Year: 2019

Political parties are receiving money from Property Administration for renting office space on monthly a basis. This is done without any legal act or criteria such as number of members in Parliament, number of party employees, location where the office could be leased…

Political parties, beside the money for regular work which they receive from the state budget and from the Property Administration (PA), also get money on monthly basis to pay rent of office space. This is done without any legal act or criteria such as number of members in Parliament, number of party employees, location where the office could be leased…

Basis for rent payment, which costs taxpayers about half million euros a year, Interparty Agreement on the terms, manner of providing and using space for the work of parliamentary parties in the Republic of Montenegro, signed 26 years ago. The agreement was signed by the DPS and several parties that no longer exist on the political scene – ”Narodna stranka”, ”Liberalni savez” i ”Srpska radikalna stranka”, as well as the former President of the Parliament of Montenegro, Risto Vukčević.

Information which ‘’Vijesti’’ got on the basis of the Law on Free Access to Information from PA, show that opposition parties receive the most money on this basis, but also that there is no ruling DPS on the list. In the past, this party took ownership over the assets of the League of Communists, from which they profited, because part of that property they are renting and thus receiving significant incomes. Also, the once united SDP managed to move in permanently into the premises of the League of Communists.

President of the the Committee on Comprehensive Reform of Electoral and Other Legislation, Branimir Gvozdenović (DPS) and Deputy President Strahinja Bulajić (DF), didn’t want to respond at Vijesti’s question whether the committee will address this issue in order to specify the criteria for financing the parties.

State Audit Institution’s (SAI) recommendations

In 2010, the State Audit Institution warned that giving money to parties for rent is ungrounded. That’s because the Budget Law allocate money for their work.

The recommendation to abolish this practice remained only on paper. After nine years, SAI has the same opinion.

SAI’s Senate member, Nikola Kovačević explained for ”Vijesti” that by Article 10 of the Law on Financing Political Entities and Election Campaigns provides, inter alia, that the expenses of ordinary work of the parties include expenses for administrative and office payments, including the costs of renting premises for work.

“Article 7 of the Law defines that the money for the financing of employees in the caucuses and providing of office premises for their needs is provided by the Parliament, and that when it comes to the office premises for the needs of caucuses in local Parliaments, PA is in charge. The audits of the financial operations of the parties found that in most cases PA paid for the rent of office premises, after conducting the public procurement procedure for the lease of premises, while some parties were given office premises for use (DPS and SDP) according to the Article 5 paragraph 1 of the Law on property of former socio-political organisations” explained Kovačević.

Senator said that the recommendation of the Supreme Audit for solving this issue is by amending the Law in unique way.

By the decision of the Ministry of Finance on the amount of the budget money for financing the regular work of parties for this year, the state budget allocated 379,47 thousands per month, i.e, 4,55 million euros per year.

On the basis of Law on Free Access to Information, “Vijesti” asked PA and all municipalities to provide information on their monthly expenses, since the Montenegro’s independence, for renting office premises, by what criteria they are giving money and in what amounts.

Municipalities that did not respond to the FOI request municipalities are Bijelo Polje, Petnjica, Rožaje, Kolašin, Kotor, Tivat, Ulcinj, Danilovgrad, Nikšic, Plužine and Andrijevica.

The conducted data shows that the PA doesn’t keep a record on how much, since 2006, political parties costed the state budget, while in the municipalities situation is different. Some municipalities don’t allocate money for rent of the premises, but only for regular work, while others have this kind of expense in the budget.

PA, managed by Blažo Šarančević, allocates about 44,000€ to parties for rent per month, or about 528,000€ per year. This data is from 2018.

Analyse showed that some parties receive more than € 6,000 per month or the option to rent several premises. So, for example, DNP, whose leader is Milan Knežević, costs taxpayers about 6,210 euros a month for two office premises, while first place holds Aleksa Bečić from Democrats, who pays around 6,610 euros for the lease of four offices. The DNP has three members of Parliament and the Democrats have seven. According to the data, the Knežević’s party received 2,546 euros in 2017 and one paid office space, while Bečić rented two premises for 4,731 euros.

The ”Demos” with one member of Parliament , Miodrag Lekić, receive almost 4,500 euros a month, and in 2017 the same lessor received 2,880 euros. Comparing the most recent data from PA with the ones in 2017, for PZP, Nova, BS and Albanian minority party, the rent was increased. The lessor of SNP’s offices reduced the rent from 6,120 to 4,623 euros.

Šaranović claims that he does not have the information about how much money since independence each party has received.

“The lease contract term and the use of the office premises is until the lease expires. PA acts in accordance with the document ”List of categories of registration materials with time limit of keeping PA”, explained PA.

Šaranović doesn’t have an answer to the question whether the Interparty Agreement from 1993 is a proper document on the basis of which money is paid to parties, whether it is necessary to define criteria for the distribution of money and why the PA hasn’t raised the issue to the date, so that taxpayers’ money is spent properly.

Situation in municipalities 

The agreement from 1993 does not apply to municipalities. But it does not bother some of them, that despite the fact they do not pay their tax obligations on a regular basis, to pay the parties rent.

An analysis of the documents submitted by the municipalities of Žabljak, Šavnik, Plav, Mojkovac, Berane, Pljevlja, Cetinje, Podgorica, Herceg Novi, Budva, Bar and Gusinje shows that some municipalities only give a money for the regular work of parties, while other municipalities also pay to the parties “subtenants life”.

Žabljak has paid 49,327.82 euros for the lease since independence, and they are currently paying rent for the SNP, PZP and DSS at the amount of 80€ a month and for the Democrats 105.84€.

The municipality of Žabljak is the only one which have a specific decision to provide money for leasing the premises of the parties, where the criteria are clearly specified. According to the decision, if the municipality doesn’t have its own premises then it gives money for the lease.

”The amount of rent financed from the municipal budget is six euros per square meter of leased space, as follows: from 1 to 4 councilors – the rent may not exceed 80 euros, from 5 to 10 councilors – the rent may not exceed 150.00 euros and for over 10 councilors the rent may not exceed 200 euros” says a decision submitted to the ‘’Vijesti’’ through FOI request, from the Secretariat of Finance.

Local government Secretariat of the Šavnik said that they only give money for the regular work, but not for the rent of office premises. The same response came from Plav, Berane, Gusinje and Podgorica.

“The parties, according to the Law on financing political entities and election of campaigns, pay office space rent from the money that they receive from the budget for regular work, so there is no obligation for the Capital to additionally provide them money for office space rent,” they said in the municipality of Podgorica.

Mojkovac has paid 55,200 euros since independence. For the purpose of rent payment, DF, URA and Democrats get 100€ a month. Municipality of Mojkovac allocates the money following the decision on financing political parties.

Since independence, Pljevlja spent 77,955€ on rent of office spaces for parties and they do not have a decision on what criteria the money is given. Currently, they pay to Democrats and NSD 300 euros each per month, to BS and SNP 250 euros each, and the Pljevlja Movement 200 euros.

Cash register of Herceg Novi received 328,597 thousand euros since 2006.

“This data can be analysed by years, and not by parties, because it is a long period of time to know who was lessor over more than 10 or 12 years ago. The money was paid directly to the lessors and the lessors themselves changed. ”The payments are based on the Law on Financing of Political Entities and Election Campaigns ”, they said from local government of Herceg Novi.

This municipality currently allocates 900€ to the DPS, 750€ to the Democrats, 400€ to the PZP, 450€ to the Novska List, 400€ to the NSD and 350€ to the SDP coalition ”Vazda”.

In Budva, they said they don’t have any specific criteria for doing that. “SNP, PZP, Democrats and Demos receive € 2,543€ a month, the DPS, the URA/LP/SDP coalition, Montenegro and the Social Democrats receive 2,580€ and the NSD 550€,” according to the Budva municipality. From Cetinje municipal’s local Parliament they said that they are currently giving 180 euros for Democrats, the SDP 150 euros, and for URA 200 euros. They received information from the Secretariat of the Finance, and they don’t have information on which criteria they are allocating money for rents.

The municipality of Bar pays rent to Democrats (280euros) and the BS (300euros), while they gave municipality owned premises to other parties without any compensation.

DPS profited

Member of Parliament from the United Montenegro (UCG) Goran Danilović said the agreement (memorandum) is a result of the former DPS’s absolute ownership over all objects and property of the League of Communists.

“They did not want to share the property with anyone, they just registered themselves as owners. The only way for other parliamentary parties to get space for use, was to rent it. DPS rented League of Communist’s property and made huge money, while at the same time the budget financed premises for all of the parties… We all accepted this as part of a political agreement and legacy. I think that today this must be regulated differently. UM doesn’t receive money for regular financing, nor for renting office premises,” Danilovic said.

Danilović adds that they are not jealousy, but something has to be changed.

“Political parties that in the meantime start collapsing, continue to receive money from the state budget, regardless whether they preserve the unity, regardless if they have a proper, internal, legal structure. It is necessary to have money for renting the party premises, but it is necessary to limit it because no one needs hundreds and thousands of squares to function properly ” Danilović said.

He consider that everyone must follow procedures, and that the tender for the allocation of premises is justified.

’’However, we must keep in mind that the biggest winner in the whole situation is DPS. For decades, the ruling party rented inherited assets, to the Government and municipalities. Today, for example, the same people are demanding the proof of ownership over temples and religious buildings built over 1918 from religious communities representatives, while the DPS became owner of their premises in the most brutal way – by registering former communal property to themselves, and at the same time handing it over to state authorities, thus putting a hand in the pockets of taxpayers ” pointed out Danilović.

Miodrag Lekić, leader of ‘’Demos’’ said that “if this matter is defined by regulations and if its norms are respected, then there can be no talk about illegality, not even abuse.” “This does not mean that the regulation itself should not be reconsidered, especially because it was long time ago when it was adopted. It is an opportunity to look at all the elements of this issue, especially the rationality of it, and therefore – saving the communal funds, which should be the access to all social and economic activities financed from the budget” said Lekić. He said that with adopting the new regulation, comparative practices in democratic countries should be consulted.

It’s a fact that the state, on the basis of unpaid tax debt, takes business premises in which it provides accommodation to state bodies, pensioners… and until now no one thought about how to save taxpayers’ money and to put some political party in one of these premises.

In Serbia they don’t pay rents from state budget

From the Ministry of Finance of the Republic of Serbia, they said for Vijesti, that parties don’t receive money from the budget to pay office rent. They explained that on the basis of the Law on Financing of Political Activities (article 16) it is regulated that money from public sources which is provided to fund the regular work of the parties whose candidates have been elected for Members of Parliament and local Parliaments, amounts 0.105 percent of tax revenues of the budget of the Republic of Serbia, tax revenue of the autonomous province budget, ie, tax revenues of the municipal budget.

“The parties allocate this money in accordance to provisions of the Law on Financing of Political Activities (they are not paid separately to cover costs of renting). Agency for prevention of corruption controls how parties spend money, and in case of illegal spending, initiates proceedings against parties” said representatives of Ministry of Finance of the Republic of Serbia. From the Ministry of Finance of the Republic of Croatia, “Vijesti” didn’t get any answer.

Bečić is renting office premises from person arrested in action ”Klap”, BS renting from own financier

It’s interesting that parties are mainly renting office space from their own members, activists, financiers, voters… which raises the question of whether this is political corruption.

According to the PA’s data, the Bosniak Party is renting a premises from Sadrija Dacić, who, according to unofficial sources Vijesti, is its financier.

SNP rents office premises from ”Pop Comerce” owned by Momir Popović, from whom former SNP leader Srđan Milić purchased office premises for the political party. URA is paying the rent to Mirko Rakčević, cousin of Žarko Rakčević who is one of the founder of this party.

Democrats, whose leader is Aleksa Bečić, are leasing offices from Aleksandar Ivanović, recently arrested by the Special Police Department with other other persons in the police action ”Klap”, by the orders of the Special State Prosecutor’s Office, based on suspicion of having committed the criminal offence of creating a criminal organisation, a criminal offence of tax evasion, and the offence of causing bankruptcy fraud.

Authors: Danijela Lasica and Marija Mirjacic

This article was produced within the project ‘’Money Watch – Civil Society Guarding the Budget!’’ that is implemented in partnership with Institute of Public Finance from Zagreb and NGO New Horizon from Ulcinj. The project is financially supported by the European Union and co-financed by the Ministry of Public Administration of Montenegro.

This article was originally published in daily newspaper Vijesti, and at Vijesti’s portal.