ANC stalls over public funding of parties

Certain addictions are hard to beat. The ANC looks no closer to exiting the Chancellor House deal now than it did a few weeks ago. At least two years have passed since then-secretary general of the ruling party, Kgalema Motlanthe, publicly conceded that Chancellor House is a “front company” used by the ANC to raise money.

Chancellor House has benefited, through its stake in Hitachi Africa, from the contracts to supply boilers to the new Medupi and Khusile power stations. Although Barbara Hogan, the minister of public enterprises, called for a quick exit in a recent speech to the National Assembly, there is no unanimity within the party on how to deal with the thorny issue.

If it is genuinely concerned about the ethics of the ruling party gaining millions indirectly from a World Bank loan, why does it not simply sell its shares? Instead, ANC treasurer general Mathews Phosa seems unable to get past opposition from the craven right wing of the ANC and from individuals such as Chancellor House chairperson Popo Molefe.

South Africa’s democracy is suffering from the absence of transparency and a complete lack of regulation of private funding, despite being a signatory to the African Union convention on corruption, which includes a provision requiring national regulation based on the principle of ­transparency.

Given the ruling party’s intransigence, it seems time to contextualise the problem yet again and try to map solutions. There seem to be three main dimensions to the challenge.

First, the demand side: political parties need money to operate.

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. Therefore it is probably unrealistic to suggest an outright ban on private donations.

But limits on expenditure may be desirable. Many donors are tired of seeing their donations spent on the poster “arms race” that precedes every election. They would rather see their money being spent on creating real capacity in political parties. In the Netherlands, for instance, half the public funding must go towards policy institutes attached to each party.

Second, there is the supply side. Corporate donors in particular are increasingly vexed by the choice they face. Some have fled from the scene, concerned that the funding environment is a minefield in which their reputations can only be harmed.

Others have taken the opposite view, pumping secret donations to the ruling party to oil the tender wheels. In between, a small minority of companies have taken the open road, declaring their donations, but invariably making them on the basis of the current proportional representation within the National Assembly — which only really serves to cement the status quo.

The third dimension is the public one: there is already substantial public funding of political parties — about R70-million in the current financial year. There have been hesitant calls for an increase in this figure from across the political spectrum. Some believe that it will result in less dependence on either corporate or dodgy donors. Minority parties hope that it will increase the overall envelope and therefore heighten their ability to compete.

Five years ago Idasa decided against appealing the decision of the Cape High Court that political parties are entirely private associations, whose sources of funding are not subject to disclosure in terms of the Promotion of Access to Information Act. We did so on the basis of the ruling by the court that legislation initiated in Parliament, rather than litigation, was a more appropriate mechanism to address the issue of regulating political donations.

Idasa also took the ANC at its word when it stated in court papers that it was committed to the initiation and passage of such legislation in Parliament. We had underestimated the depth of the ANC’s addiction to secret, dodgy funding and the inability and unwillingness of its leadership to take any steps to clean up its act.

Subsequent to that, at the ANC’s Polokwane conference in 2007, the party resolved to “champion the introduction of a comprehensive system of public funding of representative political parties — as part of strengthening the tenets of our new democracy. This should include putting in place an effective regulatory architecture for private funding of political parties — The incoming NEC must urgently develop guidelines and policy on public and private funding, including how to regulate investment vehicles.”

Yet, since then, nothing. Despite the Independent Democrats’ Lance Greyling leading a brave charge, Parliament as an institution has shown itself to be deaf to his requests for a debate on the issue, despite parliamentary rule 103, which states that a member “may request the Speaker to place a matter of public importance on the Order paper for discussion”.

Furthermore, Greyling’s requests for an ad hoc committee have also fallen on fallow ground despite there being precedent for Parliament setting up ad hoc committees on, for example, the question of “service-delivery protests”.
The Democratic Alliance has submitted a private members’ Bill that tries to tackle a few of the challenges of regulation, though its focus is far too narrow.

The ANC under Jacob Zuma has promised that it will do things differently. If it is serious about curbing the corrosive impact of money on our political system, it will start by introducing legislation in Parliament that regulates private funding to political parties.

Although legislation alone can never be a panacea for all ills, unless a start is made to creating an environment for transparency in political party fundraising, we will have no guarantee that the public interest has not been eclipsed by the interests of political parties eagerly lining their coffers.

Judith February heads Idasa’s Political Information and Monitoring Service. Richard Calland is associate professor of public law at UCT

Judith February
Judith February

Judith February is based at the Institute for Security Studies and is a visiting fellow at the Wits School of Governance.

Richard Calland
Richard Calland
Richard Calland has for over twenty years been working in the fields of democratic governance and sustainable development in South Africa and beyond. Based at the University of Cape Town (UCT), where he is Associate Professor in Public Law, he built and led its Democratic Governance & Rights Unit from 2007-2016.

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