Gain drain: The Right2Know initiative wants a ban on party donations from companies doing business with the state or political parties’ investment vehicles.
As Parliament gears up to regulate private funding of political parties, an array of wealthy businesspeople, international criminals and multinational companies have emerged as some of the principal funders.
These “secretive deals” are a remnant of the apartheid era, the Right2Know (R2K) campaign has charged.
A multiparty parliamentary ad hoc committee set up to regulate private funding to political parties started reviewing 16 submissions from nongovernmental organisations on Thursday. Groups such as R2K and My Vote Counts are arguing for regulation with funding caps, or for transparent donations.
In the most recent local government elections, the ANC raised about R380-million for its election campaign and the Democratic Alliance raised more than R350-million.
United Kingdom-based property billionaire Nathan Kirsh, the controversial Gupta family, convicted German fraudster Jurgen Harksen, slain mining magnate Brett Kebble and Uruguayan tycoon Gaston Savoi are just some of the powerful men who have funded South Africa’s political parties, hiding behind the rules protecting their anonymity.
The names are included in an R2K campaign dossier of the publicly exposed donations by individuals and companies to the ANC, the DA, AgangSA and the United Democratic Movement since 1994. These donations were meant to buy influence rather than promote democracy, the civic group says.
“Small donations or R50 membership fees are less of a concern. You require transparency when there are big cheques because that kind of donation comes with influence,” R2K spokesperson Murray Hunter said this week.
“It could be diluting the power of ordinary voters. It’s not just about tracking corruption; a cheque for a million rands is worth a lot more than an X on a ballot paper,” he said.
Other than private individuals, companies have also given generously, and sometimes dubiously, as was the case with the Japanese multinational Hitachi, which was in partnership with the ANC’s investment arm Chancellor House in the building of two multibillion-rand power plants. Though not admitting guilt, Hitachi was fined $19-million by the United States Securities and Exchange Commission under anti-bribery laws.
Standard Bank, South African Breweries (SAB) and French multinational arms company Thales are other known political party funders.
The DA has benefited from private donations by wealthy individuals and this is expected to increase significantly since it won control of the Johannesburg, Tshwane and Nelson Mandela Bay metros in coalition councils last year.
The My Vote Counts submission to Parliament proposes that the ad hoc committee and economists set a threshold for disclosure on private donations, “with aggregated disclosure information for donations below the threshold amount and disaggregated information on donations above the threshold amount”. It proposes periodic disclosures that would vary, particularly if the country is in an election year.
Regarding foreign funding, My Vote Counts proposes that direct payments by foreign companies or governments to political parties be stopped and that a trust fund be set up to prevent a perception of political meddling.
“The perception that it could be possible for foreign interests, in the form of countries, companies and individuals, to influence national decisions, be they executive or political, is a gravely dangerous one,” the submission reads.
R2K has proposed a quarterly disclosure of private funding and supports setting a threshold at which point the party would be compelled to reveal a funder’s identity.
But its most controversial proposals include a ban on donations from companies doing business with the state or political parties’ investment vehicles.
Out of all the parties, only the UDM has declared its funders. Its president, Bantu Holomisa, announced three years ago that his party received funding from SAB, mobile operator MTN and Standard Bank before the 2014 local government elections.
A leaked ANC document revealed that the party spent R429-million on its election campaign during those elections, but received less than R73-million from the Independent Electoral Commission of the public funds allocated to all political parties.
“At a conservative estimate, then, for every R1 of public funds provided by the IEC, political parties could be receiving R5 or R6 in undisclosed funds from private sources,” R2K says.
Holomisa said the regulation of private donations is necessary to root out corruption.
“That way we will also be in a position to know that if company X won a tender, it is not obliged to go pay back a part of that money to the political party in government which gave them a tender,” he told the M&G.
Hunter said the link between dodgy businesses, criminals and political parties has its roots in the apartheid era.
“It’s got a dirty history with a lot of dirty laundry. Research recently done by Open Secrets did a lot to peel back the secrecy of apartheid-era funding and, unfortunately, that same level of secrecy echoes in the post-’94 era.”
Hennie van Vuuren’s book Apartheid Guns and Money revealed that billionaire Christo Wiese, electronics giant Altron and companies such as Barloworld all gave money to the National Party government during apartheid, and wanted to keep their donations confidential.
“There are some situations, in the extreme case, where lines have blurred between organised crime and formal democracy. You’ve got extremely shady characters, and not only the Guptas, linked to organised crime and syndicates seen to be close to political parties,” Hunter added.
ANC treasurer general Zweli Mkhize also favours regulation and transparency, as long as the public allocation of funds to political parties is increased.
But the DA is vehemently opposed to revealing the identities of its private funders, claiming that those who do business with the state could be punished by the governing party.
This week Mkhize hit back at the DA’s basis for opposing reform.
“It’s the strangest reasoning you could ever have … The ANC has got nothing to hide. The DA must explain to the public: What do they fear? What are they hiding?”
Economic Freedom Fighters chairperson Dali Mpofu said 90% of the party’s funding is drawn from its membership, much of which comes from taxing its ward councillors 50% of their salaries.
Politics and money make poor bedfellows
In 2015, Cape Town mayor Patricia de Lille spearheaded the R1.5-billion development of Maiden’s Cove in Clifton. But her plans were tainted when it emerged that the developers were controversial businessperson Mark Willcox and property developer Tobie Mynhardt, who were De Lille’s acquaintances and apparent Democratic Alliance funders. Any undue influence she may have had over the deal was never proven, but questions about the mayor’s reasons for pursuing the project have haunted her ever since.
In a December 2015 letter, Truman Prince, then-Beaufort West mayor, wrote to the Construction Education Training Authority (Ceta), saying the ANC needed money for its local government election campaign. Writing on an official municipal letterhead and aiming to secure campaign funds, Prince said the ANC would like to see companies “sympathetic” to the party benefit from Ceta’s planned projects.
Newly elected DA Western Cape leader Bonginkosi Madikizela last month admitted that his birthday party at a swanky five-star hotel in Cape Town was paid for by one of his friends, who is a building contractor. The registrar of the Western Cape legislature found that Madikizela had “improperly placed the norm between him and his friends (regarding gifts) above the duty-bound obligation visited upon him by the prescripts of the code of conduct”. But Premier Helen Zille defended Madikizela and said the contractor had not improperly benefited from government contracts because of the donation.
Before the 2016 local government elections, business tycoon Robert Gumede donated R7.5‑million and 12 vehicles to the ANC for its election campaign in Mpumalanga. The province’s premier, David Mabuza, also used an ANC-branded helicopter to visit four regions in one day, at a reported cost of R500 000.