4.  The applicant party is a Turkish political party based in Ankara.
5.  Supervision of the finances of political parties in Turkey is entrusted to the Turkish Constitutional Court (“the Constitutional Court”) under Article 69 of the Constitution. Accordingly, all political parties are obliged to submit their consolidated final accounts annually to the Constitutional Court, which reviews the compliance of the political parties’ incomes and expenditure with the principles set out in Article 69 of the Constitution and sections 70-77 of Law no. 2820 on Political Parties (“the Political Parties Act”). Failure to comply with the relevant laws is subject to sanctions set out in the Political Parties Act. The decisions delivered by the Constitutional Court in this regard are final.
6.  In keeping with the requirement under Article 69 of the Constitution and sections 74 and 75 of the Political Parties Act, the applicant party submitted the consolidated final accounts of its headquarters and local branches for the years 2007, 2008 and 2009 to the Constitutional Court for inspection. While the exact dates are unknown, it appears that the accounts were submitted within six months of the end of each respective fiscal year (that is, before 30 June) in accordance with section 74(2) of the Political Parties Act.
7.  The Constitutional Court carried out a preliminary inspection on 1 July 2010 for the 2007 accounts and on 6 April 2011 for the 2008 and 2009 accounts. At the end of each preliminary inspection, it found the information submitted by the applicant party to be complete and decided to proceed with an examination on the merits.
8.  On 7 October 2011, 29 November 2011 and 15 February 2012 the Constitutional Court sent the applicant party “questionnaires” in relation to its accounts for the years 2007, 2008 and 2009 respectively, whereby it requested the party to provide further information and documents regarding some of the expenses that it deemed problematic. It also requested the applicant party to provide the original invoices or other supporting documentation as required under Law no. 213 on Tax Procedure (“the Tax Procedure Act”) for all items of expenditure that had not been submitted previously.
9.  It appears that the applicant party responded to the Constitutional Court’s requests within fifteen to thirty days of their receipt; its responses are summarised in the appendix below. It was, however, unable to provide original invoices or the like for all the items of expenditure as requested.
10.  On 7 March 2012 the Constitutional Court delivered its decision regarding the final accounts of the applicant party for the year 2007, which was followed by decisions pertaining to the 2008 and 2009 accounts, both delivered on 11 July 2012. The decision concerning the 2007 accounts was published in the Official Gazette on 5 April 2012 and the decisions for the 2008 and 2009 accounts were published on 20 September 2012.
11.  In all three decisions the Constitutional Court found at the outset that the income and expenses presented in the final accounts were financially accurate. It also held that the income obtained in the period under review had been mostly in compliance with the rules on funding as set out in the Political Parties Act. As for the expenses, the Constitutional Court made the following preliminary remarks to explain the basis for its examination:
“One of the main tenets of accounting is the principle of ‘documentation’. Section 229 of the Tax Procedure Act explains that ‘an invoice is a commercial certificate given to a customer by a vendor or a merchant to indicate the amount owed by the customer in return for the goods sold or service provided’, and section 232, entitled ‘Obligation to use an invoice’, specifies under what circumstances and by whom an invoice must be received and provided. In this connection, it has been made obligatory to document purchases of goods and services with invoices and to use invoices as supporting documents in bookkeeping.
Section 236 of the same Act, entitled ‘Obligation of receipt’, states that ‘self-employed persons are under an obligation to issue a freelance receipt in duplicate for all payments received in relation to their professional activities and to give one copy to the customer; and the customer is under an obligation to request and receive such receipt’. The contents of a receipt have been set out in section 237.
Section 234 of the same Act, entitled ‘Expense note’, states that ... those [tradespersons exempt from taxation] who are under no obligation to furnish an invoice should issue expense notes.
Since section 70(3) of Law no. 2820 [the Political Parties Act] provides that expenses below five thousand liras[1] do not need to be substantiated with documents such as a receipt or an invoice, any expenses exceeding that amount must be based on a relevant supporting document.
Under section 70 of the Political Parties Act, ‘all expenses of a political party shall be incurred on behalf of the legal personality of that political party’ and pursuant to section 75 of the same Act, ‘at the end of its inspection, the Constitutional Court shall determine the accuracy and the lawfulness of the political party’s income and expenses, and shall order the registration of unlawful income and expenses as revenue with the State Treasury’.
Law no. 6111 ..., which was published in the Official Gazette dated 25 February 2011 [and which introduced some amendments to section 74 of the Political Parties Act], came into force on the date of its publication and it does not envisage ... the [retroactive] application of the amended provisions ...; therefore, the unamended provisions are to be applied to inspections and proceedings predating the amendments.”
12.  On the basis of the principles outlined above, the Constitutional Court found that certain expenses incurred in the respective periods under review had been in violation of the Political Parties Act. The violations in question fell under two heads: the first head consisted of expenses that could not be considered to have been made “in pursuance of the objectives of the political party” and “in the name of the party’s legal personality” on the basis of a decision of the competent party organ, in accordance with section 70 of the Political Parties Act; and the second head concerned the expenses that had not been substantiated with the necessary documents as required under section 76, regardless of whether they were otherwise lawful. The Constitutional Court accordingly ordered the “confiscation of the party’s assets”[2] in the amounts corresponding to its unlawful expenditure for each respective year under review, as per sections 75 and 76 of the Act.
13.  The details of the Constitutional Court’s findings are presented in the table below (the amounts indicated are in Turkish liras (TRY)):
 
Year
Total income
 
Total expenditure
Expenditure confiscated by the State for infringement of the Political Parties Act
State funding
Other sources
Undocumented expenses
Other unlawful expenses (not incurred in pursuance of the party’s purposes and/or in the party’s name) 
 
2007
 
79,859,379
 
53,675,876
 
 
127,470,011
 
691,636
 
2,679,610
 
2008
 
 
20,471,032
 
50,088,000
 
49,227,118.86
 
82,952.66
 
1,349,304.64
 
2009
 
 
49,860,840
 
78,385,330
 
125,443,105
 
314,000
 
943,030.83
14.  Further details regarding the individual expenses that were deemed unlawful by the Constitutional Court may be found in the appendix below.
15.  The Constitutional Court treated all expenses that were not supported by original invoices, freelance receipts or expense notes as “undocumented”, referring to the strict requirements of documentation set out under the Tax Procedure Act as referred to in paragraph 11 above. The applicant party informed the Constitutional Court that in view of the sheer volume of documents circulating in the party, the originals of some invoices had been lost and submitted other documents as proof of payment. However, where the expense concerned an invoiceable transaction, the Constitutional Court did not accept as proof of payment vouchers, receipts, payment orders or even duplicates or notary‑certified copies of invoices, and ordered the confiscation of the applicant party’s assets in the amounts corresponding to the undocumented expenses.
16.  The expenses that were found not to have been incurred “in pursuance of the party’s objectives” and “in the name of the legal personality of the party” following a decision of the competent party organ, and those that were considered to “fall outside the party’s political activities”, covered a wide array of financial activities.
17.  They included food, pharmaceutical and accommodation expenses, including those incurred by members of the party and employees of the party headquarters or its youth branches. Although the applicant party argued that the expenses in question had been incurred by the relevant individuals while on official duty, the Constitutional Court did not accept them as lawful expenses since the invoices had been drawn up in the individual members’ or employees’ names, rather than in the name of the party. Moreover, the applicant party had not submitted any other tangible evidence to demonstrate the professional nature of those expenses. In this connection, the Constitutional Court refused to accept that the food expenses of the driver assigned to the party leader and of other drivers working for the party could be lawfully met by the applicant party, in spite of the latter’s explanation that the relevant expenses had been incurred while the drivers were on duty.
18.  Among the food expenses declared unlawful were expenses incurred by the head of the applicant party’s youth branch, F.P., who appears to have hosted six dinners in 2008 in connection with election work. The Constitutional Court accepted two of those meals as lawful expenses in relation to party work, but rejected the remaining four without any explanation.
19.  Reimbursement of food and commuting expenses of persons not on the applicant party’s payroll and not party to the collective labour agreement between the applicant party and its salaried employees, such as freelance consultants, was not considered to be in keeping with the “party’s objectives”. Similarly, meals offered to persons who provided various services to the applicant party, but who were legally employed by other public or private bodies, such as police officers, municipality employees, journalists or gardeners, could not qualify as legitimate expenses under the Political Parties Act because any meal costs had to be met by the relevant person’s respective employers and not by the applicant party. Some dinners hosted for the applicant party’s guests, volunteers or personnel for special occasions were also considered to constitute personal expenditure not related to the party’s legal personality, whereas some other dinners were accepted as relevant to party work. In this connection, the Constitutional Court found that the expenses borne for the meals hosted for the Alevi-Bektaşi Federation and the Pir Sultan Abdal Association, as well as the meals organised for party personnel on the occasion of Bayram[3] and following the death of an employee’s father, should not have been paid from the party’s budget, whereas it deemed legitimate the expenses in relation to food offered to Tekel[4] workers during their industrial action.
20.  The Constitutional Court also refused to accept a great number of travel expenses as lawful, because the bus and plane tickets in question had been prepared in the name of the individuals travelling rather than in the party’s name, and the official decisions of the relevant party organs authorising travel had not been submitted. In addition, reimbursement of passport fees to various employees was not considered relevant to the party’s objectives, even when the passports had been obtained for travel in connection with party business, as passports could be used for personal travel as well. The Constitutional Court also deemed costs for printing of business cards for employees to be unlawful, considering them to be personal expenses.
21.  Payments made to employees apart from the entitlements specifically indicated in the collective labour agreement, including New Year bonuses (approximately 35 euros (EUR) per person in 2008) or bonuses to reward extra work during the general election period, were also deemed to fall outside the scope of the lawful expenditure provided for in the Political Parties Act. Moreover, chocolates distributed to party personnel for Eid al‑Fitr (Ramazan Bayramı) in 2009 were found to be unlawful expenses, whereas no such finding was made in relation to the chocolates distributed during another religious holiday, Eid al-Adha (Kurban Bayramı). Blankets, umbrellas and raincoats purchased for use at the party headquarters were also found to be personal expenses, whereas no such finding was made for clothes and dishwashers purchased for the use of personnel.
22.  In addition, payments made to security and cleaning personnel in excess of the amounts specifically indicated in the service agreements, where such excess amounts – no matter how meagre – could not be explained by increases in social security contributions or taxes, were considered unjustified and thus unlawful.
23.  The Constitutional Court also found that the severance packages given to employees whose contracts had been terminated, which included basic severance pay, unused vacation time and benefits corresponding to unused leave, were not in compliance with the Labour Act and were therefore unlawful, as benefits corresponding to unused leave should not have been included in the severance packages.
24.  The review of the financial accounts for the years 2007 to 2009 also revealed that the applicant party had paid court fees in various legal proceedings in which members of the party’s senior management and/or its members of parliament, including its leader at the relevant time, had been involved. Although the applicant party stated that the legal proceedings in question had concerned the party’s political activities, and not personal disputes, the Constitutional Court nevertheless decided that the litigation expenses had to be met by the persons in question, regardless of their role or status in the party, as the political party itself was not a party to any of the relevant proceedings. In the decision of 11 July 2012 concerning the review of the 2009 accounts (see paragraph 10 above), one of the judges dissented from the majority’s approach to this matter, and argued that demanding that such costs be met by the individual members of the party involved directly in the litigation, regardless of the effects of that litigation on the political party, would unduly curtail the scope of the party’s political activities in an unconstitutional manner.
25.  Another payment that was considered unlawful by the Constitutional Court was made to Halk TV, a nationwide television channel, for the live broadcasting of political rallies and activities attended by the applicant party’s leader and coverage of the party’s parliamentary group meetings, press conferences, and important statements made by the party’s senior management, as well as the distribution of that material to other media outlets. The Constitutional Court found that while the applicant party could lawfully pay for the live broadcast of the relevant events, additional payments to cover the costs of production and for the allocation of link bandwidth were unacceptable, as such costs had to be met by Halk TV itself. In addition, payments made in 2009 for the lease of vehicles for broadcasting rallies organised by the party in various provinces were considered unlawful unless accompanied by the relevant lease agreements and detailed information on the exact nature of the services acquired. The Constitutional Court also noted that an agreement had already been made with Halk TV for coverage of the applicant party’s political rallies and other events.
26.  Fuel and other expenses (such as installation of sound systems, speakers and microphones) for the vehicles owned or leased by the party and its local branches were accepted as having been made in the party’s name and for its purposes only where the vehicle registration certificates or lease agreements had been submitted to the Constitutional Court along with the invoices. As for fuel and other expenses for vehicles made available to the party by volunteers during the election campaigns, they were deemed entirely unlawful in the absence of any contracts with the volunteers for the use of the relevant vehicles.
27.  The Constitutional Court held that gold coins given as wedding gifts at wedding ceremonies attended by the applicant party’s leader on behalf of the party could not be considered to have been made in the name of the party or in pursuance of its objectives. Similarly, the costs of flowers sent by the applicant party’s treasurer for special events could not be classified as lawful expenses where the invoice had been drawn up not in the party’s name but in the name of the treasurer.
28.  The Constitutional Court also held that fines for traffic violations by the party’s drivers, as well as fines or interest on late payment of various financial obligations, such as social security contributions, court orders, rents or motor vehicle taxes for the party’s vehicles, could not be lawfully covered from the party’s budget, and had to be met by the individuals who had been responsible for defaulting on such payments.
29.  Moreover, the Constitutional Court found that advance payments made to fifty-two employees in 2009 had only been partially repaid. In the light of the prohibition in section 72 of the Political Parties Act against lending money, the advance payments in question were unlawful and were thus confiscated in full (including the amounts that had been repaid by the relevant employees).
30.  The Constitutional Court also issued a number of warnings in relation to certain expenditure in 2008 and 2009.
31.  One of those warnings concerned the payment of employees’ salaries. Although the applicant party had submitted the relevant payment orders, it had not provided bank statements demonstrating that the amounts ordered had actually been paid. The Constitutional Court warned the applicant party to submit such bank statements with its consolidated accounts to demonstrate that the payments in question had indeed been made.
32.  Another warning was issued in relation to a payment made to a private company in return for installing a sound system for an election bus. The Constitutional Court requested the applicant party to submit a technical report indicating when the work had been completed and a record stating that the bus had been duly delivered. The applicant party responded that there was no legal obligation to prepare such documents. The Constitutional Court held that in the absence of such information, it could not know whether the service had been delivered on time and, if not, whether the service provider had paid the penalty envisaged in the service agreement for defaulting on its obligation.
33.  Yet another warning was issued about the incompatibility between the party’s expenses and its inventory, in that a number of items allegedly purchased for the party (three televisions and one computer) had not been registered in the inventory.
34.  The Constitutional Court also issued a warning in connection with advance payments made to some employees in 2009, in addition to ordering the confiscation of the applicant party’s assets in the full amount of the advance payments in question (see paragraph 29 above).
35.  On 11 May 2012 the applicant party received a letter from the Ankara governor’s office ordering it to pay the amounts indicated in the Constitutional Court decision concerning the review of the 2007 final accounts, which totalled TRY 3,372,446 (approximately EUR 1,435,000 on 7 March 2012, the date of the delivery of the decision), within thirty days of the receipt of the letter.
36.  On 23 May 2012 the applicant party sent a letter to the Ankara governor’s office requesting postponement of the payment until January 2013, in view of the financial difficulties it would suffer for the rest of 2012 in the event of immediate payment of the amounts concerned.
37.  On 12 March 2013 the Ministry of Finance informed the applicant party that the payments due in relation to the 2007 final accounts had been deducted from the State funding allocated to it on 10 January 2013 for that year, together with interest of TRY 176,211 running from the date on which the payment had become due (namely 12 June 2012). The amount deducted thus totalled approximately TRY 3,549,000 (approximately EUR 1,527,000 on 10 January 2013).
38.  On 31 October 2012 the applicant party received a letter from the Ankara governor’s office ordering it to pay the amounts indicated in the Constitutional Court decisions concerning the review of the 2008 and 2009 final accounts, plus interest, which totalled approximately TRY 3,738,700 (approximately EUR 1,604,000 as at 31 October 2012), within ten days of the receipt of the letter.
39.  On 6 November 2012 the applicant party sent a letter to the Ankara governor’s office, once again requesting the postponement of the payments due in relation to its 2008 and 2009 accounts until January 2013.
40.  On 15 January 2013 the applicant party paid TRY 1,432,257.30 (approximately EUR 605,212 at the material time) to the State Treasury for its unlawful expenses, in compliance with the Constitutional Court’s review decision for the year 2008, and TRY 1,257,030.83 (approximately EUR 531,168 at the material time) for the decision regarding the accounts for the year 2009. It refused to pay the interest, which it contested before the relevant authorities.
41.  On 7 June 2013 the applicant party paid the State Treasury the sum of TRY 45,920 (approximately EUR 18,460) as default interest on the amounts confiscated in relation to its 2008 and 2009 accounts.
42.  On 30 March 2014 local elections were held in Turkey.