Germans like to see themselves as an orderly bunch who follow the rules. But when it comes to party donations, German politicians have not always been squeaky clean.
Over the years, the country has been hit by various party funding scandals. Stories of suitcases full of cash delivered straight to the chancellor’s office badly tarnished the legacy of Helmut Kohl. More recently, parliament imposed a hefty fine on the far-right Alternative for Germany over illegal transfers from a Swiss-based company.
This is, of course, not how it’s meant to work. But party funding will be under scrutiny once again as parties try to gain an edge through donations from companies and individuals as Germany’s general election campaign heats up.
Here’s POLITICO’s guide to everything you need to know about political party financing in Germany.
How is it meant to work?
The do’s and don’ts are laid down in the Law on Political Parties.
Parties have three main sources of income: state funding; contributions from members or from the salaries of elected officials such as MPs; and private or corporate donations.
State funding is based upon the party’s “rootedness in society.” This is calculated according to how many votes a party has won in the last European, federal, and state elections, and how much it has received in membership contributions and donations.
The idea is that the more relevant a political party is for society at large, the greater its need for neutral financing. Smaller, or newer, parties thus have an inherent disadvantage in the German system.
To be “rooted in society” does not, however, necessarily mean being part of the political mainstream. The neo-Nazi National Democratic Party of Germany (NPD) received €350,000 of taxpayers’ money in 2020 and is scheduled to receive the same amount this year. Germany’s government, together with both houses of parliament, filed an application to the constitutional court to stop funding the party with state cash. The court has yet to rule in the case.
Are there limits to state funding?
A party can never receive more state funding than it generates through its own revenue in any given year. In other words, up to 50 percent of a party’s income can come from the state.
The total ceiling on state funding for political parties is set each year by the president of the Bundestag. This amount has increased dramatically in recent years: in 2010, the total was €133 million; the figure for 2021 is over €200 million.
The large increase was made possible by an amendment to the party law in 2018. The ruling parties (CDU/CSU and SPD) argued that due to new developments — such as social media and digitization — political parties needed more funds. The amendment passed despite opposition from all other parties in parliament.
How dependent are political parties on donations?
For political parties represented in the federal parliament, state funding made up more than one-third of total income flows in 2019. Membership contributions were the second most important income source, while donations made up around 14 percent of their income.
Donations — private and corporate — generally increase sharply in an election year.
Are there limits to party donations?
After the Christian Democrat funding scandal that tarnished Kohl, several adjustments to the Law on Political Parties were made. These adjustments, however, mainly focused on transparency, rather than imposing restrictions.
Party donations above €50,000 must be reported immediately to the president of the Bundestag, who then publishes the information on the parliament’s website. There’s no limit on personal or corporate donations.
Donations above €10,000 must be published in each party’s annual report, which the president of parliament checks and publishes online. In practice, the full reports are only made available to the public two years later. So donations under €50,000 made in the current election year will likely only be published in early 2023.
Critics say these regulations are too lax and easy to get around. Lobbycontrol, a German NGO focusing on transparency, reported that the CEO of a gambling machine company had donated €120,000 to Bavaria’s Christian Social Union in 2018 — but did so by making one donation as an individual and five more through businesses he owned. He thus avoided his donations being made public immediately, as each one was under the €50,000 limit. That same year, German politicians were deciding on whether to impose stronger regulation for gambling machines.