Blog


2018-07-20
The thorny issue of party funding


Funding of political parties can be used as a tool for influence and/ or bribery.  A funder can steer the policy direction of a political party or who a government department awards a tender to.  Access to information about who funds political parties is therefore crucial in enhancing transparency and holding politicians accountable.

In 2005, the Institute for Democracy in South Africa (Idasa) sought a court order to compel political parties to disclose the details of all funding that they receive (Idasa v African National Congress and Others, 2005).  The court application was made in the context of revelations in the Schabir Shaik trial.  The trial illustrated how secrecy in donations invariably prompts corruption and erodes public confidence in party politics.  The application was dismissed as the Western Cape High Court was of the view that although “a compelling case” was made, the court was ill-equipped as compared to the legislatures, to perform the task of forcing political parties to disclose their funding.  The Respondents also placed evidence before the court, showing that the question of whether funding of political parties should be made known publicly and, if so, in what manner and to whom.  It is a complex policy issue best dealt with by way of legislation, which properly balances the various interests at stake, rather than through court orders with retrospective effect[1]

In June 2017, the National Assembly (NA) resolved to establish a multi-party ad hoc committee to inquire into and make recommendations, on the funding of political parties represented in Parliament and the Provincial Legislatures.  The committee tabled the Political Party Funding Bill in the NA on 28 November 2017 and recommended that Parliament pass the Bill.

The Bill seeks to establish the Represented Political Party Fund for the purpose of enhancing multi-party democracy.  The fund provides funding for political parties that participate in Parliament and provincial legislatures.  The Bill also proposes the establishment of a Multi-Party Democracy Fund (MPDF) to provide for private sources of funding for political parties that participate in Parliament and Provincial Legislatures.  Funding from organs of state, state owned enterprises and foreign governments or foreign government agencies to political parties are prohibited.  In addition, the threshold for disclosure of donations to political parties is R100 000,00.

The Bill, however, lapsed[2] at the end of 2017, but was revived on 28 February 2018 and referred to the NA Adhoc Committee on the Funding of Political Parties.  The NA committee held public hearing, deliberations and adopted the Bill.  The NA subsequently referred the Bill to the National Council of Provinces (NCOP) Adhoc Committee on the Funding of Political Parties.  The NCOP Committee held public hearings on 20 June 2018.

The Council for the Advancement of the South African Constitution (Casac) was of the view that the Bill makes great strides in enhancing transparency in private funding of political parties.  Casac requested that the Bill should be passed in its present form.  It also expressed concern that should the NCOP amend the Bill, it may require further deliberations from the NA committee and this may unduly delay the finalisation of the Bill.  This would mean that the Bill would not apply to the 2019 general elections and therefore that political parties would not need to disclose the source of their funding.  It further pointed out that the threshold to disclose donation is on the high side and should be lowered to R50 000,00.

The South African National Editors Forum (Sanef) and the amaBhungane Centre for Investigative Journalism, emphasised that the Bill makes provision for private persons making donations to the MPDF, to request to remain anonymous or for the size of their donation to remain secret.  This poses a threat to transparency and could make the MPDF susceptible to improper contributions.  It further asked that personal services volunteered should be disclosed if it exceeds the threshold of R100 000,00.  Services such public relations, legal and accounting volunteered could amount to a very substantial benefit.  To enhance transparency, it proposed that all donations, cash and in-kind should be disclosed. 

The Congress of South African Trade Unions (Cosatu), emphasised that there is a crisis of corruption and state capture and this erodes the public’s faith in political parties and in the political system.  The Bill is also critical as there have been growing examples of a vicious cycle whereby business persons seek to bribe political parties with funding with aim of obtaining tenders.  Cosatu therefore welcomed the Bill.  However, they opposed the principle of expanding public funding of political parties in a climate of austerity.  Cosatu further rejected the disclosure threshold of R100 000,00.  They demanded that the clause be deleted from the Bill and that all donations must be disclosed.

Members commented that in order for democracy to work, small parties don’t wish to remain small and enquired what informed the reduction of the threshold to R50 000,00.  Casac responded that no one knew the exact amount that would buy influence but it felt that R100 000 was just too large a sum of money.

The Bill is tagged a section 75.  In terms of the Constitution, it means that the NCOP does not have competence or mandate to amend the Bill.  The NCOP may only recommend amendments to the Bill.  The NCOP committee finalised its deliberations on the Bill and adopted the Bill without recommendations.  The Bill was adopted in the NCOP on 26 June 2018.  As there were no recommendations from the NCOP, the Bill was referred to the President for assent. 

The thorny issues in the Bill related to the disclosure of donations, that a private person could request to remain anonymous or that the amount donated be kept secret.  However, given the time constraints, it appeared that all stakeholders desired that the Bill be finalised in order that it can be operative by the 2019 general elections.  So much so, that they were willing to forego their concerns on the thorny issues, at least for this phase of the Bill.  Almost fast-tracked, a clear signal that South Africans are tired of corruption.   

There will very likely be a plethora of court applications ordering the Commission to disclose the donor and the amount.  It may even change the political landscape.  The Bill will be like a mirror that voters can use to hold political parties accountable.  Political Parties will therefore have no choice but to up their governance and due diligence on the funding it receives.  This enhanced transparency will strengthen and improve accountability of politicians, which ultimately will result in a stronger democracy.

Zelna Jansen,

Director, Zelna Jansen Consultancy

 

[1] www.saflii.org/za/cases/ZAWCHC/2005/30.html

[2] The Bill was not finalised by the deadline given by the NA.