Opposition demands ban on party donations by secretive trusts

The opposition today proposed that non-residents and companies or trusts whose shareholders cannot be traced are prohibited from donating money to political parties.

As the committee discussion on the party financing bill continued, opposition MP Claudio Grech said such donations would “expose the country and the political system to unnecessary risks” and proposed a new clause to prohibit donations from people who do not vote in Malta and companies or trusts whose ultimate beneficiaries are unknown.

Attorney General Peter Grech explained that while the draft bill does not make a distinction between Maltese and foreign citizens, he said that other laws already prohibit “alien” individuals and companies to donate money to political parties during electoral campaigns.

In reaction to the opposition’s proposal, justice minister Owen Bonnici said that although he had no qualm in allowing foreign citizens and companies to donate money to political parties, the proposal to prohibit donations by secretive trusts would be “studied.”

Moreover, Bonnici said, he was open to the possibility of widening the definition of anonymous donations to cover trusts and other companies whose beneficiaries are untraceable.

Earlier, the committee agreed to have all donations between €50 and €500 registered, with parties obliged to register the name and ID card number of the donors.

The draft law proposes that donations of €50 or under should remain anonymous as long as these are collected in public events organised by a party.

Any donation over €50 needs to be registered but can remain confidential unless the electoral commission has reasonable proof to carry out an investigation and request the details of the donations in the band.

Donations between €500 and €7,000 needs to be registered but do not need to be individually disclosed to the Electoral Commission unless requested. Parties are obliged to automatically disclose details of donations over €7,000 while anything over €40,000 is illegal.

Nationalist MP Claudio Grech argued that this effectively means that all donations under €500 are anonymous because the names of the donators cannot be revealed and cannot be traced. “We don’t agree with anonymous donations between €50 and €500,” he said.

AD deputy chairperson Carmel Cacopardo concurred and said that all donations under €7,000 would remain confidential unless the commission demands otherwise.

Denying that this was tantamount to a loophole, Bonnici argued that there should be a difference between anonymity and confidentiality and said that the current structure allows people to donate up to €500 without having his name disclosed as long as the electoral commission does not have reasonable proof to investigate the donations.

The opposition also floated the proposal to limit donations to €40,000 over the period of three consecutive calendar years instead as the draft law allows the donation of €200,000 from the same source in one single legislature.