The Estonian Political Parties Financing Surveillance Committee (ERJK) decided at a meeting held on Thursday to ask the Centre Party, Reform Party and Social Democratic Party (SDE) how they plan to sort out their financial problems.
Committee deputy chair Kaarel Tarand told ERR that parties had a lot of expenses before Riigikogu elections they didn't really have the money for.
"The situation now is that both the Centre Party and the Reform Party owe over half a million euros, while the Social Democratic Party owes more than €100,000. These bills have been outstanding for over six months and should be paid. The committee perceives this a problem, irrespective of whether parties owe a single major creditor or several smaller ones," Tarand said.
The deputy chairman of the committee said parties' creditors are usually media and communication partners who normally do not demand payment as forcefully as normal business practice dictates. He added that this means major parties can live on debt for a very long time.
"The committee finds this is not a sensible or beneficial situation for society as poor party finances and deep deficits create temptation for corruption. Estonia is no exception here. Everyone looking at funding reports and finding parties virtually insolvent can be tempted to try and tie donations to some other matters that while entirely legal, can benefit someone else," Tarand said.
He added that it is a bad sign when parties spend more than they can afford and cannot pay their bills despite receiving a lot of money from the state budget.
ERJK decided to ask Centre, Reform and SDE how they plan to pay their debts. Tarand explained that while parties are allowed to borrow from credit institutions, using services and not paying for them could be interpreted as illicit donations.
"Parties say that their intentions are good and that they mean to pay. However, it is not happening quickly enough and looks bad in public. It is similar to a person who does not pay their electricity or phone bills. Telling companies' customer service centers that you plan to pay them eventually usually doesn't help. Parties want to be the ones in charge of allocating major funds, but this means their own house should be in order first," Tarand said.
He said that amending the Political Parties Act could be one way of improving parties' financial situation, which is something ERJK has proposed to the Riigikogu.
"We need to contain the situation to avoid the temptation of parties to run up substantial debt, avoid a funding race and go over parties' financial situation. I find that the ban on legal person donations for parties introduced 15 years ago has not served its purpose. It was hoped to deliver more stability, while the financial situations of parties have only gotten worse over the years," Tarand said.
Editor: Marcus Turovski