fees and voluntary contributions and to issue certificates thereof, to include benefits received from related parties in the financial accounts, and to establish internal financial control mechanisms,” the GRECO report says.

A particular problem, as emphasized, is the lack of adequate sanctions for violating the rules on party financing.

“Although a new Service for Auditing the Financing of Political Parties was established at the Central Election Commission (CEC) of BiH, there is no evidence of an increase in the financial and personnel resources allocated to the CEC for the performance of its supervisory functions related to both party financing and elections”, GRECO stated.

GRECO pointed out that it is necessary to continue the reform process to increase the transparency of political financing further and to encourage the role of political parties as a basic element of the democratic system.

“GRECO once again appeals to Bosnia and Herzegovina to fully implement eight of the nine recommendations on Topic II that remain unresolved,” the report pointed out.

Nedim Hogić, Bosnian lawyer and a PhD candidate at Sant’ Anna School of Advanced Studies, explains for EWB that the legislative framework that regulates these issues in BiH has been overcome and has not been changed since 2012, which is why it can not respond to the modern challenges of financing political parties.

“Both the Council of Europe and the OSCE/ODIHR have been warning about this for almost a decade, but unfortunately, they failed to take a more significant political action that would increase the pressure on domestic political actors to adopt the necessary changes or on foreign political actors not to recognize the legitimacy of the elections. The recently imposed amendments to the election law by the High Representative dealt with this issue, but did not cover the entire range of possible misuse of funds for the election campaign,” says Hogić.

He states that the key problem is that the legislative framework does not fully prescribe the obligation of political parties to be transparent.

Hogić explains that according to the current law, parties are not obliged to provide data on legal entities they control.

“The media have no obligation to make available reports on who they rented media space to and under what conditions.” As is the case in Montenegrin legislation, there is no obligation to monitor employment at the level of local self-government units or cantons immediately before the elections. There is no single agency in which the competencies essential for preventing corruption meet, but several institutions must coordinate their work on these issues”, says Hogić.

According to him, all these factors prevent transparency and political responsibility.

Case Hungarian Fund in Republika Srpska

Case Hungarian Fund in Republika Srpska

After the visit of the Hungarian Prime Minister to the Republika Srpska in November 2021, the formation of the so-called “Hungarian Fund” was announced, which should invest EUR 100 million in the Republika Srpska.

Orbán’s support for the Republika Srpska stands out from similar programs that Hungary offered to countries where the Hungarian minority lives, since only 166 members of the Hungarian national minority live in the Republika Srpska.

During the election campaign, farmers in Republika Srpska were allowed to apply for a call for help in purchasing machinery and tools. For this purpose, according to Radio Free Europe, 35 million euros have been set aside, which is only the first part of the aid agreed upon during Viktor Orbán’s private visit to Dodik in November last year.

Not a few people in Bosnia and Herzegovina believe that this is just one of the ways Viktor Orbán is financing Milorad Dodik’s election campaign with Hungarian taxpayers’ money.

Nedim Hogić says that the use of funds Viktor Orban used to support the RS, indirectly Milorad Dodik can be an extraordinary example of circumventing the law.

“The funds were not directly paid to a political party – which would be against the law, but to the Pegassus Foundation, that is, to a part of private and public legal entities under the control of SNSD,” says Hogić.

He states that knowledge of what happened to the money is missing for a definitive conclusion in this direction.

“If the funds paid to the Pegassus Foundation were only used for the purchase of Hungarian equipment, then it is only a loan aimed at strengthening the financial position of Hungarian exporters of agricultural equipment, and it is a financially damaging deal for the Hungarian government more than BiH and the RS because it buys favor in RS, exporting its equipment that it could promote in a much cheaper way. If the funds paid to private companies were used for the purchase of goods and services in connection with the campaign, the Prosecutor’s Office of Bosnia and Herzegovina would have to investigate,” concludes Hogić.

Asked what should be done for improving transparency of financing political parties in BiH, Nedim Hogić explains that the first step would be to hire more people in the Central Election Commission who would be trained to deal with the audit of financial reports of political parties.

He adds that it would also be necessary to adopt the recommendations of the GRECO Committee of the Council of Europe, which refer to the transparency of the work of political parties.

“The third step would be to strengthen the capacity of SIPA and the BiH Prosecutor’s Office in monitoring financial reporting. Unfortunately, in this election cycle, although we witnessed increased work by the Prosecutor’s Office and SIPA, it was reduced not to the monitoring of election frauds in connection with voting and not in connection with fraud related to the misuse of funds in the campaign”, Hogić concluded.

This article was published as part of the project “Civil society for good governance and anti-corruption in southeast Europe: Capacity building for monitoring, advocacy and awareness-raising (SELDI)” funded by the European Union.

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