Wednesday, April 11, 2012

The best democracy that money can buy

[with acknowledgements to Greg Palast’s 2003 book of that title]

How much does politics cost? Italians and Americans have very different figures but they both have the same answer… too much. And in both countries it is democracy that is brought into disrepute.

The present rot in Italy began a long time ago, when Parliament reintroduced public financing of parties within months of a referendum which had abolished it in 1993. They called it “elections campaign reimbursements”, a fiction to begin with made even more absurd when they did not even have to show their expenses for the campaign. The absurdity was cubed when we learnt that the “reimbursements” ran for five years even when the legislature only lasted two as in 2006-08 (the clock obviously started again after the 2008 elections). Last month we also learnt that a party does not even have to exist any more in order to receive the taxpayers’ manna.

Since 1994, the different groups received €2.5 bn but accounted for less than €600m with bona fide election expenses. The rest went into the party kitty. The combination of corruption in the now defunct Margherita and the Northern League with the swingeing tax increases and benefit reduction have meant that political party approval ratings are below 10% and sinking. A bill to change the public financing of parties will probably be presented to Parliament this week but is more likely to be a fudge than any serious reform. None of the parties is willing to give up public support nor their control over many public resources.

After the Lockheed bribery scandals in 1974, explained because of the need to pay for election campaigns, Parliament introduced public funding. This was abolished in the April 1993 referendum (90.3% for abolition)in the wake of the kickback scandals only to be reintroduced later the same year as “reimbursements”. Parliament revised an existing law on electoral expenses so that €47m were paid out for the 1994 general election.

In 1999 the centre-left introduced electoral expenses at 800 lire per year per vote received. And three years later, in 2002 the Berlusconi government more than doubled the reimbursement to €1 (lire 1,936) for European Parliament elections, Chamber, Senate and Italian regional elections. For a total of almost €50m p.a.
The parties are given a “reimbursement for electoral expenses” which are paid yearly over the five years following the elections. In 2006, the outgoing Berlusconi government introduced a small amendment which means that if there are early elections, the parties are paid for the original elections and for the early ones which is exactly what happened in 2008.

On top of all this, there is the indirect financing of politics. Friends, relations and political supporters are given jobs either in the public administration (anything from road sweepers on the town council’s wages bill to senior civil servants in ministries) to the very popular “consultants” or as elected representatives. Berlusconi’s “dental hygienist” and alleged procuress for his Arcore parties, Nicole Minetti is a regional councillor for Lombardy (salary €12,000 pm) as was Umberto Bossi’s son Renzo until Monday; other female friends of Berlusconi are in the European Parliament.

The shows of indignation by politicians at the moment is amazing. You remember the old one, the Spaniard who asks the Irishman if they have a word for maƱana. “We would” replies the Irishman, “but without its sense of urgency”. Is there a word for chutzpah in Italian? “Of course, but without its sense of ethical rigour”.

This is another proof of my contention that chutzpah is actually originally an Italian word. It is only now that once again after two party treasurers have been shown to have been rather too relaxed about the public financing of their parties that something might be done.

The Genoese comic Maurizio Crozza was already saying it five years ago when he asked “how much does politics cost?”. The style was very funny but the detailed and accurate figures wiped any smile off taxpayers’ faces; and the situation has only got worse. All the numbers he used were taken from the bestseller La Casta, the bestseller by two Corriere della Sera journalists, Gianantonio Stella and Sergio Rizzo. Yesterday, Rizzo wrote yet another horror story explaining that tax relief for donations to parties and party newspapers receive 51 times more tax relief than donations to research on child leukemia. He adds bitterly that there are some deputies who think that even that is not enough tax relief.

In the US, things are different. It is true that the taxpayer makes only limited direct contributions to campaign. But all donations are tax deductible so in the end, the taxpayer is indeed paying. The damage to American democracy is not in the illegal use of those funds it’s the uncontrolled quantity of funds. Since the Supreme Court’s Citizens United verdict in 2010, corporations may contribute unlimited funds to election candidates via supposedly independent Political Action Committees (PACs). The power of PACs has been shown by Romney’s ability to outspend all his opponents on the airwaves.

In France, starting on Easter Monday television and radio media access is strictly limited and controlled for all ten presidential candidates, a stark contrast to both the US and Italian campaign and financing methods. There are flaws in France, too, no doubt, but for the moment neither Italy nor the US give the idea of democracy a good name.

2 comments:

italpolblog said...

I am grateful to David Kertzer for a correction - US contributions to parties are NOT tax deductible
http://taxes.about.com/od/deductionscredits/a/CharityDonation.htm
jw

demata said...

Italy is a cleptocracy. Read this, it'll be interesting. Bye
http://demata.wordpress.com/2012/04/20/italy-a-cleptocracy-as-a-supreme-court-judge-wrote/