2018 state subventions: trends in distribution and possible use for indirect campaigning
In the period from June 2018 to January 2019, the Civil Network OPORA’s observers recorded 1506 cases of using publicly-funded events for the purpose of indirect campaigning in favour of people’s deputies and political parties. In 75.2% of recorded cases those events were financed by means of subvention for socio-economic development of territories, in 5.1% of cases – from Road Fund, in 2.7% of cases – from State Fund for Regional Development. In the remaining 17% of recorded cases, those events were financed by means of budgetary funds as well as medical and educational state programs.
According to the Chair of the management board of the Civil Network OPORA Olha Aivazovska, the manner, method and purpose of allocating state-financed subventions for socio-economic development of territories has been an unresolved problem for several years in a row.
“Civil Network OPORA has no issue with financing projects aimed at ensuring local development or accommodating socio-economic needs of Ukrainian citizens. At the same time, the manner, method and purpose of spending these funds require further analysis, especially in a poor country like Ukraine. It should be noted that in the 2016-2018 timeframe more than 12 billion hryvnias of Ukrainian taxpayers were spent on local development programs within the framework of state-financed subvention for socio-economic development of territories. In 2019, the applications for funding such projects amounted to 824 million UAH, and these funds have already been allocated. The total amount of funds allocated under this article of expenditure shall be calculated towards the end of the year”, – emphasised Olha Aivazovska.
According to the Civil Network OPORA’s data analyst Andriy Savchuk, more than 4 billion UAH of budgetary funds were allocated within the framework of state-financed subventions in 2018. Based on the decision of Budget Committee, the so-called transitional funds form a special part of these allocated funds. This means that the bulk of these funds will be spent during the 2019 elections.
“Besides non-transparency, the main problem with allocation of budgetary funds is uneven distribution thereof among different regions of Ukraine. In particular, Vinnytsia and Kyiv oblasts received the largest sums of state-financed subvention for the third consecutive year – 327 million UAH and 233 million UAH, correspondingly. Furthermore, if we compare the regions with similar areas and populations, for example, Ivano-Frankivsk and Ternopil oblasts, we will see that there is a threefold difference in the amount of budgetary fund allocations to these regions. Ivano-Frankivsk oblast received 220 million UAH, while Ternopil oblast received only 77 million UAH. It should be noted that Ternopil oblast, as well as Luhansk oblast which received only 26 million UAH, are the outsiders for the third year in a row when it comes to receiving state-financed subventions”, – said Andriy Savchuk.
According to the results of OPORA’s monitoring, people’s deputies were the ones who most often resorted to indirect premature campaigning – 65.2% of recorded cases, mass media accounted for 12.3% of recorded cases of premature campaigning, MPs’ assistants – 10.1% of recorded cases, local self-government bodies, state authorities or their officials – 8.5% of recorded cases, representatives of political parties – 3.9% of recorded cases.
Overall, OPORA identified two main types of use of state-financed events for indirect campaigning purposes: media / social media activity – 698 recorded cases (46.3%) and public events – 643 recorded cases (42.7%). Some cases of indirect campaigning also included the use of web resources of state authorities or public pages of their officials – 126 recorded cases (8.4%). Furthermore, special mention should be made of cases of self-promotion of people’s deputies in the form of outdoor advertising and reports on work is done – 39 recorded cases (2.6%).
643 cases of indirect campaigning during public events conducted by state authorities with alleged use of budgetary resources were related to participation of people’s deputies in the unveiling of newly constructed or reconstructed infrastructure facilities (schools, kindergartens, playgrounds, sports facilities, medical and obstetric centers, etc.), presentation of newly purchased equipment (furniture sets, multimedia and computer equipment, musical equipment, etc.) or inspection of the progress of work. In the majority of recorded cases (75.2%) such events were financed by means of subventions for socio-economic development of specific territories.
698 cases of indirect campaigning on social media and mass media with the alleged use of budgetary resources manifested themselves in several forms. In particular, the information about budget funds allocated for implementation of particular projects with the assistance of people’s deputies were published by corresponding MPs or members of their campaign teams on their social media pages. Mass media also published information materials placing emphasis on the fact that budget funds were allocated for the construction of infrastructure facilities with the assistance of certain people’s deputy. Indirect campaigning also took the form of so-called “thank-you letters” from grateful voters and employees of budgetary institutions which were published on local web resources and were addressed to MPs in appreciation of their assistance in attraction of budgetary resources.
126 cases of indirect campaigning with alleged use of budgetary resources involving state authorities and their officials manifested themselves in the following two forms. Firstly, state officials participated in public events on unveiling/inspection of newly constructed facilities, during which they emphasised that the funds for construction of such facilities were allocated on the “initiative” or with the “support” of certain people’s deputy. Secondly, information materials emphasising certain MP ’s assistance in attracting budgetary resources for the construction of infrastructure facilities were published on the websites of local authorities. According to OPORA’s estimates, high and low-ranking public officials were formally involved in approximately 39.9% of all cases of indirect campaigning.
Furthermore, OPORA recorded cases of indirect campaigning by people’s deputies in the form of outdoor advertising and reports on work done. MPs made statements on the amount of attracted budgetary resources, published the information in local media and placed billboards.
According to the Civil Network OPORA’s analyst Anatoliy Bondarchuk, cases of using budgetary resources for indirect campaigning purposes were recorded in all regions of Ukraine. “The largest number of such cases was recorded in Cherkasy oblast – 124 cases, Lviv oblast – 119 cases, Volyn oblast – 109 cases, Rivne oblast -100 cases, Mykolayiv and Poltava oblasts – 98 cases apiece. The smallest number of such cases was recorded in Zaporizhzhya oblast (20 cases), Donetsk oblast (16), Luhansk oblast (7) and in the city of Kyiv (16)”, – said Anatoliy Bondarchuk.
For the most part, indirect campaigning activities were aimed at residents of villages – 72% of all cases, and to a much lesser extent, they were directed at residents of cities (21%) and townships (7%). According to OPORA’s estimates, cases of indirect campaigning were recorded in 1112 different populated places across all regions of Ukraine (one case of indirect campaigning could apply to several populated places at once).
Cases of indirect campaigning with alleged use of budgetary resources were recorded on the part of 137 MPs-majoritarians and 24 MPs elected from party lists. Such cases were recorded within the boundaries of 155 electoral constituencies, which account for 78% of the total number of constituencies or 88% of constituencies-regular recipients of state-financed subventions according to OPORA’s estimates.
According to the results of OPORA’s monitoring, in the period from June 2018 to January 2019 indirect campaigning activities with alleged use of budgetary resources were most often conducted in favor of the following MPs: Ihor Huzya (“People’s Front”, Volyn oblast) – 72 recorded cases, Kostyantyn Ishcheikin (Petro Poroshenko Bloc “Solidarity”, Poltava oblast) – 56 cases, Vasyl Yanitsky (Petro Poroshenko Bloc “Solidarity”, Rivne oblast) – 46 cases, Oleh Liashko (Radical party, elected from party-list) – 41 cases, Oleksandr Dekhtyarchuk (Petro Poroshenko Bloc “Solidarity”, Rivne oblast) – 40 cases, Anton Yatsenko (deputy group “People’s Will”, Cherkasy oblast) – 38 cases, and Oleh Barna (Petro Poroshenko Bloc “Solidarity”, Ternopil oblast) – 36 cases.
As for people’s deputies elected from party lists, besides Oleh Liashko, the following MPs made the most of indirect campaigning activities: Khvycha Meparishvili (“People’s Front”) – 21 recorded cases, Ihor Kononenko (Petro Poroshenko Bloc “Solidarity”) – 14 cases.
It should be noted that indirect campaigning activity with alleged use of budgetary funds is more typical of people’s deputies-majoritarians, while involvement of MPs elected from party lists in this process is a relatively new development. However, such kind of activity was most often conducted within the boundaries of certain territorial election constituencies. In particular, OPORA’s observers recorded cases of systemic indirect campaigning activity on the part of Ihor Kononenko (Petro Poroshenko Bloc “Solidarity”) within the boundaries of electoral constituency No.94 in Kyiv oblast, Khvycha Meparishvili (“People’s Front”) on the territory of electoral constituency No. 90 in Kyiv oblast, Roman Zastavny (“People’s Front”) on the territory of electoral constituency No. 163 in Ternopil oblast, Vadym Pidbereznyak (“People’s Front”) on the territory of electoral constituency No. 132 in Mykolayiv oblast, Oleksandr Horbunov (“People’s Front”) within the boundaries of Kropivnitsky electoral constituency, etc.
During the period of monitoring, OPORA’s observers recorded cases of alleged use of budgetary resources for indirect campaigning purposes on the part of representatives of all parliamentary factions and deputy groups. The largest number of such cases was recorded on the part of members of Petro Poroshenko Bloc “Solidarity” – 771 cases, and People’s Front – 290 cases. MPs not affiliated with any party faction were involved in 148 cases of indirect campaigning, members of deputy group “People’s Will” – in 119 cases, members of deputy group “Vidrodzhennia” Party – in 110 cases, MPs representing the Radical Party of Oleh Liashko – in 49 cases.
According to OPORA, members of AUU “Batkivshchyna”, “Samopomich” Union and “Opposition Bloc” were involved in the smallest number of cases of alleged use of budgetary funds for indirect campaigning purposes – 12, 5 and 2 cases correspondingly.
Within the framework of its monitoring activity, the Civil Network OPORA also identified the subject matter of publicly-funded events (in the context of 2 124 state-financed subventions for socio-economic development) that were allegedly used by people’s deputies for indirect campaigning purposes. In most cases, the subject matter of such events was related to the unveiling of educational institutions – 59.7% of all cases (1268 events), to a much lesser extent such events were related to improvements in public utilities sector, beautification and development of infrastructure – 10.7% (227 events), construction of medical institutions – 10.6% (225 events). In 5.8% of all cases (124 events), state-financed subventions were allocated for the development of socio-cultural sphere and only 3.5% of all cases (74 events) were related to road surface repairs.
9.7% of recorded cases of indirect campaigning (or 206 cases) were related to “traditional events” dedicated to unveiling of newly constructed or reconstructed children’s playgrounds and sports grounds.
According to the results of prior research studies conducted by the Civil Network OPORA, the efficiency and cost-effectiveness of budget spending aimed at ensuring sustainable development of the regions is one of the main challenges facing the system of state-financed subventions. However, the list of state-financed projects is packed with striking examples of non-systemic or even petty expenses year after year. In 2016, only 13% of state-financed facility construction projects cost less than 50 thousand UAH, while in 2018 projects under 50,000 UAH accounted for 37% of all state-financed projects. Furthermore, the average size of state-financed subvention decreased from 660 thousand UAH to 386 thousand UAH (by 41.5%) as compared to 2016.
Therefore, the lack of justified priorities of state development in terms of allocation of state-financed subventions has remained a problem for several years now. There are no official comments on this situation, but the current principles of state budget expenditures are in complete agreement with the logic of political struggle for the votes of citizens.