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Content updated: 27-06-2019 10:21

The article of the Law on Political Parties establishing the procedure for the calculation of the amount, distribution, and payment of state budget appropriations for funding the activity of a political party was not in conflict with the Constitution

07-06-2019

By its ruling adopted today, the Constitutional Court has declared Article 21 of the Law on Political Parties (wording of 26 November 2013) not in conflict with the Constitution, insofar as this article does not stipulate that, when the next regular election to the Seimas takes place at a certain point of a budget year, the state budget appropriations for funding the activities of political parties for the half year during which the election to the Seimas takes place are distributed according to the results of the previous election and the new election to the Seimas and are calculated in proportion to the term of office of the members of the Seimas.

The Vilnius Regional Administrative Court, the petitioner, had doubts regarding the compliance of Article 21 of the Law on Political Parties with the Constitution while considering the administrative case concerning the annulment of the decision of the Central Electoral Commission on establishing the amount of the state budget appropriations allocated for the second half of the year 2016 for funding the activities of political parties, and the obligation to adopt a new decision. By the said decision, the Central Electoral Commission distributed appropriations, among other things, according to the results of the election to the Seimas of 2012. In the administrative case in question, the court is requested to annul the said decision and oblige the Central Electoral Commission to adopt a new decision whereby the appropriations would be established not on the basis of the results of the election to the Seimas of 2012, but the results of the election to the Seimas of 2016.

The Constitutional Court has held that the Constitution does not directly provide for any sources and ways of funding, or any grounds for control over funding, of election campaigns and their participants, including political parties; however, the related principles accordingly arise from the striving for an open civil society, which is enshrined in the Constitution, among others, in the Preamble thereto, as well as from the specificity of the political aim of parties, which are directly provided for, among others, in Article 35 of the Constitution, and the specificity of the implementation of the said aim.

Paragraph 3 of Article 35 of the Constitution provides that the founding and activities of political parties are regulated by law. Interpreting this provision and other related constitutional provisions, the Constitutional Court noted that, in regulating the founding and activities of political parties, the legislature may, under the Constitution, establish, among other things, the sources and ways of funding political parties, as well as the procedure for control over this funding.

The Constitutional Court has also held on more than one occasion that the Constitution, among others, Paragraph 2 of Article 128 thereof, gives rise to the requirement that state-owned property must be used sparingly, not wasted, and managed rationally and all state institutions that have the powers to adopt decisions concerning the possession, use, and disposal of state-owned property must observe the norms and principles of the Constitution.

In this ruling, the Constitutional Court noted that, under the Constitution, among others, Paragraph 3 of Article 35 and Paragraph 2 of Article 128 thereof, and the constitutional principles of a state under the rule of law, the protection of legitimate expectations, justice, and responsible governance, when regulating the relations linked to the founding and activities of political parties, among other things, when establishing the sources and ways of funding political parties, as well as the procedure for control over this funding, the legislature has wide discretion. The legislature may, among other things, choose state budget funds as a source of funding political parties whose candidates have received significant approval (confidence) from voters in the respective elections.

Once the legislature has chosen state budget funds as a source of funding political parties, the Constitution, among others, Paragraph 3 of Article 35 and Paragraph 2 of Article 128 thereof, and the constitutional principles of a state under the rule of law, the protection of legitimate expectations, justice, and responsible governance give rise to the duty of the legislature to establish such a model of regulating the relations linked to this chosen source of funding political parties that would ensure the proper, transparent, and public distribution of state budget funds allocated to political parties under the procedure established by means of a law, among other things, to establish clear and objective criteria and (or) conditions and other essential elements (including time limits) of the distribution of state budget funds to political parties so as to ensure, among other things, the transparency and objectivity of this process and allow the state institutions authorised to distribute state budget funds no possibilities for the abuse of the powers conferred on them or the distribution of state budget funds in an unfair and non-transparent manner, thus violating the principles of responsible governance and the rational management of state property. The legislature may not establish such a legal regulation that would create the preconditions for receiving public (state) funds by political parties if they have committed violations of law that are assessed as essential (gross) by the state institutions authorised to exercise control over the funding of a political campaign; the legislature also may not establish a legal regulation that would consolidate such conditions for allocating state budget funds to political parties that would disproportionately complicate their possibilities of implementing their political aim or would have a negative impact on the free development of the multi-party system.

Interpreting the impugned Article 21 of the Law on Political Parties, the Constitutional Court held that this article established the following criteria and conditions to be satisfied by a political party in order to receive state budget appropriations for funding its activity: 1) a political party had to meet these criteria: it had to be registered in the Register of Legal Entities and have the number of members required by law, and no restructuring or liquidation procedure may have been instituted in respect of it; 2) a political party also had to meet these conditions: it must have received not less than 3 per cent of the total votes in the last election to the Seimas and the powers of the candidates elected in that election must not have been terminated or, in the event of their termination, a vacant place must have been occupied without holding an election, and the results of the said last election had to be valid.

In addition, the impugned Article 21 of the Law on Political Parties established the procedure for determining the amount of state budget appropriations for funding the activity of a political party, the subject authorised to determine this amount – in this case, the Central Electoral Commission, as well as the time limits by which the Central Electoral Commission was obliged to transfer these appropriations, respectively not later than by 15 April and 15 November of each year, to the account of state budget appropriations allocated to the political party.

Paragraph 4 of Article 20 of the Law on Political Parties established one more condition that had to be satisfied by a political party in order to receive state budget appropriations allocated for funding its activities, i.e. in cases where the Central Electoral Commission recognised that a political party had grossly violated this law or had committed a gross violation in relation to the funding of the political campaign, state budget appropriations were not to be allocated, upon the decision of the Central Electoral Commission, to such a political party for a period of up to two years counting from the date of the entry into force of the said decision.

Summing up the legal regulation established in Article 21 and Paragraph 4 of Article 20 of the Law on Political Parties, the Constitutional Court noted that the Central Electoral Commission had the right to allocate state budget appropriations for funding the activities of only such political parties that satisfied the criteria and conditions established in Article 21 of the Law on Political Parties, as well as the condition prescribed in Paragraph 4 of Article 20 of this law, requiring that a political party must not have grossly violated the Law on Political Parties or must not have committed a gross violation in relation to the funding of the political campaign.

The Constitutional Court pointed out that the petitioner impugned not the legal regulation consolidated in Article 21 of the Law on Political Parties, but the fact that this legal regulation did not prescribe what, according to the petitioner, had to be prescribed under the Constitution, specifically that a special legal regulation governing the distribution of state budget appropriations to political parties is necessary for the half year during which the next regular election to the Seimas takes place, i.e. the petitioner raised the question of legislative omission.

As mentioned before, under the Constitution, regulating the relations linked to the sources and ways of funding political parties, the legislature has broad discretion. Therefore, the Constitutional Court held that, in exercising this discretion, the legislature is not obliged to establish, among others, in Article 21 of the Law on Political Parties, which was impugned by the petitioner, such a specific way (model) of distributing state budget appropriations for funding the activities of political parties that was specified by the petitioner, i.e. specifically for the half year during which the next regular election to the Seimas takes place, to establish a special legal regulation whereby state budget appropriations for funding the activities of political parties would be distributed according to the valid results of the previous last election and new election to the Seimas and would be calculated in proportion to the term of office of the members of the Seimas elected in the respective election to the Seimas.

Thus, the fact that, in the impugned Article 21 of the Law on Political Parties, the legislature did not establish a special legal regulation governing the distribution of state budget appropriations for funding the activities of political parties specifically for the half year during which the next regular election to the Seimas takes place may not be considered to be legislative omission under the Constitution.

However, in assessing the compliance of the legal regulation established in Article 21 of the Law on Political Parties with the constitutional principles of a state under the rule of law, justice, and responsible governance, which were indicated by the petitioner, the Constitutional Court noted that, under this legal regulation, as interpreted in conjunction with the legal regulation laid down, among others, in Paragraphs 1 and 4 of Article 20 and Paragraph 5 of Article 23 of this law, Items 5 and 6 of Paragraph 4 of Article 17 and Paragraphs 1 and 2 of Article 20 of the Law on the Funding of Political Campaigns, Article 1 of the Law on Elections to the Seimas, and Paragraph 6 of Article 1 of the Law on the Budget Structure, the Central Electoral Commission was obliged to allocate six-month state budget appropriations for funding the activities of those political parties that satisfied all the criteria and conditions established by means of the impugned legal regulation. Such a decision had to be adopted by the Central Electoral Commission not later than respectively by 15 April and 15 November of each year, which are fixed as the deadlines (latest dates) for transferring the allocated state budget appropriations of, respectively, the first half and second half of the budget year concerned to political parties.

The Constitutional Court pointed out that, under the impugned legal regulation, according to the results of the respective election to the Seimas, state budget appropriations are distributed to political parties for the period of four years, i.e. for the period of the same duration as the term of office of the Seimas.

The Constitutional Court made the conclusion that, under the impugned and related legal regulation, state budget appropriations for funding the activities of political parties, among others, for the half year during which the next regular election to the Seimas takes place (in this case, it would be the eighth half year of the four-year period for which state budget appropriations are distributed for funding the activities of political parties according to the results of the previous election to the Seimas), were distributed under the same criteria and conditions applied together and established in Article 21 and Paragraph 4 of Article 20 of the Law on Political Parties, i.e. under the same conditions as the state budget appropriations distributed for the other seven half years, because the above-mentioned condition, established in Paragraph 4 of Article 20 of the Law on Political Parties, under which a political party must not have grossly violated the Law on Political Parties or must not have committed a gross violation in relation to the funding of the political campaign, could normally be satisfied only after 15 November, once the Central Electoral Commission has verified the financial statements of the respective political campaign. In other words, in order to meet the said condition, the results of the new election to the Seimas cannot be taken into account.

With a view to the overall legal regulation, the Constitutional Court held that, in the impugned Article 21 of the Law on Political Parties, the legislature had established the procedure, among other things, the clear and objective criteria and conditions, as well as other essential elements (including time limits), applicable to the distribution of state budget appropriations to political parties for funding their activities for the period of four years, among others, for the half year during which the next regular election to the Seimas takes place.

Therefore, the said legal regulation laid down in Article 21 of the Law on Political Parties, as well as the above-mentioned related legal regulation, did not deny the legitimate expectations of political parties that state budget appropriations for funding the activities of the respective political party would be received for the period of four years, i.e. for the period of the same duration as the term of office of the Seimas; such a legal regulation equally ensured the requirements of its certainty and stability; and it did respect the legitimate interests and legitimate expectations of political parties having obtained the established percentage of the total votes that they would receive the funding over the indicated period. At the same time, this legal regulation did not deny the constitutional principle of justice.

The Constitutional Court also held the following: by means of the legal regulation in question, the legislature provided the state institution (in this case, the Central Electoral Commission) authorised to distribute state budget funds with no preconditions for the abuse of the powers conferred on it or the distribution of state budget funds in an unfair and non-transparent manner, thus violating the principles of responsible governance and the rational management of state property.

The Constitutional Court emphasised that, if the legal regulation laid down in Article 21 and Paragraph 4 of Article 20 of the Law on Political Parties, as well as the above-mentioned related legal regulation, were interpreted in a different way, among others, so that state budget appropriations for the half year during which the next regular election to the Seimas takes place must be distributed according to the valid results of the last new election to the Seimas prior to 15 November, the legislature would fail to comply with the prohibition, stemming from the Constitution, among others, Paragraph 3 of Article 35 and Paragraph 2 of Article 128 thereof, to establish a legal regulation that would create the preconditions for receiving public (state) funds by political parties that have committed violations of law assessed as essential (gross) by the state institutions authorised to exercise control over the funding of a political campaign.

Taking into account the foregoing arguments, the Constitutional Court made the conclusion that Article 21 of the Law on Political Parties, to the specified extent, was not in conflict with the constitutional principles of a state under the rule of law, justice, and responsible governance.

However, at the same time, the Constitutional Court emphasised that, only based on the systemic interpretation of the impugned legal regulation, laid down in Article 21 of the Law on Political Parties, among others, in Paragraphs 3–5 thereof, in conjunction with another reviewed legal regulation as laid down, among others, in Article 1 of the Law on Elections to the Seimas, Paragraph 6 of Article 1 of the Law on the Budget Structure, Paragraph 4 of Article 20 of the Law on Political Parties, and the Law on the Funding of Political Campaigns, it was held that the impugned legal regulation was not in conflict with the Constitution, among others, the constitutional principles of a state under the rule of law, justice, and responsible governance. In view of the above, the Constitutional Court also noted that, having regard to the Constitution, among others, the constitutional imperative of legal clarity, by aligning the provisions of the Law on Political Parties and the other above-mentioned laws, the legislature should provide for a clearer legal regulation governing the procedure for distributing state budget appropriations to political parties for funding their activities.

The full text of this ruling of the Constitutional Court can be found on the website of the Constitutional Court at  http://www.lrkt.lt/lt/teismo-aktai/paieska/135/ta1936/content.