Secret funding of political parties is the chink in our Constitution’s armour

28 Sep 2020

South Africa’s Constitution is widely recognised as one of the most enlightened in the world, being the product of years of public participation and transparency. There is a chink in its armour though, and it’s one that allows political parties to get away with funding obfuscation.

When South Africa’s Constitution was adopted in 1996, it was hailed as one of the most enlightened and progressive in the world. It was a product of at least seven years of extensive public participation. Our Constitution took shape in the open. A full generation later, we can all be proud that its robustness has stood the test of time.

But our near-perfect Constitution had one serious shortcoming: it did not regulate the funding of political parties. In particular, it did not explicitly prohibit the practice of political parties keeping their sources of funding secret. It also placed no limitation on who a party may accept money from or in what amounts.

The reason this happened was that every party in the 1996 Constitutional Assembly was opposed to regulation of their funding. Unfortunately, those of us who were in favour of constitutionally entrenched controls on party funding lost the battle at the time.

Having spent nine years of my life on the development of the Constitution (as the ANC NEC member responsible for negotiations from 1990 to 1994, as the ANC’s chief negotiator in the Constitutional Assembly until 1996 and then as minister for constitutional development until 1999), I felt a deep sense of responsibility on this question. But this was a big battle, with a great deal at stake, the preparation for which had to be slow and meticulous. And, the timing had to be precise.

At the beginning of 2017 – 21 years after the adoption of the Constitution and eight years into that spectacularly corrupt and reactionary government – Parliament seized a moment of rare opportunity. The chief whip of Parliament, Jackson Mthembu, decided to bypass then-president Jacob Zuma’s government by establishing a purely parliamentary process for the drafting and adoption of a party-funding law.

The result was that Parliament passed a law on party funding that constitutes the biggest advancement of our democratic order since the adoption of the Constitution.

It should be of enormous concern to us that after having sacrificed so much for our freedom, our Parliament risks falling under the control of foreign governments or individuals and corporations through the use of money.

One of the first actions on the part of President Cyril Ramaphosa, back in January 2019, was to assent to the Political Party Funding Act. This will remain one of the great lasting legacies of the current president.

Unfortunately, the act, even though it is on the statute books, is of little value because it has not been brought into operation. A wonderful law, sorely needed to deal with the toxic relationship between money and politics, is still on the shelf.

The implications of the law are far-reaching and of a transformative nature.

The law prescribes which donors are allowed and which are not. It places upper limits on the size of donations. It requires public disclosure of donations received. It places an obligation on parties to publish annual audited financials. It allows the Auditor-General to inspect the books of any party.

Political parties are to democracy what oxygen is to the human body. They are its lifeblood.

Our Constitution is premised on crucial assumptions about political parties:

That there exists more than one political party;

That political parties are the coming together in an organised form of like-minded citizens;

That citizens are able to make a free and informed choice of the party they wish to join and/or vote for;

That it is always possible to vote in new parties and vote out old parties;

That political parties (large and small) are financially sustainable; and

That political parties are just that – not the private property of a businessperson, a foreign government or a gangster.

Political parties are public institutions, not private clubs. The Constitution, various Constitutional Court judgments and the passing by Parliament of the Political Party Funding Act elucidate this point.

We have undergone a long and tortuous road to gain our freedom as a country and as a nation. The first line of our Constitution declares the Republic of South Africa as a sovereign state. We rule ourselves.

A foreign power can violate our sovereignty by invading the country with military force. However, a more insidious way of achieving this is through the use of money. Why engage in a messy and costly military invasion and occupation of a country when you can use money to control the political parties in Parliament?

In this way, they will be under your control and everyone will think that they are independent.

South Africa is one of the only countries in the world that allows political parties to be funded by foreign governments (including countries that violate human rights or indulge in undemocratic practices).

Not only do we allow our parties to take money from any foreign government, we also do not require parties to inform the public, or even their own membership, that they are doing so.

It should be of enormous concern to us that after having sacrificed so much for our freedom, our Parliament risks falling under the control of foreign governments or individuals and corporations through the use of money.

Because political parties are not revenue-generating entities, they take money from whomsoever is willing to fund them. In democracies around the world, highly respected political parties accept donations from unsavoury characters.

There may be some companies and wealthy persons who fund political parties for purely altruistic reasons – expecting nothing in return. However, these are few and far between.

Based on the evidence in democracies around the world, it is clear that the majority of funders expect, and are given, favours by political parties. We also know that this is done secretly and often illegally.

The fact that politicians and political parties solicit, and are given, secret money brings into question the ethics of both the receiver and the giver.

The default position of many businesses and businesspersons is to offer a bribe to advance a business interest. This addiction to this bad practice on the part of many businesses is not about to be cured (perhaps it is the oldest profession).

Thus, the need for rules and regulations that make it possible for society to see all transactions between businesses and political parties.

We as a society are also to blame. Could it be that we have thrown our political parties to the wolves?

If parties play a crucial role in making democracy function, then surely it is in the public interest that, firstly, they do exist and, secondly, that they are financially sustainable.

In recent months both the ANC and the DA have had difficulty with finding the money to pay staff salaries.

Because political parties are not revenue-generating entities, they take money from whomsoever is willing to fund them. In democracies around the world, highly respected political parties accept donations from unsavoury characters.

It is not uncommon to hear of respected parties and politicians flirting with illegality when raising money.

During election campaigns, when parties are cash hungry, the vultures circle.

Often, this is when parties make promises to funders. The promises are simple: if we win, you will be first in line to receive tenders; or, if we win, the current investigations against you will be dropped.

In order to complement state funding, the new act establishes the Multi-Party Democracy Fund (to be administered by the Independent Electoral Commission) into which private donations can be deposited.

It is safe to assume that large funders call in the chips after the elections.

It is in the general interest that political parties should receive sufficient public funding. It makes them less susceptible to being preyed upon.

If they are largely state-funded, it would be easier for the public to make them more accountable. After all, he who pays the piper calls the tune.

And, yes, it is affordable. Our political parties (notwithstanding the general perception) are not extravagant. (I am, of course, not referring to individual politicians.) All the major parties in South Africa survive, by and large, from hand to mouth. Their budgets are modest.

In discussions with Finance Minister Tito Mboweni, he confirms that the Treasury is in support of increased state funding for political parties. This would be conditional on the parties practising transparency and good financial governance as set out in the act.

In order to complement state funding, the new act establishes the Multi-Party Democracy Fund (to be administered by the Independent Electoral Commission) into which private donations can be deposited.

South Africa has a reputation for having some of the best laws and regulations governing our banks. We also have a legal framework which requires all companies to practise good governance, openness and transparency. The budgets of government departments are debated openly in Parliament and these entities are subject to the scrutiny of the Auditor-General.

However, one of the most important sectors – political parties – has hardly any legal obligations to ensure good governance or transparency.

Even the smallest company on the JSE must publish its financial statements, the salary levels of its executives, its compliance with the Employment Equity Act and its carbon footprint. None of this is known about the ANC, DA or EFF even though they are responsible for making the laws that require everyone else to be transparent.

Aren’t political parties meant to have a higher sense of public purpose, at least in comparison with business enterprises, which are driven mainly by the profit motive?

Remarkably, there has hardly been a loud enough call for political parties to be transparent about their finances.

In 2017, when Parliament called for political parties to put forward proposals on the regulation of party funding, not a single opposition party submitted a proposal.

The official opposition, the DA, said it was (some would say incredulously) strongly opposed to there being any degree of transparency regarding party funding. They even insisted that the rights of funders to secrecy would be violated.

It is quite hypocritical that much is said about the ongoing wave of corruption by all the political parties even though they know that at the heart of the matter lies the funding secrecy they all practise.

The only party to table a proposal was the ANC. It argued for full transparency, limits to the size of donations and proposed a list of disallowed donors. The then treasurer-general of the ANC, Zweli Mkhize, appeared before the parliamentary committee to make this case.

From the side of the ANC headquarters, the Deputy Secretary-General, Jessie Duarte (with the support of the then secretary-general, Gwede Mantashe), marshalled the support of the party behind the work being done by the chief whip in Parliament. I know that some would think this strange – but these are the facts.

This was happening at the same time when the Zuma government had handed over large swathes of authority to the Guptas and other businesspersons.

Luthuli House, at the time, was obviously concerned. But that was then.

When Parliament finally voted on the bill, in June 2018, it was passed with a majority of more than 85% and not a single vote cast against.

Now, more than two years later, the act is still awaiting implementation.

It is quite hypocritical that much is said about the ongoing wave of corruption by all the political parties even though they know that at the heart of the matter lies the funding secrecy they all practise.

Some even think that it is still possible to prevent the coming into force of a properly adopted act of Parliament, believing they can continue to keep the voters and even the members of parties in the dark.

My message to them is that those who stand for enlightenment, human rights and freedom have a proven tenacity. Progressive people are not going anywhere. Undemocratic forces will not succeed in prolonging the darkness forever.

The road will run out for those with dirty money who are subverting our political parties. DM/MC

Valli Moosa was the minister of constitutional development in former president Nelson Mandela’s Cabinet.

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