Financial Transparency Evasion Practices As Seen in Political Parties and Election Campaigns in Russia

Andreichuk S.V.


This paper presents the results of the author's research and public inquiries into the financial transparency of political parties and campaign funds. The paper is based on data about the practice of bypassing or directly violating legislative norms that control party and election campaign funding, as well as the practice of illegal state funding of parties and candidates. The author attempts to summarize all gained experience and develop a coherent set of recommendations for changing the legislation.

The need to ensure transparency in the funding of political parties and candidates and to ensure equality of opportunity during elections is recognized internationally as one of the prerequisites for free elections [5; 10]. The issue of transparency in political finance is reflected not only in the documents of the Council of Europe and the Venice Commission in particular but also in anti-corruption instruments such as the UN Convention against Corruption. The UN Convention proclaims that member states should "consider taking appropriate legislative and administrative measures ... to enhance transparency in the funding of candidatures for elected public office and, where applicable, the funding of political parties" [40]. The Constitutional Court of Russia also recognizes the need to establish rules for the funding of parties and election campaigns in order for the state to be able to guarantee citizens the right to free expression of their will [19; 20].

Today, political finance issues draw the attention of researchers, journalists, and civic activists all across the world. For example, the catalog on the website of the International Institute for Democracy and Electoral Assistance (International IDEA) alone contains 40 such publications in different languages [4]. Moreover, International IDEA has developed a global database of election finance legislation [31]. There are specialized resources that reveal information about politicians' donors — resources created by official bodies, journalists, and citizen investigators alike. For example, two such databases are available to voters in the US: one created by the Federal Election Commission [3] and Opensecrets, a civilian-run website [28]. In Russia, an attempt to create a similar database was made by the Movement for Defense of Voters' Rights "Golos" [22] (recognized in Russia as performing the functions of a foreign agent).

At the same time, the topic of political finance control remains relatively new compared to most other topics in political studies. At the very least, the Venice Commission pointed out in 2002 that the interest in the issue of political party funding was "relatively recent" [17].

Academic analysis of the funding issue in Russia has so far focused mainly on several aspects. First, the legal side of the issue gets analyzed, without much attention to actual established practice, which may differ significantly from the norms declared in the legislation [29; 34]. An attempt at a multifaceted analysis of the party funding issue can be found in the works of Fyodor Dolgikh [9], Yurii Korgunyuk [21], and several other authors.

For example, Yurii Korgunyuk noted that state funding of parties in Russia has become a "domesticating" and "blood draining" tool the authorities use on parties, thus weakening their ties with society [21: 117]. Although analyzing direct state funding of political parties is not the intention of this paper, we must point out that the situation has deteriorated even further since 2010. While the share of state subsidies in the budget of United Russia amounted to 23.5% in 2008 and to 27% in 2009 [21: 117], it was followed by a significant increase: 36% in 2010, 22.6% in 2011, 68% in 2012, 63% in 2013, 52% in 2014, 69% in 2015, 43% in 2016, 80% in 2017, 60% in 2018, 62% in 2019, 45% in 2020 [37]. It is thus evident that there was an instant spike in the share of state funding in 2012, from a level of 20-30% to a level of 60-80%. Between 2012 and 2020, there are only two years when the share of state funding decreases to about 43-45% — 2016, the year of parliamentary elections, and 2020, the year when single voting day elections were joined by voting on constitutional reform. Both in 2016 and 2020 saw a sharp increase in parties' spending on campaign funds and on "propaganda activities", i.e. advertising, printing, etc. These items of expenditure required additional donations, which naturally reduced the share of public funding.

The share of private donations in the budgets of state-funded parties is small, and individual donations and party contributions from voters are almost negligible against the general background. Parties practically stopped working on attracting private donations, including voter outreach [36]. From 2012 to the late 2016, political parties themselves increased the amount of state support from 20 rubles per vote cast in federal elections to 152 rubles, i.e., by 7.5 times. Over the same period, the total support of parliamentary parties in elections decreased from 61.3 million votes to 45.7 million votes [36].

This paper presents the results of the author's research and public investigations conducted for two public associations: Transparency International – Russia Center for Anti-Corruption Studies and Golos Movement for the Defense of Voters' Rights (both recognized as foreign agents). The paper is based on data about the practice of bypassing or directly violating legislative norms that control party and election campaign funding, as well as the practice of illegal state funding of parties and candidates. The author attempts to summarize all gained experience and develop a coherent set of recommendations for changing the legislation and everyday practice.

The text is based on publicly available and mostly official data. Unfortunately, this data does not provide a complete picture of the real amounts of funds that are raised in the political sphere, since a significant part of the expenditures of political actors does not appear in official reports at all. We were able to identify some of these funds through indirect signs, but determining the real share of "shadow" funding of politics in Russia remains a task for the future.

Political activity funding refers to the legal and/or illegal funding of the current activities of political actors (parties, candidates and affiliated third parties) that affects the results of election campaigns and competition in the entire political market. The latter is especially important because in today's Russia, it is not the course of the election campaign itself (including the election day) that has the greatest influence on the results, but the permanent distortion of the competitive political field.

The issue of political activity funding can be broken down into two closely related but still independent topics: ensuring financial transparency of political activity and compliance with the principles of political neutrality of the state in electoral processes. At the same time, we take into account both direct material support of parties and the more subtle ways of providing political players with additional resources and increasing their competitive advantage. This includes, for example, unequal media coverage, closed sociological studies at public expense, etc.

The practice of concealing the real donors of political parties and candidates and circumventing funding restrictions and bans

As was noted above, legal analysis of the issues of political party and election campaign funding is the most studied aspect of the topic in Russia. There are numerous works of varying length and quality covering this topic. Nevertheless, it is necessary to repeat the main points in this paper.

It is impossible to assess legal regulation in isolation from the context in which a particular country exists and from the challenges faced by its political system. What works great in one country may not make any sense in another. All references to global experience make sense only when comparing similar issues under similar conditions. And even then, one should be extremely careful when drawing such analogies, since the overall context in which the same issue exists in the two countries can differ dramatically.

It is also important to remember that it is often not the laws themselves that play a key role, but the practice of law. For example, if in combating the excessive (in their opinion) influence of money on elections outcome, the legislator decides to strictly limit the maximum amount of expenditures of campaign funds, then they shall immediately lay down the working mechanisms of control and enforcement as well. Otherwise, such a solution will only divert a significant portion of the funds "into the shadows".

In Russia, unfortunately, a significant share of financial resources is not reflected in such reports at all, and their availability is determined through indirect indicators only.

One of the most obvious signs of the use of unofficial funding in elections is understated expenditures of the campaign fund in the accounting documents. As the experience of the 2014 gubernatorial campaign shows, much of the money spent by candidates is not reflected in official reports. The size of campaign funds declared by candidates from all parliamentary parties raise serious questions. For example, in Altai Krai (1.8 million voters), A Just Russia gubernatorial candidate Oleg Boronin, who actively campaigned in 2014, declared only 300,000 rubles in expenses, and the "Green" party candidate Vladimir Kirillov, who also ran the entire campaign, stated that his fund amounted to only 119,000 rubles. Given that the municipal filter in Altai Krai stood at 549 signatures, these amounts were barely enough to pass the registration stage. At the same time, while Vladimir Kirillov did not actually do much campaigning, Oleg Boronin was very active, having toured much of Altai Krai. Andrei Andreichenko, an LDPR nominee in Primorsky Krai (1.5 million voters), only spent 330,500 rubles out of the allowed 100,000,000 on his election campaign that same year. However, United Russia's Andrei Bocharov seemingly was the most frugal of all—he won the 2014 gubernatorial election in Volgograd Oblast while spending only 250,000 rubles out of the allowed 77,542,500 rubles on his campaign (the number of voters in the region is about 2 million people) [1].

The lack of expenditures on political consultants in the reports of many candidates is also prominent. In 2017, only five out of the 13 winning governors, whose reports were available, declared expenditures on consulting services. At the same time, the names of political consultants appeared in the media, tied to regions and campaigns, which suggests they indeed provided services [2]. For example, neither Alexei Tsydenov (with the official campaign fund of 18.5 million rubles), nor Aleksandr Yevstifeyev (16.5 million rubles) indicated any expenses for "Costs of labor (services) of informational and consulting nature".

The situation was similar a year earlier. For example, Sholban Kara-ool, who was elected as the head of the Tyva Republic, indicated that his campaign funds amounted to 2.5 million rubles, with 0 rubles spent on costs of labor (services) of informational and consulting nature, 550 rubles on other labor (services) performed (rendered) by legal entities or citizens of Russia under contracts, and 135,400 rubles on other expenses directly related to the election campaign [41].

At the same time, even the Presidential Executive Office did not conceal the fact that they themselves actually sent some of the most expensive political consultants in the country to the regions where gubernatorial campaigns were going on [38].

It is worth pointing out, however, that in many cases such violations are pushed by the existing system of limits on donations and spending. While at the federal level there has recently been a visible trend toward increasing the maximum amount of campaign funds, the situation in the regions can vary greatly, not to mention the regulation of local elections.

That said, the maximum amounts of election funds for gubernatorial candidates are set very unevenly. For example, in 2015, when maximum amounts were recalculated by the number of voters, it turned out that the largest campaign fund can be formed in sparsely populated Kamchatka with 102.1 rubles per voter. At the same time, the densely populated Krasnodar Krai ended up with only 2.5 rubles per voter, i.e. the gap exceeded 40 times [1]. Naturally, the severe limitation of funding pushes many candidates into the shadows, otherwise it becomes virtually impossible to run a competitive campaign.

Existing restrictions on the maximum donation from one person, which should protect the political sphere from excessive dependence on specific business interests, are also easily circumvented. Especially when it comes to holdings with many legal entities but same owners.

For example, OAO Tomsk Housebuilding Company (TDSK) was one of United Russia's largest donors for several years (we are talking about party funding without taking into account the campaign funds of candidates, which the company also helped). In 2015, the company donated 24.8 million rubles to the party [30], while in 2016 the donation jumped to 45 million rubles. However, United Russia got an extra 15 million rubles in 2016 from ZAO Tom-Dom of Tomsk Housebuilding Company, which is part of the same holding [8]. CPRF had a similar situation in 2016, with four companies linked to State Duma deputy Vakha Agayev depositing 43 million rubles each in the party's accounts during the year. In total, these companies donated 172 million rubles—almost four times the maximum allowed contribution. This amounted to almost a quarter of all donations to CPRF in the year of the parliamentary election [8].

We cannot say that all attempts at shadow or illegal funding go unpunished, because there are well-known criminal cases related to "slush funds": for example, the "Khoroshavin case" and related cases of his colleagues [35] or removal of the A Just Russia list from the Smolensk Oblast Duma election in 2007 [25: 424-425]. However, such cases are very rare and leave a sense of selective enforcement.

The problem of not being able to identify the real owners of funds donated to a candidate or party is not limited to unofficial incomes. Often even those funds that are listed in official reports cannot be correlated with the actual sources of revenue. This is primarily due to two donation schemes: through public organizations and through individuals.

Russian legislation stipulates that donors of parties and candidates may include public organizations, with some exceptions. The problem is that such legal entities are not obliged to disclose their own donors. This way, a legal entity often becomes a kind of "party purse," where those who do not want to openly provide their support can contribute.

This scheme has been actively used in recent years. Thus, 68% of all donations by legal entities made to United Russia in accordance with the legislation in 2013-2014 were made on behalf of public organizations [1].

This trend continued in the following years and spread to other parties. According to official reports on the expenditures from the federal election funds of political parties, donations in the 2016 State Duma elections from various NPOs amounted to approximately 20% of all funds received, or 529.3 million rubles. For some parties, this share was much higher. United Russia received 289 million rubles from 12 affiliated regional public organizations at the federal level alone out of the 663.1 million rubles collected in the campaign funds (43.6%). Seven NGOs donated 140 million rubles out of 432.2 million rubles (32.4%) to A Just Russia, and four NGOs donated 98 million rubles out of 432.2 million rubles (22.7%) to Yabloko. Considering the donations to single-seat candidates and regional offices of parties, the expenditures of non-profit organizations to support candidates in these elections amounted to about 0.8 billion rubles [12].

According to the database of the Golos Movement, the list of 50 largest donors to all political parties and candidates in recent years includes 48 legal entities that are non-profit organizations and foundations, and only two legal entities that are commercial companies [22].

Such donor NGOs are usually organizations affiliated with the party itself. For example, the largest donors in the 2016 elections included various regional foundations affiliated with United Russia (in almost all cases, the foundations were established by the party). Some of the largest donors to United Russia in recent years were the National Foundation for the Support of Regional Cooperation and Development, formerly known as the Interregional Public Foundation for the Support of United Russia, the Foundation for the Support of Future Generations, and the People's Projects Foundation. The last two foundations share the same founders: Alexei Grishkovets, Yuri Puzynya, and Olga Shabalina. At least one of them, Alexei Grishkovets, worked in United Russia's various legal posts: he was an advisor to the first deputy chairman of the United Russia faction in the State Duma, and the head of the party's legal service [12].

A Just Russia received 1.2 billion rubles from sponsors in 2016. The largest amounts were donated by various political party support foundations. According to Russiangate calculations, at least 19 foundations (out of the 20 on the list) share their origins: they are all linked by common leaders and founders, and some are registered at the same addresses and created on the same day. In total, these ventures donated 701.5 million rubles to A Just Russia, which amounts to 60% of all donations to the party in 2016. The foundation's connections lead to the party's leader Sergey Mironov through his assistant Anatoly Pavlyuk [8].

As a result, voters are deprived of the opportunity to find out whose money really made it to the parties' or candidates' funds, and the norm of law on publishing this data becomes purely formal, losing its substance.

Moreover, the problem of ensuring transparency of funding through NGOs is also associated with the problem of control over hidden government funding: there are known cases of non-profit organizations that previously received government grants issued by bodies under the control of these candidates becoming sponsors of parties or candidates. For example, Heroes of the Fatherland, a public organization from Samara Oblast, donated 956,861 rubles to United Russia in 2014. It should be noted that that same years, the organization won a regional government grant competition with the project "From St. George Cavaliers to Heroes of Russia" as well as received subsidies for the statutory activities and implementation of the project "Memory Parade" for aт amount comparable to the donation. Nikolai Merkushkin was the head of the region at the time the grant was awarded, and he subsequently became gubernatorial candidate from United Russia — the funding went full circle [1]. Various associations and trade unions, whose founders may also include a large number of state and municipal enterprises, also become donors [1].

The problem can be solved through mandatory public financial reporting of such NGOs, which would disclose detailed information about all donors of the organization.

Another scheme that now became a classic is to mask the real donors as personal donations. In Russian reality, the generally positive practice of personal donations is significantly distorted: citizen donors often turn out to be just intermediaries, hiding the real donors. This is evident in cases where large donations are made by employees of party and candidate headquarters [1; 11]. Moreover, donors are often citizens whose solvency raises serious questions [1; 26].

It is impossible to control the "purity" of such donations under the existing legislation, although an audit the solvency of people donating large sums to organizations that aspire to participate in the distribution of public funds and the adoption of laws would be quite reasonable and would find understanding among citizens. The tax service could take over the auditing function.

Transparency of donations is also negatively affected by mechanisms to circumvent restrictions on maximum donations or donations by foreign persons or state and municipal bodies (which, of course, is a problem in and of itself). This refers to a number of restrictions on participation in the funding of parties and candidates. Clause 6 Article 58 of the Federal Law "On Basic Guarantees of Electoral Rights and the Right to Participate in Referendums of Citizens of Russian Federation" outlaws contributions to the campaign fund of a candidate or party by foreign states or foreign organizations, foreign citizens, with some exceptions, stateless persons, international social movements, etc. Election campaign funding by Russian legal entities with foreign participation if the share (contribution) of foreign participation in their authorized (share) capital exceeds 30% is against the law as well. It is also against the law to donate money to legal entities, 30% of which are owned by organizations with foreign participation (if the share of foreigners is at least 30%). Similar restrictions are imposed on the funding of political parties, with the exception of cases of state support stipulated by law. This regulation is repeated without change in other related laws, including laws at the regional level.

This is not even the matter of the large number of facts of direct violations revealed in recent years by journalists and civic activists [8], but the matter of flaws of the regulation itself, because adding even a single link to the chain makes the funding scheme legal. As a result, the situation may turn out completely absurd. Let us suppose company A, registered in the US, owns 30% of Russian company B, which in turn owns 30% of company C. If company C in this situation donated money to candidate Ivanov's campaign fund, such a donation would be considered illegal, although the actual share of foreigners in company C would be less than 10%. But if you add a single link to the chain–making Company D the donor — the scheme becomes legal, even if the actual ownership of foreigners throughout the chain is 100%. The same applies to legal entities under the de facto control of state or local authorities.

An obstacle to changing the situation is the absence the Russian electoral legislation lacking the concept of a "beneficial owner;" if the concept is introduced, it would eliminate the said scheme of political funding altogether.

The fact that the law "On Basic Guarantees of Electoral Rights and the Right to Participate in Referendums of Citizens of Russian Federation" lacks the stipulation to indicate the TIN of legal entities (donors) does nothing to make the information about donors of parties and candidates more available to voters. And while the CEC on its own initiative indicates the TIN of the company, constituency commissions usually do not. As a result, it is often impossible to reliably identify the donor, especially if the company name is quite common.

But an even bigger problem is the high limit for information that can be disclosed, and the list of said information. This is especially true of regional laws. For example, the "framework" law 67-FZ stipulates that the information about corporate entities who made donations of over 25 thousand rubles to campaign funds must be made public. But in many regions, election commissions stipulated in their decisions that only information about the total amount of donations would be made public, or they set another minimum limit for the amounts to be given to the media. For example, during the 2015 gubernatorial elections in the Chuvash Republic, Omsk, Rostov, and Smolensk Oblasts, only information about the total amount of money received by the respective campaign fund and the total amount of money spent from it was subject to mandatory disclosure. In the Jewish Autonomous Oblast, information about legal entities that donated at least 500,000 rubles and about private individuals who donated at least 100,000 rubles were subject to mandatory disclosure. At the same time, the maximum size of the campaign fund was set at 5,000,000 rubles, and almost all donations were below this limit. This made the funding of election campaigns of gubernatorial candidates in the Jewish Autonomous Oblast nearly non-transparent. A similar situation occurred during the 2014 gubernatorial elections. In Volgograd, Kurgan, and Lipetsk Oblasts, the information on legal entities who donated at least 500,000 rubles was made public. In Oryol Oblast, the figure stood at 1,000,000 rubles for legal entities, and 100,000 rubles for individuals. Sakha Republic, Udmurt Republic, Krasnoyarsk Krai, Ivanovo, Kirov, Murmansk, Nizhni Novgorod, Novosibirsk, and Tyumen Oblast made only total amounts of donations public. This is quite a high limit that cuts off most donations.

In general, it should be recognized that the funding of political parties is much more transparent than the funding of campaign funds, especially when it comes to elections below the federal level. There is perhaps merit in bringing the disclosure requirements for elections at different levels to a single standard.

The fact that the standards used in elections at different levels in different territories have significant differences complicates the transparency situation. What complicates it even further is that often the information, even the one mandatory for public disclosure, is simply not available on the websites of the relevant election commissions [8].

There is a simple solution to the situation: it is necessary that information about the receipt and expenditure of funds at all levels of elections be published on the Central Election Commission portal according to a single standard (for example, in the "Information on elections and referendums" section, especially since a small part of this information is already there). It would also help to publish this database in machine-sensible formats that allow for machine searches of the entire data set.

Although this is not going to help when a candidate's only sponsor is his/her political party. In this case, donors are only included in the party's summarized financial report, which is published almost nine months after the single voting day. The result is "deferred reporting," which does not allow the voter to understand who the donor to the candidate is at the time of the election itself. Moreover, it is virtually impossible to properly single out donations to a particular candidate's fund from such reporting.

Abuse of "administrative resource"

Russian legislation, including the constitution, declares elections to be based on the principles of equality of all candidates. Article 13 of the Constitution of the Russian Federation in particular states that all public associations, including parties, are equal before the law and that no ideology can be declared as state ideology. This idea was developed in the federal legislation. For example, Article 4 of Federal Law No. 25-FZ of March 2, 2007 "On Municipal Service in the Russian Federation" includes non-partisanship among the basic principles of municipal service. And Clause 1 of Article 14 of this Federal Law directly and unambiguously prohibits a municipal employee from "using his/her official position in the interests of political parties, religious and other public associations, as well as publicly expressing his/her attitude toward the said associations as a municipal employee" and "creating structures of political parties, religious and other public associations (except for trade unions and veterans' and other public bodies) within local self-government bodies and other municipal bodies, or to encourage the creation of such structures".

Besides, electoral and party legislations do not permit the use of state and public resources (including using the advantage of one's official status and public funds) to create preferences for certain political forces. For example, Article 10 of the Federal law of July 11, 2001 No. 95-FZ "On Political Parties" states that "interference of public authorities and their officials in the activities of political parties ... shall not be permitted". The same regulation stipulates that "individuals holding state or municipal offices as well individuals in state or municipal service shall not use the advantages of their official or service position in the interests of the political party of which they are members, or in the interests of any other political party”. Article 9 of the same law prohibits the activities of political parties in local government bodies and state organizations.

According to the electoral legislation, executive authorities and their officials are forbidden to interfere in the campaign process, support any of the candidates, or provide them with their resources. Any assistance to candidates and parties between elections and during the election period shall be provided only on the principles of equality and voluntariness.

Unfortunately, the bypass mechanisms for these restrictions are quite widespread in Russia, if one wants to use them. We have already cited the example of a governor's grant to a public organization, which later donated a comparable amount to the political party that nominated the governor for a new term. Similar schemes are found with commercial companies that receive grants and government subsidies. Moreover, they do not necessarily have to then donate some amount to a party or candidate — it may turn out that the owner of this enterprise becomes the candidate, which thus frees personal funds from the need to invest them in business and directs them to company funds. For example, on June 3, 2016, Altai Krai published a list of machine-building enterprises that received governor's grants [8]. This list also included the Rubtsovsk Repair Parts Plant owned by Viktor Zobnev (United Russia), a candidate for the 40th single-seat constituency in the State Duma. A similar scheme was used in Altai Krai during the 2012 elections to the Barnaul City Duma, when a halva factory owned by one of the candidates for deputy was allocated large funds to modernize production. This allows candidates with entrepreneurial background to withdraw part of the funds from their businesses and use them to fund the election campaign.

Such schemes are quite difficult to detect, since the information is scattered, but it is quite easy to trace the receipt of public funds by donors of parties and candidates through the public procurement system. Indeed, the studies of the summarized financial reports of political parties show that the recipients of large state contracts almost exclusively donate to the party of power [8; 11; 15].

At first glance, the problem of government contractors contributing funds to political parties and candidates does not seem obvious. However, analysis shows that after donating to United Russia, things did indeed go much better for a significant part of the contractors: 104 companies from this list began to receive more government contracts in 2016-2017 than in previous years of operation [8]. This correlation may indicate a direct link between receiving of a government contract and the financial support for the party. This is very reminiscent of the traditional kickback corruption scheme. This is why future consideration should be given to banning donations by recipients of state contracts. Moreover, using such forms of hidden state support is often associated with using corrupt practices or practices that erode commercial competition. A separate issue that has not yet been addressed, but which also relates to the problems of government contracts and donors to parties and candidates, is that of hidden and completely unregulated lobbyism.

However, illegal indirect state support of political parties and candidates poses a much bigger problem. Indirect state support for candidates and parties is stipulated by Russian legislation. It may consist of providing, for example, free print space or air time. Moreover, in some large municipalities the current deputies of the city parliament have the opportunity to manage the so-called "deputy fund" — a certain amount of funds allocated from the city budget at the disposal of the deputies to solve the issues of the territories they represent. This practice itself, although questionable from the point of view of ensuring equal conditions for all participants in the political process, nevertheless remains quite transparent and, as already indicated, legal.

However, Russian practice also has illegal types of indirect state support, which are usually referred to as "administrative resource". Identifying such techniques poses a serious challenge to any researcher. Developing methods to counter this phenomenon poses an even more difficult task, since the effectiveness of this struggle almost entirely depends on the political will of election organizers (both formal and actual).

There are quite a few types of abuse of power — political corruption, essentially — that fall into this category.

One of the most common types is increased budget expenditures during the election campaign, aimed at solving pressing social issues (road repairs, area improvement, construction of social facilities, etc.), financing of mass cultural events, which are instead used for campaigning. For example, media reports say that the amount of funds allocated for road repairs almost doubled in Kaliningrad before the 2015 elections [8]. Candidates with a hold on administrative resources also actively use their working hours and state-owned offices or buildings for campaigning [14; 27].

This is something that can be seen throughout the country. Some of these techniques suggest that it is being imposed on a centralized basis. This includes the adove-mentioned distribution of campaign managers by the Presidential Executive Office [7; 13; 16; 18; 23; 32]. The scale of the problem of hiring and paying for campaign manager services was illustrated by a study of state procurement for conducting sociological research in Moscow, carried out by Transparency International – Russia in May–June 2017. The study revealed that 79 government purchases for sociological research worth about 400 million rubles were made in the spring of 2017, and 1.4 billion rubles were spent for the same purpose between 2011 and May 2017. Almost all contracts contained a comprehensive sociological research assignment, conducted using various quantitative and qualitative methods: focus groups, surveys, in-depth interviews, monitoring of publications in the media and social networks. At the same time, a large part of the state contracts were clearly requisitioned before the election, as they included a TOR to identify the electoral preferences of citizens, monitor the activities of candidates, and voters' evaluation of their programs. Many contracts explicitly requested the following: "identification of electoral preferences of district residents... in terms of attitudes and support for political parties"; "analysis of electoral preferences of residents, compilation of political party support rating"; "study of dynamics of attitudes of different respondent groups towards political parties (with a breakdown by groups)", etc. [24].

For example, on August 28, 2014 the prefecture of the Eastern Administrative Okrug of Moscow and the Federal State-Funded Science Institution "Center for Security Research Problems Center of the Russian Academy of Sciences" entered a contract of more than 10 million rubles for the provision of services to organize and conduct a sociological study "on the performance of candidates for the Moscow City Duma in the pre-election campaign in the Eastern Administrative Okrug of Moscow" [6]. The purpose of the study was "the collection and analysis of information about the current attitude of okrug residents to the results of the candidates for the Moscow City Duma in the pre-election campaign, evaluation of the effectiveness of election programs of candidates from the Eastern Administrative Okrug of Moscow". Study objectives includes assessment of electoral dynamics (ratings) of the candidates. The methodology involved qualitative and quantitative research: conducting three focus groups, two waves of phone survey (total number of respondents amounted to 8,400). The authorities never published the study results, thus creating a competitive advantage for the candidates supported by the Moscow mayor's office.

The subject matter of the procurement itself often does not indicate pre-election goals of the customers, but the technical documentation clearly points to this. Perhaps the most revealing example is the contract between the Arbat District administration and OOO Alfa that the two entities entered on September 3, 2013 (less than a week before the Moscow mayoral election) to conduct a sociological survey called "Social Attitudes of Moscow Arbat District Residents and their Change and Development Dynamics". The TOR included two waves of polling in the pre-election week to identify electoral preferences and protest activity, channels of communication, the common issues. And even the TOR file on the public procurement portal was called "calculation + TOR for elections" [8].

The vast majority of such surveys are conducted by companies well known in the political consulting market. Almost all such contracts include an assignment for permanent consulting support of government bodies and local authorities by campaign managers. For example, OOO IMAConsulting was one of the largest contractors for quite a while. In 2014–2016, this contractor got 52 sociological research contracts in Moscow for 132.6 million rubles. The company's role in the Moscow market is highlighted by the fact that the IMA Group website states the company owns the prominent local CAO TV channel. In total, IMA Group and its affiliates received more than 400 government contracts worth nearly 2.5 billion rubles between 2011 and 2017 alone, including a total of 250 government contracts worth 666 million rubles, mostly from the Moscow authorities, with OOO IMA-Consulting receiving 89 government contracts worth 1,031 million rubles. In addition, OOO KA IMA-Press received 89 government contracts worth 1,031 million rubles, mostly for information support of Moscow and federal government entities, including the Directorate of the President of the Russia [8].

It is important that the services provided to the Moscow authorities by campaign managers, paid for from the public funds, are comprehensive in nature. They are directly linked technologically, include information support as well as organizing the interaction with opinion leaders [33]. This is a classical political consulting pattern: first, the manager measures public opinion, identifies the moods, the main issues and preferences of citizens, then develops the concept of an information campaign and implements it.

The cost of government and local government media outreach has long raised questions about its validity and transparency. This is the problem that exists in both Moscow and the regions. A study on state funding of the media in Altai Krai indicates that during an election year, such contracts may contain an assignment to develop covert political campaigning and circulate it in the media [39].

That said, gubernatorial elections were held in Altai Krai in September 2014. Alexander Karlin, who was governor between 2005 and 2018, won the election. The reports on state contracts for information support of the Altai Krai administration in 2014 happened to contain an unexpected type of service, which was never seen before or after. They service included regular development of themed roadmaps, generation of news hooks, "initiation of publications in the federal media," initiation of thematic inquiries from journalists on topics corresponding to the incumbent governor's election program, and, most importantly, a "comment program," i.e. payment for comments in the digital media. For example, 80 thousand rubles were allocated to pay for the comments in July 2014 alone. [39].

Another characteristic feature of 2014 was the increased circulation of Altai Pravda, the region's official newspaper. At the usual daily circulation of about 50,000 copies in 2014, half a million copies of the special issue describing the "Priorities" special project were issued on May 10, 2014. The issue was distributed for free. Publishing the issue cost 1,360,000 rubles, which were allocated in addition to the usual funds that go into the newspaper. In 2017, just before and during the campaign for the Barnaul City Duma elections, the municipal newspaper Vecherny Barnaul picked up the baton from Altayskaya Pravda. The city's official newspaper, whose editor-in-chief was also a member of the city election commission, not only increased its circulation, but also published a series of materials about almost all future major United Russia candidates [39].

A reference to "social advertising" or a "themed project" called "10 Steps to a Set Goal" also appeared in state contracts in Altai Krai during the year of the gubernatorial election. For example, the Doс22 media got paid almost 700,000 rubles of public funds to cover the project's events during 2014 [39]. It is worth mentioning that in 2014 the Altai Krai administration undertook a large-scale project "What Does Altai's Success Mean for Us?", which involved a large-scale survey of residents intended to form a socio-economic development program called "10 Steps to Success". The social effort was accompanied by dozens of posters and banners placed throughout the region. The development of the original layouts for these highway billboards was also covered from public funds and cost the taxpayers almost 90 thousand rubles. The election campaign officially began in late June 2014, and as the election day approached, the residents could observe how social advertising, developed and supported at the expense of the region's public funds, was actually transformed into a solo campaig of one of the candidates [39].

Such examples are a good illustration of how public funds can be used for covert political advertising.


At the legislative level, the funding system for election campaigns and political parties in the Russian Federation is quite elaborately described, but the analysis shows that there is a significant gap between the regulations and their actual application. All the more so because the legislative regulation itself can vary greatly from region to region and, as a rule, not for the better if compared with the regulations at the federal level. In addition, it is often that even the directly prescribed regulations are simply not abided by. For example, the financial statements that election commissions are required to publish on their official websites are often simply impossible to find there.

The situation is aggravated by the fact that official reporting is significantly distorted and poorly corresponds to reality in many cases: a huge portion of the funds raised for political campaigns simply do not appear in official reports. At the same time, the agencies that organize elections do not have any real power to effectively control such receipts - this should be done by the investigative authorities. In fact, today the only method of combating this phenomenon that can be even remotely hoped for in terms of effectiveness is to raise the limits for donations and campaign funds. Moreover, the possibility of facilitating the reporting of expenditures by political actors should be explored.

We believe that in the interests of voters, the focus of control should be shifted from the expenditures of political parties and candidates to the sources of these funds, especially since they are the actual problem and cause genuine interest from voters, the expert community and the media.

Even the official funding sources of parties and candidates are not always traceable. This is due both to the special characteristics of Russian legislation, which lacks the concept of a "beneficial owner" or the requirement for public organizations that support parties to disclose their donors, and to the established practice of donations through proxies.

However, the biggest problem today is the abuse of "administrative resources" and indirect state support of certain political powers. Such support comes from public funds, out of taxpayers' pockets. Such support may include shaping a distorted information picture through the media controlled by the state or individual officials, purchasing services of political consultants and sociologists at public expense or other use of official position up to the direct participation of officials in campaign events or exerting pressure on voters, candidates or members of election commissions. Such a violation of the principle of political neutrality of public officials leads severely distorts the entire political field and is an obvious manifestation of political corruption.

Unfortunately, it is obvious that amendments to existing legislation are not enough to enact change. What is more important is the presence of political will, the need of the very people who make the rules of the game to change the current deplorable situation.

Nevertheless, some recommendations at the organizational level can be made.

First, more attention should be paid to identifying and combating administrative resources and shadow funding. This may require a review of the functions and powers of election commissions, up to and including the separation of the functions of election administration and financial control. International practice has plenty of experience and different ways of implementing this idea. For example, a number of countries, including Norway, Great Britain, France, Belgium, etc., created an agency specifically for these tasks — it checks the financial statements of parties and candidates. The US system works in a similar manner, where the Federal Election Commission only reviews financial reports. Another model is to assign the functions of financial control over compliance with the established rules and prohibitions to public audit bodies (agencies with such powers exist in Austria, Iceland and Israel). We believe that this approach will enable election commissions to focus exclusively on organizing the elections, and financial control will be carried out more professionally.

Russian legislation has to be introduced with the concept of a "beneficial owner" ("ultimate owner") of a company, which will finally eliminate the possibility of funding Russian election campaigns by foreign individuals or companies with state participation, as well as prevent the circumvention of bans on donation ceilings for large holdings.

Non-profit organizations that provide financial support to parties or candidates should be required to publicly disclose information about their own donors (company name or name of individual, tax identification number, region, donation amount). Such reports should be published.

Donations to parties and candidates by state contractors and various forms of state support (subsidies, grants, etc.) should be prohibited.

A single public database of sponsors of candidates and political parties of all levels would facilitate the transparency of funding and compliance with unified standards of information transparency. The database would include all financial reports of regional branch offices and candidates in single-seat elections published in machine-sensible form on the website of the Central Election Commission according to a unified standard, including mandatory publication of TINs of legal entities (donors).

We also find that a discussion of a mechanism that would stimulate financial support for the party by its members and ordinary citizens could be beneficial. For this purpose, for example, amendments to the Tax Code could be made that would allow citizens to send a portion of the personal income tax (no more than 1%) to support a specific public organization, including a political party. This could replace the current system of public funding of parties.

Naturally, all these changes should be made with caution, realizing that increased transparency in an authoritarian political regime may not help the free expression of the will, but rather negatively affect the main goal of elections. Therefore, democratization of the country is the main factor in changing the situation.

Received 05.05.2022, revision received 18.05.2022.


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