Tax and Legal News - February 2023

Tax and Legal News - February 2023


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The electoral campaign – a battle without rules?

Although it has probably not been very obvious in recent months, election campaigning in the Czech Republic has rules set by law. What is the importance of ethics in campaigning and what conduct is already beyond the boundaries set by law?

Unless you’ve been on a long vacation or business trip for the last few months, you certainly couldn’t have missed it. The election campaign and now the election of the head of state are behind us. It has been described by some political analysts and journalists as the most heated and contentious of all presidential election campaigns in the modern history of our country. I also remember quite vividly both previous direct elections and, compared to the campaign that has just taken place, I would probably agree with this assertion. However, it’s also possible that selective memory is at work here, trying to displace negative experiences, since previous campaigns were certainly not conducted in the spirit of fair play (unless there’s something impossible about the very combination of the terms “election campaign” and “spirit of fair play”).

I’d like to assure our esteemed readers that the purpose of my editorial today is not to add another political commentary to the pile of already published analyses and opinions. As an attorney, I’d like to look at the legal regulation of election campaigns and try to summarize the boundaries within which individual candidates and especially their marketing teams move during the campaign and how realistic it is that they sometimes cross that boundary. Most of us – those who follow the political scene with an eye toward maintaining our sanity – suspect that there are rules about campaign finance or the release of polls at some point in the run-up to an election. After looking into the Presidential Election Act, however, I was surprised by the detail of the legal regulation. Indeed, I don’t come across this kind of legal regulation very often in the practice of law.

I was perhaps vaguely aware that persons entering an election campaign in support of a candidate would be required to register with the Office for Supervision of the Management of Political Parties and Political Movements. This is actually only because in 2013, during the first direct elections, there was a lot of discussion about a full-page ad in a tabloid newspaper slandering one of the candidates. The advert at the time did not contain any indication of a registered supporter of the other candidate and thus clearly breached the legal rules. Incidentally, this database of supporters is also publicly available on the Authority’s website for this year’s elections and it would probably be interesting to try to make a comparison between the sponsors of individual billboards and the officially declared group of supporters. I would hazard a guess that the first group would be considerably larger (again, strictly speaking, in violation of the law).

However, I was very surprised that the Presidential Election Act contains a provision that literally reads “The election campaign must be conducted honestly and fairly, and in particular no false information about candidates may be published.” Does the law directly define campaign rules in this way, even referring to the concepts of “honesty” and “integrity”? Did the legislature really run the risk of someone arguing and proving in a court of law what is true and what is false? We can all remember examples from the past when blatantly false information was published about individual candidates. So is this an empty provision of the law? As you may have guessed, it’s not that simple. The Supreme Administrative Court’s decision in the proceedings on the invalidity of the presidential election concerning the first direct presidential election held in 2013 will help us to find answers to these questions.

Many of us will remember that the election campaign at that time, right from the first direct election, showed that in the pursuit of votes some candidates didn’t worry too much about what was honest and fair. In the court proceedings, the appellant listed a total of twelve “fouls” that the then presidential candidate and Minister of Foreign Affairs Karel Schwarzenberg had had to face. This included, among other things, the deliberate distortion of statements about the legal nature of the so-called Benes Decrees, the publication of patently false information about the use of Nazi symbols in Mr. Schwarzenberg’s ancestral residence, completely fabricated information about the alleged support of a representative of the Sudeten German Regional Association, or the publication of the aforementioned false and misleading advertisement on the first day of the second round of the elections.

In the reasons for its decision, the Supreme Administrative Court agreed with the appellant’s view that many of the above-mentioned claims made to voters during the election campaign “may have appeared to many people to be unfair, demagogic and some even false.” The court then also stated that any invalidation of an election must be a wholly exceptional decision, as it interferes with the decision of the electorate as the sovereign of the electoral system. For such intervention, the court defined the following three conditions – (i) the illegality of the conduct, (ii) the relationship between that illegality and the election of the winning candidate, and (iii) the fundamental intensity of that illegality. Intensity may consist not only in one intensive illegal act, but also in the accumulation of a greater number of weaker illegal acts. In this context, the Court used L. L. Fuller’s simile “most of the injustices of this world are not committed with fists, but with elbows.”

In the reasons for its decision on the merits, the court presented a detailed analysis of its above three conditions for the possible invalidity of the election. First, it stated that the concepts of “honesty and integrity” cannot “be identified with good morals as understood by the Civil Code in the context of an election campaign, nor can they be judged in terms of private law and general morality. Lack of ethics in an election campaign does not necessarily make such conduct unlawful.” So the question of ethics is settled in the election campaign.

In particular, the court considers the timing of each possible illegal act to be crucial and essential, which in my view actually extends its own conditions for invalidating an election to four. The court found that the opponent had the opportunity to respond to almost all of the alleged unfair arguments in the campaign. In the reasoning of the decision, the court specifically stated that “even an apparently serious foul, which occurs long before the voters vote, will not significantly affect the election result, since the candidate in question can respond to it in an appropriate manner and, in the end, may even benefit politically from it.” With a certain amount of cynicism, the court’s opinion could be interpreted to mean that you can lie in an election campaign, you just have to stop in time.

However, the election campaign at issue in the court case also produced clearly illegal conduct that simply could not pass this “time test”, since the advertisement in the national daily was published on the first day of the second round of the election. Readers were therefore able to read it the morning before the polls opened and the other candidate did not have a chance to respond to the ad. The court therefore had to address the fulfilment of its third condition set out above, i.e. the existence of a substantial degree of illegality. While noting that the newspaper in question had a daily circulation of 300,000 and reached approximately 1 million voters with its content, the court concluded in the reasons for its decision that “despite the high intensity of the illegality, the advertisement was not capable of changing the election results,” as the overall result of the election was significantly in favour of the other candidate, with nearly 500,000 votes. I don't know about you, but I get the sense from this decision that the court’s interpretive conditions effectively preclude the effective application of the statutory rule of election illegality. If there is already an obvious and highly intense illegality to which the aggrieved candidate could not respond, the election would still have to end in a close enough result to even consider invalidity.

How to end my commentary at least partially positively? Oddly enough, I can borrow another sentence from the court decision under discussion for a positive conclusion. In its reasoning, the court also used the following quote from political science literature – “an exceptionally aggressive style of negative electioneering can have a counterproductive effect, i.e., it can backfire on its initiator and, as a result, reduce the number of votes received in an election.” Let’s just hope that this risk will be taken into account by candidates in future elections in which a positive campaign aimed at presenting individual electoral programs prevails. 

 

Most of us – those who follow the political scene with an eye to maintaining our sanity – suspect that there are rules about campaign finance or the release of polls at some point in the run-up to an election. However, after looking at the Presidential Election Act, I was surprised by the level of detail in the law; after all, I don't come across this kind of legislation that often in the practice of law.

 


Content of the February issue

Pillar 2 – Pillar 2 of BEPS 2.0 - from 2024 already – does is concern us?

Pillar 2 – Pillar 2 – focusing on safe harbours

Investment incentives – Investment Incentives Act amendment increases and simplifies support for energy savings and semiconductors

Judicial window – Supreme Administrative Court on the question of the taxability of income in connection with the return of recovery of damages

Judicial window – Positive ruling on the deductibility of interest on an acquisition loan

Read more from our February Tax and Legal News here. 

Tax and Legal News - February 2023

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