A JOINT INVESTIGATION between Noteworthy and 50 journalists from 26 outlets from all over the EU has highlighted a number of interesting details about how political parties around Europe are funded.
Transparency Gap: the funding of political parties in the EU, a cross-European project led by Follow The Money, identified a number of gaps in legislation that lead to our political donations framework being largely opaque.
As well as these gaps, other issues relating to the donations and other funding sources caught our eye. Here are five findings that you must know about how political parties are funded in the EU.
State funding is provided to political parties in Ireland who receive more than 2% of first-preference votes, even if the candidate is not elected.
While this funding is necessary to maintain the political activity of larger parties and the momentum of minority groups, across the EU it was found that a significant number of these political parties rely heavily on State subsidies.
A total of €3.7 billion was provided to parties across the EU, with some being more reliant on such funding than others.
In Spain, for example, a portion of a central fund made up of taxpayer money is allocated on the basis of the party’s representation in local and national government and its share of seats in the previous election.
This funding must be used for party activities and campaign spending but some experts view it as the parties living in an ivory tower of public funding.
“Parties that only have public financing, as is the case in Spain, end up becoming just another branch of the State,” said Fernando Jiménez, professor of political science at the University of Murcia.
“They lose their capacity to represent society and I believe that this is very negative.”
Political parties in Belgium get so much public funding they barely have to worry about finding other sources of income, like private donations.
Ireland is very similar.
More than 80% of all party finances from 2019 to 2022 was made up of public funds. Ireland had the highest proportion of taxpayer money funding politics in all of the EU.
Per capita, each person spends over €3.50 to fund politics with their tax money each year. That is the eighth-most-expensive price of politics in the EU.
Most years, the donations that Irish parties get only make up a small fraction of their finances. The rest is allocated to them through the two pots, Exchequer funding (for all party activities) and the Parliamentary Activities Allowance (for TDs only).
This reflects the large reliance from parties in Ireland on State funding.
According to Fernando Casal Bertoa, an associate professor in comparative politics at the University of Nottingham in England, this does not incentivise parties to engage with the public as much either.
While most parties get their money from the State, a big chunk comes from donations.
Analysis of thousands of donations from 2019 to 2022 found that nearly 300 political parties received almost €685 million from private individuals and companies.
In Germany, political conviction or party loyalty apparently do not enter into the equation for corporate donors.
For example, the insurance company Allianz, every year, gives between €20,000 and €30,000 to five different parties.
Another German business, Florian Rehm (who owns the herbal liqueur company Mast-Jägermeister), gave almost €300,000 to three different political parties in 2021 and 2022.
The German subsidiary of cigarette company Phillip Morris handed out €310,000 over the past few years to various different parties as well.
But it is all peanuts compared to the spending of the German metal and electro-industries, who have donated €1.35 million to the Government coalition parties since 2019.
The industry donated €90,000 to the Chancellor Olaf Scholz’ party, the SPD, €430,000 to the Die Grünen party and €430,000 to the liberal FDP party.
But, despite not being part of the German government anymore, the same industry donated €2.9 million to the majority opposition party, the Christian Democratic Union (CDU), over the same period too.
Almost half the EU-countries allow companies to donate to political parties, including Ireland, but there is nowhere else where the amounts are comparable to what happens in Germany. In four years, companies donated €77 million to German parties.
That figure is stark when compared to the country that had the second highest number of corporate donors in Europe, Italy – where parties received €6 million from firms between 2019 and 2022.
Just €2,000 worth of corporate donations to political parties were declared in Ireland during the same period.
Private donation frameworks must be transparent. But there are many cases where politicians who donated thousands of euro to their respective parties were later appointed to ministerial positions.
In 2021, Bulgarian MP Nikolay Sabev was the owner of the largest private postal service and donated €50,000 to a party called ‘We Continue to Change’.
A few days later, the party leader announced that Sabev was their candidate for the job of minister of transport and communications. After the party won the elections and Sabev was officially designated for the job, he donated another €105,000.
As minister, Sablev controls the State-owned postal services, the biggest competitor of his own private company.
In Poland, it was revealed that around 80% of donations that were given towards the Law and Justice (PiS) vice-president Joachim Brudzińskand’s campaign in the 2019 European Parliament elections, were donated by people who were employed in State-owned companies and institutions.
Strikingly, managers of State-owned companies in Poland donated the exact same amounts to the campaigns of then-ruling politicians from PiS – all of them on the same day.
Each of them, however, insisted that they made the payments of their own free will.
While Ireland has some of the toughest regulations in place for who can donate and how much they can donate to political parties, the legislation seemingly makes no effort to create obligations to identify who donated and how much they donated.
This is reflected in this investigation, where we found that the sources of just 8.37% of donations made to political parties in Ireland between 2019 and 2022 were disclosed to the public.
This places Ireland’s political donations framework as one of the least transparent in the EU, when compared to other member states.
Our team also reported that politicians can donate money to their own party, using funds which were originally donated to them. Additionally, there are no rules in place which make it necessary for politicians to disclose if they used donor money to fund their own donation.
While the name of the politician is later added to the annual list of declared donations, the public are not always made aware of the source of the money donated by TDs, ministers or MEPs.
Read our full story on these findings here.
The four largest single donations made in Europe between 2019 and 2022 are all from the same trust fund to the same party.
A group of wealthy business owners in Finland established a trust so that they can donate to the Swedish People’s Party, a group who represent the Swedish-speaking minority in Finland.
In Finland, the €30,000 donation limit can be exceeded if funding is provided to parties through a trust. The group have given more than €1.5 million to the party, every year since 2010.
Separately, Steven Schuurman, a billionaire Dutch tech-entrepreneur, is the private individual making the biggest donations. The German party Die Grünen received €1.25 million from him in 2021, when elections were held.
Schuurman also made a donation of €1 million to the Dutch liberal party, D66, through The Dreamery Foundation, which he had founded.
Read more articles in this series >>
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By Muiris O’Cearbhaill for Noteworthy
This article is part of The Transparency Gap investigation with 26 media outlets across Europe, led by Follow the Money. Noteworthy and The Journal are the project’s Irish partners. Find out more about the collaboration here.
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This work is co-funded by Journal Media and a grant programme from the European Parliament. Any opinions or conclusions expressed in this work are the author’s own. The European Parliament has no involvement in nor responsibility for the editorial content published by the project. For more information, see here.
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