7 - Public financing of parties in Italy

Summary

During the first period after the introduction of the republican constitutional system in Italy, that is, from 1948, to 1974, no legislation was passed to regulate the financing of political parties. As it was in the prefascist period, the political funding system was exclusively private. According to an in-depth survey carried out by the Center for Research and Documentation, there were five main channels in 1971 through which the political parties could obtain funds to satisfy their fiscal requirements:

1. contributions from cardholding members and supporters;

2. subsidies from external private organizations, including “kickbacks” on contracts and supplies paid to parties controlling the central and local administrations;

3. diversion of public money by means of bureaucratic tricks, “black” contracts and “black” interest on the bank accounts of state and parastatal economic agencies.

4. income from business, industrial and commercial activities controlled by the parties through cooperatives, financial and trading companies;

5. financing aid from abroad, either from foreign governments, or from trade union or private organizations.

This wide range of methods for party fund raising left considerable leeway to use questionable sources. For a long time, the use of such sources was rationalized by the state of need in which the parties found themselves and the absence of suitable legal sources from which to pay their expenses.

In 1961 this state of affairs triggered a wide-ranging political and cultural debate in Italy. This debate was aimed at solving the problem of party funds through public financing.