Parties' local elections quarterly reports yield some unusual expenses

ERJK chief Liis Oviir.
ERJK chief Liis Oviir. Source: ERR

The third quarter 2021 (Q3 2021) party political financial reports are the subject of particular scrutiny, as they include the bulk of the expenses incurred ahead of the October 2021 local elections. At the same time, electoral alliances which ran in the same elections are also having to submit reports, though many of them are less experienced in doing so than the nationwide parties.

This has led to one investigation of an electoral bloc's Q3 report by the body tasked with monitoring party finances; other electoral blocs, and even in one case a mainstream party, had entries in their Q3 2021 reports which billed a fuel retailer, a hairdresser, public broadcaster ERR and a long-defunct company for PR and advertizing services, in connection with the election.

One electoral alliance under ERJK scrutiny

The Political Parties Supervision Committee (ERJK)  has started to look at one particular electoral alliance and its finances ahead of the October 2021 local election. This happened after some of those running in the same municipality had drawn attention to the alleged misdeeds, however.

.ERJK chair Liisa Oviir told ETV news show "Aktuaalne kaamera" (AK) that: "Competitors [for votes] drawing our attention to the fact that while the advertising campaign was quite substantial, on the other hand there were no expenses reported, is probably in and of itself not a serious thing. But we are in the process of looking at [the alliance]."

Oviir was unable to say which electoral alliance was under scrutiny, since it was still subject to proceedings.

Electoral alliances treated in same way as national parties, when it comes to quarterly financials

Parties and electoral alliances alike had to submit Q3 2021 financials. For the parties, this is a year-round thing, but for electoral alliances, their only significant dealings are around local elections time, i.e. covering one or two quarters in a four-year period.

Both in any case have submitted their Q3 2021 reports, replete with entries relating to the local election, which took place on October 17, two-and-a-half weeks after the quarter ended.

Of larger sums of money in the Q3 reports, the €40,000 spent on social media all told, with a sizeable chunk of this – close to €7,000 – spent by Tallinn mayor Mihhail Kõlvart (Center), in a bill as yet unpaid, ERR reports.

Hairdressers, fuel retailers and ERR all provide PR and advertizing services, according to some electoral alliances' reports

Costs incurred by some of the electoral alliances and their candidates are not always clear, however.

For instance Krisli Kaldaru, who ran for the "Meie vald " electoral alliance in Lüganuse municipality, Ida-Viru County, submitted expenses totaling €166 to a company called Edevuselaat OÜ, ERR reports. While the expenditure was categorized as PR, the company in question provides hairdressing and other cosmetic services.

Electoral alliances Raasiku Vald and Sinu Elva incurred expenses, of €756 and €2,863 respectively, denoted to a company which, according to the commercial register, ceased operations in 2017.

Meanwhile, the Kiili Külade Ühenduse electoral alliance running just outside Tallinn reported it had billed public broadcaster ERR for advertizing. ERR as a public entity does not carry commercial advertizing, however.

Mainstream parties were not immune to such oddities either; Conservative People's Party of Estonia (EKRE) local elections candidate Armo Hiie spent €139 euros in campaign money from AS Krooning, again to cover public relations expenses (Krooning in fact sells fuel – ed.).

EKRE spent most on 2021 local election campaign

EKRE itself spent the most on political activities in Q3 2021, followed by Reform, then Isamaa and then Center.

EKRE MP and party board member Siim Pohlak said that: "Reports for the first three quarters have now been released. EKRE started its local election campaign a little earlier than the parties."

Of other notable donations, Nikolai Degtjarenko, a candidate on the "Golos Maardu" electoral list, made the largest submission, at €20,012.

Tõnis Liinat, a Center candidate in the Pirita district of Tallinn, put up €27,839 for the party's campaigning.

Center's non-campaign-related expenses highest

Liisa Oviir told AK that the overall picture of party expenses for Q3 was now clear and that Center members stood out for non-campaign-related expenses.

She said: "The Center Party may have stood out due to the fact that, as a party, it did not actually spend much on advertising and political activities at all, but the members and candidates of that party spent a large amount on personal expenses."

Andre Hanimägi, Center's Secretary General, said that members made donations for the centralized campaign, while local candidates largely paid for their own campaigns. Hanimägi put the personal expenses for both party members and electoral candidates at €400,000 for the quarter, adding that some expenditures have been held over to Q4 and will appear in those reports.

ERJK deputy director: Irrational to equate electoral alliances to political parties

The picture with electoral alliances, however, is more opaque, ERJK deputy director Kaarel Tarand said, adding these are not as well-regulated as parties, while at the same time their raison d'etre is largely gone once an election is finished and councilors have taken up seats.

This makes in unreasonable to treat them in the same way as political parties, including in terms of their financial reporting, he said.

Tarand added that this was hampered by many alliances' administrative incompetence – to the extent that it mystified him in some cases how some alliances had been able to even register for the local elections, given the parlous state of their quarterly report.

The incompetence was just that, he added, and generally no intent to deceive was behind the shortcomings.

Tarand: Possible reforms might include barring national parties from local elections

At the same time, the obligation to prepare reports should not be removed, in the interests of avoiding further corruption in municipalities – including political parties conducting transactions under the guise of an electoral alliance.

Tarand said he hoped legislative changes would improve the situation, adding that the ERJK does not have sufficient resources on its own to monitor all areas, nor the legal basis to issue sanctions – or whose responsibility enforcing sanctions is, if they do get issued.

In many cases, unclear or dubious entries in reports do not require clarifying, due to their trivial nature, he added.

All in all, the situation is still rosier than it was when the ERJK was formed 12 years ago – before that there had been no monitoring of this kind, Tarand said.

Barring political parties, with all their advantages of resources and national profile, from local elections, or alternatively allowing electoral alliances to run in Riigikogu elections, might be another possible means of improving the situation, Tarand went on.

Electoral alliances only appear during local elections

Electoral alliances are peculiar to the local elections in Estonia, and present an alternative to voters to the mainstream parties, often outperforming them and providing municipal leadership as a result. The nexus between them and the national parties is somewhat blurred, however. For instance, while former interior minister Katri Raik became mayor of Narva with the Social Democratic Party (SDE) just over a year ago, she was later ousted in a vote-of-no-confidence, in August this year.

Raik however returned with her own electoral list for October's elections, and has been reinstated as mayor after the list's strong performance. Businessman Margus Linnamäe provided financial backing for Raik's campaign.

While it was in office with EKRE and Isamaa in the last administration, Center had proposed abolishing the ERJK altogether, and melding its primary tasks into the National Audit Office's purview – in other words nationalizing the independent body tasked with scrutinizing party finances. Conversely, the current administration has proposed broadening the ERJK's powers.

Liisa Oviir is a former SDE MP and was enterprise minister 2015-2016.


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Editor: Andrew Whyte

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