For immediate release

Tbilisi, 12 April 2013 – Transparency International Georgia (TI Georgia) is releasing a new report - Finances of political parties for the year 2012 as part of the project Transparent and Accountable Political Finances in Georgia. The report contains the analysis of annual financial statements of the 9 political parties that took part in the 2012 parliamentary elections independently or within a bloc and received over 1% votes.

The research highlights several important trends and facts:

• Revenues of political parties – the revenues received by political parties in 2012 (except for August and September) were distributed as follows: six parties comprising the Georgian Dream electoral coalition received a total of GEL 4, 607,000; the United National Movement received GEL 13,434,000; the Christian-Democratic Movement received GEL 961,000, and the Labor Party received GEL 337,000. A considerable share of the revenues received by the political parties was in the form of state financing and donations.
• Political party donors - in 2012, political party donors were only individuals, because receiving donations from legal entities was forbidden by law. Nevertheless, the analysis of the existing data revealed that 397 United National Movement donors, 33 Georgian Dream donors, and 10 donors of other political parties had certain connections with businesses.
• Expenditures of political parties - in 2012 (August and September excluded), the expenses of the six parties comprising the Georgian Dream coalition made up a total of GEL 6,200,000, the UNM spent GEL 3,500,000; the Christian-Democratic Movement spent GEL 750,000; and the Labor Party spent GEL 250,000. The distribution of costs was diversified by the parties according to types. Office and communications costs, as well as expenses for advertising and salaries made up the largest share of the parties’ expenditures;
• The State Audit Office Activities - The State Audit Office activities amounted basically to political reprisal rather than monitoring the financing and expenditures of political parties. A biased and selective approach by State Audit Office had been repeatedly observed. In several cases the State Audit Office had ignored the activities of the then ruling party. As regards the verification of annual statements, despite a number of flaws made by political parties in their reports, the State Audit Office has so far not responded to them. In addition, the State Audit Office did not publish the annual declarations of the entities found “connected to a political party”, including Georgia is not for Sale, a non-commercial non-entrepreneurial legal entity, and the Georgian Dream civil movement, which constituted a violation of the law;
• Legislative concerns – Even though serious problems still linger, election funding laws have significantly improved compared with the previous period, as financial declaration forms, effective until December 2011 legislative amendments, and the functions of the regulatory body could not ensure proper transparency and accountability. Introduction of the new declaration forms reduced the number of problems to a great extent, but certain issues still need to be addressed.
• Financial declaration forms – detailing the declarations merits a positive assessment, especially in terms of costs, since all expenses are, in fact, categorized. Furthermore, information on certain types of expenditures has become more itemized with each expense individually listed in the public statements. On the other hand, a part of revenues has not become subject to categorization, and, as in 2011, there still remains a possibility that the origin of the funds raised by a political party continue to be unclear. At the same time, a detailed cost breakdown would be desirable for the expenses that are the most conspicuous as far as the electorate is concerned and costly for the parties (e.g., advertising).

In 2012, TI Georgia published six research reports as part of the Transparent and Accountable Political Finances in Georgia project.

The report was made ​​possible by the generous support of the American people rendered through  the USA Agency for International Development (USAID). The contents of the report are the responsibility of Transparency International Georgia and do not necessarily reflect the views of the International Foundation for Electoral Systems (IFES), USAID, or the USA Government.

The report was prepared through the financial support of the Open Society – Georgia Foundation (OSGF). Positions expressed by the authors in the information materials do not necessarily reflect the views of OSGF. The Foundation is not responsible for the contents of the materials.