Defend Truth


Who is funding our political parties, and why don’t we know?


Judith February is executive officer: Freedom Under Law.

As campaigning ahead of the local government elections ends, it’s worth asking: who exactly has paid for all those rallies and posters and free t-shirts? Campaigning is an expensive business, but political parties are not required to disclose the donors that fund them. This needs to change.

This week’s local government elections take place against the backdrop of what has been a turbulent few years for South Africa. Local government, the key driver of delivering decent services to citizens, has become mired in corruption and protest. According to an Afrobarometer survey 61% of citizens ‘disapprove or strongly disapprove’ of their local councillor’s performance. Hardly cheery news.

For the ANC, political killings are threatening to become the ‘new normal’ as the fight for resources at local level intensifies. In Johannesburg, Cape Town and Nelson Mandela Bay, the ANC, DA and EFF are gearing up for tough electoral battles. The latest polling shows that the ANC might not secure a majority meaning that coalition government could be the governance mode of the future. It’s early days yet.

And so it comes as no surprise then that ANC elections head, Nomvula Mokonyane, glibly said recently that the ANC had spent R1 billion on this election. The enormity of that sum is quite hard to comprehend. Predictably Mokonyane backtracked a few days later and ANC Treasurer-General Zweli Mkhize denied the amount. It is uncertain whether Mokonyane is going to be censured by the ANC for her comments.

If the ANC has indeed spent R1 billion on these elections it would be staggering. Who donated these large sums of money and what was the money used for- a poster war, rallies, the ubiquitous T-Shirt? No doubt too, opposition parties are pouring large sums of money into these elections. But quite how much political parties have spent on campaigning, no one knows, because of a complete lack of transparency in the funding of political parties. It’s an old chestnut with a long history in South Africa and one that has not been dealt with at all. It’s the trite case of ‘you show me yours and I’ll show you mine’. In addition, the benefits on incumbency make finding out where the money comes from quite hard.

It’s easy if you are the party in government to host large scale gatherings as ‘report back’ sessions in communities under the guise of just doing the work of government and not electioneering as such. In addition, food parcels have been a familiar way in which the ANC has garnered support over successive elections.  This past week the vexed issue of money and politics was again raised by advocacy group ‘My Vote Counts’ who will again take to the courts to try to use the Promotion of Access to Information Act (PAIA) in a bid to get parties to disclose their sources of funding. It was Idasa who first took the matter to court in 2005 albeit unsuccessfully. Some fatigue on the issue may well have settled in and it represents yet another court battle which will doubtless drag on which is what political parties will hope for again this time. Needless to say the courts have become far too great a player in South Africa’s political discourse. They have become the option of last resort when faced with recalcitrant politicians. 

Examples of the toxic impact of money on the political process abound as the voices of the poor and marginalized are drowned out while big money influences policy decisions.

What is the quid pro quo being offered to those who donate? In the City of Cape Town, for instance, the proposed Maiden’s Cove development has raised eyebrows simply because the developer is alleged to be a businessman with close ties to DA mayor Patricia De Lille. ‘State capture’ has become the easy term for the entangled relationship between money, politics and the untrammelled conflicts of interest. In January this year, the ANC’s Truman Prince brazenly wrote a letter on a municipal letterhead in which he called for ‘sympathetic’ construction companies to win tenders. He could not have been more clear about the aim when he wrote, ‘We (will) want to see construction companies sympathetic and having a relationship with the ANC to benefit, in order for these companies to inject funds into our election campaign process,”

In 2015 Hitachi agreed to pay $19-million to settle the US Securities and Exchange Commission charges that it violated American anti-bribery law through improper payments tied to the supply of boilers to Medupi and Kusile here in South Africa. Hitachi agreed to the settlement without admitting to or denying the SEC’s allegations. The SEC claimed Hitachi had violated the Foreign Corrupt Practices Act by inaccurately recording improper payments made to Chancellor House Holdings.

The SEC said in a statement on its website that: “Hitachi allegedly sold a 25% stake in its South African unit to Chancellor House Holdings (Pty) Ltd, allowing the company and the party to share profits. Hitachi paid Chancellor House, which it knew was a front for the ruling African National Congress, $5 million from the contracts and another $1 million in ‘success fees’.” The SEC also alleged that in 2008 Hitachi paid an additional $1 million in ‘success fees’ to Chancellor House, which was improperly booked as consulting fees. Hitachi settled the matter and there is therefore no admission of guilt. The $19 million settlement however does raise more questions than answers regarding alleged payments made to the ANC as a result of the deal. Why would Hitachi pay a settlement figure? What was that in lieu of?

Clearly the toxic impact of money on politics has many shades and manifestations. To untangle this web will take some doing. It will mean a collective appreciation of the depth of the problem of money in politics and also the creativity to forge a regulatory regime which is suited to our context and which will take care of the worst excesses there are. Such a regime also cannot be set up in isolation from other anti-corruption mechanisms specifically for instance the work of Chief Procurement Officer, Kenneth Brown, who is attempting to centralise all tender processes in one database. In addition the Public Administration Management Act that regulates public servants’ involvement in companies that benefit from state tenders are intrinsically interlinked as well as the recent Regulations in terms of the Act.

All political parties agree that transparency is a good thing, but they appear to lose their appetite for it when it comes to disclosing their sources of funding especially during election time. Just as the ANC has displayed coyness about its sources of donations in the past, so the opposition Democratic Alliance has been reticent to disclose its sources of funding. The lone Parliamentary voice on this issue has been the UDM’s Bantu Holomisa who has doggedly stuck to the call for party-funding transparency.

Logically, the ruling party, with its overwhelming majority within Parliament, would have had to deal with this issue as it promised as far back as 2005 after the Idasa court case. Then the ANC undertook to lead on the matter in Parliament. That never happened and is a sad indictment on the ANC.

In 2007 when the political winds of change were in the air, the ANC’s commitment to transparency in relation to party funding was articulated in its Polokwane resolutions. Though Polokwane seems a lifetime away, the ANC has a mandate from its members to legislate on this issue. Yet there has been no movement on the matter since Polokwane. The ANC treasurer-general, Zweli Mkhize, has made some useful suggestions such as the case for an intermediate body through which to filter donations. This ‘democracy fund’ might well remove some of the corruption in the system. A democracy fund would of course need to be backed by legislation to regulate private funding to political parties, yet Mkhize’s suggestion could be the starting point for a more interesting and nuanced conversation about the impact of money on politics.

It is clear that political parties need money to operate. But knowing where the money comes from is crucial if political parties, and in particular the ruling party, is serious about stated commitments to transparency in tender processes and conflicts of interest. Without transparency in relation to political donations there can be no way of knowing whether tenders are being allocated because of what companies or individuals have donated to the ANC or any party, for instance.

While regulation will not be the panacea for all ills, in its absence can we be certain that policy, environmental and development decisions that have been made or are going to be made will be in the best interests of the country or the narrow interests of the ruling party – be it the DA or the ANC?

Strong democracies require healthy political parties. In turn, political parties require resources to sustain and operate a basic party structure, to contest elections and to contribute to policy debate. And it would likely be unrealistic to outlaw private donations.

Moreover, it is clear that the more than R100 million a year of public money that the major political parties currently receive is not enough to finance the myriad activities political parties need to undertake. South Africa is a particularly challenging country within which to contest an election – a sprawling land mass, large rural areas, eleven languages and a low literacy rate.

Reform and regulation now represent mainstream modern democratic thinking, though the detail of the regulation varies and must take the context into account. In Britain, public disclosure of contributions is required only of corporations and unions. Parties are required to submit quarterly reports detailing the name and address of the donor and the nature of the donation to the Electoral Commission. German law entitles parties to receive donations, but donations that exceed a value of 10,000 euros a year must be publicly disclosed by giving the name and address of the donor as well as the total amount in the annual report. Donations that exceed 50,000 euros have to be reported immediately.

Whatever the shortcomings of regulating private funding to political parties (and as has been seen in the UK, Germany and the United States there have been problems with the implementation of regulations) the advantages of transparency seem to far outweigh complete secrecy. Increasing public funding might only be part of the solution, because public money will never be enough and will not do away with political parties’ need to raise private money. So, in a sense, requesting greater amounts of public money is only one aspect of this challenge because the nub of the problem lies in the millions of rands raised in secret and the accountability deficit that has been created in our political processes.

Who will take the bull by the horns? Unfortunately our Parliament and by implication, the ANC seems too fraught with division to fill the gap in South Africa’s anti-corruption apparatus- unless the Courts compel them to. And so we enter another election without much idea of who is funding the political parties we are asked to vote for. The public has the right to know who is funding our political parties.

Secrecy only breeds mistrust and an environment that is ripe for corruption. The time has come for a proper debate on this issue and for inaction to turn to action. If the political parties won’t act, citizens will have to demand that they do. DM


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