Senior communists have raised questions about a total of R1,7-million in donations made to the South African Communist Party (SACP), which they say are unaccounted for.
And they claim that the donations were made directly to SACP general secretary Blade Nzimande.
Nzimande is on leave and, despite repeated Mail & Guardian attempts, could not be contacted for comment on the allegations.
But party chair Gwede Mantashe conceded: ‘Of course it is very worrying. We will investigate, but we will not do it in the media.â€
Mantashe declined to respond substantively to the claims, saying only that the party would conduct its own investigation. The SACP would not, in any event, disclose the identity of its donors to the press.
‘You don’t ask the DA who funds them — you only ask the SACP and the ANC,†Mantashe said. ‘It’s dangerous and awkward to give you a list of our donors. I am tired and weary that we have to account to the media about our finances.â€
The R1,7-million includes R500 000 which, as reported last Sunday, is the subject of complaint by controversial businessman Charles Modise to the South African Police Service. Modise claims he gave Nzimande the money in cash for salaries and that it subsequently went astray.
In addition, the SACP is alleged to have received three other payments that are not accounted for: a R600 000 donation by a Limpopo politician-cum-businessman, R360 000 paid over accidentally by the Banking Association and R300 000 from the Chinese Communist Party.
The SACP’s original treasurer’s report, presented in a sanitised form at the party’s recent congress, says that R1,1-million in donations to the party is unaccounted for and that these need to be identified and receipts given to the donors. The additional donations, making up the R1,7-million, are alleged to be those made by the Banking Association and Chinese Communist Party.
‘Limpopo donation’
Three senior SACP figures have told the M&G that two cash payments of R300 000 each were handed to the SACP in 2005 by Justice Pitso, Limpopo’s transport minister, which were unaccounted for.
Pitso denied giving money. ‘I don’t know anything about this — this is a malicious attack on me. I have not paid a cent — this is rumour-Âmongering and an attempt to discredit and attack me,†he told the M&G.
But the sources, who requested anonymity because of the party’s internal battles, insisted the cash was donated by Pitso and his business associate, Joyce Moloi.
They said Pitso told them he had handed over the R600 000 in two tranches. The cash was intended to pay salaries, they believed.
‘There were two payments of R300 000 each in cash. We don’t know what happened to the money because it was never declared,†one party insider said. The two other officials confirmed this account.
Moloi and Pitso are directors in a brick-making company, ‘Biz Africa 359â€. The SACP donation was made on behalf of this company, people familiar with the circumstances were told.
Pitso and Moloi are both members of the SACP’s central committee in Limpopo, where Pitso also is the party’s provincial secretary.
Pitso confirmed that he had been a director of Biz Africa 359, but said he had resigned ‘about two months agoâ€. The companies’ register lists him, Moloi, Sonny Leshika and a George Diamond as active directors of the company.
Pitso and Leshika were previously directors of another brick company, Zebediela, with Mathuding Ramatlhodi, the wife of then provincial premier Ngoako Ramatlhodi.
But Pitso insisted none of his businesses had made political donations.
‘R500 000 in a garbage bag’
The SACP has dismissed Charles Modise’s claims of his R500 000 donation going astray as a smear campaign against Nzimande, but police are taking Modise’s claims seriously. On Wednesday they questioned axed party treasurer Phillip Dexter for two hours about the money, the M&G understands.
Modise’s version — that he handed the money in cash to Cosatu president Willie Madisha in black garbage bags which were delivered to Nzimande — is understood to be corroborated by statements Madisha has made to the police. Madisha was prepared to say only that he had received the cash, and delivered it ‘where it was supposed to goâ€.
Modise told the M&G this week that Nzimande had hosted a lunch for him, his wife and Madisha at a Gauteng hotel to thank him for the donation.
‘He acknowledged that he received the money and was very grateful — that’s why he invited us for lunch to the Birchwood Hotel [in Boksburg] where the SACP was having their conference at the time,†Modise said.
Modise said the lunch was held ‘a couple of months†after he gave the money to the SACP. Two other sources have confirmed the lunch took place.
Speaking this week in the presence of his lawyer, Zehir Omar, Modise said: ‘I gave the money to the SACP because they were in financial crisis and steeped in debt. They had outstanding salary bills; they couldn’t pay their rent and telephone bills. I’m not an ANC or SACP member, but I didn’t want to see the SACP go to ruin, because they’re the voice of the workers.â€
He said he has bank statements to prove the cash withdrawal. ‘I sent Nzimande cash because I knew if I write a cheque, creditors will take the money and the SACP will see none of it.â€
Banking Association’s R360Â 000
Nzimande was personally involved in receiving at least two other donations that subsequently could not be traced, people with direct knowledge of the circumstances have told the M&G.
Three well-placed sources said the Banking Association South Africa (formerly the Banking Council) intended to make a payment of R360 000 to the Financial Sector Charter Council, known by the acronym ‘FSCCâ€. This body is responsible for the financial sector empowerment charter and representative of institutions targeted in the SACP’s ‘Red October†campaign.
Instead, the money went to a very different FSCC – the Financial Sector Campaign Coalition. This organisation, founded and led by the SACP, campaigns against banks that charge high fees and refuse to grant mortgages in poor areas. It is chaired by Nzimande.
All three sources and a fourth party insider said that Nzimande had refused to return the money.
The Banking Association’s Cas Coovadia declined to comment, but a senior SACP source told the M&G that the money has not been returned ‘because it was used to pay for the party’s policy conference. That money is gone — they can’t give it backâ€.
There are also questions about an R300 000 donation from the Chinese Communist Party which was not paid into the regular, audited, party account, but received by Nzimande personally, says a party official.
Congress delegates kept in the dark
Delegates at the 12th congress of the SACP were kept in the dark about R1,1-million in missing donor funds, suspect membership figures and an unpaid tax bill, the M&G has learned.
A report on the party’s finances, drawn up by suspended treasurer Phillip Dexter, was presented at the congress in sanitised form by chairperson Gwede Mantashe.
The original report, which the M&G has obtained, drew attention to the party’s inability to explain how donations had been spent. ‘The outstanding donations identified as unaccounted for amount to R1,1-million and these need to be identified and receipts given to the donors,†it says.
These remarks were edited out of the version presented by Mantashe.
Under the heading ‘Donationsâ€, both reports say: ‘The party received R3,3-million in donations since its 11th Congress (July 2002). These were given by fraternal parties, trade unions, sympathetic individuals and businesses.â€
The report, delivered in Port Elizabeth, stops there. But the original continues: ‘Some donors have recorded their disappointment at not receiving any acknowledgement of their giving. Efforts to compile a donor register proved unsuccessful.â€
Also left out of the version presented to party members was a warning on ‘historical debt built up over a period of 10 yearsâ€, during which time the SACP apparently failed to hand over employees’ income tax contributions to the South African Revenue Service (Sars).
‘Amnesty was applied for in this regard, but has been refused by Sars. The SACP must now pay this tax bill,†the original report reads. The M&G has independently confirmed this account.
It goes on to point out that the party has not had a full-time financial manager since its accountant was sacked in 2002, and warns that, despite the introduction of measures to control waste, it continues to ‘live beyond its meansâ€.
Delegates to the congress, however, were assured that Nzimande’s office was helping to manage finances.
‘We have, however, allocated part of the time of the office manager in the office of the general secretary to assist with the management of finances as well as contracted some outside accountants and financial administrators,†Mantashe’s version of the report says.
Dexter’s battle with SACP general secretary Blade Nzimande over the missing money burst into public view this week after Modise lodged a formal complaint about the disappearance of his donation with the police.
The balance of the R1,1-million appears to be another cash donation of R600 000 handed over by a senior Limpopo politician.
The original report also calls into question the party’s claims of buoyant membership growth. The congress was told that the SACP has 51 872 paid-up members, but Dexter’s report puts the number at 14 000.
‘The Young Communist League claims to have 20 000 members and that amount was added to the 14 000 SACP membership and the rest was made up,†an SACP source told the M&G this week.
In May Nzimande told a press conference that the party has 40 000 members. ‘This represents a 100% growth since our July 2002 11th national congress,†he said, attributing the party’s growth to successful campaigns on land reform, service delivery, banking and economic Âcooperatives.
The financial report was not Dexter’s first warning. A fortnight before the congress, he was handed a one-year suspension by the party’s politburo because he had, in a leaked internal discussion document, described its leadership as ‘rigid, doctrinaire, dogmatic and quasi-Stalinistâ€.
In that document Dexter also sounded a warning about poor financial governance.
He wrote: ‘Financially, the Party is indebted to a few key creditors. It limps from month to month, relying on the dedicated members who contribute their levies and certain BEE funders for funding.
‘When it gets resources, these are either immediately used to pay salaries or are, frankly, squandered on vehicles, bonuses and junkets for the select few in the party leadership. The same comrades seem to go on every overseas trip. The same pattern of bonuses favours certain officials. The same people are bought new vehicles. These practices must stop.â€
Dexter declined to comment, saying his attorneys had handed a formal statement to police investigating Modise’s claims.
The great divide
The battle over SACP funding takes place against the backdrop of increasingly acrimonious divisions in the party and the tripartite alliance, writes Rapule Tabane.
Two crucial issues dividing party leadership are the support for presidential hopeful Jacob Zuma and a debate about whether to pursue socialism in an electoral alliance with the ANC or independently.
Allegations that general secretary Blade Nzimande could not account for large cash donations handed to him follow claims that he might have helped facilitate funding for Zuma from Libya’s Moammar Gadaffi.
The party has dismissed these claims repeatedly as politically motivated attempts to minimise its voice ahead of the ANC’s December conference in Polokwane.
Nzimande is at the head of a dominant bloc, which is adamant in its backing for Zuma and which is seen as unwilling to brook the public airing of contrary views.
Former party spokesperson Mazibuko Jara was expelled last year from the Young Communist League after he wrote a discussion document questioning the party’s willingness to expend energy supporting Zuma and suggesting that Zuma’s alignment with the left wing of the tripartite alliance might be opportunistic.
Former national treasurer Phillip Dexter was suspended after he wrote a paper warning that a culture of opportunism, ideological incoherence and factionalism was overwhelming the party.
He warned that the party’s influence was in decline, despite its claims of increased membership.
At the SACP’s July congress in Port Elizabeth Nzimande and other supporters of Zuma were firmly in the ascendant, forcing out of leadership positions most of those perceived as overly sympathetic to President Thabo Mbeki.
Safety and Security Minister Charles Nqakula was removed as chairperson, while Provincial and Local Government Minister Sydney Mufamadi, Intelligence Minister Ronnie Kasrils and Cosatu president Willie Madisha failed to win election to the central committee.