Interview: Fernando Jiménez Sánchez

We spoke to Fernando Jiménez Sánchez, a professor of political science at the University of Murcia and a Council of Europe GRECO expert, about two hugely challenging issues facing Spain: political financing and judicial reform.

Daniel: How well are the controls on political funding working in Spain?

Fernando: Donations from companies have been banned since 2015 but as is often the case in Spain, the legislation contains major loopholes. Companies can’t donate directly to parties, but they are permitted to make unlimited donations to foundations controlled by the parties.

This practice is opaque, but donations made in this way become public knowledge when there is a corruption case or judicial investigation. There have been several of these, especially involving regional parties, such as in cases in Catalonia.

We have seen that parties' election expenses are funded by the foundations. This is the loophole. Although the money doesn’t appear in the official party accounts, investigations have revealed that campaign expenditure is often paid for directly by the foundation using corporate donations. The problem is that there is very little oversight of how the foundations or the parties use that money.

Another problem is that the Tribunal de Cuentas (Court of Auditors) does not conduct thorough inspections of the parties’ accounts; instead, they perform a compliance review. This is not the same as a full investigation.

For example, a party might claim to have spent a certain amount on a campaign. When reviewing the accounts, the Court may select six of the biggest cities at random and check how many bus stops had ads for this party. Then they might verify how much that would cost at market rates and compare to the declared sums in the accounts.

It is difficult to detect non-compliance in this way, let alone without a judicial investigation. It means the oversight system is defective.

Daniel: Do parties raise funds through other means?

Fernando: Yes. Political parties in Spain have traditionally borrowed money from banks. As an election approaches, they request an advance on the public funds they expect to receive based on their predicted election results. Depending on the party, they ask the bank to advance 60% or 80% of this amount.

Prior to the 2008 banking crisis, these loans were provided by regional savings banks ('cajas de ahorro'). The people running these banks were connected to the political parties that dominated in each region. The savings banks operated within a specific geographical area. For example, a savings bank in the Valencian Community was in effect controlled by the parties governing that region

Depending on a party's needs, the savings bank would lend money even though it knew those loans would be very difficult to recover. In the end, this led to the downfall of the savings banks and they almost disappeared altogether. The only one that remains is CaixaBank, the savings bank of Barcelona, which has become a stronger institution with more professional management and now operates as a regular bank.

These days it’s harder for political parties to obtain these loans as the banks now have much more professional management and demand more guarantees.

Daniel: Which country gets political financing right?

Fernando: In my view, the best system is the German model that matches public to private funding but with limits and total transparency. It restricts big donors because the amount a company or business association can contribute is limited to a certain amount per year. It incentivises parties to obtain small sums from a range of sources. This encourages the parties to deeper and broader connections with society, but without there being any undue influence. I think private financing is necessary for that, because parties cannot be completely encapsulated and isolated from society and only receive public funding.

Daniel: What are the chances of this system being introduced in Spain?

Fernando: Right now, it's zero. Firstly, it’s not part of the debate — not a single party is proposing this. Some small civil society organisations are interested in the topic of political financing,, but they’re not very representative associations. They're like mushrooms — they pop up everywhere, but they don’t seem to want to collaborate to increase their visibility, even though come to the table with good ideas. The parties are comfortable with their current financing situation and are well aware of the limitations this creates.

Daniel: The Council of Europe body GRECO has been critical of the pace of judicial reform in Spain. Why so?

Fernando: The big problem in Spain is that the parties have largely colonized, even excessively influenced, the oversight bodies. For example, take the appointment of the General Council of the Judiciary. It’s been a longstanding criticism from GRECO that judges are selected by Parliament, by Congress and the Senate. In other words, by political parties.”

What ends up happening is the politicization of judges, and then the appointments made by the General Council of the Judiciary for the higher courts are too sensitive to the needs of political parties. So this game of interests has to be broken. That’s why judges should elect the judicial members of the General Council of the Judiciary. And this hasn’t changed.

All this distorts the functioning of oversight bodies everywhere: in the Constitutional Court, in the high courts — not so much, perhaps, in the Supreme Court (well, partly, but still, in the end the Supreme Court has to show a certain professional solidity). But, for example, the Higher Courts of Justice of the Autonomous Communities are made up of magistrates who are tremendously sensitive to political interests, to the interests of the parties. And, of course, those magistrates are appointed by the General Council of the Judiciary.

And these types of appointments are made because the General Council of the Judiciary is again heavily influenced by political parties. So this is what I’m saying perverts everything. In the end, we don’t have oversight bodies, we don’t have referees.

Whether it’s party financing, lobbying or integrity policies more broadly, we always have the same problem in Spain. The referees wear the jerseys of the team they’re supposed to oversee.