Reports on income and revenue of campaign for parliamentary and presidential elections 2012 and comparison with monitoring findings Transparency Serbia

About project(s) Transparency – Serbia, as part of project “Monitoring of election campaign“, monitored important aspects of political subjects’ and state organs’ proceedings in campaign for parliamentary, provincial, local and presidential elections in 2012 Monitoring begun on 26 March Sample of monitoring comprehends events in Belgrade, Niš, Novi Sad, Kragujevac and in 20 smaller cities and municipalities Monitoring also comrehends media with national broadcasting and proceeding of public insitutions nation-wide After the monitoring we collected campaign finance reports and compared them with our findings Created as part of the project of Transparency Serbia Monitoring of election campaign financing supported by Internationa Foundation for Electoral Systems (IFES) and USAID. Project activities are partially financed from regional research of Transparency International on role of money in politics – thankfully to donation of Ministry of Foreign Affairs of Norway. Stated oppinions do not neccesarly represent donor’s oppinions.

1. Facts about elections Presentation of data on income and expenditures from campaign finance reports of political parties, coalitions and citizens’ groups

Incomes and expenditures in republic elections Lists/candidate proposers Total incomes in republic elections Total expenditures in republic elections Pokrenimo Srbiju 560,004,134562,877,916 Izbor za bolji život 861,030,354820,787,910 SPS-PUPS-JS 228,862,581229,153,178 DSS 117,515,593107,212,394 Preokret 121,091,049289,954,758 URS 189,485,738513,761,487 SRS 125,515,385146,880,972 Dveri 50,980,71051,780,787 SVM 34,427,66424,070,151 PRS 48,248,88596,249,355 Socijaldemokratski savez 49,368,29311,924,217 Total 2,386,530,3862,854,653,125

Structure of incomes and expenditures in republic elections

Translation of slide In blue: income on parliamentary and presidential elections In red: expenditures on parliamentary and presidential elections Parties and lists: SNS, DS, SPS, DSS, LDP, URS, SRS, Dveri, SVM, PRS, SDS, total

Expenditures in republic elections Lists/candidate proposers Expenditures in parliamentary elections Expenditures in presidential elections Pokrenimo Srbiju 309,069,090253,808,826 Izbor za bolji život 467,878,306352,909,604 SPS-PUPS-JS 187,045,29042,107,888 DSS 66,612,68940,599,705 Preokret 230,620,36959,334,389 URS 466,339,81347,421,674 SRS 89,450,68357,430,289 Dveri 11,810,33939,970,448 SVM 23,350,161719,990 PRS 25,516,16970,733,186 Socijaldemokratski savez 1,160,01310,764,204 Total 1,878,852,922975,800,203

Paralel presentation of expenditures in republic elections

Translation of slides In blue: expenditures parliamentary election In red: expenditures presidential elections Parties and lists: SNS, DS, SPS, DSS, LDP, URS, SRS, Dveri, SVM, PRS, SDS, total

Share in total expenditures in republic elections

Translation of slides DS 28% SNS 20% URS 18% Preokret (LDP) 10% SPS-PUPS-JS 8% SRS 5% DSS 4% PRS 3% Dveri 2% SVM, SDA 1%

Structure of incomes in parliamentary elections

Translation of slides Budget 57% Credits and loans 29% Donations natural persons 8% Parties’ own funds 3% Donations from firms 3%

Structure of incomes in presidential elections

Structure of expenditures in parliamentary elections

Translation of legend Public events Bilboards TV Press Everything else

Structure of expenditures in presidential elections

Translation of legend Public events Bilboards TV Press “cost of marketing agency” Everything else

Structure of incomes in parliamentary elections with uncovered costs included

Translation (clockwise) Budget, private sources, loans, uncovered expenditures

2. Comparison General remarks on reports’ quality General remarks on transparency and legality of campaign finance Comparison of campaign finance report data with monitoring findings – specific types of income and expenditure Hidden campaign Main conclusions and recomandations

2.1. Quality of published reports Only scanned documents published – unable to search and even to read some figures Lack of information about media where parties advertized – failure of parties or mistake in electronic reporting form?; as a consequence, some information obtained through monitoring is impossible to compare with party reports Often failure to stamp reports by all coalition members Reports are usualy containing requested information, but some expenditures are not reported on proper place Report for presidential candidate M. Zukorlic not submited (or just not published yet) Much more reports not submited for Vojvodina province and local election or wrongly fillled (several municipalities’ elections in one report

Few good practices Useful additional information found in reports: LDP – in “public events” parts – visible information about transport companies where buses were rented SRS – not on repayment of loan and detailed presentation of public events’ costs

2.2. General remarks on transparency The reports are, generaly speaking, more reliable and informative than before due to: – Significant increase of budget funding – More detailed reporting form – Announcement of monitoring and control Reports are not comprehensive still – some expenditures are not presented at all or not clearly, as well as related income For allmost half of expenditure is not known yet what will be the ultimate source of income (loans and commited but not paid for services) Rules are not ensuring publicity of data during the campaign, the deadline for reporting is too long, there is no deadline for publishing of reports

General remarks on legality of campaign financing Violation of rules or at least suspicion for that identified: – Submission and formal correctness of reports – Distribution of budget funds (local level) – Publishing of bigger donors’ names – Alocation of expenditures for various election types – Reporting of expenditures on TV, press, bilboards – Reporting of costs of promotional activities (rallies, conventions etc) – Using of public resources for political promotion Although it is suspected that signifcant revenue and expenditure is not reported, it is safe to say that most of expenditure is, being related to the visible advertizement costs; additional checks are necessary in order to verify accuracy of reported sources of income as well as monitoring on how the rest of costs will be paid

2.3. Publishing of donors’ names Financial report No. of nonpublished donations in July 2012 Value of non published donations in July 2012 SPS parliamentary DSS parliamentary URS parliamentary SPS presidential DSS presidential URS presidential Total

Interpretation All political subjects obliged to publish donations of bigger value (more than 38 thousend RSD) within the 8 days. For election capmaign it should be published on coalition web-page. Bigger donations were not published on coalition web-pages at all, but could be found sometimes on party’s web-pages (e.g. LDP, DS) 60% of overal donations’ value are those not published on parties’ web- pages. The percentage even bigger having in mind small value donations which does not have to be published on web-page Important remark: The comparison is made only on the basis of donor’s lists that parties reported in election campaign finance reports

2.4. Comparison – TV advertizement (separate document Translated) листа Укупно - процена ТС Укупно - извештаји странакаРазлика % покривености За бољи живот ,00 Покренимо Србију ,38 СПС/ПУПС/ЈС ,47 ДСС ,42 УРС ,08 Преокрет ,85 СРС ,58 Двери ,13 СВМ NA ПРС ,58 СДС ,89 укупно ,93

Overview of number of TV stations where advertized Report of political subject AGB Nielsen information on number of TV stations where advertized No. ListSpotsRented timeSpotsRented time 1.DS SRS114/ 3.URS? (19) 95 4.LDP3/52 5.SNS??84 6.DSS5/3/ 7.SPS11//1 8.DVERI??// 9.SVM? (13) 1/ 10.PRS1/11 11.SDS4/1/

Overview of advertizement places – presidental elections Report AGB Nielsen information on number of TV stations where advertized proposer of candidate SpotsRented timeSpotsRented time 1.DS SRS10/4/ 3.URS14/85 4.LDP SNS DSS3/3/ 7.SPS6/51 8.DVERI43/2/ 9.PRS SDS1/1/

Interpretation of findings Big differences in price in comparison to TS estimation could be explained in following ways: – Reports include preparation of spots prices (small impact) – Parties reported advertizement cost in local media, which is in contrary to RBA instructions to the broadcasters – Discounts were smaller than we calculated (possible violation of RBA instructions or failure to report discount) – Parties incorporated cost of other election types (local, violation of party finance rules) – Parties paid debts as well (from previous elections)

Wrong distribution of costs DS: part of presidential campaign reported in parl. Campaign report SNS: part of presidential campaign reported in parl. Campaign report SPS, SVM, DVERI– parliamentary campaign presented, although not ran on national broadcasters LDP – less expenditure in pres., more in parl. Then we identified PRS and SDS – much greater costs then identified

2.5. Press Type of electionDSSNSLDPURSDSSSPSSRSPRS Parl. TS data Parl. Reports Pres. TS data Pres. Reports TOTAL TS Total reports difference

interpretation Differnneces that could be explained by discounts (e.g. SPS). For SRS, PRS, DSS, discounts should be as big ad 50% to explain discrepancy СНС није приказала трошкове оглашавања у штампи вредне преко 30 милиона динара без попуста Више пријављених расхода (ДС, ЛДП, УРС) – можда се може објаснити великим степеном оглашавања на локалним медијима или плаћањем оглашавања на интернет страницама новина

Public events – transportation expenses Cases where transportation expenses were not reported or were reported in significantly lower amount than noticed: DS: final conference of presidential candidate in Novi Sad, SPENS – (24 buses the least, nothing reported); Rally in Prokuplje 6.4.; Rally in Novi Sad, square in front of SPENS, 30.4 SNS: rally in Belgrade, 28.4; promotion in Novi Sad – the least 28 busses, nothing reported SPS – PUPS – JS: promotion of coalition in Novi Sad, SRS: final rally in Belgrade, 3.5. DSS: rally in Hala Sportova, Belgrade; final conference in Sava Centar, 2.5 URS: convention in Bel Expo Centar; convention in Prokuplje, 23.4.; Convention in Vranje in Hala Sportova, 10.4.

Expenses of premises renting On the basis of data from institutions that rent premises for political rallies, in the reports for presidential and parliamentary elections there is no data on premises renting in following cities (possibly some of them can be found in the reports for local or provincial elections – wasn’t verified in all cases): DSS: small expenses for premises in Raška and Jagodina, differences in prices for renting of premises in Sava Centar URS: difference in price for rally in Novi Sad, Kraljevo, Zrenjanin and Bojnik DS: No data on renting in Čačak, Raška, Bojnik, Jagodina, Sombor, Kraljevo, Subotica, Nova Varoš and Kostolac. Difference in price in Prokuplje, and for Belgrade Sava Centar SNS: no data on renting of premises in Novi Sad, Prokuplje, Prijepolje, Raška, Kragujevac, Užice, Nova Varoš, and for Belgrade Sava Centar No data for LDP for Raška, Užice, Nova Varoš, and for Belgrade Sava Centar SPS: no data for Novi Sad, Petrovac na Mlavi, Raška, Zrenjanin, Kikinda, Sombor, Pančevo and for Belgrade Sava Centar

2.8. Concealed campaign Most common forms: Significant increase of public officials activities, often without logical relation with their posts, through timing of events or giving greater significance to the event than it deserves Merging of public and party-promotional activities Visiting of companies, meetings with investors, mentioning in advertisements, support of VIPs – does this represent donation of those people and companies to the campaign? Increased subsidies from public funds, employing and awarding of aid, support to events Direct advertizing – promotion of public institutions Using of non commercial space

Examples of election campaign with using of public resources or business resources – Visiting of construction site of the bridge Zemun – Borča, Boris Tadić, Dragan Đilas, Bojan Pajtić – „Presidential candidate of the coalition „Izbor za bolji život“ Boris Tadić and Minister for Infrastructure Milutin Mrkonjić attended begining of construction of two high-way sections through Grdelička klisura“ (quotation from Ministry’s web page) – Milutin Mrkonjić, Oliver Dulić and Boris Tadić mark the beginning of construction „section of high-way Belgrade-Južni jadran“ – Visit of Boris Tadić to Gorenje; – Boris Tadić will put into operation facility for regeneration of used sulfid acid in Oil rafinery Pančevo and will attend signing of Protocol on intention of establishing free zone Pančevo between city of Pančevo and “NIS" a.d. Novi Sad.

Examples of election campaign with using of public resources or business resources – Boris Tadić and Dragan Đilas attend „finalization“ of works on detour around Belgrade – section Straževica - Batajnica 30.4 – Boris Tadić visits cement factory „Lafarž“ 3.5. – Ivica Dačić, Milutin Mrkonjić, Boris Tadić, „attend oppening of new section of detour“ with the tunel Straževica Boris Tadić, Oliver Dulić, Dragan Šutanovac - handed the keys to tenants of settlement Stepa Stepanović – Milutin Mrkonjić and Boris Tadić visit construction site of Žeželjev most in Novi Sad; Ministry of Infrastructure for that occasion publishes text with title „Socialist are supporting Tadić“

Examples of concealed campaign Beginning of works in construction of industrial section in Jagodina – Verica Kalanović, Dragan Marković Palma Prokuplje – promotion of URS candidates – general hospital received new x-ray device Kuršumlija – – V. Kalanović – URS fulfilled promise, road was asphalted and ŠIK Kuršumlija works again Niš – 3.5. – minister of health visits newly constructed clinic for surgery on the last day of campaign Trstenik, Kruševac, 5.4 – visit of V. Kalanović and M. Dinkić with the guest from Italy and signing of memo by these two companies; statement on employment of 50 workers; organized shooting

Examples of concealed campaign 20.4 – Minister О. Dulić visiting village Supska „where final works on school are being made“, as well as „pool in Ćuprija whose construction is ending“ Placing of headstone for solar energy – Kuršumlija, village Matarova – Petar Škundrić, V. Jakovljević, president of municipality Kuršumlija Oppening of first recreational center in Niš – Vuk Jeremić, D. Ćirković, president of GO Medijana Visit of state secreatry M. Đidić to villages near Kruševac, promise of decreasing taxes to artisans and on introducing electric energy in villages – Oliver Dulić opens sports hall in village near Kruševac – Dragan Šutanovac attends oppening of „free zone“ (which otherwise exists for more than a decade)

Examples of concealed campaign Opening of construction site in reconstruction of road Požarevac - Kostolac – mazor of Požarevac (DS) and Ivica Dačić Industrial sector Jagodina – beginning of works in constructing factory Andrea Confezioni – Verica Kalanović, Dragan Marković Palma

Examples of concealed campaign 5.4. Vranje and Vranjska Banja: in „Simpo“ presenting of new products of young designers, addressing of minster Petrović; visit of vice president of DS D. Petrovića to agricultural farm in Kostolac: from to Minister of Interior Ivica Dačić visits termal plant and beginning of works 5.4. Novi Sad: Minister of Interior Ivica Dačić visits PD in Novi Sad, where director of „Srbija gas“ Dušan Bajatović hands uniforms for members of Special Police Unit

Examples of advertizing of municipalities in campaign NewspapersDate pageAdvertismentsize Price without VATWith VAT Nin (Ringier) Municipality Ruma pr text 1/ Nin (Ringier) Municipality Ruma pr text 2/ Press Loznica open city 1/ Nin (Ringier) so Kraljevo pr tekst 1/ Nin (Ringier) so Kraljevo pr tekst 2/ Press Loznica open city 1/ Nin (Ringier) Municipality Vladimirci PR tekst 1/ Kurir Assembly of Belgrade activities 1/ Kurir Assembly of Belgrade activities 1/ Kurir Municipality Voždovac inserterIns Nin (Ringier) Municipality Svilajnac pr tekst 1/ Vecernje novosti SO Veliko Gradiste PR tekst 1/ Nin (Ringier) SO Šid PR tekst 2/ Nin (Ringier) SO Šid PR tekst 1/ Danas SO Kragujevac activities 2/ Danas SO Kragujevac activities 2/ Kurir Assembly of Belgrade activities 1/ total

Increase of public spending? In first half of 2012, according to published data of MF, there was no increase of public expenditures, but budget incomes are less than planned From the standpoint of election campaign can be indicative significant increase in April - e.g. Double the subsidies than in other months for purchasing of goods and services, significant payments for subventions and capital expenses and total consumption from 96 budget users up to 96 billion of RSD (comapring to 70 in May, 79 in March, 74 in February same year) Information on increased employment in public enterprises, incentives for unemployed, assisting in public events etc. that should be checked

2.9. Control and sanctioning Anticorruption Agency went public with summary presentation – which of the larger parties submitted reports, how many uncovered expences etc. and stated to ask for ammendments of the reports/procedures for sanctioning were not initiated so far „mesaures of warning“ and/or initiating misdemeanor procedures Other organs (RBA, prosecution, police, SAI) so far haven’t appeared in public regarding campaign financing and violation of other regulations – e.g. Whether broadcasters violated Instructions in regards to publishing of commercials for level of elections which is not their zone of coverage, whether financial conditions were different for various parties; purchasing of votes is criminal act; using of public resources for the campaign

3.1. Findings – effects of application of new Law New rules of campaign finance brought greater transparency of data but still are far from expectations. The results will depend on comprehensiveness of control to be performed by the Agency and effects of subsequent sanctioning procedure Even now clear that many provisions should be clarified or added

3.2. Findings – income and expenditures and their structure Reported expenditures are much bigger then on previous elections For almost half of reported expenditures is unknown ultimate source of income (loans, committed services), which is problematic from the point of view of compliance with the law, lack of transparency and trade in influence Budget far dominant source of income, no “big fishes” within donors lists, share of donations only 15% TV advertisement ¾ of reported expenditures, followed by billboards; greater importance of internet, less rallies

3.3. Conclusions – quality of reports Mistakes in reporting form and filling in, lack of coalition members’ stamps Incomplete information and not reported expenditures identified for almost all parties. However, they are most significant in SNS reports – there are no properly reported press advertisement costs, costs of rallies and conventions, while billboard costs are underreported Pres. Candidate M. Zukorlic – the report not submited or not published Symptomatic lack of report on Vojvodina elections (LSV, SNS, URS), Belgrade (DS, SNS, URS, Novi Sad (DS, SNS, URS)

3.4. Findings – public resources Various types of using of public resources for promotional purpose – all ruling parties (DS, SPS coalition and URS) Most important factor that prevented broader abuse of public resources – lack of revenues in the budget and not legal prohibitions