Political Party Funding Act has more work to do

A major milestone can be sweet, especially when it’s the first of something. We look forward to it. Celebrate it. Laud it, even. There has been one such event recently that is worth noting: a complete year of political party funding disclosures under the Political Party Funding Act (PPFA). Perhaps not the first thing to cross our minds when we think of amazing events, but never has there been a major milestone quite like this act. 

The implementation of the act was a historic moment for South Africa that has left many political parties and private companies feeling uncomfortable. 

In a country where kleptocracy abounds, where politicians and businesses seem more interested in their own self-enrichment and where the South African public is losing trust in its elected representatives, the act offers hope for something better. 

But, as promising as the act is, its short life has been hampered by talk of gutting its most important aspect: disclosure thresholds. With the recent release of the fourth-quarter disclosures by the Electoral Commission of South Africa (IEC), the PPFA has provided us with the opportunity to reflect on the year and the moves political parties have made to curtail it.

After an exceptionally long road to getting the PPFA enacted, it was finally implemented on 1 April 2021. This signalled a new era in politics and the South African public would now have access to the private funding information of their political parties. 

Although the disclosures, thus far, have given us crucial insight into who funds and influences our politics, it has also laid bare loopholes in the legislation. 

Since April 2021, we have been able to get a better idea of the relationship between money and politics in South Africa. Granted, we had already been given a front-row seat to the sordid spectacle revealing the details of the toxic relationship between money and politics through the Zondo Commission, but the PPFA disclosures have given us the opportunity to begin to connect the dots and start to scrutinise the links between money and political decision-making. 

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The ANC, despite the claims of financial woe it laid before the PPFA, was able to raise at least R66,643,938 through private funding sources in the past year.

Interestingly, large chunks of that money came from three major donors that each donated the maximum of R15-million: United Manganese of Kalahari, Chancellor House and the Batho Batho Trust. These donations alone make up almost 70% of the total donations received by the ANC. 

But that is not the only interesting thing about these donations. United Manganese of Kalahari (UMK) is a Russian-linked company, part-owned by the Renova Group, in turn owned by Russian businessperson Viktor Vekselberg. Vekselberg recently had his $90-million superyacht seized as part of ongoing charges levelled against him for fraud and money laundering. 

Chancellor House also has its hand in UMK as a BBBEE investor holding an indirect interest of less than 25%. 

The PPFA is silent on investment vehicles and holding companies like Chancellor House. The sources of money funnelled into holding companies such as Chancellor House do not fall under the scope of the act and this presents an opportunity for shadowy business to take place. 

As the governing party, the ANC accepting money like this through Chancellor House could compromise the party’s political decision-making and policy. Although we know about these donations because of the PPFA, we cannot use the act to issue punitive measures against this because it does not precisely address this issue. 

When we add in the donation from the Batho Batho Trust, things only get worse. The Batho Batho Trust has investments with Shell, which has been under much scrutiny for its proposed fracking in the Karoo and its exploration attempts along the Wild Coast. The ANC also has a long-term investment in the Batho Batho Trust.

But the ANC is not the only party that received sizeable donations from only a few sources. 

The DA received R15-million from Oppenheimer heir Mary Oppenheimer-Slack and businessperson Martin Moshal, as well as nearly R3-million in foreign donations from the Friedrich Naumann Foundation and the Danish Liberal Democracy Programme. 

The Oppenheimer family donated about R25-million to political parties (just under R10-million to ActionSA and R15.5-million to the DA). 

The PPFA does not regulate interrelated donations that may come from the same source. The money donated by members of the same family to a party would therefore not be read as one donation, but as three separate contributions. This makes the R15-million cap per donor for the year easily circumventable. 

The PPFA exists to enhance political transparency and the rights of voters and to limit the toxic relationship between money and politics. These revelations alone show how necessary the act is. The PPFA has shown how our political parties rely heavily on a small group of very wealthy and very powerful entities to fund their activities, a very dangerous mix.

The fourth-quarter disclosures have also shown that it is perhaps only the larger parties such as the ANC and the DA that are able to source donations on a regular basis. The continued lack of donations to smaller parties ensures that only a few parties can offer themselves as viable candidates to voters. This is not in the spirit of multiparty democracy. Private donors spending large amounts of money on a few parties only serves to maintain the status quo. South African voters deserve better. 

One solution to this could be better-regulated public funding that is distributed in a manner that serves all parties on a more equitable basis. Oversight and reporting like the PPFA may be necessary for this kind of public funding to ensure that the money is not abused, but used in the interest of the public. 

Despite claims by political parties to the contrary, political parties are not only voluntary associations. They do serve a public function and they should be beholden to what the public wants, not to private money. The over-reliance on these big donors only serves to provide an opportunity for narrow interests to take root. 

Multi-Party Democracy Fund