Author: Elsa Cerpja, JD capelouto, Lorin Kadiu
In last year's election in Albania, a company based in the northwestern city of Lezha donated fuel worth 501,000 lek (about $4,600) to a small political party called Bashkimi Demokristian Albanian.
An official government audit of the party's finances claimed that the firm's donation called Linda 80 sh.pk, was legal. The audit did not mention whether or not the firm had violated Albanian laws on the conflict of political interest.
But a review of the company's records showed that Linda 80 may have benefited financially from the Albanian government and its policies: the company was involved in nearly 30 government contracts totaling more than 9 million leks ($83,340) since 2015, at a time when many of these contracts were made during the election campaign.
Linda 80 is one of two donors who appear to have had a conflict of interest with their donations to political parties in last year's general election.
None of the cases were identified by any Central Election Commission (CEC) audit, or ever publicly investigated by the government.
A two-month investigation of Albanian Center for Quality Journalism and CENTER of New England for Investigative Reporting, located in the United States, found that the case of Linda 80 it is a symptom of weak financial laws, Albanian for election campaigns.
It also shows the lack of institutional oversight, failing to provide transparency about those who donate to political parties, the potential conflict of interest and how parties spend campaign money abroad.
Conflicts of interest, on the radar
The Albanian law on electoral campaigns prohibits donations to political parties, if the donor already owes money to the government, works in the media or has been involved in government contracts worth over 10 million ALL during the last two years.
Donations from Linda 80 (whose contracts did not reach the total of 10 million ALL), as well as from an investor whose businesses have debts in unpaid taxes, raised questions about the power of money in Albanian electoral elections and the level of supervision of institutions.
"Political parties refuse to report their finances in a good and transparent model, - said Aranita Brahaj, the executive director of the Albanian Institute of Science, adding that, - the institutions that supervise the election campaign are theoretically independent, but in practice they are composed of political parties."
Brahaj, whose organization aims to increase government transparency, initially identified two cases of potential conflict of interest.
Her claims were verified by public records through the Center's investigation.
A representative for Linda 80 said that the company had not made a contribution, despite being listed on the party's donor list.
In another case, businessman Edmond Stojku donated 100,000 lek ($926) to the Socialist Integration Movement, a relatively large party that won 19 seats in parliament.
This donation was declared by the party in its financial records.
But, according to government records, one company, where Stojku is a small shareholder, has unpaid taxes.
According to data from the General Directorate of Taxes and the National Business Center, the joint-stock company Royal Farma, where Stojku owns 5% of the shares, is listed among entities with "mortgage obligations or security problems" due to unpaid taxes since 2014. The list, updated in March 2018, does not specify how much money debt Royal Farma.
Stojku's shares in the company could be considered his debt to the government, Brahaj said, implying that the donation may or may not be legal.
Contacted to comment on the matter, Stojku denied having shares in the company, although records show that he had a share of Royal Farma-s.
The Chairman of the Central Election Commission said that he was not aware of these two cases.
"It is not easy to monitor and find out what the political parties are trying to do," said the mayor Klement Zguri in an interview. "Political parties have a tendency to cross the red line by trying to break the law, for the simple reason of unfairly and illegally benefiting in the process."
Neither of the two parties, the Albanian Democratic Christian Union Party or LSI, has responded to the Center's requests for comment.
Zguri said the commission he heads oversees elections and party finances, but his power to investigate further or press charges is through Albania's General Prosecutor's Office. However, this process often does not work, said Zguri.
The commission does not have close relations with Albanian prosecutors, who may also conduct their own investigations into election finances. He said that the prosecutors do not inform the CEC sufficiently.
"For the sake of truth, not only in 2017, but also in the past elections, we did not find a common and cooperative language with the country's prosecutor's office," he said. - They often abuse and lose interest when the elections are over. Different interventions and different interests cause these issues to be closed and archived".
"The situation," said the election commissioner, "is unjustifiable, because in such a situation the non-punishment of violations of the law creates the tendency to repeat the violations in other processes and in a way spoils the image of the country, the elections and our democracy." ".
Lack of laws
The election commission's ability to closely monitor political donations is further hampered by current Albanian election laws, particularly the requirement that parties only make public the names of donors who contribute 100,000 lek or more – the equivalent of $1.
Linda 80 and Stojku were only two of 66 entities (64 individuals and 2 businesses) who donated more than 100,000 ALL to political parties in last year's elections, according to election campaign reports.
In conclusion, the financial reports made public by the parties are full of hundreds of lines of donations - totaling millions of lek - identified only as "natural person", many of which are paid in advance cash.
Experts say that the parties keep the data of all those who make donations, but they do not want to make this information public.
"What the parties declare is very little," said Brahaj. - Parties have little interest in declaring... finances, because the more they declare, the more they become subject to scrutiny. This has created the culture of spending, but not declaring".
In the United States, candidates must provide their name, address, employment, and sometimes employer for almost all direct donations they make.
"You can't hide who you are," said Pam Wilmot, an expert on US campaign finance laws for the US system. "The implementation may take a long time, but they (in America) have fined and tried to shut down the activity of groups that have tried to hide their identity."
Wilmot, executive director of the Massachusetts Common Cause — a political advocacy group — said information on donations helps voters understand who is trying to influence elections or gain favors.
“You can track if a company is really throwing money at a race…
You can see what the employees of this company are doing", she said.
The law in Albania, because it does not require specific information on donors, reduces the possibility of the public and the media to identify the conflict of interest in hundreds of donors whose names are not made public, says Brahaj.
"The lack of transparency in the Albanian process raises a serious concern, in principle, about the level at which candidates and parties may have obligations to illegal private interests," the Coalition of Local Observers said in a report on the elections.
Regarding the first audit, conducted by the Central Election Commission last year, the Coalition, a local organization that focuses on election campaign issues, said in its report that the audit was "completely ineffective in ensuring transparency and in strengthening the implementation of legal provisions", due to the lack of legal structure and "lack of addressing significant problems in the system".
Institutional delays
Another flaw in the campaign finance law, experts say, is that parties are not required to register their income and expenses until four months after the end of the election.
"There has been no evolution in terms of party transparency," said Afrim Krasniqi, political analyst and executive director of the Institute of Political Studies in Albania.
In conclusion, public trust in the political process has eroded, say Krasniqi and other experts.
"This is a big failure," he said. - As a rule, our laws turn into political compromise".
He said reporting the finances so late in the process is pointless, as it clearly doesn't give the public the information they need to know before they vote.
In more developed countries, such as the United States, the requirements on financial reporting of election campaigns are stricter; candidates for state office are required to submit a biweekly list of donor information, Wilmot said.
"There's a constant flow of information on what's going on," Wilmot said. – It's a check and balance... It helps to keep everything on the surface”.
Disclosure of campaign donations can directly influence voters. The public can consider the entities or persons who are supporting each party, and the media can report potential conflicts of interest in these donations, Wilmot explained.
Several independent organizations that observed the process of the Albanian election campaign reached similar conclusions.
"Transparency of election campaign donations remains limited due to the lack of requirements for disclosure of information during the election campaign," the Office for Democratic Institutions and Human Rights, located in Vienna, wrote about Albania in the election observation report.
Changes for the future
Various groups, including the Albanian Institute of Science, AIS, have called for changes to the system and addressed suggestions to a special parliamentary committee on electoral reform.
AIS has suggested that all election campaign donors be made public and that something like this should be done before the elections.
He also suggested that parties should be required to provide more detailed information on how they spend election campaign money.
"Until now," said Brahaj, "these recommendations have been ignored."
She emphasizes the fact that the members of the Electoral Reform Commission are politicians.
Two years ago, AIS asked the three largest political parties to make their campaign spending and donations public in real time during the election campaign.
The case went to court and is now in the Supreme Court in Albania.
Brahaj said she is still waiting for an answer.
All USD-ALL conversions are based on June 2018 exchange rates.
*The photo at the beginning of the article, Edi Rama during the 2017 election campaign. Photo: premistia.al
