Campaign finance in Georgia is a strictly regulated field under the Election Code: the law defines the permitted sources of funding, spending ceilings, reporting deadlines vis-a-vis the State Audit Office, and liability for breaching these requirements. This page explains the rules governing campaign expenses, accountability and sanctions, and shows what an electoral subject, an independent candidate and their financial managers must take into account when preparing a campaign. Because the same rules also capture spending incurred by third parties for the benefit of a subject, compliance planning must cover the entire circle of persons involved in the campaign.
Permitted Sources of Funding and the Electoral Fund
An election or referendum campaign must be financed from the party fund or from an electoral fund opened by an initiative group of voters — for the purpose of financing the campaign of an independent candidate. A candidate nominated by an electoral subject uses the fund of the subject that nominated him or her. The account of the electoral campaign fund of an initiative group of voters is opened in a licensed commercial bank in Georgia on the basis of an order of the chairperson of the relevant election commission on the registration of the relevant electoral subject.
An electoral subject is obliged to submit to the State Audit Office information on the bank account from which the election campaign will be financed; the submitted information must also include the contact details of the persons responsible for managing the campaign fund. Campaign expenses are deemed to be the totality of monetary funds designated for the campaign and deposited on the relevant bank account, as well as all goods and services received free of charge at market prices, except the value of free airtime received under the procedure established by law. It is impermissible to use any funds other than the funds of the relevant campaign fund during elections.
Spending Ceilings
The total amount of expenses incurred by an electoral subject during a year must not exceed 0.04 percent of the gross domestic product of Georgia of the previous year. This amount includes the expenses incurred by the subject and, for its benefit, by another person, as established by the State Audit Office and notified to the relevant electoral subject. The annual ceiling on the total election expenses of an independent majoritarian candidate is determined as follows: the ceiling of campaign expenses allowed for a party — 0.1 percent of the previous year gross domestic product — must be divided by the total number of voters in the country, and the resulting figure must be multiplied by the number of voters in the relevant election district.
The legality and transparency of campaign expenses are ensured by the norms established by the Election Code and by the Organic Law of Georgia on Political Associations of Citizens. This means that when calculating the limits, attention must be paid both to the subject's own spending and to spending by third parties for the benefit of the subject, since the law counts both together.
Reporting to the State Audit Office
A candidate or an electoral subject submits the relevant financial report to the State Audit Office once within 3 weeks of the day of appointment of the elections, in the form established by the Service. The subject that, according to preliminary data, will receive the required number of votes in the elections submits, no later than 12 days after polling day, a report on the funds used from the day of appointment of the elections until polling day inclusive. A subject participating in a second round is obliged to submit, 3 days before the day the second round is held, a financial report on the activity carried out after the polling day of the first round.
The final report is submitted no later than 1 month after the publication of the election results — together with an auditor's conclusion; for a subject participating in a second round, the period is counted in the same way from the publication of the second-round results. The audit is carried out by a certified auditor in accordance with the Organic Law, while if the campaign expense does not exceed 10,000 GEL, the subject is entitled to submit the report for the full election period without an audit conclusion. A late report or a confirmed breach entails a written warning and a demand to eliminate the defect and provide detailed written information; if the violation is substantial and could have influenced the election results, the State Audit Office is authorised to address a recommendation to the relevant election commission to apply to the court and request that the votes received by that subject be left out of the summary.
For monitoring purposes, the State Audit Office holds broad powers: questioning of individuals and their examination before a magistrate judge, and the solicitation of necessary information from public and private entities, including payment service providers. Information that does not qualify as public information is solicited by the Service on the basis of a court decision, and the court adopts its decision within 48 hours of the submission of the application. Administrative proceedings in the exercise of these powers last no more than 3 months, and the General Auditor may extend this period by no more than 3 months.
Liability and Fines
Failure to perform the statutory obligation to submit information and a financial report on the campaign fund, or their submission with incorrect data, entails a warning or a fine: for an independent candidate the fine is set at 1,000 GEL, and for a party at 5,000 GEL. A breach of the spending ceiling entails a fine in double the amount of the expense incurred in excess of the relevant limit.
Repetition is regulated separately: committing the same act repeatedly during the same elections entails a fine in double the amount of the fine established by the relevant provision, while repetition after a warning received entails a fine in the amount established by the relevant provision. Liability for these breaches may be imposed on a person within 6 years of the commission of the act, which means that campaign finance documentation remains in the risk zone for years after election day.
Frequently Asked Questions
From which sources may a campaign be financed?
From the party fund, and in the case of an independent candidate, from an electoral fund opened by an initiative group of voters in a licensed commercial bank. Using funds other than the fund is impermissible.
What is the spending ceiling?
The annual expenses of an electoral subject must not exceed 0.04 percent of the previous year gross domestic product; the ceiling for an independent majoritarian candidate is calculated by dividing 0.1 percent by the total number of voters and multiplying by the number of voters in the district.
When are reports submitted to the State Audit Office?
Once within 3 weeks of the appointment of the elections; no later than 12 days after polling day for a subject expected to pass the threshold; 3 days before a second round; and finally within 1 month of the publication of the results, with an audit conclusion.
When is an audit conclusion not required?
Where the campaign expense does not exceed 10,000 GEL, the report for the full election period may be submitted without an audit conclusion.
What fine threatens non-submission of a report?
A warning or a fine: 1,000 GEL for an independent candidate and 5,000 GEL for a party; exceeding the ceiling is punished with a fine of double the excess.
How We Help on Legal.ge
The lawyers of Legal.ge assist electoral subjects, candidates and their financial managers in structuring campaign finance lawfully: we verify compliance of the funding sources, calculate the spending ceilings, draw up a reporting calendar and prepare positions for interactions with the State Audit Office. Contact us for a consultation — we will assess your situation and design an expense structure that fits within the statutory limits.