Risks of illicit financing of political parties

1. Risks of illicit financing of political parties Igors Ivanovs Representative of The Corruption Prevention and Combating Bureau 29.11.2018.

2. Overview of situation Population of 1 950 000 (1,54M eligible to vote) 76 registered political parties 7 political parties elected to parliament in recent elections held on October 6, 2018 Phenomena of new political parties Reducing role and influence of money on politics

3. Sources of funding Political organizations are allowed to receive: Membership and joining fees from natural persons Donations from natural persons Income from economic activities of political party State funding Political organizations are restricted to receive: Donations from legal persons Donations from anonymous persons DonationsexceedingEUR21500frompersonper year Loans

4. Structure of funding Parliament elections EP elections Local elections

5. Structure of donations Structure of donations of the 4 largest political parties in Latvia in 2017

6. Publicity and transparency All donations, membership and joining fees are published in a publicly available data base at the homepage of KNAB - www.knab.gov.lv

7. Pre-election campaigning restrictions Limited expenses on placing advertisements (e.g., mass media, internet, outdoors) and charity events Limited expenses for third parties (persons unrelated with political party or candidates) Hidden pre-election campaigning Misuse of administrative resources

8. Case example: thirdparty involvement

9. Case example: undeclared advertising

10. Cooperation with society

11. Liability Administrative liability: For breach of income declaration procedures, exceeding financing limits, illicit financing, intermediation or acceptance of illicit funding For breach of pre-electioncampaigningdeclaration procedures, misuse of administrative resources for advertising, exceeding financing limits for advertising by third persons Criminal liability: For illicit financing, intermediation or acceptance of illicit financing of political organizations (parties) or associations of political organizations on a large scale Large scale – 50 minimal monthly salaries (EUR 21 500)

12. Illicit financing scheme of political party TOTAL: EUR 60 734

13. Illicit financing scheme of political party (2)

14. Main risks False information in contracts and bills Use of unaccounted money to cover expenses Companies that organize campaigns for political parties periodically win public procurements and obtain contracts Writing-off debts of political parties Use of intermediaries when financing political parties (~25% persons have donated their legal income of last 3 years) Financing political campaigns by third parties Bribery and trading in influence

15. Increasing amount of political advertisementsin social media and internet Structure of pre-election campaigning expenses in 2018

16. Multijurisdictional cooperation Challenge - monitoring and calculating political advertising in social media Initiated cooperation with Facebook, Google & Twitter Information was requested according to rights and powers stipulated by KNAB law Responses well and fast received

17. Thankyou! Corruption Prevention and Combating Bureau CitadelesStr. 1, Riga,LV-1010, Latvia Phone: + 371 67356161www.knab.gov.lv/en e-mail: knab@knab.gov.lv