13 June 2014, Tbilisi – TI Georgia’s new report reviews the issues related to political party finance and their accountability. The research analyses the annual declarations of political parties participating in the 2013 presidential elections, their election campaign fund revenue and expenses. It also underlines the tendencies of political party donations for 2014.

For the purposes of the research the candidates were chosen from the political parties that received more than 10% of voters in the 2013 presidential elections: 1. Coalition Georgian Dream, includes 6 political parties; 2. United National Movement and 3. Democratic Movement – United Georgia.

1. Revenue

The leading party for 2013 was Georgian Dream receiving revenue in total amount of GEL 9 million. The second in this list is the United National Movement receiving revenue of approximately GEL 5 million. The third was the Democratic Movement – United Georgia with the revenue of GEL 3.5 million.

To compare it with previous years, the Coalition Georgian Dream in 2012 received GEL 9 million, which also included revenue of several months for 2011 from the moment of the coalition’s establishment. However differences occur with regard to “National Movement”, the revenue of which for 2012 was six times as much as for 2013. The analyses show that the transfer from the ruling political party to the opposition deteriorated “National Movements” financial position. In previous years the revenue of “Democratic Movement-United Georgia” was incomparably low. This was conditioned by the fact that the political party did not participate in previous elections.

1.1. Donations

The analysis of donations received by political parties for the year 2013 and the first 6 months of 2014 was conducted to underline interesting tendencies of political party donations.

From January 1, 2013 to June 1, 2014 the Georgian Dream Coalition received donations totalling GEL 8,302,826 from 680 donors (GEL 3,735,442 in 2014 from 370 donors). While in the same period of time “Democratic-Movement” received GEL 2,671,704 from 426 donors ( from one donor GEL 1520 in 2014). As for the United National Movement they received GEL 701,142 from 306 donors (GEL 271,149 from 216 donors in 2014).

To compare these numbers with the data of previous years it is obvious that the donation of United National Movement in 2013-2014 decreased by 40 times. This proves that the donations received by the ruling political party in 2012 may not have been voluntary donations. The case of “Democratic Movement- United Georgia” is also interesting. It received donations of approximately GEL 2.5 million in 2013 and GEL 1520 from 1 donor in 2014.

However, legal entities are not main donor figures, as we checked the donations in the database. The results show that 387 donors of different parties were affiliated with 875 companies. Donations from these entities amounted to a total of GEL 5,119 662. Out of 875, 102 companies received public contracts of GEL 27,140 114 in 2013-2014, among which they received competetive tenders of GEL 11,654 908 while via simplified direct procurement –- GEL 15,445,206.

2. Expenses

Unlike 2012, in 2013 Georgian Dream had the largest expenses (around 6.5 million GEL). The second largest expenditure was made by the UNM (around 5 million GEL), while the third was made by the Democratic Movement (around 3 million GEL). Unlike previous years, when the expenses made by the ruling party were significantly higher than the expenses of the opposition parties, in 2013 the expenses of the key political parties did not vary that much.

It is also worth mentioning that the expenses made in 2013 were considerably lower than the expenses made in 2012. This can be explained by the relatively low competition shown in the 2013 presidential elections compared to the competition in the 2012 parliamentary elections.

According to the annual declarations submitted to the state audit office, in 2013 Democratic Movement has not issued any bonuses to its employees and has only spent 15,500 GEL in terms of salaries (around 0.5% of its total expense). In light of the active election campaign conducted by the Democratic Movement during the 2013 presidential elections, this number raises doubts.

In 2013 the largest expense for advertisement was spent by the Democratic Movement – around 2 million GEL; The second largest spender on advertising was the UNM (1.3 million GEL); The third biggest was the Georgian Dream (around 715 thousand GEL). In 2013, most of the money was spent on TV advertisement and the least was spent on internet advertisement and on branded accessories.

Since 2011, the share of “Other Expenses” has considerably decreased. This is due to the introduction of quite detailed declaration forms which demands more precisions on the expenses spent. In 2012, some political parties either did not declare such expenses or the percentage was quite low (1-5%). Such tendency continued in 2013 as well.

The report is made possible by the generous support of the United States Agency for International Development (USAID). The contents are the responsibility of TI Georgia and do not necessarily reflect the views of the International Foundation for Electoral Systems (IFES), USAID or the United States Government.