Author: Elsa Cerpja, JD capelouto, Lorin Kadiu
In last year’s Albanian elections, a company based in the northwest city of Lezhë donated 501,000 lek-worth (about $4,600) of fuel to a small political party called the Albanian Democratic Christian Union.
An official government audit of the party’s finances claimed that the donation by the firm, called Linda 80 shpk, was legal. The audit did not mention whether it violated Albania’s political conflict-of-interest laws.
But an examination of the company’s records show that Linda 80 may have had a major financial stake in the Albanian government and its policies: the company had entered into nearly 30 government contracts totaling more than 9 million lek ($83,340) since 2015, including many during the campaign itself.
Linda 80 is one of two donors that appear to have had a conflict of interest in their donations to political parties in last year’s general election. Neither case was identified in an audit by the Central Election Committee (CEC) or ever publicly investigated by the country’s government.
A two-month investigation by the Albanian Center for Quality Journalism and the U.S.-based New England Center for Investigative Reporting has found that the Linda 80 case is a symptom of Albania’s weak campaign finance laws and a lack of government oversight, which fail to require transparency about who is donating to a party, their potential conflicts of interest, and how parties spend campaign money abroad.
Conflicts of interest, under the radar
Albania’s campaign law prohibits donations to political parties if the donor owes the government money, works in media, or has had government contracts over 10 million lek in the last two years.
The donations from Linda 80 (whose contracts did not total 10 million), as well as an investor whose business owes back taxes, raise questions about the power of money in Albanian elections and the level of government oversight.
“Political parties refuse to report finances on a good and transparent model,” said Aranita Brahaj, the executive director of the Albanian Institute of Science, adding that “institutions that supervise the campaign are independent in theory, but in practice they are formed by the political parties.”
Brahaj, whose organization aims to increase government transparency, initially identified the two cases of possible conflicts of interest. Her claims were verified in public records through the centers’ investigation. A representative for Linda 80 said the company did not make the contribution, despite its placement on the party’s list of donors.
Businessman Edmond Stojku donated 100,000 Lek ($926) to the Socialist Movement for Integration, a fairly large party that ultimately won 19 seats in Parliament, the party’s financial records show.
But a company that Stojku is a minority investor in, according to Albanian government documents, owes unpaid taxes.
The joint stock company Royal Farma, which Stojku holds a 5 percent stake in, has been on a list of people and businesses with a “mortgage and security liability” due to unpaid taxes since 2014, according to records from the General Directorate of Taxation and the National Business Center. The list, updated in March 2018, did not state exactly how much money Royal Farma owes.
Stojku’s stake in the company could qualify as owing the government money, Brahaj said, meaning it may or may not be a legal donation.
Reached for comment, Stojku denied having shares in the company, though records show that he has had a stake in Royal Farma.
The chairman of the Central Election Commission said he was not aware of these two cases.
“It is not easy to monitor and find out what the political parties are trying to say,” the chairman, Klement Zguri, said in an interview. “Political parties tend to cross the red line by trying to break the rules that the law has, for the very simple reasons of profiting in dishonest and unlawful ways during the process.”
Neither the Albanian Democratic Christian Union nor the LSI parties responded to Center’s requests for comment.
Zguri said his commission oversees the elections and the parties’ finances, but its power to investigate further or press charges is done through the Albanian prosecutor’s office. However, that process often falls through, Zguri said.
The commission does not have a close relationship with the Albanian prosecutors, which can do their own investigations of election finances but do not sufficiently inform the CEC, he said.
“For the sake of the truth, not only in 2017, but also in the past elections, we do not find a common and cooperative language with the prosecution of the country,” he said. “They often abuse and lose interest when elections end. Various interference [and] different interests make these issues close and archived.”
This situation, the election commissioner said, is “inexcusable, because in such a situation, not punishing violations of the law creates the tendency to continue repeating violations in other processes, and this in some way undermines the image of the country, our elections and our democracy.”
Lacking legitimate laws
The election commission’s ability to closely monitor political donations is further hampered by Albania’s current election laws, especially the requirement that parties only name donors who contribute 100,000 lek or more — the equivalent of about $1,000.
Linda 80 and Stojku were two of just 66 entities (64 individuals and 2 businesses) who donated more than 100,000 lek to political parties in last year’s election, according to campaign reports.
As a result, the financial reports released by the parties are full of hundreds of lines of donations — totaling millions of lek — only identified as Person fizik — “Physical person,” many of whom paid in cash.
Experts said the parties keep a record of everyone who donated to them, but they have no desire to make that information public.
“What the parties declare is very little,” Brahaj said. “The parties have little interest in declaring …financing. Because the more they declare, the more they become subject of control. This has created this culture of being used to spend but not declare.”
In the United States, candidates must provide a name, address, occupation, and sometimes employer for almost all direct donations.
“You can’t hide who you are,” said Pam Wilmot, an expert on American campaign finance laws, about the American system. “That enforcement can take a long time, but they have fined and tried to shut down groups that are trying to hide their identity.”
Wilmot, the executive director of Common Cause Massachusetts, a political advocacy group, said donor information helps voters understand who is trying to influence an election or curry favor.
“You can track if a particular company is really pouring money into a race … You can see what their employees are doing,” she said.
The law in Albania, because it doesn’t require specific information about donors, diminishes the potential for the public or the media to identify conflict of interest among the hundreds of donors whose names are not public, Brahaj said.
The lack of transparency in the Albanian process “raises a serious concern, in principle, about the level to which [candidates and parties] may be beholden to private unlawful interests,” the Coalition of Domestic Observers said in a report about the elections.
As for the first audit conducted by the Central Election Commission last year, the Coalition, a local organization that focuses on campaign issues, said in its report that the audit was “completely ineffective in guaranteeing transparency and enforcing legal arrangements,” because of the lack of legal framework and “complete or minimum addressing of significant problems in the system.”
Institutional delays
Another flaw in the campaign finance laws, experts say, is that the parties do not have to file their income and expenses until about four months after an election is over.
“There is no evolution regarding the transparency of parties,” said Afrim Krasniqi, a political analyst and executive director of the Institute for Political Studies in Albania.
As a result, public trust in the political process has eroded, Krasniqi and other experts said.
“This is a great failure,” he said. “As a rule, our laws become a political compromise.”
He said reporting the finances so late in the process is pointless since it clearly does not provide the public the information they need before they vote.
In more developed nations like the United States, the campaign finance reporting requirements are stricter; candidates for statewide office are required to submit a list of donor information every two weeks, Wilmot said.
“There’s a constant flow of information out of what’s happening,” Wilmot said. “It’s a check and balance … It helps to keep everything above board.”
Disclosing donations during the campaign can directly impact voters. The public can take into consideration who is supporting which party and news outlets can report on potential conflicts of interest in the donations, Wilmot explained.
Several independent research organizations that observed the Albanian campaign process reached similar conclusions.
“Transparency of campaign donations remained limited due to the absence of disclosure requirements during the campaign,” the Office for Democratic Institutions and Human Rights, based in Vienna, wrote about Albania in its election observation report.
Fixes for the future?
Groups including the Albanian Institute of Science, Brahaj’s organization, have sought changes to the system, and have made a number of suggestions to an ad hoc parliamentary committee on electoral reform.
The AIS has suggested that virtually all donors to political campaigns be made public, and that it should be done before the election. It also suggested that parties should be required to provide more detailed information on how they spend their campaign money.
So far, Brahaj said, those recommendations have been ignored. She blamed that on the fact that the election reform committee members are politicians who, she says, have inherent biases.
Two years ago, the AIS asked the three largest political parties to make their campaign expenditures and donations public in real time during the campaign.
The case went to court and has now made its way to the High Court in Albania. Brahaj said she is still waiting for an answer.
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*The article main picture, PM Edi Rama during the 2017 election campaign. Photo: kryeministria.al