Polish opposition loses funding over misuse of state cash

WARSAW (Reuters) - Poland's largest opposition party, the nationalist Law and Justice (PiS), will lose millions in state funding after the electoral commission said on Thursday that it misused public money for campaigning.

The loss of financing for a party that came first in the 2023 general election but lost its majority is likely to strengthen the hand of Prime Minister Donald Tusk's pro-European Civic Coalition (KO) as it tries to establish itself as the single dominant force in Polish politics.

Poland holds a presidential election in 2025, and PiS condemned the decision as a bid to scupper its chances in the ballot. A party's state funding is calculated according to its electoral performance and paid retroactively.

"When it comes to misusing public funds in election campaigns, I believe this will be a signal for everyone that you need to think twice whether it's worth it," electoral commission head Sylwester Marciniak told reporters.

The electoral commission said that PiS illegally spent 3.6 million zlotys ($930,738) on the 2023 electoral campaign. It listed electioneering at events designed to encourage military recruitment and an advert from the justice ministry as examples of misuse of funds.

As punishment PiS will lose around 10 million zlotys ($2.59 million) from the funding related to its 2023 election performance, and will also lose about 10 million zlotys per year in annual funding until the end of the current parliamentary term in 2027. The commission warned that it could lose annual funding completely.

PiS had previously said that any cut to its funding would be an attack on democracy, and its lawmakers reacted furiously to Thursday's decision.

"The decision of the National Electoral Commission... is shameful," said former prime minister Mateusz Morawiecki in a post on X. 

"It is part of the political game of the current government, whose goal is revenge and marginalisation of the opposition," he said, adding that PiS would appeal the decision.

Prosecutors say that lawmakers from PiS ally Sovereign Poland, which was a junior partner in government from 2015 to 2023, used money earmarked for helping victims of crime to curry favour with voters in rural target seats.

Former Deputy Justice Minister Marcin Romanowski was arrested in July on charges concerning the misuse of funds, but was later released after the president of a European rights assembly said he had immunity as a member of the body.

The government also says that money spent on promoting an increase in child benefits or events to encourage people to join the armed forces were in fact a misuse of state funds for political campaigning, while local media have reported that money was siphoned off from state companies.

"PiS has learnt the true meaning of the words law and justice," Tusk said in a post on social media platform X following the decision.

($1 = 3.8673 zlotys)

(Reporting by Alan Charlish, Barbara Erling, Editing by William Maclean)