New laws and a new campaign

It doesn't matter whether he's in the Latgale countryside or on the seventh floor of a tattered, prefabricated apartment block on the outskirts of Riga.

When people open their door on a smiling Einars Repse, one of Latvia's most popular politicians, their reaction is almost always the same.

"They're thrilled. They're so happy at the opportunity to actually meet a politician, to express their opinions, to talk one-to-one about how to solve the problems we face," said Repse, the former central bank governor and odds-on favorite to be Latvia's next prime minister.

The curious thing about Repse and his New Era party, which consistently tops opinion polls ahead of the Oct. 5 general election, has been its route to the top.

As spending on political campaigns increases with each new election, New Era has won support largely by foregoing an advertising campaign, choosing instead to rely on Repse's old-fashioned door-to-door canvassing and what he calls "unassailable honesty."

"It's absolutely true that a massive advertising campaign does not always mean the most votes," Repse told The Baltic Times recently from the campaign trail in western Latvia. "We live on donations and spend only what we have, and we have so much public support because of this honest approach."

But with pre-election spending steadily increasing, New Era's approach is the exception rather than the rule.

Since general elections in 1998, anti-corruption and public policy groups say campaign spending has increased significantly. Last year, in municipal elections in Riga alone, parties spent more than 2 million lats (3.39 million euros) on pre-election ads, according to the Latvian branch of international corruption watchdog Transparency International.

"Spending is steadily increasing, and standards of living are getting higher and campaigns more competitive," said Lolita Cigane of the Soros Foundation, which has pushed for transparency in political financing.

And in many cases, increased spending on ad campaigns does have an effect on a party's popularity.

The center-right People's Party, the senior member of the current government coalition, has seen a rating that hovered around the 5 percent mark in public opinion polls earlier this year rocket to more than 12 percent, enough for second place behind New Era's 16 percent support in a recent poll.

According to the party's official financial declaration, it has spent some 1.2 million lats in advertising so far this year.

Ads featuring the party's most prominent members, including ex-Prime Minister Andris Skele and newest convert, popular composer Raimonds Pauls, are plastered on bus stops and street signs around Riga.

"When talking about general elections, successful ad campaigns can have an important impact," said Inese Voika, president of Transparency International's Latvian branch. "Repse's not spending a santim on direct advertising, but he will lose at least a little bit as these heavy campaigns kick in."

Repse said New Era would spend about 210,000 lats of the roughly 260,000 lats the party has raised on campaign-related expenses, while government members Latvia's Way and For Fatherland and Freedom have said they intend to spend about 500,000 lats and 450,000 lats respectively.

The upward trend in advertising has prompted a push for more transparency in party finances. A law that came into effect in August requires all party spending as well as all donations and their sources to be disclosed prior to an election, replacing a previous law that called for disclosure months after an election.

Some have said such large price tags could end up hurting parties in the eyes of a weary and skeptical public.

"I don't think I would like to vote for a party that is squandering more than a million lats just on an advertising campaign," said Janis Jurkans, chairman of the left-wing For Human Rights party that usually ranks second or third in public opinion polls.

Jurkans said some 250,000 lats should be enough for his party's campaign, but observers say the party can afford to skimp on advertising because many of its ethnic-Russian voters see it as the only party that defends their interests and would vote for it with or without an aggressive campaign.

The new law also sets a limit of 10,000 lats per donor, down from 25,000 lats allowed under the old law.

New Era prints what it says is a comprehensive list of all donations since August 2001 on its Web site, with private donations from Latvia, the United States and Canada ranging from 0.01 lat to 10,000 lats.

Other party donations are recorded on the anti-corruption bureau's site.

Questions about the accuracy of party declarations and the true source of donations still abound, but transparency advocates say the new law is a good start.

Cigane, of the Soros Founda-tion, said parties could still get around disclosure laws by camouflaging the source of donations.

"Some parties have one or two very rich donors who fund the entire campaign, and they get around this by finding private people to declare that they are the sources of funding," she said.

Because the law does not require donors to disclose their personal identification numbers, there's no way to check the veracity of every donation.

Cigane said there were often more private donations of 10,000 lats each on party books than one might expect in a country where the average wage hovers around 160 lats a month.

"The key is to match a party's advertising activities with its declared fund-raising," said Repse. "If there's a large mismatch, then obviously there's something wrong."

"The changes to the law are part of a pilot case. We can see some discrepancies, but we need to keep monitoring it to see what needs to be changed," Cigane said, adding that a long-term solution will have to include certain amounts of state funding for political parties.