Following the Money: Exploring Business Financial Contributions to the European Union's Political Parties

Do business groups donate to the European Union's (EU) political parties? Does the party's ideology influence the donations it receives? Since 2008, the EU's political parties can receive financial contributions from private actors. This paper systematically maps and analyses the entire population of donations given to EU political parties from 2008 to 2015. The results show that business interests follow a selective strategy targeting with their donations right&#8208;wing parties; with Eurosceptic parties performing better than pro&#8208;integration parties. Conceptually, this study provides a hard resource for conceptualizing EU lobbying beyond information&#8208;access models, and potentially opens a path for comparatives with the US literature. Furthermore, it reveals that some parties have moved away from the public utility paradigm, raising question over donations impact on EU politics and policy&#8208;making. Empirically, it provides a unique image of interest group donations to EU parties over time.


Introduction
A substantive body of work aims to disentangle the complex relationship between the political party and business interests, including why they are formed, how they are expressed, and which factors define them. In the United States (US) contributions to party campaigns have received particular attention by scholars as a bond that indicates preferences, strategic choice, and the nature of the relationship (for example, Alesina and Rosenthal, 1995;Thomas, 1999;Francia et al., 2003).
In the European Union (EU), despite significant work on political parties (for example, Hix et al., 2007;Lindberg et al., 2008;Roa Bastos, 2012) and business interests (Richardson, 2002;Broscheid and Coen, 2003;Bernhagen and Mitchell, 2009), financial contributions have evaded the research focus. This downplays a vocal number of concerns regarding business donations' impact on the EU's political parties and its policy-making integrity (TI, 2017). Moreover, this constrains conceptual discussions modelling the EU's party-business linkage, while limiting comparatives with other bodies of work (see Tables 1-4).
This paper provides an initial exploratory assessment of business donations made to EU level political parties and their associated foundations, and aims to open a research dialogue in an understudied area of party-business relations. Since 2008Since , regulation 2004Since /2003 allows the European Union's political parties and their associated foundations to receive financial donations. This leads to two interconnected questions: Do business groups donate to the EU's political parties? Does the party's ideology impact the donations it receives?
To answer these questions I employ two opposing perspectives. From an institutional perspective, the European Parliament (EP) is a non-majoritarian institution where policymaking takes place through concessions and collaboration. Business groups will hedge their support across the board to avoid vetoes or amendments that disrupt the success of their lobbying efforts (Sorauf, 1988;Tsebelis, 2002). Nevertheless, political parties and business groups rank the same policy issues differently on their agenda, due to ideological differences. Lobbyists prefer to donate to political players closer to their ideological position to increase their chances of impacting parties' behaviour (Poole and Rosenthal, 1984). This is likely to lead to a setting closer to traditional socio-political cleavages (Olsen, 1983), where business donates primarily to right-wing and prointegration parties.
The argument is assessed by analysing the entire population of donations given to political parties and their associated foundations recognized by the Authority for European political parties and European political foundations (AEPPEPF), from 2008 to 2015. The terms 'EU party', 'parties' and 'foundations' employed in the paper refer to these specific political parties and their associated political foundations. In doing so, this study conducts the first systematic mapping of its kind. By looking into party donations we gain insight into the party-business relationship outside of the EU's institutional setting, and expand our understanding of Brussels lobbying beyond information-access models. Significantly, this potentially opens a path for comparative research with the US literature.

I. Business and Political Parties in the EU
In the EU context, business financial donations to political parties have evaded the research focus, and there are a few factors supporting this trend. In this section I discuss the most prominent factors, and its implications. First, the literature frames Brussels' lobbying as an institutionalized information-access game where expertise is the primary resource in demand/supply (Coen, 1998;Beyers et al., 2008).
Focusing on the political party, the limited use for other resources is justified by the misalignment between the policy-making level that Members of the European Parliament (MEPs) operate (European), and the political level their party and constituency belong to (national) (Føllesdal and Hix, 2006). Notwithstanding the increase in EU parties' voting cohesion, from an organizational perspective this nationally based electoral setting provides little incentive for the creation of pan-European parties outside of the EP's policy-making space.
Moreover, political parties in Europe are treated as 'public utilities' (Van Biezen, 2004); they are funded primarily by the state serving an institutionalized purpose, which is supposed to limit space for formal links between interest groups and political parties, at least through financing. Thus, part of the literature still tends to assume a limited connection between parties and interest groups, although substantive work points towards the other direction (Allern and Bale, 2012;Otjes and Rasmussen, 2017).
In addition, assessing party financing is a daunting task. At the European level, parties receive financing from the EP, national party memberships, individual memberships, financial donations by individuals and interests groups, donations in kind, but also receive forms of support through their associated political foundations (Wolfs and Smulders, 2018). Despite an abundance of financial (re-) sources there is little information about them available to researchers (or the broader public), while the information available is not provided in a systematic way.
This overlooks the party-interest group partnership as a critical pillar of healthy democracies, with the capacity to greatly improve or challenge citizens' trust in government and influence its performance (Rothstein and Varraich, 2017). Thus, we downplay EUlevel political parties' evolution, ignore business groups' capacity to adapt their lobbying capabilities, and overlook changes in party financing rules. Overall, this creates an artificial and unsound conceptual barrier between party-interest association outside the institutional environment and within it.
Since 2008 regulation 2004/2003 allows the European Union's political parties and their associated foundations registered and regulated by the Authority for European political parties and European political foundations to receive donations. These parties form broader coalitions in the EP as political groups or represent standalone parties in the EP. Accordingly these parties are defined as follows: '[a] European political party is an organisation following a political programme. This party is composed of national parties and/or individuals as members, represented in several Member States and is registered with the Authority' (AEPPEPF, 2018). The regulation marks a substantial change in the parties' financial structure. In addition, it establishes a formal channel between business and political parties. Nevertheless, without a systematic assessment of donations we treat this link as a black box. Who donates and why is left unexplored. While business donations' potential impact on EU politics and policy-making remain uncharted. Exploring these questions, I take two opposing perspectives.
I assert that donations serve a mutual benefiting purpose. Political parties demand donations to cover costs associated with their organizational maintenance and expansion, for example staff, events and research. In return for the donation, political parties grant access to donors, information leaks, insider status and potential influence over their agenda and policy-making. By doing so, donors aim to shape the party's agenda and policy-making behaviour closer to their preferences. At minimum, donors benefit by supporting an organization whose agenda is in line with their preferences.
From an institutional perspective, the EP's structure may encourage donors to adopt a broad inclusive approach regarding their donations. The EP has a non-majoritarian structure, a consensual policy-making style, and observes intense competition among a growing interest group population (Lehmann, 2009;Coen andKatsaitis 2019a, 2019b). Business lobbyists need to gain support from MEPs across parties to ensure successful results. That is to say, for a legislative proposal or an amendment to pass, the MEPs of more than one party need to be in agreement. Therefore, business lobbyists need to contact and convince MEPs across the political spectrum to ensure their lobbying efforts are successful (Marshall, 2015). Donors can represent various types of interest groups such as business, civil society, associations, as well as individual citizens. However, business groups due to their organizational structure have better capacity to mobilize resources than other groups (see Bauer et al., 1972), and have a direct and clear incentive to influence single market regulation (Rasmussen, 2015), which spills over across policy fields. Donations are likely to follow a similar pattern, where business employs an encompassing strategy donating across the political spectrum to certify support from the MEPs.
From an ideological perspective, the EP's parties may encourage a more targeted strategy regarding financial donations. Political parties represent constituencies based on an agenda that places specific issues higher or lower than their political opponents (Lefkofridi and Katsanidou, 2018). As such, political parties have a preference over the committees they aim to manage through chairs and vice-chairs (McElroy, 2006;Yordanova, 2010). For example parties focused on single market issues are likelier to target committees responsible for market regulation or consumer protection.
Ideology and party agenda-preference has a secondary layer of impact. The legislative proposals that are managed by rapporteurs within committees are also targeted by parties that have greater interest in the portfolio (Kaeding, 2004;Yordanova, 2010). Rapporteurs who are in charge of the legislative file, and their shadows, receive most lobbying attention as power-interlocutors (Costello and Thomson, 2010). In other words, political parties pick up the legislative files that they deem most important to their cause, within committees they seek to chair because they deem them most important to their political agenda. Business stands to benefit by supporting political parties that (will) pick up specific committees and legislative files closer to their interests.
Furthermore, business and parties interact while seeking to preserve or change policy. Business will provide donations where its support is in greater demand (Bonardi et al., 2005). That is to say, not all political parties welcome business donations (Piattoni, 2001;Gherghina and Volintiru, 2017). In summation, under this logic interest groups are likely to follow a 'selection strategy' donating to groups that are closer to their ideological affinity. Brussels' political compass has two central dimensions pro-/anti-European integration, and left/right dimensions (Hix and Lord, 1997). We may observe a division along traditional socio-political cleavages that sees business interests donating to right-wing, and pro-integration political parties. I frame this discussion under three expectations.
In summary, I expect that donations to political parties will depend on the lobbying strategy this can be either (i) encompassing or (ii) selective. In the first case, political parties that cover more seats in the EP, and their associated foundations, will receive greater donations. In the second case, groups will donate greater donations towards organizations that are ideologically closer to their stance this can be (i) pro-integration; (ii) right-wing.  E1. In relation to other types of donors, due to their resource-mobilization capacity business groups will provide the largest donations to EU-level political parties and their foundations, measured by the total amount donated.
E2a: If business groups are employing a selective strategy, we will observe business donating based on traditional socio-political cleavages focusing on right-wing and pro-integration parties.
E2b: If business groups donate based on an encompassing strategy the political agenda will play a minimal role, we will observe political parties across the board receiving donations.

II. Research Design
In order to examine the expectations outlined information is needed on the donations, specifically, the donors, the amount per donation and the receiving parties. This paper focuses on EU-level parties and their associated foundation recognized by the Authority for European political parties and European political foundations (AEPPEPF). These parties and their associated foundations must have their budgets audited by an independent accountant, and then submit the budget to the EP's financial service for a final check. The budgets are published on the EP's website for transparency purposes. The budgets of all political parties and foundations from 2008 onwards (with a one-year lag) are available online. All donors that donated more than 500 euros must be named and their legal address must be provided in the budget.
Although this information is available in the form of scanned budgets turned into pdf or original pdf files, these files are in an unstandardized format making automated text analysis an unreliable data collection method. Moreover, to my knowledge this is one of the first studies on EU-level political parties' donations. Therefore, because this study has exploratory characteristics I chose to collect data following meticulous archival work. For the data gathering I initially collected all budgets from all political organizations available on the EP's webpage. Following this, I logged all donations per party organization, per year, that were placed under the title 'donation', focusing on the amount of the donation, the name of the donor and the donor's address, covering the period 2008-15.
Donors were placed in one of six categories through a directed content analysis (Krippendorff, 2004) based on the literature, information provided on their online website and cross-referencing with the EU's transparency register. The six categories are: (i) Business, (ii) Civil society, (iii) Associations, (iv) Political organizations, (v) Political actors, (vi) Individuals.
Political organizations whose budgets were examined were categorized either as a Party (17 organizations), or a Foundation (18 organizations) based on their categorization by the Authority. Their ideological compass was allocated based on a summative content analysis (Hsieh and Shannon, 2005) of their agenda and mission objective available online, the literature and discussions with colleagues. Therefore each party and foundation was categorized as Far-left, Left, Right or Far-Right, and each party and foundation was categorized as Pro-integration or Anti-integration.
Overall, the methodology employed to code the ideological compass does not aim to highlight the rich spectrum of political agendas in the EU; but aims to place parties and their associated foundations in ideological groups in a manageable, straightforward and reliable way. For further discussion on coding please see the Supporting Information. In the interest of encouraging further research/dialogue in this area, as well as research transparency, the data collected, coded and analysed for this paper are made available.

III. Analysis
Starting with the aggregate image, we observe financial donations as a resource increasingly utilized (see Supporting Information Figure 1), while the total number of observations is modest, the largest part of the total number of donations and amount of donations took place in the last two years (2014-15). As the EP's empowerment from the Lisbon Treaty, and consequently political parties, became more evident with the election cycle drawing closer, donations grew in significance. Thus, while a limited number of business interests are employing donations this is changing quickly over time. Moreover, while the amount is regulated and cannot exceed 15 per cent of the party's budget, donations as a total amount are growing over time.
In agreement with the first expectation business interests are the largest donors, providing nearly 2.4 times more donations than the next category, and provide nearly a third of the total donations received by parties. However, the link between donors is unclear at this stage, that is to say business groups may be providing donations through other interest groups as well, to minimize detection by competing interests or political parties. Significantly, businesses may employ other organizations as donors to avoid detection from the Authority that regulates such activity. In similar fashion, we observe that donations (total amounts) are similar for political parties and their foundations; EU parties are investing in their structure outside of the parliament, underscoring the linkage between the party's different components.
Focusing on ideology's impact, the analysis provides a highly skewed distribution. Almost the entirety of donations is received by political parties on the rightno party or its affiliated foundation that is categorized as 'Far Left' received a donation, while only a single donation was received by a political foundation categorized as 'Left'. Taking this into consideration, the analysis seeks to observe variation in business donations vis-à-vis the parties' pro-integration/Eurosceptic positions (Eurosceptic, Pro-Integration). The distribution, again, is skewed and in contrast to the expectation: somewhat surprisingly business is likelier to donate to Eurosceptic parties and organizations.
Overall, the results lend support to the argument that party ideology impacts business donations. Specifically business follows a selective donation strategy targeting parties that are closer to its position. Simultaneously, we must consider that it is likely that parties on the Left side of the spectrum are less willing to accept donations from business interests due to reputational considerations and/or due to different political agendas. That is to say, there is little mutual agreement over policy to warrant a supportive donation and/or left parties do not want to demonstrate a partisan link with business.
Assessing the Eurosceptic parties' performance I consider the following explanations. First, business groups focus their lobbying efforts on parties that may disrupt the policyprocess vis-à-vis their interests. In other words, business stands to benefit primarily by trying to adjust the debate within the most risky political community relative to its interests, and finds little reason to hedge against other parties that are unlikely to shift their attitudes either due to positional proximity or distance. That is to say, right (and far-right) Eurosceptic parties whose agendas become anti-integration ultimately pose a more fundamental risk to the single market. Through donations business organizations attempt to steer the debate to ensure these parties maintain a political agenda that, while is sceptical of further European integration, supports the single market and limited business regulation. Significantly, parties can be Eurosceptic and pro-business. Thus, while they may be sceptical of the EU as a broader political union they can maintain a positive stance in favour of the single market. For example, New Direction a political foundation associated with the European Conservatives and Reformists maintains a Eurosceptic but probusiness agenda, taking up a substantive part of the overall donations. Further work assessing the overlap between different ideational dimensions and business donations provides a path for future research.

Conclusions
This paper provides the first systematic assessment of EU party-business relations with respect to financial contributions. Aiming to open up a research discussion the dataset and coding are provided online through the Harvard Dataverse. For more on the coding procedures, and dataset please see the Supporting Information. The results presented here raise some points for future consideration.
First, at least some parties have made use of the change in party financing law, and moved away from the public utility paradigm receiving contributions by various donors, and business in particular. This demonstrates a shift in attitude (Bardi et al., 2014): in the EU, party financing is no longer a state monopoly. Moreover, the fact that affiliated foundations are on the receiving end suggests that the party structure is evolving outside of the institutional setting. At the same time, the paper demonstrates that we are far from a comprehensive map of EU party financing. Further work assessing the network properties  between different donors and recipients, linkages between party and foundation, and different forms of donations is needed. From a conceptual perspective the results provide a hard resource component for operationalizing EU business-government affairs beyond information-expertise. At the same time, donations are not yet a widely used tool, and this raises questions regarding their strategic use. Why and when does business employ donations? It is worth exploring the potential impact donations have on EU politics and policy-making. That is to say, what are the political and policy implications that donations carry?
A question arises as to whether we are likely to observe further institutionalization of financial contributions along with additional regulations that normalize the process, while crystalizing socio-political cleavages in Brussels. The results suggest that a partisan linkage between business interests and political parties is formed at the EU level (Hix et al., 2007;White and Ypi, 2016). As such further work uncovering the link between partyinterest group national and EU cleavages is warranted (Olsen, 2018). By studying a phenomenon at its early stages we can better understand its future trajectory.
From a public policy and research perspective, two central issues are raised. First, considering the issue of data availability and accessibility in the EU as a measure of transparency (Héritier, 2003), information on donations to political parties can and should be improved by making the data easily accessible to scholars and the broader population in a systematic way. Second, additional regulation of donations may be necessary in view of the overwhelming distance between business and other types of donors. If donations are a form of political speech, additional research is needed to understand what it is saying (McMenamin, 2012).