Corporate donations to political parties in the Czech Republic

Latest study findings

Photo: CreativeCommons/ markemark4

Corporate donors play an important role in the economy of political parties and may influence their political decisions. The findings of the study made by Vítězslav Titl, Miroslav Palanský and Jiří Skuhrovec reveal serious shortcomings in the transparency of Czech political party financing and control systems, which may impede the democratic functioning of the state. It focuses on data analysis of corporate donations between 2006 – 2013 to political parties whose representatives were elected to the Parliament of the Czech Republic or gained at least 1% of the vote in the parliamentary elections in 2013.

  • Companies that sponsored political parties received public contracts worth 390 billion CZK in between 2006 – 2013.
  • Almost 28% of all companies that made a donation to a political party won at least one public contract in the given period. Taking into account public contracts offered by regional offices, companies donating to political parties active in the regional parliaments won public contracts worth 57% more than non-donating companies.
  • Every tenth contract in the Czech Republic was given to a firm which sponsored a political party between 2006 – 2013.
  • The donor companies are able to gain from 40% to 60% more public contracts than their non-donor competitors.
  • There are visible ups and downs in the amount of donations that correlate with the election cycle. In the non-election year 2007, the amount of donations to four major parties matched only 17% of the amount donated to these parties during 2010, when parliamentary and local elections took place.
  • When examining the share of donations in the overall incomes of the parties of the Czech Parliament in between 2006 – 2013, we see that the ODS (Civic Democratic Party) was mostly dependent on donations (38% of its total income). In their first year of existence, TOP09 and ANO2011 were almost totally (95%) dependent on corporate donations.
  • Political parties are not allowed to accept donations or free benefits from legal entities owned by the state or municipalities. Despite this, the survey found seven entities that made donations to political parties (although marginal sums, sometimes repeatedly), donations that were accepted between 2006 – 2013.
  • Upon examining the data on public contracts in the building and construction sector, donor companies whose turnover ranges between 100 million and 1 billion CZK succeeded in gaining public contracts which valued 46% more than the contracts gained by non-donating companies. In the case of the total number of public bids won, the donating corporations got 20% more bids than non-donating companies.
  • In the case of European funds, there are 594 recipients of European funds in the sample of donor companies, which is 17.4% of all corporate donors. They received a total amount of 5.2 billion CZK from European funds. In contrast to public contracts, the survey has not found any statistically significant connection between donors and those receiving European funds.
  • Among the donors are anonymous shell companies without employees, as well as companies owned by state, from which receiving donations is illegal for political parties. Many of the donor firms are owned by companies in tax havens or do not disclose their owners at all.
  • As for transparency, only 7 out of 29 major donors who gave more than 500,000 CZK to any political party during 2013 disclosed their annual report for the year 2012 in the business register by July 2014. The deadline was 31st December 2013. The firms can thus be considered non-transparent from the perspective of public control, and receiving donations from such companies may put into question the credibility of the political parties’ finances.
Jan Adamec

Jan Adamec

is editor of the V4Revue, historian and political scientist. His area of expertise is the history of Hungary, USSR and Czechoslovakia 1948 – 1957. He graduated from Central European University in Budapest and Charles University in Prague where he currently completes his PhD degree with thesis about the Hungarian uprising in 1956.