AK: Most parties going in for protection money distribution this year

The 2021 state budget bill, in the hands of (off picture) Reform MP Aivar Sõerd.
The 2021 state budget bill, in the hands of (off picture) Reform MP Aivar Sõerd. Source: Reform Party

The entry of the Reform Party into office has brought into focus its stance on the annual distribution of funds to political parties, dubbed 'protection money', ahead of the state budget vote. Reform has long criticized the practice, though now it is in office, some opposition MPs say it has tempered its stance, now it can influence the distribution of funds more than when in opposition.

Most parties partake in the protection money (Estonian: Katuseraha, literally "roof money") process, with Reform having been a notable exception in recent years.

The funds, which for 2021 totaled €6 million (out of a €13-billion state budget), see sums often in the tens of thousands of euros earmarked ostensibly for regional development.

The process generally greases the wheels of the state budget debate and vote, ongoing through autumn, but has long been criticized as a form of corruption and as lacking in transparency – a point Reform Prime Minister Kaja Kallas made last week.

NGO union representative: Protection money practice inherently corrupt

Alari Rammo, the head of advocacy at the Good Citizen union of NGOs (Vabaühenduste Liit), told ETV news show "Aktuaalne kaamera" (AK) Monday that: "I don't think the distribution of protection money can be made much more transparent than it is, partly because I haven't heard any sensible ideas on how to do that, and second, every few years some of the parties say that now they are changing this system, which is more of a distortion in my mind."

"In my opinion, nothing regarding protection money, which is by its very nature corrupt, ever changes," he went on.

Finance minister Keit Pentus-Rosimannus (Reform), whose party actually refrains from distributing protection money on the grounds that it constitutes a type of corruption, said that: "I believe that parliament has learned from the past, and this time the process will be much more transparent. It must not be obscured with a few bad examples which overshadow what is overall a bad practice."

Reform MP: Different strands of opinion on protection money within party

Reform MP and Riigikogu finance committee chair Aivar Sõerd said that within the party are several different strands of opinion on the practice, telling ERR that: "At the moment, all I can say is that we in the [Riigikogu] group have very different views on this issue. It is a difficult one."

His own position was that the protection money scheme should be halted, as it is both a diversion from the main business of the budgetary procedure, and also debases the process.

He said: "The Riigikogu should not deal with protection money funds, but with the substantive and major issues of the budget. This devalues ​​the budget procedure, it devalues ​​the credibility of the Riigikogu in processing the budget," Sõerd said.

Former Reform finance minister: Practice is just grandstanding

Reform MP and former finance minister Jürgen Ligi has long been a critic of protection money.

Ligi said: "I even oppose using wording like 'regional investments' … Budgetary money has been applied for here in the name of personal popularity, often for activities related to the applicant and to Tallinn, which does not need any extra money."

"Our position has not changed, there should be no such opportunity," Ligi added, though noted that the issue was one for the legislature as a whole, and could at least be reformed, for instance by funding being issued on the basis of need and in conditions of competition and not for self-aggrandizement or pet projects.

Many other Reform MPs have called for a more transparent process this time around, ERR reprots, and the party's Riigikogu group chair, Mart Võrlklaev, said discussion on making changes to the rules was taking place, and once this had happened, going ahead with the disbursement of funds could happen.

Võrklaev said: "MPs from different Riigikogu groups have expressed a desire to make regional investments. Our condition is that these can come when we make their distribution more understandable and transparent," Võrklaev said.

EKRE MP: Reform have changed tune now in office

Conservative People's Party of Estonia (EKRE) chair, Martin Helme, said that his party would take protection funds this time around.

"Yes, we have done that before, both when we were in office and when we have been in opposition, so I see no reason why we should not this time," Helme, a former finance minister, said.

EKRE's former Riigikogu speaker Henn Põlluaas said he had detected a sea change within Reform now the party is back in office.

He said: "When they were in power last time, they were happy to share [protection money] and in the meantime they were in opposition and were not willing [to join the scheme] and now they are willing to share again, and probably as a result the can now influence government more and the size of protection money funds, and which party they are going to."

"However, when it comes to protection funds, this is the most transparent of funds of all. If we look at the state budget, neither the government ministers nor MPs understand it. The budget does not indicate where any money goes. But with the protection money you can clearly see where money is going and how much. In this aspect the problem of transparency is least serious here," he went on, adding his party had not discussed what objects the funds might be used on yet and that €70,000 of last year's funds are being withheld from the party from last year.

Center MP: Up to party deputies how they want to distribute funds

As for Center, MP and chair of the finance committee at the Riigikogu said the issue had not been discussed, at committee-level.

Savisaar said: "It is too early to make any fundamental decisions. The state budget will be brought to us this week when it arrives in the Riigikogu and then we will start discussing all these issues. There are no answers yet today."

Center's approach so far has been to let MPs decide themselves how the money will be apportioned, rather than having some centralized guiding principles, though added the latter might one day appear.

Prime minister: More transparency needed

Prime Minister Kaja Kallas (Reform) said last week that the protection money process should become more transparent.

In recent years, the funds, which are issued in proportion to the size of a party's representation, have been spent largely on ostensibly local projects, including sports facilities, while NGOs focused on social issues, sometimes only set up shortly before the money is due to be doled out, are also in the picture.

The restoration of churches has been a major entry for Isamaa, while EKRE has seen abortive attempts at use of the funds for a statue commemorating a controversial Baltic German military leader.

The practice is seen by critics as a way of inducing MPs to vote in favor of the main state budget, since the issuing of the funds coincides with the state budget bill reading.

Another arguably unfortunate aspect of the process is that virtually any English translation of the term, Katuseraha, ends up sounding like it has a negative connotation.

Parties also receive state subsidies in direct relation to their Riigikogu representation. This is among their main sources of funding, along with party donations.

State budget bill readings in October, November, final reading just before Christmas

It also faces charges of being a "jobs-for-the-boys" means of doling out contracts to favored firms.

This year in particular the issue is also in sharp relief given the local elections take place right in the middle of the state budget Riigikogu debating and voting process (the bill usually passes its first reading in mid-October, its second a month later and its third and final reading about as late on in the year as it can do, in the second week of December).

The state budget bill itself has to be prepared at cabinet level by the end of September. Two supplementary budgets have also been issued in spring 2020 and 2021, in response to the coronavirus crisis. This year's supplementary budget came to €641 million.

Finally, the longer-range state budget strategy (RES) for 2022-2025 was unveiled in early May; it called for austerity measures of over €60 million in cuts.

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Editor: Andrew Whyte

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