Crowdfunding bypasses party finance laws, warns Spain’s Audit Court

Spain’s Audit Court is concerned about a loophole in party financing legislation that could be used to circumvent legal restrictions on donations.

The problem lies with financial contributions made through crowdfunding websites, which make it difficult to identify individual donors.

The report noted that €50,000 in donations were not properly identified in Podemos’s accounting

The national watchdog is asking lawmakers to regulate this type of fundraising, which was successfully used by Spain’s new grassroots party Podemos to finance its European election campaign last year.

The recommendation is part of a report analyzing party spending during the run-up to the May 25 elections to the European Parliament.

The report detected “deficiencies” and “inconsistencies” in Podemos’s accounting, and noted that nearly €50,000 in individual donations were not properly identified.

Podemos’s finance chief, Segundo González, said the Paypal account that online donors sent money to does not make the same identity requirements as the Spanish Audit Court. In other words, online donors are not required to provide their name, ID and address the way other donors are.

The report makes further recommendations, such as limiting campaign expenditure to “the essential” and providing the Audit Court with detailed documentation on costs.

The Audit Court’s chief prosecutor has also published a separate report accusing most Spanish parties of financial crimes in their 2012 accounts, including unlawful donations.