/ 11 October 2017

Ruling on party funding boosts transparency

Democracy in action: Regulating the private funding of political parties will lessen the risk of parties being beholden to donors and vulnerable to corruption
Democracy in action: Regulating the private funding of political parties will lessen the risk of parties being beholden to donors and vulnerable to corruption

The private funding of political parties has been a long-running saga. Thanks to the sustained allegations of state capture, the question has become even more pressing. After all, as the Constitutional Court observed some time back, political parties “are the veritable vehicles the Constitution chose for facilitating and enriching democracy”.

By “enrichment”, the justices meant that political parties are critical to the promotion of democracy — not that certain organisations and well-heeled individuals would enrich themselves by investing on the sly in political parties.

Unregulated private funding of political parties can have a devastating effect on the viability of democracy. One needs look no further than the decision of the United States Supreme Court in Citizens United, which lifted regulation of the private funding of political parties and candidates. Within the time it takes to say Chief Justice John Roberts, individuals such as the Koch brothers, Sheldon Adelson and other promoters of rightwing causes had poured huge sums of cash down the gullets of Tea Party candidates and fellow travellers.

For the same reasons, the recent decision by Judge Yasmin Meer in the Western Cape high court, following litigation by the organisation My Vote Counts, is so important. The application, which was upheld by the court, concerned, among other issues, a declaration that private funding of political parties and independent ward councillors is reasonably required for the effective exercise of the right to vote and to make political choices. A further finding was that the Promotion of Access to Information Act is unconstitutional to the extent that it precludes provision of information regarding the private funding of political parties.

The Democratic Alliance argued that there were other pieces of legislation to deal with corruption. As the judgment records: “The DA denies that the secret nature of donations promotes corruption for, inter alia, the following reasons:

  • Almost all donations are unconditional and, when donations are conditional, the conditions are anodyne;
  • Private funding does not affect party behaviour and the disclosure regime contended for by the applicant invades the rights of donors;
  • Unscrupulous individuals would not be thwarted by mandatory disclosure of private funding; and
  • The fact that donations are made to parties and seldom to individuals lowers the risks identified.

To this set of arguments, Meer said: “Much of this is gainsaid by the DA’s acknowledgment that certain donations are conditional, albeit ‘anodyne’. The applicant points out that the DA has accused the ANC of using political favour by rewarding funding with lucrative contract awards. It is widely reported … that a company that was granted almost R2-billion in tenders from Eskom had paid R1.7-million in donation to the governing party. This too negates the DA’s reasoning above. It is further belied by the minister’s statement in his answering affidavit that the notion that financial backers may corrupt a political system, is correct.”

In concluding this issue, Meer said: “The prospect of political parties being beholden to donors, especially substantial donors, creates considerable scope for corruption, submits the applicant. Secret funding creates the risk that public officials may extend undue and undetected favouritism towards those that funded their political progress.”

The upshot of this important judgment is that the principles of transparency and accountability in public life have been vindicated. Furthermore, the court has recognised the clear link between fair elections and the right of voters to exercise a free and fair choice between parties, taking into consideration the sources of their private funding.

It was also argued that the disclosure of private funding breaches the right of privacy of both the political party and the private donor. The court was having none of that. Given the public nature of political parties, and the fact that the private funds they receive have a clear public purpose, their rights to privacy can justifiably be limited. The same principles must, as a necessary corollary, apply to private donors.

First prize for the most bizarre argument must go to the DA, which argued that there was no evidence demonstrating “how the right to vote is impoverished by the absence of a disclosure regime in respect of private funding information”. In a context of widespread corruption at least from the time of the arms deal at the dawn of democracy and persistent allegations of state capture, it is astounding that it could be seriously contended that the right to vote is not imperilled by private funding.

That private funding has been at the root of these allegations is sufficient evidence to justify the greatest possible transparency regarding the private funding of political parties.

The DA also sought to argue that, as a minority party, its funders would be deterred if their contributions were made public; that is, that the ruling party would exact retribution or be perceived to so act if minority party funding was disclosed. The court found this to be an unsubstantiated basis on which to reject the application.

If upheld by the Constitutional Court or by much-promised legislation, this judgment represents an important step on the road to rediscovering urgently needed transparency in our political life.