We defeated the entropy.
24 November 2014 06:51 (South Africa)
Opinionista Paul Berkowitz

SA party financing: Show us the money

  • Paul Berkowitz
It’s just plain daft to expect political parties, business or government to lead the crusade for greater regulation and oversight of funding for political parties. Only a citizenry united in its demand for reform and transparency will transform the murky world of party finances. 

There’s a famous scene in the movie Jerry Maguire where our eponymous sports agent hero (played by Tom Cruise) is reduced to crazy screaming into his phone. In order to retain his booby-trap-prize of a client, quarterback Rod Tidwell, (played by Cuba Gooding Jr, and duly rewarded with an Oscar) he’s forced to yell “Show me the money!” repeatedly to demonstrate his loyalty. 

It’s a hilarious send-up of professional sports, the culture of celebrity and the grubby habit of chasing money. For every minute that Maguire is trapped on the phone, bearing silent, frustrated witness to Tidwell’s inspired rant, a few more lights die on his switchboard as his remaining clients leave his stable. Maguire finally screams himself hoarse with desperation and a hint of madness, as he sees his money receding beyond the horizon just as he’s asking it to reveal itself. 

“Show me the money” may have entered popular culture as irony but in the South African context it’s a request that citizens should be making of their political parties with a straight face, every day. 

There have been many promises and pledges from government to review the issue of transparency in political party financing. Thus far there has been no action. There are few, if any, parties in the National Assembly that will agree to make public their finances. The efforts of the Independent Democrats (and particularly MP Lance Greyling) in the past are noted, but the ID has been subsumed into the Democratic Alliance. The DA, like the African National Congress, will not open its books to the public. 

There are a number of points to consider before discussing possible solutions for South Africa. Firstly, collusion between political elites and special interests with money is not a new thing. The US battled with the corrupting influence of political donations for well over a century before the first really serious legislation was introduced to regulate campaign financing, only to be eventually defeated in the Supreme Court, opening the gates to the flood even wider. Australia’s political parties have ignored a number of proposed reforms, much like their South African counterparts. 

Secondly, synchronised action by politicians and special interests is not just an African thing, nor is it just an ANC or DA thing. (This point should be superfluous in light of the first one, but some people cannot help themselves but to reduce the complex problem of modern government to some form of race essentialism. Not only is this not helpful, it is in fact counterproductive, since any hope for a solution lies in the hands of a non-partisan citizens’ campaign.) 

When President Jacob Zuma recently claimed that businesses supportive of the ANC would prosper he was pilloried by the opposition and the media. There were claims that this was evidence of ANC corruption, but the truth is that this is evidence of the party’s increasingly unsophisticated, some would say brazen, attempts at fundraising. If you must curl your middle-class lip at Zuma and the ANC, sneer at their clumsy attempts to solicit.

The ANC under Zuma is demonstrably corrupt but he is not responsible for Chancellor House and the arms deal by himself. He certainly didn’t tell Humphrey Mmemezi to launder his money through McDonald’s artworks. Nor is the fishy awarding of DA-controlled municipal IT contracts to Didata due to the corrosive influence of so many black African ANC members. 

Whether the ANC or DA grows or shrinks, or a new party one day overcomes both of them, corruption of the body politic will continue and even worsen without structural changes in how political entities disclose their finances. 

Thirdly, it is crucial for political parties to receive money to finance their work: campaigning, policy research and administration. Political parties do need a minimum amount of funding. Part of the solution can be to substitute private donations with funds through the Treasury. This doesn’t mean writing a blank cheque, nor does it exclude a reform of which political entities qualify for public funding.

Fourthly, there are legitimate defences for private donations to political parties, including the freedom of speech and (possibly) the freedom of association. It is undesirable and unconstitutional to ban all donations to political parties. Political finance reform should, however, include caps on individual donations.

When the Cape High Court ruled in 2005 that political parties were not public bodies and could not be compelled to reveal their sources of finance, the applicants in the case (the Institute for Democracy in South Africa and others) decided not to appeal the decision. At the time of the judgment the ANC (one of the respondents, along with the DA, Inkatha Freedom Party and New National Party) asked for the legislature to be allowed to debate the issue and to develop the appropriate legal framework. The judge himself, as a representative of the judiciary, declared his reluctance to usurp the role of Parliament by making a far-reaching judgement.

That was almost eight years ago, and not much has changed. Last year the ANC’s treasurer, Mathews Phosa, called for more money for political parties in order to break the yoke of powerful special interests but added that “t]he public can’t ask for transparency if they don’t come to the party. Only when they come to the party can one say: let’s see how much political parties get.”’ Phosa got it half right, by appealing for centralised funding, and all wrong by both insulting South African citizens and by threatening to hold transparency to ransom. 

It is clear that the parties themselves aren’t interested in greater transparency. Part of that is the fear that funding could dry up if donors were forced into the open, and part of it is fear by business and labour interests that they will be unable to unduly influence policy if they are forced to donate less, or donate under more transparent conditions.

Finally, here are my suggestions on what is to be done, with a bit of preaching and exhortation thrown in for free:

  • Increase funding from the fiscus for political parties. Currently, around R100 million is provided by Parliament to all parties in the National Assembly, in proportion to the number of seats they hold. Double this amount to R200 million, and introduce legislation to cap the amount of money that an individual can donate at R100 000. 
  • Provide another R30 million for the funding of research and policy units affiliated to the parties, in a similar proportion. Allocate a further R30 million to the funding of independent research into public spending oversight and policy reform. Give a further R40 million to the office of the Auditor-General so that all parties, affiliated research units and political donations can be audited and monitored.
  • At a minimum, all political entities must produce annual financial statements which include the source and destination of their funding. All research units and bodies affiliated to political parties must do likewise, as must any trusts, societies, or other legal entities donating more than R100,000 a year to political parties. All private donations in excess of R10,000 must be placed on public record.

How can we raise the additional R200 million a year (R100 million for party activities, R30 million for party-affiliated research, R30 million for independent research, R40 million for the Auditor-General’s office) you may ask? One easy way is by scrapping the Department of Women, Children and Other Casualties of the Patriarchy. It has achieved nothing and its 2013/14 budget is in excess of R200 million. 

Even if this eminently sensible option isn’t possible, an annual increase of R200 million in a R1 trillion budget amounts to two hundredths of a percent of total spending. By way of comparison, the bribes paid over the arms deal are claimed to be in the billions. The magnitude of irregular spending in the municipalities is in the tens of billions. 

These are my suggestions, and here are my exhortations. If you are an ANC, DA or even Pan Africanist Congress supporter, lobby your party to support political funding reform. Campaign for a member’s bill to be introduced in Parliament and lobby for the topic to be raised during parliamentary debate. If you are a member of a political party, lobby from within your party for reform. 

If (like me) you think that all politicians should be redeployed to empty VIP toilets for the minimum wage, create a petition calling for reform. Get as many signatures as you can. Spend your time arguing with the politically brainwashed to convince them that the thieving must stop, and that there is no qualitative difference between your party stealing from you and the other guy’s party stealing from you. 

It is beyond time that political parties and their benefactors were regulated and their relationships subjected to proper oversight. We can keep bickering over who should expose themselves first or we can unite in our demands for the money to be shown. DM  

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  • Paul Berkowitz
PaulBerkowitzBW

Paul Berkowitz: studied economics, maths stats. Worked at Econometrix, FNB, Wits. Interested in South African politics, economics.

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