Can Campaign Finance Reform Put the Squeeze on NGOs?-

29 Feb, 2012

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February 24, 2012 – 2:01pm, by Molly Corso
Georgia: Can Campaign Finance Reform Put the Squeeze on NGOs?

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Campaign finance reform in Georgia may potentially threaten freedom of expression and donor funding for non-governmental organizations, civil society activists say.

is holding parliamentary elections this fall. In late December, the legislature passed amendments as part of comprehensive election code overhaul that imposed political-party financing restrictions on non-governmental organizations (NGOs) and other bodies considered to be either linked to political parties or to have “declared political goals and tasks.”

If an NGO or other entity is found to be in violation of the amendments, it will face stiff financial penalties. In the worst-case scenario, the state could impose a cap of 60,000 lari, (roughly $37,000) on the amount of money a non-profit can receive annually from donors. If the state auditing body, the Chamber of Control, determines that a political party has received an improper donation, or in-kind services, the money would either have to be returned to the donor, or it could be potentially confiscated by the state.

Some media groups and NGOs maintain the amendments are so vaguely worded that they are vulnerable to manipulation for political purposes. Some activists, for example, suggested that an opinion about a particular political party could provide grounds for a business, organization, or individual to be investigated, if the declaration is followed by an activity that involves money and that could benefit a group of voters.

Already, two NGOS — New Generations, New Initiatives, which is involved with political party training and election monitoring, and the New Republican Institute, linked to the opposition Republican Party — have been asked to submit financial documents to the Chamber of Control. The investigations are ongoing.

Over 200 Georgian media organizations and NGOs have joined forces in a campaign (“Es Shen Gekheba,” translated by the group as “This Affects You, Too”) to demand that parliament repeal the campaign finance rules.

Four days after the campaign kicked off, Parliamentary Speaker Davit Bakradze on February 20 asked governing party lawmakers to revisit the issue to “try” to find a solution to “remove [NGOs’] concerns.”

The request, as yet unfulfilled, has not reassured NGOs. Keti Khutsishvili, executive director of the Open Society Georgia Foundation (OSGF), a “This Affects You” campaign member and one of Georgia’s most active NGO donors, agrees that the rules’ vague wording gives the government too much leeway.

“[N]one of us wants political corruption to be involved in the elections. None of us wants any hidden resources to be used for vote-buying, or somehow affecting the voters in their decisions,” Khutishvili said. “But this type of amendment is not very thoroughly thought through.”

“According to this legislation, any of us can be considered as a person directly or indirectly related to a political party,” added Khutishvili. [Editor’s Note: OSGF is part of the Soros Foundations network. EurasiaNet operates under the auspices of the New York-Based Open Society Foundations, a separate entity in the Soros network].

Tamar Chugoshvili, chairperson of the Georgian Young Lawyers’ Association (GYLA), one of the campaign’s founders, argues that the lack of clarity creates a problem for donors and NGOs alike. “I don’t understand what I should not do, what is prohibited. … And this is a problem for donor organizations [and NGOs] because they really need to be careful on one hand, but, on the other hand, they will never know what they should be afraid of,” said Chugoshvili. GYLA has already submitted an alternative draft law for consideration. [Editor’s Note: the GYLA receives financing from OSGF].

United National Movement lawmakers say the amendments are designed to stop political donations being made through ostensibly non-political entities, and they challenge the claim that the changes can hinder freedom of expression. “[W]hat these standards are saying is that the entities indirectly or directly related to a political party should have the same regulation,” said National Movement MP Chiora Taktakishvili, a deputy chair of parliament’s Legal Affairs Committee.

Taktakishvili said she is closely monitoring the Chamber of Control campaign finance investigations, and has not noted any abuse of power. “This does not concern any civil society activity like grants from donor organizations, or something like that,” she said. “This does not limit their freedom of expression in support or against any concrete political party.”

OSGF and other donors say they have cause for concern about the amendments’ potential effect on grant-giving. OSGF’s Khutsishvili said the amendments could mean that a donor could lose funds given to a grantee targeted by an investigation, even if the donor-financed project does not have any political ties.

The confusion over the law, she added, appears to be affecting both Georgian civil society and the state auditing body. “On the one hand, they look like they are ready to cooperate” on addressing concerns about the amendments, she said of the Chamber of Control. “On the other hand, they also have difficulties in interpreting the law.”

The Chamber did not grant an interview in time for publication.

Another large NGO donor in Georgia, the Eurasia Partnership Foundation, declined to comment. The Swedish International Development Cooperation Agency (SIDA), however, says it also is monitoring developments “closely,” though sees a more general problem.

“Theoretically the law could affect donor-supported activities, but we see the issue as a broader concern of society in general, rather than an issue specifically linked to donor-supported projects,” Peeter Kaaman, the first secretary at the Swedish Embassy in Tbilisi, wrote in an emailed response to about SIDA.

Other members of the international community also have waved a red flag about the regulations. In a February 14 statement, US Ambassador John Bass called for “a process of clarifying exactly what the rules are, so that everyone is clear on their respective responsibilities.”

A February 13 report by United Nations Special Rapporteur Maina Kiai was blunter. The reform, Kiai said, “applies restrictions on every person in this country for the mere reason of holding political opinions.”