How parties finance their campaigns: 19.4 million from the budget, large donations from public officials and private companies doing business with the state.

Political parties received 19.4 million KM from budgets at all levels of government in the last election year, and they also received 5.8 million KM in donations from individuals, which is the largest amount ever, and were also funded by a large number of private companies doing business with the state.

As a result, Transparency International submitted 10 new reports to the Central Election Commission, and interestingly, companies that donated to parties last year received over 55 million KM in contracts from the state. Additionally, out of 2000 donations from individuals, 40% of contributions came from people who hold public office.

Donations as a business strategy: Officials and companies invest in politics.

Financial reports of political parties for 2022 confirmed that parties continue to conceal the actual amounts they have, and that companies that donated to parties last year received over 55 million KM in contracts from the state, and 40% of individual contributions came from people who hold public office.

An analysis of annual reports published by the Central Election Commission of BiH shows that parties, in addition to the budget from which they received 19.4 million KM, mainly base their election year financing on contributions from individuals, from whom they received over 2,000 donations worth 5,843,000 KM, which is 3 million KM more than in 2020 and is by far the largest amount of donations parties have reported in a single year.

Officials as main donors.

In addition to the dizzying increase in individual contributions, TI BiH, thanks to data from registers of public officials, companies, and institutions, identified over 800 individuals holding public office in executive or legislative bodies, or as members of the boards of public companies and institutions, who donated funds to parties, and these contributions make up 40% of the total number of donations parties received from individuals.

For example, Nenad Nešić, president of DNS and current minister in the Council of Ministers of BiH, according to the DNS report, donated over 32,000 KM to his party, which is above the 15,000 KM allowed by the Law on Financing Political Parties. Besides him, Adna Bešić donated an unauthorized amount of 15,225 KM to the party For New Generations, Aleksandar Stevanović donated 17,900 KM to the party Successful Serbian Movement, and Milan Šuvak donated 19,990 KM to the People’s Party of Srpska, whose president is MP Darko Banjac.

Incidentally, Milan Šuvak is the owner of the company “Šumil” d.o.o., which received over 18 million KM in public procurement contracts for various works at the “Mlječanica” Hospital, whose director is Darko Banjac. Meanwhile, his party, NPS, failed to submit a financial report after the elections, and this is the first time the public is learning about how this party is financed.

It is particularly noteworthy that among the donors are directors and board members of public companies and institutions, as well as a large number of directors and members of School Boards of primary and secondary schools. This confirms the widespread issue of political influence across the entire public sector, especially in the education system, which TI BiH has long pointed out, and which led to the launch of the initiative Politicians, Leave the Classroom aimed at depoliticizing schools and educational institutions.

They contribute and then win tenders.

In addition to private contributions, there has been an increase in contributions from legal entities, with parties reporting donations from 170 companies in their reports. An analysis of data from the Public Procurement Agency of BiH shows that over 70 of these companies entered into public procurement contracts last year with a total value exceeding 55 million KM.

The reported amount of donations is likely even higher because parties, as in previous years, mostly understated or concealed donations from legal entities, collectively reporting 620 thousand KM, which is only 2.1% of the total revenue of political parties in 2022, and this amount is less than the revenue parties earned from their assets, which amounts to 639 thousand KM.

For example, parties SNSD and A-SDA still claim they did not receive a single mark from private companies, while most major parties, unlike previous years, reported donations from legal entities. Due to observed violations of the Law on Financing Political Parties, TI BiH has filed complaints with the Central Election Commission of BiH.

The complaint was, among others, filed against SDP, whose sponsor “S.E-SARAJKA” doo from Živinice, according to data from the Public Procurement Agency, received 38 contracts in 2022 with a total value exceeding 4.5 million KM, with several dozen contracts worth over 2 million KM coming from the City of Živinice administration alone. A similar example is with one of the sponsors of SDA, the company “GREEN OIL” D.O.O., which signed contracts worth over 9 million KM last year, with 4 million KM coming from a single diesel fuel procurement tender.

The company “KOP I KO” d.o.o., which appears as a donor to the aforementioned SDP as well as the Democratic Action Movement, also won several tenders worth over 700 thousand KM, and unauthorized donations were also reported by DNS, which received a contribution from the company “DBS” d.o.o., whose business with the state exceeded 220 thousand KM in 2022, several times above the allowed limit.

TI BiH reported a total of 10 parties that showed donations from companies that conducted business with executive authorities worth more than 10,000 KM in one year, which the Law on Financing Political Parties explicitly prohibits. It is important to emphasize that this ban does not apply to business with public companies and institutions, and TI BiH has long advocated for improving regulations in this area to completely prevent parties from receiving donations from companies that win public procurement contracts.

Interestingly, among the donors of political parties in the reports are other parties, so Dragan Čavić’s party, the People’s Democratic Movement, donated 45,000 KM to the Socialist Party, on whose list Čavić was a candidate. Similarly, the People’s Party of Srpska reported a donation from the municipal board of SNSD Brčko in the amount of 5,700 KM, which in itself is not prohibited but raises a number of questions about the nature and motives of such transactions.

Gifts, debts, and unpaid obligations.

This time, parties reported relatively large amounts of gifts and non-monetary donations worth almost 290 thousand KM, and particularly interesting is the SNSD report in which performances by Svetlana Ražnatović and Aca Lukas at the party’s final rally were presented as a gift worth 18.5 thousand KM that the party received from these pop artists.

In addition to revenues amounting to 29.5 million KM last year, parties reported 9.9 million KM in debt in their 2022 financial reports, the highest since 2018, and this amount continues to grow as obligations are carried over from previous periods.

Thus, the Democratic Front owes the company Ascanius Media another 129 thousand KM out of a total of 694,458 KM in outstanding obligations dating back to 2018. The same company has unpaid claims from the party For New Generations for services incurred last year, and interestingly, this company has collected over 265 thousand KM for media promotion services from various government bodies and public companies through the public procurement system since 2018.

A similar example is with the company “SAMAS” doo from Sarajevo, to which the parties NiP and DF owe 31 thousand KM each, while it claims another 17 thousand KM from SDA. This company, to which parties owe a total of 80 thousand KM, won tenders worth 1.6 million KM from contracting authorities based in the Sarajevo Canton.

Parties reported a total debt of 1.9 million KM to providers of media, marketing services, and promotion and advertising agencies, which is an area of particular importance since, according to the results of monitoring the election campaign last year, TI BiH pointed out that parties significantly understated the actual amounts spent on advertising and election promotion.

In addition to private suppliers, parties also have debts to public companies, institutions, local government units, and other public bodies amounting to almost 517 thousand convertible marks, and it is particularly interesting that parties owe 533 thousand KM in unpaid taxes and contributions for personal income, even though they received over 19 million KM from the budget last year.

SDA reported 262 thousand KM in unpaid salary obligations, and this party is among the largest debtors, ranking behind SDP BiH, which has by far the largest amount of debt at 1.8 million, followed by PDP (740 thousand KM), NiP (702), HDZ 1990 (698), SNSD (558), SDS (422), DF (377), Socialist Party (290), and Our Party (282 thousand KM), among other parties.

These findings confirm the justification for TI BIH’s initiative for urgent changes to the Law on Financing Political Parties, whose shortcomings allow parties to conceal their real financiers and the amounts of income they have, and to understate amounts received from unauthorized sources of financing.