Reform to deoligarchize Ukrainian politics reaps first results

President Petro Poroshenko stated that the early parliamentary elections in Ukraine would only benefit the Kremlin and will not happen. But the president's fear of a snap election may be also caused by the falling ratings of his Bloc party. The growing polling numbers of the other political forces led to intensified discussions on the necessity of electing a new parliament. However, no matter whether a party is interested in new polls or not, it is always ready to promote itself. The revealed budgets show that Ukrainian parties spent a big share of their state allocated funds for this reason. The Ukrainian political scene for many years has been a playground for Ukrainian oligarchs securing political influence through financing political parties, which in their turn guarded the profits of the oligarchs. With platforms that hardly represented any real ideological divide, legal electoral loopholes, and victories secured by vicious populism, year after year the same faces crafted laws in the interests of their shadowy benefactors. The promising Law on Prevention and Counteraction to Political Corruption which was called to end the oligarch-controlled politicians rule of the country came into force over six months ago. Called to put an end to the oligarch-political tandem, its first positive result is the increased transparency of parties’ budgets. However, it also now apparent that Ukrainian politicians don’t consider other ways of being known and trusted except through advertising.

Read also: Electing bad leaders in Ukraine: how to break the vicious cycle #UAreforms

Those that drafted the law say that it has been a successful experiment but the legislation should now be supplemented. Let's take a closer look at the benefits and the drawbacks of this experiment, presented at.

The parties overwhelmingly spend on self-promotion

In 2016 state funding was provided to parties represented in parliament proportionate to their results in the last elections (in 2014). Last year the state allocated UAH 191 mn ($ 7 mn) to political parties. However, the Opposition Bloc (the successor of the party of the runaway tyrant president Viktor Yanukovych) refused them and Batkivshchyna did not receive the state funding in the 3rd quarter because it did not manage to prepare the necessary documents, so 162.7 mn ($ 6 mn) was actually distributed to parties last year. Poroshenko’s Bloc, the party with the biggest share of representatives in parliament, spent UAH 18.8 mn ($697,000) on propaganda activities. Further details were not provided. The second biggest party Narodnyi Front leads in propaganda expenditure - UAH 33 mn ($1,2 mn). The largest portion of this sum going on TV advertisements, with the rest spent radio and printed press.The Samopomich party spent UAH 17.6 mn ($652,000) of their state funds on their newspaper. The Committee of Voters of Ukraine, the NGO which analyzed the expenditures, has pointed out that this newspaper has suspiciously enormous circulation — 6.5 mn copies, and despite the fact that the newspaper is distributed across Ukraine, it covers mostly local problems. For example, a number of issues were devoted to the rubbish blockade in Lviv, a problem which was harmful for the Lviv's mayor Andriy Sadoviy, who is also the head of Samopomich. The Radical Party of Oleh Liashko spent more than UAH 5 mn ($185,000) on branded products - calendars, T-Shirts, jackets, notebooks etc. All the parties justified these large expenditures on promoting themselves saying they had only a short period to spend the provided money. Parties received the state funds for the third quarter only a few days until before it ended, so in the fourth quarter they had to spend money for six months. "So we started to think quickly how to master it. If we had not spent the money it would be returned to the state's budget, and we would be criticized for not coping with it. On the other hand we would be criticized for the way we spent it," said Maksim Savrasov, the representative of the Bloc of Petro Poroshenko at a Forum called “Financial evolution of Ukrainian parties: Reform or Imitation?”.Whether these enormous expenditures are one off or shall be repeated, they need to be regulated by law. “We can’t forbid political advertisement at all, because the advertisement is what helps media to survive,” said Viktoria Syumar, an MP from Narodnyi Front and an initiator of the law on political corruption. However, she believes there must be a maximum threshold for the amount to be spent on political advertising. Syumar also thinks the contents of political advertising needs to be changed: “The “The TV ads should show not grannies who make you want to cry, but politicians telling you about their activities.” The bill which should define what the parties can use the state funds for is already registered in the parliament and it’s likely that it will pass. The bill forbids spending state funds on party promotion.

The success and points for improvement

Weak points Despite receiving funds from the state, shadow financing of the parties still exists. For example, Narodnyi Front did not mention any centers of the party in regions which would have the status of an entity. Also there was no any mentions of the centers of Radical Party of Oleg Liashko in the third quarter. The way the parties were allocating money to the regional centers is not transparent. They either gave the majority to the center office, or divided it disproportionately between regions. “For example, there are two neighboring oblasts. One receives 300,000, another gets a million. The number of the members of the party is approximately equal, the elections results are also almost equal,” said Viktor Taran, the head of the anti corruption NGO Eidos. “One of the biggest problems is that contributions are done by anonymous persons,” says Syumar. She explained that in financial reports the information about the sponsors is absent or partially present. Another example of the lack of transparency is that parties exceed the maximum possible allowable contribution from one person, as well as parties not spending money on disseminating their policy, analysis, or teaching their members. So far there is no serious punishments for the violating the legislation despite the risk of harming a party’s reputation. Progress Still, the legislation has made parties make huge steps towards transparency. For the first time society has received access to information on parties’ finances. Before it came into force, it was impossible for society to see even a 15 page report on this. “Now financial reports of parties consist of 200-250 pages. For the parties which are not represented in the parliament it is about 100 pages,” said Taran. He also emphasized that introducing state funding has proved that parties can survive without oligarchs money and that will be the next step of the reform. Among other positive changes is that parties started to develop their regional networks. “The accountability reform did take place. This is the main success of this law,” concludes Taran.

Financing for 2017

In 2017 the state will allocate UAH 442.4 mn ($16.4 mn) for the statutory activities of the parties:

Narodnyi Front	UAH 113.7 mn ($4.2 mn)
Petro Poroshenko’s Bloc	UAH 112.1 mn ($4.1 mn)
Samopomich	UAH 56.4 mn ($2 mn)
Opposition Bloc	UAH 48.5 mn ($1.7 mn)
Radical Party of Oleh Liashko	UAH 38.3 mn ($1.4 mn)
Batkivshchyna	UAH 29.2 mn ($1 mn)

Also Samopomich will receive additional UAH 44.2 mn ($1.6 mn) as a bonus for adherence to gender quotas during the previous election. Gender quota bonuses are received by parties whose electoral lists feature at least one woman for every three candidates. According to Ukrainian media sources, this year the Opposition Bloc fulfilled the requirements for eligibility for state funding and has received funding for the first quarter. Those who invest more in self promotion usually win the competition for people's trust, which translates into votes. Nevertheless, the new rules introduced make it much harder for the parties to stick to the old order. Now they have to take into consideration that the society’s oversight does matter. The new legislation is the first big step towards the financial independence of Ukraine’s political parties, previously an instrument of oligarchs.