Understanding the role of the ANC treasurer general, and the books that he will hand to his successor, sheds light on the course of the ruling party. The manner in which the ANC treasury operates sadly has come to represent the worst feature of modern democracy: the secret embrace between money and politics, where two is company and the electorate makes an unwelcome crowd.
A decade ago Mendi Msimang inherited a political party that was nearly broke and about to lose its rainmaker, Nelson Mandela. Msimang’s was an unenviable inheritance. Makhenkesi Stofile, Msimang’s predecessor, by his own admission did not have the financial skills for the job. Moreover, the position itself was undergoing transformation. Until the early 1990s the ANC received most of its income from the Nordic countries, Sweden in particular. As the ANC prepared to govern, suitors lined up to fund the party. Some wished to support the ANC in its final push for liberation. Others, of course, saw money buying them access.
While these might be the ways of neoliberal democracy, they can be regulated to an extent through disclosure, ceilings on expenditures and donations, and prosecution for those who break the law. Where this doesn’t happen the impact is profound. The Bush government’s torrid affair with corporate America is one example; South Africa, where private funding of political parties remains unregulated, is shaping up to be another.
With the backing of sections of the ANC leadership, Msimang has shrouded the party’s finances in secrecy. According to a report in Financial Mail earlier this year, Msimang ”put a few slides up on a screen … but no audited statements were presented” to delegates at the ANC’s 2002 conference in Stellenbosch.
Of course many opposition parties, including the DA, self-righteously denounce corruption while embracing the same secretive methods. But the ANC is the ruling party and its donors have the most to gain from leverage. What is it that Msimang does not want the world to see?
There is little doubt that the big businesses that kept white politics afloat under apartheid are doing the same today, with new players who wish to ”support democracy” in the Brett Kebble mould.
The most fundamental shift in ANC funding directed by Msimang in the past few years has seen party interests seemingly conflate with state power.
Stofile’s comments, as reported in a 1997 interview with The Star, provide a useful reference point: ”There were a number of options,” he said. ”One was the National Party option, which formed companies and gave them contracts that produced a steady basis of income. We didn’t think that would be a good thing to do. We then considered joint ventures and also thought that they would not be viable and would be the source of conflict.”
Only 10 years later it appears that Msimang is steering the ANC towards the so-called National Party option.
Recent reports in the Mail & Guardian suggest that the activities of ANC front company Chancellor House should concern every South African, not least ANC members.
First uncovered in research undertaken by the M&G and the ISS Corruption and Governance Programme last year, Chancellor House was reported to benefit from a joint venture giving it access to untapped manganese fields worth R7billion.
Next came the announcement, early this year, of a Russian fertiliser deal valued at R14billion. The M&G‘s most recent exposé links it to the massive Medupi power station tender, from which Chancelllor House could receive as much as R3billion in turnover.
When these contracts were awarded, the links between Chancellor House and Luthuli House were public knowledge. How could senior bureaucrats and politicians not have been aware of a very real conflict of interest? Allegations of bribery in the arms deal are one thing, but the criminalisation of sections of the state would be something altogether more dangerous.
It is unclear whether the profits accrued by Chancellor House will ultimately benefit the ANC or sectional interests within the party. Such funds, if not clearly accounted for, are open to abuse in internal battles or to provide patronage.
All this underlines the importance of regulation of party funding. It also speaks to the responsibilities of the new treasurer general to be elected at Polokwane. Can both nominated candidates — Phumzile Mlambo-Ngcuka and Mathews Phosa — handle the difficult mix of managing money and retaining integrity?
Delegates might wish to consider the words of the late ANC treasurer general, Thomas Nkobi, who warned in 1991: ”We [the ANC] have the national responsibility and duty to create and sustain alternative, reliable sources of funds and the only sources that will be reliable are those sources that come from our people.”
If not the people, then who — and at what cost?
Hennie van Vuuren heads the Institute for Security Studies corruption and governance programme in Cape Town