How financial muscle may have given Jubilee edge over ODM in polls

Nakuru County Jubilee Headquarters at Milimani Estate. [Harun Wathari, Standard]

The 2017 elections were decided even before the August 8 polling day, going by the amounts of money Jubilee Party and ODM spent.

An analysis of financial statements of the two parties show that ODM was outgunned by Jubilee’s financial might and the two were playing worlds apart.

Despite ODM being part of the National Super Alliance (NASA) that also comprised Wiper Democratic Movement, Ford Kenya and Amani National Congress, its official spending is but a fraction of what Jubilee splurged.

The party books analysed by the Sunday Standard give a sneak peek in to how political parties in Kenya are run and show the rift between the two parties and the role finance played in deciding the 2017 elections.

For instance, Jubilee Party reports in its audited accounts that it had slightly under Sh1.4 billion in its account in the period preceding the August 2017 General Election.

From that figure the party collected Sh1.11 billion from its members. Sh621.8 million was raised from nomination fees, Sh387 million as contribution from members – the figure includes monthly party subscriptions -- and Sh97.1 million from party membership fees.

In contrast, ODM, with Sh434 million and Sh161 million in its account in 2016/17 and 2017/18 financial years, respectively, was running a cash strapped affair which could have handicapped its campaigns.

There is a Sh1 billion funding difference between the two parties, with ODM collecting significantly lower fees and donations from its members than Jubilee does.

The revelations come as ODM battles for funding from the Political Parties Fund, which was established to even out the political finance playing field and reduce instances of patronage in politics.

Nomination fees

It is instructive that in 2018, ODM had banked on receiving Sh1.2 billion from the Political Parties Fund but ended up receiving only Sh112.3 million.

The lower nomination fees collected by ODM came even after the party raised its nomination fees in late 2016.

The party’s election board had said those seeking the party’s ticket to run for president would pay a nomination fee of Sh1 million, governors Sh500,000, senators and MPs Sh250,000, MCAs Sh25,000 and special interest groups Sh15,000.

The effect was the party only managed to raise Sh194.8 million from nomination fees, a fraction of the Sh621.8 million that Jubilee raised.

In the election year and at a time when parties are in desperate need for more funding, ODM said it was only able to raise Sh35 million from its members.

MCAs gave Sh1.36 million, Sh1.68 million came from governors, Sh11.7 came million from MPs and Sh2 million was members’ contributions. An additional Sh72.7 million was raised from life membership fees.

Out of the money it collected, campaign expenses took up Sh267.8 million in 2016/17 financial year. Comparatively, Jubilee used double that amount – Sh537 million – to run its campaigns.

In the following financial year, Jubilee said it spent Sh241.6 million to finance its campaigns for the two presidential election in 2017.

A good chunk of ODM’s funds went to planning conferences (Sh38.7 million), party policy and advocacy (Sh30.6 million), branch trainings (Sh8.4 million) and travel and accommodation (Sh7.4 million).

The salaries paid by the party was constant at Sh45 million across the two years.

But for its shortfalls in funding, ODM has an equity investment of Sh28.7 million in Connector Communications. Another factor that has dented the party’s finances is bad debts which stood at Sh20.6 million in 2016/17 and 13.6 in the following year.

A closer look at the figures reveals some discrepancies. For instance in 2016/17, ODM says it only used Sh20,000 or Sh1,600 each month to pay for cleaning its offices. In contrast, the figure rises to Sh100,000 in 2017/18.

Wealthier party

The wealthier Jubilee Party, on the other hand, splurges Sh69.6 million a year (Sh5.8 million each month) as rent for near-empty Jubilee House along Thika Road.

In 2017/18, membership fees was Sh81.4 million while contributions from elected members was 295.7 million.

The largest chunk of the party’s funds went to paying for its nominations in April 2017, which despite gobbling up Sh685.7 million, aborted after numerous hitches and had to be redone.

Jubilee’s training expenses almost doubled in the year after the election from Sh7.9 million to Sh13.4 million.

But perhaps the biggest beneficiary from Jubilee’s funds were banks, which pocketed the Sh17.8 million that the party said were banking charges from paying the staff it had engaged in that period.

According to its most recent financial statement filed with the Registrar of Political Parties, Jubilee is running a cash-strapped affair. 

In the last financial year, the party raised Sh339,041,370 from July 1, 2018 to June 30, 2019 and spent all but Sh381,000.

In contrast, in 2017/18, the period covering the August 8, 2017 General Election and the October 26 repeat presidential election called by the Supreme Court, the party reported that it had slightly over Sh618 million in its accounts.

Out of the figure, Sh240 million was received from the Political Parties Fund while Sh378 million was raised from public donations.

Subscription fees

From the amount, the party reported it had spent Sh515 million to run the campaign.

Political parties are also silent on the amount of money that its elected members pay as subscription fees.

For instance, in Jubilee Party, MPs pay a monthly subscription of Sh10,000 to the party. From its 205 MPs, Jubilee collects Sh2 million each month. The money is collected through a check off system. Each of its 25 governors are also required to part with Sh20, 000 each month making up half a million shillings. 

In the county assemblies, where Jubilee has 582 MCAs, excluding those nominated, the party collects Sh1.75 million each month.

The figure will rise to more than Sh2 million if the nominated ward representatives are included. Unlike their elected colleagues, the nominated MCAs are deducted Sh5,000 each month. In total, Jubilee Party collects Sh4.5 million each month from its elected members.