Controversy over new party funding regulations took a new twist on Thursday evening when senior lawmakers from the ruling party stated that the new rules had no retroactive effect whatsoever and parties, including those allied with billionaire opposition politician Bidzina Ivanishvili, had no obligation to return several million Lari back to donors.

Two ruling party lawmakers Pavle Kublashvili, chairman of parliamentary committee for legal affairs, and Akaki Minashvili, chairman of the foreign affairs committee, claimed on Thursday evening that one of the provisions of the new regulations was misinterpreted and wrongly perceived as giving the new regulations retroactive effect.

Wording of the provision in question in the final draft of the legislation is slightly different from the one which is now available on the website of the state online registry of legal acts; this slight difference in just one word in fact changes the substance of the provision in a way that it seems no longer applicable retroactively, thus those parties which recently received corporate funding and still have these donations on their accounts at the time of enforcement of new regulations will no longer be obliged to return these funds back to their donors.

The final version of the draft of amendments to the law on political parties contained a provision, not featured in its initial version, with following wording: Political parties “which have received funding in violation of regulations of this law [i.e. corporate donations] and by the time of enacting this law these funds are not spent, are obliged to return these funds to a donor within three days after this law goes into force.”

The text of the legislation now available on the state online registry of legal acts reads: Political parties “which have received funding in violation of regulations of law [unlike previous version it no longer specifies ‘in violation of this law’] and by the time of enacting this law these funds are not spent, are obliged to return these funds to a donor within three days after this law goes into force.”

The four opposition political parties, allied with Ivanishvili, received in recent two months total of GEL 4.1 million from twelve companies, ten of which are affiliated with Ivanishvili. These donations were received in line with the previous funding regulations as before the new rules went into force on December 29 corporate funding was legal.

Being aware of the final version of the draft, which was envisaging a retroactive application of the new regulations, election watchdog and legal advocacy groups summoned a news conference and then released a joint statement condemning the provision. They called on the President to veto the bill as it was unconstitutional because of it retroactive effect. Next day, on December 29, representatives of these groups held a protest rally to further condemn the new regulations.

Late on Thursday afternoon, after the legislation was posted on the state online registry’s website,  the U.S. embassy released a statement expressing “concern” and saying that “retroactive application of certain campaign finance provisions would reinforce existing imbalances in political competitiveness.”

About an hour after the U.S. embassy released its statement, the ruling National Movement party’s press office informed journalists that the two senior ruling party lawmakers were planning a news conference at 6:30pm local time.

At the news conference the MPs, Pavle Kublashvili and Akaki Minashvili, claimed that the provision in question was misinterpreted.

“This law has no retroactive effect whatsoever; not a single political union will be held responsible for receiving donations legally [before the new regulations went into force],” MP Kublashvili said.

MP Minashvili, who chairs foreign affairs committee, welcomed “the positive statement” by the U.S. embassy, but also added: “I want to express certain regret over the part of the statement which refers to the party funding and a provision, which as if has a retroactive effect.”

“This part of the [U.S. embassy] statement is based on false information and I want to call everyone to gather more information while making such statements and to check sources. But I want to stress once again, that we welcome this statement, which clearly notes that the [electoral] reform, carried out in Georgia, will contribute to competitive electoral environment for 2012 [parliamentary elections],” MP Minashvili said.

The idea of giving the new regulations retroactive effect was first voiced by a ruling party lawmaker Koba Khabazi on December 27 and after the Parliament passed the bill with its third and final reading on December 28, MP Khabazi welcomed that his proposal was included in the final version of the bill.

Claims made by senior ruling party MPs that the controversial provision of the law was misinterpreted and its criticism was based on “false information” are in conflict with remarks of MP Khabazi, whose statement made after the bill was passed on December 28 indicate that this controversial provision was in fact part of the passed legislation.

MP Koba Khabazi said on December 28: “The issue, which I raised yesterday [December 27] has been reflected in the article 2, which says that those political parties, which have received donations in violation of this [newly] passed law and if these funds are not spent and represent savings for the elections, will be given three days to return these funds back to [donors]. Of course if these parties have already spent these funds they are free from any responsibility.”