What did they spend? Party Funding and Election Campaigns in SA …
May 12, 2009
Judith February, IDASA/Bus. Day
 Election 2009: Map showing, for each municipality, the party with the largest number of votes in the National Assembly election. Lighter shades indicate a non-majority plurality. Green: ANC; Blue: DA; Red: IFP |
With the elections over and the African National Congress celebrating its victory, it is clear that, along with the people, the money has also spoken.
Estimates put the ANC’s election spending at between R200 million and R400m. No one can be sure of the actual amount, given the lack of transparency in the funding of political parties.
All political parties seem to agree that transparency is a good thing but appear to lose their appetite when it comes to disclosing their own sources of funding. It has been a case of “show me yours and I’ll show you mine”.
For as much as the ANC has been coy about the sources of its donations, so has the opposition Democratic Alliance – which flooded the Western Cape with posters and, towards the end of its campaign, laid on a helicopter for Helen Zille – been reluctant to disclose its funding sources.
So, the question remains, who will lead the way in closing this gap in South Africa’s transparency regime? Logically, it would have to be the ruling party, with its overwhelming majority in Parliament.
The ANC’s commitment to transparency in party funding was articulated in its Polokwane resolutions. It therefore has a mandate from its members to legislate on this issue. Yet, there has been little movement on the matter since Polokwane.
According ANC treasurer-general Mathews Phosa, there seems to be a move toward demanding greater public funding. The question, of course, is what the public will think of this.
It is clear that political parties need money to operate. In the recent election, we have seen what happens when parties lack resources. The Independent Democrats, the United Democratic Movement and, to a lesser extent, the Congress of the People have been hamstrung by a lack of funding.
 Map showing, for each municipality, the change in the ANC percentage of the vote since the 2004 election. Green indicates a swing to the ANC; magenta a swing away. |
But knowing where the money comes from is crucial if political parties are serious about 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, for instance.
There is no doubt that 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 is probably unrealistic to outlaw private donations.
Moreover, it is clear that the R70m- odd a year of public money that the political parties currently receive is not enough to finance the myriad activities political parties need to undertake. But what is also clear is that reform and regulation now represent mainstream modern democratic thinking, though the detail of the regulation varies and must be contextually orientated. In Britain, public disclosure of contributions is required only of corporations and unions. Parties are required to submit quarterly reports, which detail donor information, to the electoral commission.
German law entitles parties or several of its bodies to receive donations, but donations that exceed R112 000 a year must be publicly disclosed.
Whatever the shortcomings of regulating private funding to political parties, the advantages of transparency are clear.
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 only serves to create a diversion, because the nub of the problem is the millions of rands raised in secret and the accountability deficit that has been created in our political processes.
Perhaps the new Parliament can start its term with a commitment to filling the lacuna in South Africa’s anti corruption apparatus and initiate legislation to ensure that political parties are transparent about their sources of funding?
The public has the right to know who is funding our political parties because secrecy only breeds mistrust and an environment ripe for corruption.
This article first appeared in Business Day, Friday, 08th May 2009.
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'China funding ANC campaign?'
26/03/2009 21:00
News 24/SAPA
Cape Town - The government's refusal to grant the Dalai Lama a visa highlights the need for the regulation of political party funding, political analyst Judith February said on Thursday.
"We just had the situation with the Dalai Lama, so I think it is reasonable to ask whether the ANC received funding from the Chinese recently to fund its election campaign," February, an analyst for the Institute for Democracy in South Africa (Idasa), told the Cape Town Press Club.
The Dalai Lama was refused a visa to attend a 2010 World Cup peace conference to have been held in Johannesburg starting on Friday.
The event was cancelled after Nobel peace laureates FW De Klerk and Archbishop Emeritus Desmond Tutu withdrew in solidarity with the Dalai Lama.
Shrouded in secrecy
"The whole process of party funding is shrouded in secrecy," February said.
"There are no regulations of private funding to political parties. This is a big gap in our anti-corruption apparatus. It needs to be fixed sooner rather than later."
Idasa took five political parties to the Cape High Court in 2005 to get them to reveal their funding.
The organisation was unsuccessful in its application, with the judge ruling that political parties were private bodies which did not have to make their books public.
Issues with funding
She said all political parties had had issues with funding, including the ANC, DA and Independent Democrats.
"I think most political parties agree on a situation of 'show yours and I'll show you mine'," she said.
February said it was worrying that Parliament had shown no movement on the issue, despite the ANC taking a resolution at its conference in Polokwane in 2007 calling for transparency on contributions to parties.
February also spoke on the upcoming April 22 elections.
ANC could be hurt in polls
She said there was a good chance that the ANC might be hurt in the polls after the way in which it handled corruption charges against party president Jacob Zuma.
"I think that the ANC is in danger of losing the two-thirds majority in Parliament," she said.
"Some of the pressure to drop the charges against Zuma might hurt them at the polls," she said.
"The ANC needs to be very careful in the way it deals with this issue."
February said she expected the DA to "do very well" in the Western Cape and the ANC had itself to blame for losing support in the province.
"The party did not do a good job in running the city," she said.
"I think that in Helen Zille people see a leader of integrity. The city of Cape Town has had no corruption scandals. That sticks with people."
» » » » [News 24/SAPA]
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ANC's dodgy funders
21 Mar 2009 06:00
Mail and Guardian
The ANC is keeping mum on its funding sources for the election campaign, but party insiders involved in fundraising say its election effort is heavily subsidised by the ruling parties in Libya, Angola, China and India.
A source involved in fundraising said the party began actively fund-raising in these countries for its election coffers before Polokwane. The ANC's initial election budget for the 2009 election totalled about R100-million, excluding travel and logistical arrangements, which cost the most, a source said.
He said the party has also received funds from oil-rich Equatorial Guinea, one of Africa's most notorious dictatorships.
The ANC's funding strategy is based on donations by individuals, but the big money comes from ruling parties elsewhere.
ANC president Jacob Zuma and ANC delegations have been travelling, ostensibly to build historical relationships with other ruling parties but also to raise funds, insiders say.
He visited Angola in March last year for the celebration of the battle of Cuito Cuanavale with a heavyweight ANC delegation.
In June last year, in New Delhi, he signed a memorandum of understanding between the ANC and the Indian National Congress. This was followed by a visit to China where he met Hu Jintao, Chinese president and general secretary of the Communist Party of China.
In October last year he attended Equatorial Guinea's independence day celebrations as a guest of dictator Teodoro Obiang Nguema Mbasogo, who has ruled the country since 1979, despite flawed elections.
"The ANC have never asked for money from foreign governments; it is always from one ruling party to another," said an ANC insider.
ANC treasurer general Mathews Phosa would not be drawn on the ANC's finances, saying the party did not want to sound boastful.
"We need to stay humble about our finances. Our supporters are humble people," he told the M&G.
He said the party will talk about election funding only after elections.
It has a long-standing relationship with the Libyan dictator Moammar Gadaffi, who has been a major funder of its election campaigns, insiders say.
Zuma, SACP secretary general Blade Nzimande and Cosatu general secretary Zwelinzima Vavi have visited Libya, begging bowl in hand.
"They went to get money for the ANC election campaign under the guise of the alliance. This was before Polokwane, when they were preparing to take over," an alliance source said.
"Once the Libyans knew Zuma was coming, they knew they had to find money from somewhere. The amount would have been communicated behind the scenes to the delegation. Zuma never brought it up directly," another source involved in fundraising said.
The source said when former president Nelson Mandela visited Gadaffi in 1994 he returned with $40-million in briefcases to fund the ANC's election effort.
The ANC was also said to be receiving funding from Angola's ruling MPLA after Zuma took the party reins. Relations between Angola and South Africa were frosty while former president Thabo Mbeki was ANC leader, but Zuma had made a determined effort to change this.
A Zuma presidency is expected to pave the way for South African businesses to invest in Angola, with mining, agriculture and construction targeted. Countries such as Libya, where the government is investing heavily in infrastructure, are also looking to South Africa for specialised skills and companies.
"It would be naive to think strengthening of relations will not influence things like allocation of tenders. There will be business opportunities a fraternal country will be able to exploit.
"You have much more to offer; there are contracts and cooperation," the ANC insider said.
The ANC has had pre-1994 ties with the Indian Congress Party and the Chinese Communist Party, but "it is different when you're a ruling party", said a source.
He said previous ANC election budgets had reached R300-million, but in 2009 the budget had fallen to half this amount.
Meanwhile, the Congress of the People, which has vowed to disclose its funding, is understood to have an election budget of R40-million and hopes to raise this to R60-million. The DA reportedly budgeted R60-milllion. The government provides R75-million for political parties to fight elections, but this is distributed in proportion to each party's parliamentary representation.
Additional reporting by Stefaans Brümmer
» » » » [Mail & Guardian]
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Who Funds Who? Money in RSA Election Politics
A comprehensive resource on the private funding of South African political parties
WhoFundsWho
Political parties need money to run election campaigns. However, such monies have the power to corrupt and subvert voter interest in favour of powerful interest groups who donate funds with conditions attached.
Transparency in the private funding of political parties is an issue that confronts all modern democracies. It is evident that even where regulation exists, loopholes are found by the corrupt to abuse entrusted power for private benefit.
The lack of regulation of party funding across many countries on the African continent may allow efforts by the wealthy to exert undue influence on a government's policy choices, to go largely undetected. This also holds equally true for South Africa where state funding is adequately regulated while private funding is an activity that happens far from the public eye. The Money in South African Politics web site, a joint ISS - Idasa project, comprises:
- A brief analysis of ‘the problem’ created by the lack of effective regulations of political parties.
- A Party Funding Monitor database that provides policy-makers, researchers, journalists, and political parties with a source of information with which to track the reported sources of private funding of political parties. This research is indicative of funding received by political parties.
- A relevant list of Research and Publications including Independent Electoral Commission reports as well as local and international papers that provide background information for those wishing to explore the policy options available to effectively regulate the private funding of political parties.
- Information about the project partners and the funding of this initiative.
- A list of links to relevant domestic and international websites.
Importantly, this site does not blow the whistle on party funding or expose it, rather it strives to broadly achieve the following:
- Provide the tools for political parties, policy makers and others to develop regulation of the private funding of political parties.
- To assist the media, civil society and the research community with background information on this issue.
- To produce a database that will help keep track of reported instances of private funding of political parties – the first online database of its kind on the African continent.
The private funding of political parties is a necessary to ensure that political parties can fund campaigns designed to reach the voting public during national and local elections. All parties represented in Parliament do receive funding from the State via the Independent Electoral Commission as outlined in the Represented Political Parties Fund Act. It is however argued by parties that this is not sufficient to run a successful election campaign and they are therefore compelled to raise money privately. Estimates in the 1999 election were that the unregulated secret private funding of parties may have outstripped transparent public funding by 4 - 1.
Who are the donors?
Many large donors may be well intentioned and disposed to the development of democracy – and the contribution by many donors may well be motivated by such intentions. However, a lack of control over the private funding of political parties may allow the wealthy to ‘buy' influence and access through secret donations, drowning out the citizens' voice and undermining the equal value of each person's vote. South Africa has a powerful range of legal mechanisms to combat corruption, but the lack of regulation in favour of transparency leaves open the back door for organised criminals and rogue business people to effectively corrupt the political process through party donations. As long as the public cannot see the link between donors and political parties, a real threat exists that party funding could become a tool to undermine internal party democracy and the democratic process as a whole.
Is this a South African phenomenon?
There are a number of instances of impropriety that have demonstrated that it is unhealthy for a democracy when private fund-raising is allowed to continue unregulated. Examples range from the German Christian Democracy Party (CDU) and its links with French oil giant Elf, to the effect that large corporate interests have had on the war in Iraq (the links between the US Republican Party and large corporations such as Halliburton and others) or the relationship between the Bush Government and Enron. The USA is an example of a country were campaign finance remains a conduit for influence peddling despite regulation in favour of transparency. This outlines the many challenges South Africa will face to monitor party funding even after the practice is regulated.
Has South Africa had party funding ‘scandals’?
Most South African political parties have had the whiff of scandal linked to party funding – it is an issue that is not unique to any one political party. The Party Finance Monitor lists media reports of some of these. One such case case is the former New National Party (NNP) Western Cape MEC for Environmental Affairs, James Malatsi, who has been criminally charged with altering important decisions to benefit controversial developer Count Ricardo Agusta (himself linked to organised crime networks). In addition senior NNP members, including the chairperson of Parliament's public accounts committee (SCOPA), Francois Beukman, are alleged in media reports to have offered kickbacks to developers in return for funding in the run-up to the 2004 elections.The other is German fraudster Jurgen Harksen who provided funding for the Democratic Alliance (DA) at the time that he was a fugitive from justice. Although no link to corruption was identified by the Desai Commission of Enquiry, this highlighted the nature of the problem.
The African National Congress (ANC) has most recently come under the spotlight following the ‘Oilgate’ scandal according to which state funds were allegedly channelled to the ANC. The Independent Democrats (ID) did not escape its first nationally contested election (2004) without allegations of abuse of party funding by a former provincial leader. This includes allegations of funding received from a well-known Western Cape ‘gang figure’.
What to do?
After nearly ten years of democracy, the secrecy surrounding the private funding of political parties has not been pierced because there remains a glaring lacuna in South African law: There is no law regulating private funding to political parties.
As a result, the private funding of political parties remains one of the last ‘legitimate' avenues by which the private sector, foreign governments or even criminals can extract influence on public officials.
Following the country's third democratic elections it is important to now give urgency to the debate on the necessity to regulate the private funding of political parties in South Africa and eventually impact on the debate in other democracies in the region.
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