PL and PN end 2024 with heavy financial burdens and no donor transparency

Though their day-long telethons might have made you think otherwise, both the Labour Party and the Nationalist Party ended last year with heavy financial burdens, deficits, and no commitments to disclosing who their major donors really are.

This week, all eyes were on the Nationalist Party’s new leader, Alex Borg, and his promise to deliver the party’s late accounts by the 100th day of his tenure.

While the Nationalist Party did successfully file its audited accounts with the Electoral Commission earlier on Monday, those accounts also reveal that the party has a total of around €11.7 million in liabilities, over €10 million of which constitute loans. The debt figures published by the PN’s are much less than those disclosed by some of its top brass a few months ago.

According to its financial statements, the PN also owns assets worth around €16.2 million, a figure which was increased following the revaluation of the party’s property portfolio.

In total, the PN said it spent €738,000 more than it earned during last year, writing off an additional €1 million in bad debts that ancillary entities like Media.Link – the NET TV operator – had accumulated, effectively erasing its own credit and further weakening the party’s financial structural integrity in the process.

More than €7.5 million in loans taken out by the Nationalist Party were guaranteed using the party’s assets as security, effectively trapping the party in a cycle of dependence on its own loss-making subsidiaries and exposing the party to greater risk should any of its key organs fail.

The Labour Party, on the other hand, owns assets worth a total of around €40 million, while its liabilities amount to around €7.2 million.

The PL spent €1.1 million more than it earned last year, with €1.8 million spent on the 2024 MEP and local council elections alone when compared to the PN’s relatively paltry €251,000 campaign.

While the PN’s day-to-day spending power is limited by its heavy debt, the PL is more reliant on bank overdrafts, mostly from the government-controlled Bank of Valletta, to support its day-to-day operations, indicating that the party is not in a position to sustain a long-term campaign that would further drain its limited liquidity.

In addition, the PL’s auditors, Grant Thornton – often used by government entities through major contracts – explicitly flagged uncertainty about the overall valuation of the party’s properties:

“These assumptions are subjective in nature and involve uncertainties and matters of significant judgement, and therefore cannot be determined with precision,” the auditor’s note reads.

What truly stands out from a thorough look at these accounts is just how much both parties depend on major donors whose identities remain hidden behind legal loopholes.

The PL made just €102,000 from membership fees, with “monetary donations” accounting for around €1.5 million. The PN made just under €100,000 in membership fees and around €1.5 million from unnamed private donors.

One glaring example of just how opaque this process is can be seen in the day-long telethons organised by both major parties on their respective political party television stations.

On Sunday, the Labour Party claims to have raised a total of €1.1 million in donations, while the Nationalist Party claims to have raised around €730,000.

Nationalist Party MP Adrian Delia claimed to have raised €100,000, while party CEO Sabine Agius Cabourdin separately claimed that she had raised more than €120,000 – figures which sound great on paper, but which hardly mean anything without any clear explanation as to where those funds originated from.

It is a known secret that major business organisations, particularly developers and contractors, ‘invest’ in political donations, particularly with the party of the governing administration in return for permits, public contracts and other substantive sweeteners.

Following the PN’s press conference earlier on Monday, The Shift asked Opposition Leader Alex Borg to explicitly state whether the party plans on honouring his promises of “total transparency” by publishing a breakdown of all donations received via telethon.

While Borg was careful to say that he does not have any problem with the publication of any information which is in line with the party’s legal obligations, he stopped short of fully committing to publishing a breakdown of donations received via telethon.

While the presentation of the PN’s long-overdue accounts is a promising start for the party’s young leader, its ongoing refusal to support legal amendments that would oblige parties to publish details of their donors shows that the party is just as reliant on business donors as is the situation, possibly to a bigger extent, of Robert Abela and his Labour Party.