Political parties will have to register donors who give more than €500, and contributions larger than €50,000 by any one source will be banned, it is being suggested.

A White Paper launched for consultation yesterday, which would regulate parties for the first time if it becomes law, also addresses the controversial issue of campaign expenses by raising the present, unrealistic, thresholds.

It is being proposed that prospective MPs will be able to spend €25,000 as opposed to the current €1,400, and the limit for MEP candidates will be €50,000, up from the present €18,000.

The White Paper was launched yesterday by Justice Parliamentary Secretary Owen Bonnici, flanked by the members of the working group that drafted the document, led by former Nationalist MP Franco Debono.

The document proposes that the Electoral Commission should be given more powers and resources to be able to police and regulate the law, starting with the establishment of a register for political parties.

Party treasurers will be expected to present yearly audited accounts that will be made public and also to follow the guidelines of the law for the bookkeeping of donations and their provenance.

Failure to adhere to the law will trigger sanctions such as naming and shaming, fines and, possibly, administrative measures, which have not been defined. Feedback will be received from the public until March 31, after which the parliamentary secretary will hold talks between April 1 and May 15 with the primary stakeholders, which have been identified as the two main parties, Alternattiva Demokratika and the Electoral Commission.

The final Bill will be presented between June and July with the aim of having it passed before the summer recess.

Dr Bonnici said the document was not cast in stone and he hoped that there would be substantial feedback.

The proposed Bill would be based on the Private Member’s Motion presented by Dr Debono in the last legislature that was one of the points of friction between him and his own government.

The document was polished further but, Dr Bonnici noted, the government had held back from launching this process earlier because the Nationalist Party was having financial trouble and the government did not want to be seen to be introducing the law as a form of political gambit.

“I think enough time has passed and this is the right moment to launch this process,” he said.

The last significant attempt at party financing legislation was made in the mid-1990s by a tri-partite commission chaired by the late Anthony Gales.

However, the report produced was never acted upon.

Dr Bonnici was asked whether the government was excluding State funding, a mechanism suggested in the Galdes report. He said the White Paper did not go into the matter because it was felt that the first step should be to get the house in order before venturing into something, like state funding, that required the people’s trust in the parties’ transparency.

Registration of political parties

• The White Paper proposes that parties should be registered with the Electoral Commission, which will have oversight and a regulatory function over the provisions of the eventual party financing law.

• When they file for registration, parties need to provide the European Commission with a plan outlining how they intend to abide by the demands of the law. Existing parties will be given three months to register from when the law comes into force.

• A party will need to have a statute providing for the election of the party leader, the official responsible for electoral nominees, including emblems and descriptions used on the ballot vote, and treasurers.

• Treasurer responsibilities will include oversight of the party’s accounts and their auditing, the control of donations and their verification, and the responsibilities for reporting to the Electoral Commission under the terms of the party financing law.

• The proposals also contemplate the liquidation of a party, through the endorsement of two thirds of its members or, in exceptional cases, by court order. These exceptional cases include instances where a political party advocates principles that go against democracy, performs criminal activities or constantly uses violence as a political tool.

• It also recommends that parties should have their own internal disciplinary structures and, while the mechanism is left to the parties to decide, the White Paper recommends that people disciplined by the parties should have the right of appeal to court on points of law.

Accounting requirements

• Parties will have to produce and publish a profit and loss statement. Statements of accounts and all relevant documentation will have to be submitted to the Electoral Commission within four months from the end of the financial year. Failure to meet this deadline could incur administrative sanctions.

• The Electoral Commission should be given the power to start investigations relating to party finances.

• Parties will have to notify the Electoral Commission with the acquisition and disposal of funds. If a party fails to abide by the rules, the Electoral Commission will be able to name and shame the party, impose fines or start administrative procedures.

• The White Paper does not prescribe criminal sanctions but asks whether an ad hoc crime should be prescribed for false declarations in relation to financial statements.

Donations

• The term donation is understood broadly by the White Paper, not only in terms of a financial contribution but also as objects and sponsorships. Even discounts on the market value of an object or service are considered a form of donation.

• Political parties should not be given donations from non-Maltese sources with the exception of donations from EU citizens or from foreign political associations that have the same political ideas.

• Anonymous donations will be allowed but only up to a maximum of €500 in one financial year.

• Donations exceeding €50,000 from the same source in one financial year are banned.

• Every donation above €500 or more should be registered within the party. The name, surname and address of the person and the date of donation should be indicated. An administrative penalty will be imposed if a political party fails to do so.

• In the case of donations exceeding €10,000 from a single source in one financial year, these will have to be flagged to the Electoral Commission in a special report that will be made public.

Campaign expenses

• Candidates for local council, general and European Parliament elections will be expected to declare every donation exceeding €500, just like the parties.

• The existing cap on campaign spending has been raised across the board to reflect a more realistic bill. Prospective local councillors will be able to spend a maximum of €5,000, in proportion to the number of voters in their respective localities, those contesting general elections €25,000 (up from about €1,400) and candidates for European Parliament elections €50,000 (up from about €18,000).