Money and politics: a toxic mix that needs to be diluted in South Africa

Private funding of political parties must be transparent, or risk creating an environment that is ripe for corruption.

Political parties require funds, but no one knows how much will be spent on campaigning for this year’s elections given the complete lack of transparency of the funding of political parties.

The lack of regulation of private funding to political parties also represents a major gap in South Africa’s anti-corruption framework. Political parties seem to agree that transparency is a good thing, but when it comes to disclosing private funding sources it remains a matter of ‘show me yours and I’ll show you mine’. As much as the African National Congress (ANC) has been coy about its donations, the opposition Democratic Alliance (DA) has also been reticent to disclose its sources of funding.

At a recent seminar hosted by the Institute for Security Studies (ISS) in Cape Town, ANC Treasurer-General Zweli Mkhize admitted that regulation was necessary, but argued that the details should not be subsumed by politicking over the issue.

The DA’s Lance Greyling also agreed on the importance of regulating private funding, but pointed out that several attempts to bring this onto Parliament’s agenda over a period of ten years had been consistently stymied by the ruling party.

Donors, specifically companies, should be held to account for the donations they make

Given that South Africa is holding national and provincial elections on 7 May, there is an increased need for political parties to seek resources from companies and wealthy individuals. But Greyling argued that the playing field was not fair as government resources were being used to favour the ruling party during election time, specifically with increased advertising of government achievements.

There is also the question of political party investment vehicles such as the ANC’s Chancellor House, which has been bidding for state contracts. Mkhize agreed that Chancellor House should not be bidding for state contracts, yet he disagreed with Greyling over the banning of investment arms. Mkhize believes that regulating investment vehicles would be a more realistic option.

In the seminar, Lawson Naidoo of the Council for the Advancement of the Constitution (CASAC) and Greg Solik of My Vote Counts both emphasised that South Africa should fulfil its international obligations in terms of the African Union Convention on Preventing and Combatting Corruption, which calls for transparency with regard to all political donations. South Africa is a signatory to the Convention and should therefore take action to promote disclosure.

Naidoo reminded attendees that donors – specifically companies – ought to be held to account for the donations they make. This means transparency in terms of how they decide to make donations, for example, whether it is in proportion to a party’s representation in Parliament, or whether alternative formulas were used to determine the amount donated.

So, the question remains – who will lead the way in closing this gap in South Africa’s transparency regime? Logically, it should be the ruling party, with its overwhelming majority in Parliament. Yet, at the ISS discussion, Mkhize seemed to be arguing that it was the task of all political parties to return to ‘first principles’ on this matter and push for it to be debated at Parliament.

In the absence of regulation, the public can never be certain that policy decisions are being made in their best interests

The ANC’s commitment to transparency in relation to party funding was articulated in its Polokwane resolutions. It therefore already has a mandate from its members to legislate on this issue. Yet, there has been little movement on the matter since then. Mkhize also made some useful suggestions regarding the establishment of a Democracy Fund through which donations can be filtered.

It is clear that political parties need money to operate, but being open about where the money comes from is crucial if political parties – and the ruling party in particular, given the power it exercises over government – is serious about its stated commitments to manage conflicts of interest and tackle tender-related corruption. Without such transparency, there is no way of knowing, for instance, whether tenders are being allocated in return for donations to the ANC. This raises questions and suspicion that something is being offered in return to those who donate. In the absence of regulation, the public can never be certain that policy decisions are being made in the best interests of the country, rather than the narrow interests of those who donate at the expense of the public interest.

It is clear that the R102 million per annum of public money that political parties currently receive is not enough to finance the myriad activities they need to undertake. It is particularly challenging to contest an election in South Africa: a vast country with large rural areas, 11 languages and a low literacy rate. Ensuring that voters are aware of a party and its policies is costly. It is therefore considered unrealistic to outlaw private donations, as multi-party democracy requires healthy political parties. However, as CASAC points out, a discussion on how money is being spent is also long overdue. Many companies have raised reservations about their donations simply being spent on posters during election time, rather than activities that deepen democracy and citizen participation. Perhaps more of these donations should be spent on research capacity within political parties, therefore raising the level of national debate, Naidoo argued. 

The regulation of such private donations represents mainstream modern democratic thinking, though the detail of the regulation varies globally and should be contextually orientated. In Britain for example, public disclosure of contributions is required only if it is made by corporations and unions. Parties are required to submit quarterly reports to the Electoral Commission that specify donor information such as their name, address and the nature of the donation.

German law entitles parties to receive donations, but those that exceed a value of €10 000 per year must be publicly disclosed by giving the name and address of the donor, as well as the total amount in an annual report. Donations that exceed €50 000 have to be reported immediately.

Whatever the shortcomings of regulating private funding to political parties (and there have been shortcomings in countries such as the United Kingdom, Germany and the United States with the implementation of regulations), the advantages of transparency are abundantly clear. The argument from opposition parties is that transparency could lead to the victimisation of their donors – although no instances of this happening have been reported. 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. In a sense, requesting greater amounts of public money is only one aspect of this challenge: the nub of the problem lies in the millions of rands raised in secret, and the accountability deficit that this has created in our political processes.

Perhaps the new Parliament might start its term with a commitment to filling the lacuna in South Africa’s anti-corruption apparatus, and initiating legislation to ensure that political parties are transparent about their sources of funding. The public has a right to know who political parties are being funded by, because secrecy only breeds mistrust and an environment that is ripe for corruption.

Judith February, Senior Researcher, Governance Justice and Crime Division, ISS Pretoria

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