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Integrity of Political Party Financing in the Region Speech by Ambassador Murphy
December 13, 2023

Good morning, everyone.

I am very pleased to join you all today to discuss political party financing in Bosnia and Herzegovina.  Well-regulated, transparent campaign spending is necessary to sustain a functioning, fair electoral system.  Unfortunately, here in Bosnia and Herzegovina, political party financing is anything but transparent or well regulated, and this is one of the weaknesses of the country’s democracy.

I would like to thank Transparency International and the Central Election Commission (CEC) for bringing us together today.  The U.S. government is proud to support Transparency International’s work, along with other civil society organizations, to monitor, analyze, and report on election spending and practices.  This work plays a vital role in holding political parties accountable, supporting election authorities’ monitoring and enforcement efforts, and strengthening laws governing election integrity.  We are also proud to support the work of the Central Election Commission.  The CEC plays a critical role in safeguarding Bosnia and Herzegovina’s democracy, and it should not be the subject of political manipulation, something the United States will always strongly oppose.

The work of safeguarding Bosnia and Herzegovina’s democracy could not be more urgent. To say that people here have little faith in their political and electoral system is an understatement. The U.S. Agency for International Development’s 2022 National Survey found – as it has every year since we started conducting this survey in 2015 – that 75 percent of Bosnia and Herzegovina’s citizens believe that most political parties are self-serving and work to advance their own interests rather than those of their constituents. I am sorry to say that more often than not the peoples’ assessment of their political leaders and their parties is correct.

Thanks to the diligent efforts of civil society organizations, including Transparency International, we know that political parties grossly under-report donations and spending, and that they intentionally conceal where their funding comes from and where it goes. Since citizens lack information about the source of political parties’ and candidates’ campaign funds, they lack the opportunity to question them about their donors or assess whether parties and candidates when making official decisions are putting their voters’ or their financial backers’ interests first. Citizens cannot assess whether politicians are receiving personal financial favors in exchange for access or influence over the decisions they might make once they are in office.

We know that political candidates brazenly take advantage of weak regulations, poor oversight, and laughably small punishments to misuse public funds to pay for their campaigns.  We know that they pressure voters by conditioning their public employment and that of their family members for votes on election day.  We know that they feign concern about the general welfare of their constituents by providing one-time incentive payments to vulnerable groups in order to secure their votes.  In all of these instances, the incumbent political parties and office holders are treating the public coffers as their campaign piggy bank.  This provides those in power an unfair – and illegal – advantage over outside candidates, and in the last election this cost taxpayers hundreds of millions of Bosnian marks, money that should have been spent on public goods and services.  We know that the Central Election Commission is currently stymied by ineffective legislation as well as a lack of staff and funding, which prevents it from detecting and punishing campaign spending violations.

I could go on, but these issues are so pervasive, so well understood, and sadly tolerated, that I need not belabor the point.  This is not the kind of politics that the people of Bosnia and Herzegovina want or deserve.  It will not provide for the security or prosperity of this or future generations.  It will certainly not advance the country down the Euro-Atlantic path of integration.  In a healthy democracy, politicians must earn votes, not buy them, or subject citizens to blackmail by conditioning citizens’ access to a job, health care, education, or any other public service on their vote.

The bottom line is that campaign financing in Bosnia and Herzegovina is a maze of corruption, manipulation, and dysfunction that is failing the citizens of this country.  Politicians are gaming the system for their own benefit, or the benefit of their patronage networks, at the expense of the country’s democracy and citizens’ public welfare.  Bosnia and Herzegovina’s campaign finance system requires urgent, substantial reforms as part of a broader effort restore peoples’ faith in this country’s democracy, in its democratic institutions. This is especially important because the voters will got to the polls again next fall for municipal elections.

Shortly, Transparency International and the Central Election Commission will present a set of comprehensive political party financing reforms, which if adopted, could help put an end to this morass.  These reforms would align Bosnia and Herzegovina’s campaign finance legislation with international standards, which require a state to have strict rules concerning private donations, a threshold on parties’ expenditures linked to election campaigns, complete transparency of accounts, and meaningful sanctions for the parties and candidates that violate the rules.

The proposed reforms are based on guidance provided by expert organizations, such as the Council of Europe’s Group of States Against Corruption (or GRECO), the OSCE’s Office for Democratic Institutions and Human Rights, and the EU.  But they are also common sense.

They include requiring political parties to use a single campaign account, so all donations and financial activity are transparent and easily monitored, and they would introduce additional reporting requirements that provide voters visibility on political parties’ sources of campaign funding before they vote.  They include expanding the list of forbidden sources of funding to include, for example, public institutions and public companies that should not be spending their money on political campaigns. The money that goes, whether it is in the RS or Federation of BiH, to socially owned, or state-owned construction company, road company, telecommunication companies, that is supposed to be used on services, like roads or telecommunications. It is not intended to support the parties or particular candidate. That is, essentially, stealing from the taxpayer.

Importantly, these recommendations also focus on beefing up monitoring and enforcement, because no reform is ever effective if people are not held accountable to abide by it.  The reforms would increase financial and personnel resources for the CEC’s Department for Auditing the Financing of Political Parties so it can properly supervise campaign spending, identify irregularities, and sanction violators.  They would strengthen cooperation and coordination among the CEC, taxation authorities, and law enforcement agencies, and require the CEC to report suspicious acts to these institutions.  And they would increase penalties for violations of the law.  This last point is especially important.  Political parties and individual candidates must pay a real price for their anti-democratic behavior.  If the consequences to them are not serious, their anti-democratic behavior will continue, and the country, the people of the country, will continue to suffer the consequences.

I know there are some lawmakers here today. I urge all of you to embrace and adopt these reforms as soon as possible.  It is well past time to enact positive change that not only bolsters your legitimacy as elected officials, but also helps ensure that voters’ choices are implemented and respected.  That is, after all, your job. Your citizens need you as lawmakers and leaders to summon the political will and courage to act in their interest and in your country’s interest.

Folks, ask yourself how you got here.  Bosnia and Herzegovina’s electoral system has become dysfunctional, and the corruption clouding campaign financing is part of that dysfunction.  When the people in power misuse taxpayer money to keep themselves in power, when special interests use campaign donations to bribe politicians to do their bidding, and when no one is held accountable for flouting the rules, then you cannot have a free and fair election.  That is not democracy.

Over the years certain politicians have built, and have gone to great lengths to maintain, a system that helps them and their respective parties remain in power, and that includes intentionally corrupt campaign finance practices.  They know, and we know, that they would not be elected if they campaigned in a free and fair manner.  There is a reason they are resisting reforms: self-preservation.  A self-preservation that comes at the expense of the welfare and well-being of this country’s citizens, the people they claim to represent.

I will leave you with one more statistic.  Another recent USAID poll found that one-third of Bosnia and Herzegovina’s citizens are dissatisfied with the services their governments provide.  And yet, we see the same people and political parties remain in power, year after year, election after election.  In a well-functioning democracy, with a transparent, regulated campaign finance system, citizens would have greater power to vote these incumbents out of office, if they are dissatisfied with their performance, and to elect new leaders who would actually work on their behalf.

I believe – and I am confident that all of you here agree – that this is possible here in Bosnia and Herzegovina. There is no reason why Bosnia and Herzegovina can’t have free and fair elections, can’t reform its campaign finance system. Today, you are going to be handed, in essence, a proposal to do that, that is done. The work is already done. Takes little to no time to introduce the legislation and vote affirmatively for it, if you to see positive change in BiH. The U.S. government is committed to supporting those who are working to make that happen, and to help Bosnia and Herzegovina realize its full potential as a democratic, stable, multiethnic society firmly anchored in Euro-Atlantic institutions. Adoption of this legislation would be a step in that direction.

Thank you.