Malta's Major Political Parties Disclose Minimal Large Donations Amid Millions in Contributions

Limited Transparency in Political Donations

Malta's two dominant political entities, the Labour Party (PL) and the Nationalist Party (PN), have publicly disclosed only five donations exceeding the legal threshold of €7,000 since 2018. This revelation comes despite both parties collectively amassing millions of euros in contributions over the past six years, sparking renewed debate over the transparency of political financing in the country.

Under Malta's party financing laws, specifically the Financing of Political Parties Act 2015, political parties are mandated to submit annual reports listing donations received, with the identities of donors contributing more than €7,000 requiring public disclosure.

Declared Donations and Undisclosed Millions

The five large donations declared since 2018 include two contributions of €10,000 each from Pavi Supermarkets to both the Labour Party and the Nationalist Party, made just before the 2022 general election. The PN also declared an almost €15,000 sum from then-party leader Bernard Grech following his successful leadership campaign in 2020. The Labour Party, for its part, declared a €10,000 donation from Schembri & Sons Ltd during a fundraising marathon and another €10,000 from Iracil Ltd, a company with limited public presence.

Despite these few disclosures, the financial reports indicate substantial overall contributions. Since 2016, the Labour Party has reported receiving over €13 million in donations from approximately 192,000 donors, averaging around €1.5 million annually. The Nationalist Party claims an even higher figure, with nearly €15 million in donations from over 333,000 donors during the same period. Notably, the PN reported a significant €3.3 million in donations in 2017 alone.

Regulatory Challenges and Loopholes

Concerns have been raised regarding the prevalence of donations just below the €7,000 disclosure threshold. Reports suggest that a significant portion of funds received by both parties falls within the €500 to €7,000 bracket, allowing donors to remain anonymous. For instance, half of the Labour Party's donations since 2016, amounting to over €6.5 million, were in this range. The PN also reportedly leaned heavily on donations just under the threshold, with a third of its total contributions falling into this category.

The effectiveness of Malta's party financing law has been significantly hampered by a Constitutional Court ruling in October 2018. This ruling, which followed a legal challenge by the PN, effectively rendered the Electoral Commission 'toothless' by stating it could not act as an investigator, judge, and jury on political party financing matters. This has led to situations where the Commission's role is limited to sending reminders for compliance, even when parties fail to submit their accounts for extended periods.

Recent Fundraising and Calls for Reform

Both major parties continue to rely heavily on fundraising marathons. In recent events, the Labour Party collected over €1.1 million, while the Nationalist Party raised more than €730,000 in separate fundraising drives. Critics argue that without robust enforcement and greater transparency, the public remains largely unaware of the true sources of political funding. Calls for an update to the party financing law are ongoing, with experts emphasizing the need for a legal framework that ensures genuine transparency and accountability in political donations.