Discussion on state financing of parties ‘only if PN ends Cedoli scheme’

The Maltese Government would be willing to discuss proposals on state funding of political parties, only if the Nationalist Party agrees to end its Cedoli scheme, according to a spokesman for the Office of the Prime Minister.

Launched in 2016, the controversial Cedoli scheme allows the PN to receive loans of €10,000 that it will repay over the next 10 years at an interest of 4%.

Last July, the PN announced that it had collected some €3.5 million through the scheme, which has been repeatedly criticised by the Government and the Labour Party, given that donors’ names are not disclosed to the public.

The Government’s statement comes in reply to statements made by PN leader Adrian Delia in recent weeks.

In comments to MaltaToday, Delia, when told that many people view political parties as having too close a relationship with business interests, said that if this was the case, then perhaps it was time to discuss state funding.

Speaking on current affairs programme Xtra last Thursday, Delia elaborated on the point, explaining that parties could not survive without donations from businesses and the general public. “We need to collect money for the party to be able to function and bring across its message.”

He added that the country could decide if it preferred the current system, or whether it was prepared to move to a system where parties are funded by the state.

“When things are obvious I don’t see why everyone is afraid to speak about them and bring them to the discussion table,” he said.

Pressed on whether he was prepared to put the issue on the national agenda, Delia said the country was at a stage “where we have to see what people think is the most democratic and transparent way” of financing parties.

He said that while Malta already had a party financing law in place, rather than know who had donated to parties, it was important to know whether there was dependency on the people donating money.

When contacted about the matter, the Office of the Prime Minister (OPM) noted that it had introduced party financing laws during the last legislature, “following 25 years of inaction by the previous administration”.

A pre-requisite to this debate is the Opposition coming clean on its very own Cedoli scheme by publishing details of participants and discontinuing the system

Prime Minister Joseph Muscat has in the past declared himself to be in favour of state funding of political parties.

“A pre-requisite to this debate is the Opposition coming clean on its very own Cedoli scheme by publishing details of participants and discontinuing the system,” the spokesman said.

Asked whether the Government would support broadening the scope of the current party financing law to better cover companies owned by political parties, the OPM stressed that the current law already “covers any organisation which the political parties directly or indirectly exercise effective management and control over”.

Last year, lawyer and former Nationalist MP Franco Debono, one of the main authors of the party financing law, had told MaltaToday that too comprehensive a law at this stage would “kill political parties”, stressing that the current laws were already a “big shock to the system”.

Under the current legislation, a donation is defined as any benefit received by a political party, any individual or any organisation, corporate or otherwise, representing the party. However, it does not regulate commercial relationships between these companies and third-party companies.

In fact, a year ago it was revealed that the db Group had effectively made a donation of €70,800 to Media.Link, through which it was paying the salaries of two top PN officials. The PN has maintained that the payments were part of a commercial relationship between the two companies.