Tuesday, 23 July 2013

Electoral integrity in Spain

Lately, attention has been drawn to Spain for a rather important flaw in the integrity of its elections— party finance. Spain’s leading conservative party, Partido Popular (PP), has been recently accused by its former treasurer, Luis Bárcenas, of using illicit financing methods. According to Bárcenas, Spain’s current Prime Minister, Mariano Rajoy, and the PP’s other leaders had improperly received money. Furthermore, members of the former Aznar government have also been implicated in illicitly receiving money in addition to their public wages. In addition, significant sums of money were illegally donated to the PP in a scheme that could date back over 20 years.

Mr. Bárcenas, who is now in prison, received a PP salary for more than 28 years, and the PP paid Bárcenas’ lawyers fees (over a million euro) until April of this year. It is also important to mention that PP referred to Mr. Bárcenas as an example of ‘great professional.’ Therefore, as a former PP insider, Mr. Bárcenas’ accusations have caused widespread attention both at home and abroad.

Mr. Bárcenas
While PP’s case of rampant and illegal party finance (summarized here and in wider detail in Spanish here) is the only one to have make it into the international headlines, unfortunately, it is not unique. Another high-profile case (known as the ‘Palau case’) suggests that Convergencia i Unio (CiU), the conservative nationalist party governing in Catalonia, took money from Ferrovial, one of the few Spanish multinational corporations. The scheme was simple: Ferrovial would give some money to the CiU, and then the Catalonian government would give public works contracts to Ferrovial. A similar scheme seems to be at the heart of the Bárcenas case. Such a quid pro quo is a violation of the Spanish electoral law, which forbids companies receiving public contracts from donating money to any political party.

Since the news broke in the case, Spanish society is shocked and asking questions. The President still has not given any explanation to Parliament, which has caused surprise both domestically as well as from the Financial Times, The Economist, the New York Times, Liberation,  the Independent, among others.
Where did the money come from? And what was the money used for? From what has been published in the media, the money primarily came from big companies in the construction sector. The money, in turn, has been used (allegedly) to finance electoral campaigns.

The above mentioned cases are not the only instances of illegal political party financing in Spain.  During the 1990s, both the Socialist Party and the Popular Party had their own scandals (the Filesa and Naseiro cases’, respectively).

If the money was used to finance electoral campaigns, one might ask, is it because Spain does not have a political finance law? No. The problem is that Spanish law allows for anonymous political donations up to €60,000.

Nevertheless, many corporate donations were above even this €60,000 level. One way to skirt the law was to make multiple payments. For example, if company X wanted to donate say €200,000, they would break it into six anonymous payments of 50,000. By this procedure, anonymity was guaranteed, and the law thwarted.

Even more shocking, in some documented cases the system approached the plot of a Hollywood movie. Mr. Bárcenas would collect envelopes full of cash from company X, scrupulously record it, and then put the money in the bank. Then, Mr. Bárcenas would call the PP mayor in a relevant city and tell the mayor to treat company X ‘well.’ Company X would get the contract, and the PP would have a deeper campaign war chest.

All together, the building contractors in Mr. Bárcenas records received 6,600 million euros in public contracts. Remember, this is forbidden by Spanish electoral law.

The implication of some research is that [Pinto-Duschinsky, 2002] that when party finance regulations are altered, democracy is altered. When an athlete, a biker, or a soccer player cheats, normally he looses his titles (e.g. Lance Armstrong). What should happen when a party that governs millions cheats? 

                                                                                         -Ferran Martinez i Coma 

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