João Paulo Batalha – The Great Christmas Heist: Portugal’s political party financing caper reveals a democratic deficit

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It seemed a sure thing. A vast majority of political parties in Portugal – from far left to neoliberal right – got together four days before Christmas to reward themselves by inserting lucrative loopholes in the nation’s political financing laws. The scandal that ensued is a portrait of a distressed democracy

João Paulo Batalha is a social activist and founding member of Transparency International Portugal



They almost got away with it. After months plotting behind closed doors in an informal working group – with no public hearings, no minutes of meetings, no studies commissioned or published, no semblance of a public debate – eight members of the Portuguese Parliament, representing all political parties, brought to a vote what they claimed were technical adjustments to the political financing law. These boring sounding adjustments were approved in committee without any debate, and rushed to the floor of the Portuguese Parliament. They were put on the schedule on December 19th for a vote two days later, in the last session before Christmas. To make way for this rocket-propelled legislation, other issues already on the docket were moved aside.

The parliamentarians sold the legislation as a way of strengthening the body that regulates party and campaign financing, which is housed in Portugal’s Constitutional Court. In fact, the changes to the regulator were unlikely to give it more teeth: it would remain ill-equipped and under-resourced, and would still take years to fully inspect campaign accounts after an election. But, worse than that, perhaps hoping no one would notice, the political parties took the opportunity to award themselves a blanket VAT exemption, which would add millions to their coffers every year, and to lift the annual cap on the amounts they could collect through fundraising events – such as auctions, festivals and the like. In Portugal, already one of the five EU countries with the highest level of public financing for political parties, there would effectively be limitless opportunities for private financing – specifically, the kind of private financing (through big events) that is difficult to monitor or account for.

Prepared behind closed doors, with no public participation, no transparency, no accountability – even proposed amendments were submitted anonymously, so that no-one could identify the author. The bill was to be voted on just before Christmas, in the assumption that voters would be too busy with last-minute shopping to notice. Of 230 members in the Portuguese Parliament, only 18 voted no – the Christian Democratic MPs and an independent MP from a small animal rights party. Across the whole Portuguese political spectrum, from the right-wing neo-liberal Social Democrats through to the governing Socialists, and stretching to the orthodox Communist Party and the extreme Left Bloc, all parties voted yes. Each party had three minutes to debate the issue before the vote. Clearly, the vast majority of MPs had no idea what their eight colleagues in the backroom working group had cooked up. They voted blindly, and didn’t seem to care. For those who believe in coincidences, the loopholes neatly resolved some of the more pressing financing problems of the main political parties – some of which are technically bankrupt, despite the healthy subsidies they already get from the state.

One of Portugal’s leading dailies and the national news agency published a small account of the vote on December 22nd. Some columnists and civil society activists – with Transparency International (TI) Portugal (of which the author of this article is chairman) in the lead – took notice and made some noise. Between Christmas and New Year, the issue exploded: TV, radio, newspapers, social media embarked on a feeding frenzy, desperate to use this scandal to fill a period that is usually empty of news. The great Christmas Heist of 2017 had been exposed and it made for great television.

TI Portugal wrote to the Portuguese president asking him to veto the legislation and launched a petition that quickly gathered over 3,200 signatures. Political parties were caught off guard and awkwardly tried to justify themselves. This isn’t what it looks like, the Socialists said. We voted for it but are actually against it, explained the Communist Party and Left Bloc. It was the lesser of two evils, they insisted.

Public pressure worked: first thing after the New Year, the president vetoed the legislation and returned it to Parliament citing the lack of any public accountability in the legislative process: this was not how Parliaments in democracies were supposed to work. The political parties are now licking their wounds and seem hesitant to put the legislation back on the agenda. Perhaps they will wait until next Christmas, or the summer break.

You might say that this shows the system’s checks and balances worked and the legislation was overturned. But it revealed two key failures. First, almost every political party defied rules on procedure and transparency to legislate in their own self-interest out of the public eye. This is rather shocking for a Parliament where you can’t get this big a majority to condemn North Korea.

Second, it showed parliamentarians’ contempt for the people who elected them. They were willing to cut corners on democracy all because opening a public debate, inviting ample consultation, and having a national debate was just too unpredictable. This type of political cowardice, which finds it simpler to undermine democracy rather than foster it, is not just a Portuguese problem. Let’s face it: these sorts of practices can be found in parliaments in most EU countries and in other “advanced” democracies. Is the legislative and regulatory process at the EU level much different? It consists of a European Parliament that doesn’t have the power to propose legislation, where ultimately decisions are made in an opaque trialogue between MEPs, unelected bureaucrats from the Commission, and unaccountable Member State representatives, all of whom negotiate behind closed doors.

In Portugal, in the Great Christmas Heist of 2017 and the face-down that ensued between politicians and the people, the politicians blinked first. A useful New Year’s resolution for all democracy-loving people is: let’s keep our eyes open.


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