We don’t know where 99% of political party donations come from

Over 99% of donations made to Malta’s political parties go unattributed, according to a Europe-wide analysis of where parties get their money from. 

A new cross-border project scrutinising party funding in the EU has found that the vast majority of donations to Malta’s two main parties come from unknown sources. 

In Malta, parties only need to declare the source of a donation if it exceeds €7,000. But when looking at the data since the last European election, only three donations exceeding this amount were declared by the Labour Party and Nationalist Party. 

These donations included an almost €15,000 donation made by Opposition leader Bernard Grech to his own party, and two donations of €10,000 each to the Labour Party by Schembri & Sons Ltd and Pavi Supermarkets. 

MaltaToday previously reported on Pavi’s €10,000 donation to the Labour Party. However, the company went on to issue a statement saying they made a donation of the same amount to the Nationalist Party. 

Despite few donations exceeding €7,000, both parties have collected serious cash donations over the years. Between 2019 and 2022, the Labour Party collected over €6 million in donations, with only €20,000 of that amount actually accounted for. 

The Nationalist Party has been less scrupulous with their financial reports. Indeed, the party has not submitted their financial accounts in three years. But during 2019 and 2020, the party received over €2.6 million. 

Maltese law defines a donation as any benefit received to support the activities or functions of a political party. This includes benefits received by the party itself, its members, candidates, or any affiliated organisation controlled by the party. 

Donations can take the form of gifts of money or other property, sponsorships, money spent by donors on expenses for the party, its members, or candidates, loans given on terms more favourable than standard commercial terms at the time and property or services provided at below market value or on non-commercial terms. 

However, inherited property or voluntary and unpaid work are not considered donations. 

Despite the wide definition at law, no political parties have reported any in-kind donations in their financial reports.

PN’s missing reports 

The Nationalist Party, to which EP president Roberta Metsola belongs, has not been complying with relevant laws since 2020. 

When elected, Bernard Grech promised that he would “be making proposals in parliament on reforms to the law on party financing to introduce more safeguards to prevent parties from falling prey to big business.” 

Instead, the party never published its accounts ever since. 

The PN has ignored five requests by the Electoral Commission to publish its accounts and donation reports for 2021 and 2022

Indeed, the Nationalist Party ignored five requests by the Electoral Commission to publish its accounts for 2021 and 2022, according to the commission’s reply to a judicial protest filed in court earlier this year. 

The judicial protest was filed by Labour MEP candidates Daniel Attard and Marija Sara Vella Gafa asking that the PN regularise its position at law. 

The commission said it asked the PN to file the necessary documents as required at law in letters dated 18 January 2022, 6 April 2022, 12 January 2023, 10 April 2023 and 14 June 2023. 

In its court reply, the commission said its powers to sanction political parties that fall foul of the law have been curtailed by a constitutional court ruling from 2018. The court ruled back then that the commission could not act as investigator, judge and jury on political party financing investigations since this breached the right to a fair trial. 

Since then, the commission has been powerless in enforcing the law and will remain so unless parliament makes the necessary legal amendments. So far, no changes are being prospected.

For Follow the Money’s cross-border project Transparency Gap: The Funding of Political Parties in the EU, MaltaToday, together with 25 other outlets and 50 journalists, conducted an in-depth analysis of where parties in the EU get their money from. In the runup to the European elections, the project scrutinised the incomes of almost 300 political parties, diving into 1,200 financial reports and more than 500,000 donations to uncover how political parties are financed, who funds them, and how transparent the accounts are.

This article was produced with support from OCCRP and the Daphne Caruana Galizia Foundation.