More than $1 billion will be spent on campaign, but no one knows for sure

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Jan. 15, 2010, 12:18 a.m. | Ukraine — by James Marson

Election propaganda has dominated Kyiv’s streets for months, including this campaign billboard for Sergiy Tigipko. Candidates are expected to spend more than $1 billion altogether.
© (Yaroslav Debelyi)

Much of election money spent in the shadows. Thousands of billboards, television advertisements, street campaign tents, music concerts make it clear: Running a presidential election campaign does not come cheap.

Despite a clear system for declaring donations to campaign funds, officials and experts say that Ukraine’s election law is consistently flouted, with spending from candidates’ official funds representing only a fraction of the amount truly spent. It’s rarely clear where the money comes from, and the donors often demand payback if the candidate gets into power.

By law, candidates should open an election fund for the campaign. Individuals or companies can finance candidates by transferring money to the election fund, which can be accepted or rejected by the candidate. “These donations are very open as it’s immediately clear who sent them – whether it’s a company or an individual,” said Andriy Mahera, deputy head of the Central Election Commission.

But these donations are not the main source of campaign funding. “The question is about the money that is given illegally, outside this system,” said Mahera. “It’s a big problem, because it’s almost impossible to keep track of this money.”

According to Oleksandr Chernenko, head of the Committee of Voters of Ukraine, a Western-funded election watchdog, many candidates finance their campaigns through so-called “black funds” in order to avoid declaring the money officially and paying taxes on it. “Some businessmen transfer money legally, but others bring it in from offshore companies in suitcases,” he said.

The first campaign advertisements started popping up well before the official start of the election campaign on Oct. 19, in violation of rules, according to observers. A number of candidates, led by former parliamentary speaker Arseniy Yatseniuk, paid for billboards and campaign tents before elections funds had even been set up.

But as Yatseniuk’s rating has fallen in recent months, the number of billboards and street campaigners has shrunk as funding appears to have dried up. “That is a sign that when the donors who sponsored his campaign saw he wouldn’t become a new political force with a large chance … they stopped financing him,” said Olga Aivazovska, head of Opora, a non-governmental network of civil activists.

The biggest spenders now, according to Opora’s monitoring, are front-runners Victor Yanukovych and Yulia Tymoshenko. Third-placed Serhiy Tigipko is spending the third highest sum, with incumbent President Victor Yushchenko in fourth. Concrete figures are difficult to estimate, Chernenko said, given that up to 90 percent of the money is spent off the books, but he said Tymoshenko and Yanukovych had likely spent as much as $400 million each on their campaigns.

Some candidates have been more open than others about their spending and funding sources. Anatoliy Hrytsenko declares on his web site who has given donations and how much. According to his figures, just over Hr 9 million ($1.1 million) has been collected so far. Multi-millionaire Tigipko said on Jan. 13 that he had spent the equivalent of $11 million on his campaign, mostly from his personal fortune.

Yatseniuk’s Front of Change initiative prints a list of donors on its website. He told reporters on Jan. 13 that he had spent some $10 million on his campaign. He has been accused of not declaring the identity of his biggest backers.

According to Opora’s Aivazovska, much of the money is being spent on gifts for voters, such as food packages and medications, in violation of electoral law. State resources are also being used for campaigning, with official visits across the country by Yushchenko and Tymoshenko turning into rallies. Various forces in eastern and southern Ukraine, the hotbed of support for Yanukovych and his Party of Regions, have also been promoting him through social programs, observers report. “In effect, taxpayers are involuntarily sponsoring the candidates’ campaigns,” Aivazovska said.

Kyiv Post staff writerJames Marsoncan be reached
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