Political rents

In at least 246 towns, municipalities have allowed political parties the use of rent-free or low-cost office space.

Towns in Bosnia-Herzegovina (BiH) allow political parties to use their offices free or for minimum rent an act that weight on local budgets and the civic projects they are supposed to support.

It’s also illegal. The Law on Financing of Political Parties in BiH bans parties from accepting public money and other types of donations from government bodies and agencies and public companies.

Between 2004 and 2009, government on all levels allocated more than 111 million KM for financing party expenses, rent included. Nevertheless, the Central Electoral Commission (CIK) has no examples that show a government body subtracting rent from its party donations.

The law outlaws penalties for taking prohibited donations, but CIK officials said they had no mechanisms for disciplining parties that use towns’ premises free of charge.

Parties have mainly been given business premises, while some municipalities have offered them kindergarten facilities. The municipal board of the Party of Democratic Action (SDA) in Novi Travnik, received a rent-free office in the kindergarten of Rijad Dizdarević school in 2008. That same year, the town of Modriča invited the local board of the Independent Social Democrats (SNSD) to use its old and by-then non-operational kindergarten.

Failed to Show Obligations Under Rent

According to CIK reports, municipalities and other government agencies have given rent-free premises to parties in at least 246 places between 2004 and 2009. CIK auditors calculate that the illegitimate contribution for 121 offices amounted to 1,079,437 KM. For the other 125, auditors could not calculate the unpaid rent because they had no access to information about office size and rent costs.

CIK’s president Irena Hadžiabdić explained that 19 municipalities had not even published the cost of rent.

Irena Hadžiabdić, president of the Central Election Commission said they can’t sanction political parties which are using rent-free premises because they can’t collect all the needed evidence.
Photo by CIN

During 2004 to 2009, SDA used 50 public premises free-of-charge, the Party for BiH used 34, Social Democrats (SDP) used 25, the Croatian Democratic Alliance (HDZ), 24, the Serb Democratic Party (SDS), 22, SNSD and the Party of Democratic Progress (PDP) each used 19, and the Socialist Party of RS (SPRS) used 17. Other parties used the remaining 53 premises.

CIK auditors in their 2008 report tracked a paper trail of 237,933 KM of illegitimate funds provided by municipalities. Some small part of the funds came from the Federation of BiH government. Parties that had rental agreements were under obligation to pay rent, but according to the auditors they failed to account for allowances or free space in their financial reports.

By using rent-free offices or by paying an undervalued rent in eight towns, SDA kept 87,351 KM in its coffers in 2008.

Another party in power, the Party for BiH, kept at least 36,430 KM that might have gone for office rent in 2008. SDP and SNSD also benefited in this way. SDP used at least 20 offices free-of-charge that year, though the auditors had data on square meters and pricing for five. Based on this they had calculated illegitimate gains of 23,236 KM. Even though SNSD used 10 offices, auditors calculated the gains for only two at 1,150 KM.

Both Space and Money

The Novo Sarajevo Municipality allocated 360,000 KM this year for the activities of political parties represented in the Municipal Council. Notwithstanding this, the municipality provided free premises to SDP, SDA, Our Party and the Party of Bosnian Patriots (BPS).

President of the Novo Sarajevo Municipal Council NNebojša Simić said parties negotiate the rent-free offices.
Photo by CIN

‘This was decided by the municipal council’ Nedžad Koldžo, the municipality’s president and an SDA member said. Council president and SDP member Nebojša Simić, said that the parties negotiated the rent-free offices.

‘Simply, this is done in this way to achieve some sort of balance and peace and it’s been going like this for years’ said Simić.

CIK auditors found that SDA, based on a contract signed with the Centar Municipality in Sarajevo in March 2008, used a 105-square-meter office for 1 KM per square meter. Rents in that area normally range from 15 to 25 KM per square meter.

The Center for Investigative Reporting in Sarajevo (CIN) has calculated that this deal alone gave SDA a windfall of 42,630 KM between 2008 and August 2010.

Building in Maršala Tita 9 in Sarajevo is headquarters for several parties.
Photo by CIN

‘This was set here by the Municipal Council and currently SDA, SBiH, Our Party and BPS have such contracts’ said Fahrudin Kurtović, deputy to the head of the municipal Finances and Industry Department.

SDS has similar contracts with Srbac (1 KM per square meter) and with Brod (2 KM per square meter). HDZ has them with Tuzla (1KM per square meter) and with Brod (2 KM per square meter). SNSD, SDP, PDP and SPRS have them with Brod (2 KM per square meter).

Headquarters for several parties are at Maršala Tita 9 in Sarajevo. One of them is SBiH, which has refused for years to sign a lease agreement with the FBiH Department for Joint Affairs, according to government administrator Haris Ihtijarević. He said that SBiH has refused on grounds the building in question belongs to the state, not the FBiH government.

SDA, the Liberal Democratic Party (LDS), the Croatian Democratic Community 1990 (HDZ 1990), the Croatian Peasants Party –New Croatian Initiative (HSS-NHI), the Social Democratic Union (SDU) and the European Ecological Party (E-5) have signed contracts, but they don’t pay rent in the building either.

CIK has since 2004 repeatedly warned about rent-free offices on Titova Street. Nevertheless, only in January did Ihtijarević file an order with the FBiH Attorney General to start the eviction of non-paying tenants.

Illegal Tenants

Svetozar Pudarić, president of SDP’s Main Board, said that rent-free offices for parties was an effort to level the playing field for all parties, and that CIK reports have been unrealistic.

‘CIK is looking at many things in its own way and CIK members are trying with such interpretations, to secure their posts for as long as possible’ said Pudarić.

CIK circulated a letter to municipal authorities four years ago, requesting them to stop giving public property rent-free to political parties. The municipalities continued to do so, and parties continued to not report their free rent.

Hadžiabdić said that CIK could not penalize parties because that would mean discriminating against those that they have collected enough evidence against compared to the parties for which they were unable to calculate illegal profits.

Hadžiabdić thinks that passing a Law on Political Organizing would solve this issue. She said that CIK has been trying to get the BiH Parliament to pass this law for years, but has so far failed and she expects that will be the case for long into the future.

In other European countries, laws stipulate that parties can get money to pay for necessities like space or they can be given rent-free quarters, in which case the difference between their allotments and their rent must go back into the public treasury.