Political parties must declare their private funders that pay their deposits to register as parties, as well as private funders of parties already in parliament and provincial legislatures, and make public the donors who fund internal party leadership contests.
South Africa has seen the mushrooming of new political parties whose registering deposits are often paid by dodgy private donors. Gangsters, criminals and opportunists are increasingly privately not only funding established political parties which are already getting public funding, but also funding the start-up of new political parties and also establishing their own parties. But political parties must also be compelled to declare which private donors fund internal leadership elections within parties. It is increasingly being alleged that leadership contests within the ANC itself are funded by private donors.
Parties are public institutions, and not private, because they oversee public institutions, they dispense of public money and act on behalf of citizens. Political parties when in government decide policy, appoint public servants and nominate elected representatives. Because of this, all money they receive must be made publicly available and easily accessible to citizens.
Lack information about who the real funders – and by implication their political, policy and leadership agendas, is unconstitutional, because will then vote for a party only based on the rhetoric of party leaders, manifestos which do not reflect the real policy platforms of the party and often the behind-the-scenes real leaders of the party.
Parties that do not account prudently for public funds received should have their funding cut-off until the next election cycle, and on condition they pay back the misused public funds.
Private companies that donate to political parties much be compelled to disclose the amount and the party donated to in their annual financial reports. Knowing who funds the creation of a party, and who funds an existing allows an ordinary voter to make a more informed choice when they choose who to vote for.
Since 1994 there has been a weakness in the regulation of private funding of political parties in South Africa. Private funding is not regulated in similar ways to public funding for political parties. The Electoral Act of 1998 and the Public Funding of Represented Political Parties Act of 1997 are silent on private funding, beyond saying it is permitted. The Promotion of Access to Information Act (PAIA) does not allow public access to political party funding. There are no regulatory obligations on political parties to public disclose private funding sources, amounts and spending. There are no restrictions on from whom and how much private funding political parties can receive from private donors.
The Public Funding of Represented Political Parties Act (1997, 2(1)) as amended by the Constitutional Matters Amendment Act 2005, enacted the Represented Political Parties Fund to fund parties in parliament and legislatures. In the 2017/2018 financial year, political parties received R150 million in public funding. The fund is administered by the Chief Electoral Officer, under the auspices of the Independent Electoral Commission. The Independent Electoral Commission the hold political parties account for the use of the money.
Regulations to the Act provides for how the public money to political parties should be accounted for. Parties must submit financial accounts showing how they used the funding to the Auditor-General for auditing, and the audited accounts should thereafter be submitted to Parliament. The IEC could appoint its own auditor to verify party spending account reports from the auditors of the political parties. The Act gives the President the power to make changes to the regulations, conjunction with the joint committee of the houses of parliament.
On 10 January 2019, the National Council of Provinces (NCOP) passed the Electoral Laws Amendment Bill, which makes it illegal for any political party to use public funds in their election campaigns, apart from the money they are allocated each year under the auspices of the Public Funding of Represented Political Parties Act. The Electoral Laws Amendment Bill is now awaiting President Cyril Ramaphosa to sign it into law.
In 2017, the Western Cape High Court in Cape Town ordered Parliament to amend the Promotion of Access to Information Act (PAIA) to allow for the disclosure of private political party funding. The court gave Parliament 18 months to amend PAIA so that political parties are compelled to disclose their private funding sources.
Civil society organisation, My Vote Counts had approached the court, arguing that access to information about the private donors of a political party is crucial for a voter to make up his or her mind to vote for a party or not. Because the order challenges the constitutionality validity of an act of Parliament, it has to be confirmed by the Constitutional Court before it is enforced.
Parallel to the 2017 Western Cape High Court case on PAIA, the National Assembly in 2016 established a multi-party ad hoc committee to make recommendations by 30 November 2017 on the amending the funding rules for political parties in Parliament and provincial legislatures.
The National Assembly in March 2018 approved the Political Party Funding Bill and it set for consideration by the National Council of Provinces.The draft Political Party Funding Bill bans foreign government and foreign government agencies from directly funding political parties represented in Parliament and the provincial legislatures. Foreign governments and agencies can fund policy, capacity development and training programmes of parties. Such foreign nations are limited to R4million a financial year.
The bill also prohibits donations to political parties from state-owned enterprises and government agencies. It has a requirement for parties to disclose private funding above a certain threshold, set at R100 000 per private donor per financial year. Private donors are also required to declare their donation. The bill limited the amount that private individuals and entities could donate to a political party to R15million in a calendar year.
It calls for the established of a Multiparty Democracy Fund to whom donors can donate anonymously. Parties represented in national Parliament and provincial legislatures will be allocated funding from this fund. The IEC will manage the fund. The bill allows for financial penalties for non-compliance by political parties. Funding could be suspended and fines of up to R1million could be slapped on parties. Not declaring donations that should be, and accepting donations from undesirably donors, will according to the bill, be a criminal offence, punished to up to 5 years in prison, if proven. The bill has a couple of weaknesses. The definition of a single private donor should be expanded to include related persons, family and companies. As it stands now, one donor could channel money through different individuals, companies and affiliates.
The bill excludes donors who provide funding to start-up parties. The bill is also silent on the funding of leadership election contests within political parties – which have led to rich party members and private donors buying votes to elect questionable leaders, they can control or from which they can extract patronage, such as pork-barrel policies, government tenders and prosecution for wrongdoing.
William Gumede is Executive Chairman of the Democracy Works Foundation (www.democracyworksfoundation.org) and author of South Africa in BRICS (Tafelberg).