Italian Political Financing:
How Meloni paid her way
16 Dec 2022 – Written by Lena Raballand
Summary
- Following Mario Draghi’s spectacular double attempt to resign, and a summer of turmoil, Giorgia Meloni and her party Fratelli d’Italia made their entrance at the head of the Italian government in October 2022. Italy has elected its first female Prime Minister but Meloni’s victory is no coincidence, but a result of a long history in politics and back door deals within the right wing Italian parties.
- Her election could not have happened without the political financing backing her campaign. Politics is expensive, and whose money a party will accept has consequences. Italy is only one of two European Union Member States in which no public funding is available to any party. In consequence, this forces Italian parties to scrap for funds wherever they can. Digging deeper into the public records of the Chamber of Deputies, it is evident Fratelli d’Italia relied on donations from private individuals, parliamentarians, and companies.
- Nonetheless, a degree of state capture is never far on the horizon for Italy. It’s too early to tell what impacts some donations will have on the future course of the Italian government, however some unidentifiable sources of funding on the public records signal that we need to be on the lookout in the months to come.
A summer of crisis and turmoil in Italian politics led to the election of Giorgia Meloni as the new Prime Minister on 22 October 2022.
It is clear what chain of events led to Meloni’s election at the head of her party Fratelli d’Italia (Brothers of Italy). In February 2021, Mario Draghi was invited to form a government as a “non-partisan prime minister” (Mershon, 2022) by the President Sergio Mattarella. At the time, Draghi was supported by most of the political parties including the League, the Five Star movement, the Democratic Party and Forza Italia. However, barely one year later, this was no longer the case. In June 2022, the 5-Star Movement parliamentarians refused to support a government bill addressing the cost of living crisis as they deemed the “relief measures were insufficient” (Mershon, 2022), which led to a vote of confidence in July. While Draghi technically “won the ballot in the Senate with 95 votes in favour and 38 against” (Mershon, 2022), he resigned a first time although his resignation was rejected. Eventually, as he deemed it ungovernable to stay as Prime Minister without support “of a broad coalition” (Mershon, 2022), his second resignation was accepted and a snap general election was called for October, paving the way for Meloni’s victory.
Although Meloni is now the first woman and youngest Prime Minister elected in Italy, her victory is the culmination of meticulous political career. Born in Rome in 1977, her political engagement started in 1992, when at age 15, she joined the Youth Front, the youth wing of the neo-fascist party Moviemento Sociale Italiano (MSI). The Party was dissolved in 1995, but by the following year she had gained her first experience at the head of a party as in 1996 she became the national leader of Student Action, a branch of National Alliance, the replacement for MSI.
She first entered the Italian Parliament in 2006 where she was elected as a National Alliance parliamentarian. By 2009, National Alliance had merged with Forza Italia to become the People of Freedom party. However, she did not sit in the People of Freedom party as by 2012, Meloni alongside Ignazio La Russa and Guido Crosetto, founded Fratelli d’Italia. The following year, in the 2013 Italian general election, their party successfully obtained 9 seats in parliament (2% of the overall vote) and joined Silvio Berlusconi’s centre-right coalition.
In 2014, she became President of Fratelli d’Italia and was successfully re-elected in 2017. In the 2018 general election, Fratelli d’Italia gained increased support and collected 4.4% of the votes.
Finally, in the run-up to the October 2022 snap-general elections, Berlusconi explained the centre-right’s coalition had come to an agreement that the leader of the party in the coalition with “the most votes will be proposed to the head of state as the candidate-premier” (Roberts, 2022). In consequence, when Meloni obtained 26% of the vote on the day of the election, she was proclaimed Prime Minister by the coalition.
However, what is less clear is how Meloni financed her campaign which led her to victory.
I. The role of political financing in politics
Politics is expensive. Candidates and political parties need to spend economic resources “to finance their day-to-day activities, organise the selection of candidates, run election campaigns and .. win elections” per Piccio (2020, p. 461). And the cost is only increasing. Van Biezen highlights several factors; “increased use of the mass media and more cost-intensive campaigning techniques, and as a consequence of the internal professionalisation of parties” (Van Biezen, 2008, p. 348). However at the same time, parties in western democracies have “seen their membership base decline” (Ibid.) leading to a reduction in income collected through membership subscriptions and the necessity to recruit paid professionals to conduct campaign activities, in replacement of previous volunteering by supporters.
In sum, political financing is necessary and vital for parties in a democratic system. As summed up by the OECD (2016, p. 21), “money is a necessary component of the democratic processes, enabling the expression of political support as well as competition in elections”.
II. So, how did Meloni finance her campaign?
Political financing encompasses three main types of funding: public funding, private funding and illegitimate funding (Casas Zamora, 2005, p. 18). Therefore, Meloni could have relied on several sources of financing in her 2022 campaign.
Meloni’s inability to rely on public financing. Public financing was introduced in Italy in 1974. However, following referendums in 1993 and 1997 on public financing reform, in 2014 Italy passed Decree Law No.149/2013 to phase out public financing. As such, Italy no longer has any “system of public party financing” (Gianni et al., 2019).
Uniquely, Italy is only one of two countries, the other being Malta, in the European Union to not have any public financing.
Summarised by Piccio, public financing for parties was introduced in Italy in 1974 for two reasons. Firstly, public financing would result in “moralisation of politics” (Piccio, 2020, p. 470). Following a corruption scandal within the Italian government in the 1970s, state subventions were presented as an alternative and solution to ensure political parties would be less likely to “rely on private funding from companies and interest organisations demanding policy rewards in exchange” (Piccio, 2020, p. 470). Secondly, public financing would strengthen political parties as it would provide them with more resources, and “enable them to function and operate properly for the safeguarding of Italian democracy” (Piccio, 2020, p. 470).
However, even more interestingly, the same concerns of political corruption which led to the introduction of public financing, ultimately led to its abolishment. In essence, through several factors such as “two scandals involving treasurers of two prominent parties (the Margherita and the LN)” and the Five Star Movement’s campaign against political elites, public political financing was no longer seen as a solution to avoid political corruption, but as a vehicle of corruption as public money was fraudulently stolen or misallocated. These strong critiques eventually led to the repeal of any public financing available to parties in 2014. When the decree was published it was presented “to the public as a victory for citizen’s self-determination over a state-imposed party funding regime” (Piccio, 2020, p. 471).
Meloni’s reliance on private donations. Since Meloni could not rely on public political financing of her 2022 campaign, her and Fratelli d’Italia had to rely on “direct and indirect voluntary financing” (Gianni et al., 2019). As explained by Gianni, Pera and Salerno (2019), “phasing out of state financing has gone hand in hand with encouragement of both direct and indirect contributions by citizens and legal persons in favour of political parties, which are the cornerstone of current regulation.”
The Chamber of Deputies, the lower house of the Italian Parliament, is in charge of keeping records of party donations.
To start, its data provides information not only on the sources of funds collected by parties but offer a comparison between parties. As we can see from the figure below, although Fratelli d’Italia won the 2022 election, they only come in as the 4th most funded political party. Fratelli d’Italia collected €2.36 million compared to the €6.5 million collected by Lega of the total €21.5 million collected by parties.
Moreover, the Chamber of Deputies’ data shows who the donation is coming from.
The importance of parliamentarian contributions. From figure 2, we can see the importance of donations from Parliamentary donations in Italian political parties in general, but also within Fratelli d’Italia itself.
Donations from individuals and companies. Alongside, parliamentarians, donations to Meloni and Fratelli d’Italia were also collected from companies and individuals. However, donations from companies and individuals would have been regulated, as seen in the following table.
To a Political Party e.g. Fratelli d’Italia
Natural persons can donate up to 100,000 euros to an individual party per year executed directly or through intermediaries
Legal persons can donate up to 100,000 euros in total to an individual party per year executed directly or through intermediaries
Allowed
Natural persons can donate up to 100,000 euros to each party per year executed directly or through intermediaries
Allowed
Natural persons can donate up to 100,000 euros to an individual party per year executed directly or through intermediaries
Legal persons can donate up to 100,000 euros in total to an individual party per year executed directly or through intermediaries
Not allowed
Not allowed
Not allowed
To a Candiate e.g. Meloni 2022
Natural persons can donate up to 100,000 euros to an individual party per year executed directly or through intermediaries
Legal persons can donate up to 100,000 euros in total to an individual party per year executed directly or through intermediaries
Allowed
Natural persons can donate up to 100,000 euros to an individual party per year executed directly or through intermediaries
Legal persons can donate up to 100,000 euros in total to an individual party per year executed directly or through intermediaries
Not allowed
Not allowed
Not allowed
Table 1: Sources of political finance in Italy
In sum, in terms of private donations, Meloni’s 2022 campaign could have firstly benefited from direct private contributions capped at €100,000 per year for both natural and legal persons and benefit from partial tax relief. Moreover, Fratelli d’Italia could have benefited from “the indirect two-per-thousand contribution, which allows a taxpayer to earmark 0.2 per cent of his or her taxable income as a contribution to one eligible political party”. Finally, Fratelli d’Italia would have also relied on fundraising of campaigns (Gianni et al., 2019).
Disclosure of donors. However, Meloni’s donors will have in theory been identified, as “parties must disclose donors’ names whether they are natural or legal persons if the threshold of €5,000 per calendar year is exceeded” (Gianni et al., 2019). However, the enforceability of such a mandate may be questionable as the Law stipulates “an exception to this disclosure requirement is foreseen for donors who have not given their explicit authorisation to treatment of personal data in compliance with data protection regulations” (Gianni et al., 2019).
Nonetheless, Fratteli d’Italia has published its donors and the amount donated on their website covering the periods between 2019-2022 (Fratelli d’Italia, 2022).
III. What could this financing mean?
Political financing becomes an issue when it can be weaponised to get around the democratic process. Per Piccio, “the functioning of party organisations is not just about the quantity of money flowing into the party coffers but that the sources of income matter for understanding the constitutive character of given political actors” (Piccio, 2020, p. 462).
Firstly, political financing can lead to party cartelisation. Developed by Katz and Mair, the Cartel Party Thesis describes the behaviour “in which colluding parties become agents of the state and employ the resources of the state the ensure their own collective survival” (Katz & Mair, 1995, p. 5).
As seen in the Chamber of Deputies data, this is already happening in Italy. As highlighted by Nardinocchi (2022), “the relationship between donations and ‘insiders’ is more or less an explicit dependency relationship”. The data shows that “out of 2764 total lenders, 740 are parliamentarians and 995 citizens who hold political offices at the regional, provincial or municipal level.” In sum, more than two thirds of donations to parties come from individuals or corporations within the political machine, leaving barely one third of donations from outsiders to the system.
State capture, developed within the post-Soviet context in Eastern Europe by Hellman and Kauffman, is a term describing a type of predatory relationship between individuals and corporations on the state. Per David-Barrett (2021, p. 4), “state capture is a type of systematic corruption whereby narrow interest groups take control of the institutions and processes that make public policy, excluding other parts of the public whose interests those institutions are supposed to serve”.
The future months and years will only tell whether or not politically financing Fratelli d’Italia and Georgia Meloni during their October 2022 campaign may have been a vehicle to capture certain institutions in Italy. This state capture would be identifiable as “influence on the formation of policy, seeking to influence the implementation of policy, and by disabling accountability institutions” (Dávid-Barrett & Fazekas, 2020, p. 414). Nonetheless, the roots may already be here.
For example, the public donation records show a €5,000 donation from a company named “Ts Srls”, however the nature of this company and its business is unclear. On top of this, the records show “many companies with the name Ts Srls” (Leo et al., 2022). As the nature and business of these companies are unclear, the purpose of all of these donations is equally opaque.
To summarise and answer the question of how Meloni financed her 2022 campaign, the evidence shows her campaign raised €2.36 million. While Meloni and Fratelli d’Italia could not rely on any public funding, they relied mostly through donations from Members of Parliament and local politicians, supported by private donations from individuals and companies “related to the party, and from private companies in various industrial sectors” (Leo et al., 2022).
It’s too early to tell the impacts of this 2022 campaign financing, however as inconsistencies in public donation records are already apparent, we will need to be vigilant to the possible development of party cartelisation and state capture in Italy in the years to come.
References
Casas Zamora, K. (2005) Paying for democracy: political finance and state funding for parties. 1. publ. Colchester: ECPR (ecpr monographs series).
Dávid-Barrett, E. (2021) State Capture and Inequality. Pathfinders for Peaceful, Just and Inclusive Societies, State Capture and Inequality. (New York: Center on International Cooperation), pp. 1–26. Available at: https://cic.nyu.edu/sites/default/files/cic_pathfinders_state_capture_inequality-2021.pdf.
Dávid-Barrett, E., Fazekas, M. (2020) ‘Grand corruption and government change: an analysis of partisan favoritism in public procurement’, European Journal on Criminal Policy and Research, 26(4), pp. 411–430. Available at: https://doi.org/10.1007/s10610-019-09416-4.
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Gianni, Pera, O.-A., Salerno, F. (2019) Political finance in Italy, Lexology. Available at: https://www.lexology.com/library/detail.aspx?g=d9bf766b-828f-4c83-8ba4-8c5f70035292 [Accessed: 30/11/2022].
Katz, R. S., Mair, P. (1995) ‘Changing Models of Party Organization and Party Democracy: The Emergence of the Cartel Party’, Party Politics, 1(1), pp. 5–28. Available at: https://doi.org/10.1177/1354068895001001001.
Leo, D., Gonzato, F., Loguercio, L. (2022) Dal Twiga all’industria militare: chi ha finanziato la campagna elettorale di Fratelli d’Italia, Pagella Politica. Available at: https://pagellapolitica.it/articoli/finanziamenti-campagna-elettorale-fratelli-italia [Accessed: 13/12/2022].
Mershon, C. (2022) Italy heading to snap election as unity coalition crumbles: Explaining the nation’s fragmented party system, The Conversation. Available at: http://theconversation.com/italy-heading-to-snap-election-as-unity-coalition-crumbles-explaining-the-nations-fragmented-party-system-187213 [Accessed: 28/11/2022].
Nardinocchi, C. (2022) Chi finanzia i partiti e quanto: scopri la classifica. Available at: https://lab.repubblica.it/2022/partiti-elezioni-politiche-2022-finanziamenti/ [Accessed: 12/12/2022].
Piccio, D.R. (2020) ‘Party funding in Italy: organizational models, empirical evidence and party self-delegitimation’, Contemporary Italian Politics, 12(4), pp. 461–475. Available at: https://doi.org/10.1080/23248823.2020.1838866.
Roberts, H. (2022) ‘I’m not a fascist — I like the Tories, says Italy’s far-right leader’, POLITICO, 10 August. Available at: https://www.politico.eu/article/giorgia-meloni-im-not-a-fascist-i-like-the-tories-says-italys-far-right-leader/ [Accessed: 28/11/2022].
Van Biezen, I. (2008) ‘State Intervention in Party Politics: The Public Funding and Regulation of Political Parties’, European Review, 16(3), pp. 337–353. Available at: https://doi.org/10.1017/S106279870800029X.
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Recommended citation:
Raballand, L. (2022) Italian Political Financing: How Meloni paid her way, IDRN, 16 December. Available at: https://idrn.eu/italian-political-financing-how-meloni-paid-her-way/ [Accessed dd/mm/yyyy].