Min­is­ters for sale

Finweek English Edition - - Openers - BY RICHARD CAL­LAND richard@idas­act.org.za

“WE use our po­lit­i­cal lead­er­ship to raise funds be­cause they are the best prod­uct we have to sell.” Not Thabo Mbeki nor ANC sec­re­tary-gen­eral Kgalema Mot­lanthe, but a se­nior mem­ber of the Aus­tralian La­bor Party last year. As the rep­utable Melbourne Age news­pa­per re­ported in May 2006: “This month alone, La­bor’s chief fundrais­ing arm, Pro­gres­sive Busi­ness, has four se­nior Vic­to­rian min­is­ters avail­able to the busi­ness com­mu­nity for a fee… Sound familiar? Clearly, the ANC’s so-called Pro­gres­sive Busi­ness Fo­rum (PBF) is as un­o­rig­i­nal as it’s con­tro­ver­sial. But is it dis­rep­utable? What’s wrong with sell­ing ac­cess, es­pe­cially in such an os­ten­si­bly open and trans­par­ent way?

Any­one can join, the ANC says. So what’s the prob­lem? In the US and the UK, sell­ing ac­cess to pow­er­ful gov­ern­ment de­ci­sion-mak­ers at lav­ish din­ners or­gan­ised by po­lit­i­cal par­ties is old hat. Well be­fore one con­sid­ers th­ese pri­mary ques­tions, let’s first dis­pel the idea that just be­cause the prac­tice hap­pens else­where it’s not un­savoury.

South Africa must de­cide whether it’s eth­i­cal or sen­si­ble to al­low the in­cum­bent rul­ing party to take fur­ther ad­van­tage of its in­cum­bency by sell­ing ac­cess to Gov­ern­ment min­is­ters and of­fi­cials for private gain (the cof­fers of the party). Or would we pre­fer to im­port our ethics from Aus­tralia or Amer­ica where a close align­ment be­tween busi­ness and po­lit­i­cal in­ter­ests is par for the course?

Which­ever way you look at the is­sue, it rep­re­sents a headache for busi­ness lead­ers and boards of direc­tors. Some are in­creas­ingly dis­in­clined to fund po­lit­i­cal par­ties in South Africa – or, in­deed, any­where. It’s in­ter­est­ing to dis­cover the ma­jor­ity of Lon­don- or New York-listed multi­na­tion­als now have gen­eral poli­cies pro­hibit­ing party do­na­tions. It’s got them into such hot wa­ter in so many dif­fer­ent coun­tries that the par­ent com­pa­nies are with grow­ing re­solve pre­scrib­ing to lo­cal sub­sidiaries in or­der to pro­tect the rep­u­ta­tion of the pri­mary brand, whether it’s An­glo Amer­i­can, BP or Murray Roberts.

But this is not the an­swer ei­ther. Un­til a so­cial con­sen­sus is reached about the rules of the game that might per­mit a se­ri­ous in­crease in pub­lic fund­ing, po­lit­i­cal par­ties are go­ing to con­tinue to rely heav­ily on cor­po­rate do­na­tions.

Some SA cor­po­rates have cho­sen creative, trans­par­ent so­lu­tions. Oth­ers pre­fer the cloak and dag­ger style – and risk to rep­u­ta­tion – of se­cret do­na­tions, hop­ing no doubt that they will be able to prise some ma­te­rial ben­e­fit out of Gov­ern­ment in re­turn. In­deed, there are some es­pe­cially un­savoury ru­mours float­ing around that the process of award­ing Gov­ern­ment ten­ders is in­creas­ingly linked to the size of the do­na­tion to the ANC. In the ab­sence of any reg­u­la­tion or trans­parency, it’s im­pos­si­ble to tell. Cit­i­zens can’t hold their gov­ern­ment to ac­count and CEOs can’t tell whether they are los­ing busi­ness on merit or be­cause they are be­ing out­ma­noeu­vred by dodgy do­na­tions from com­peti­tors.

Clearly, an­other cat­e­gory of com­pa­nies have suc­cumbed to the al­lure of the PBF, fear­ing that to not join might leave them out of a lu­cra­tive loop. Prob­a­bly there is some sort of over­lap be­tween the se­cret donors and the se­cret mem­ber­ship of the PBF. Af­ter all, good busi­ness is about spread­ing risk, so why not dou­ble in­sure your­self?

It’s time that or­gan­ised busi­ness stepped up to the plate. It com­plains of­ten and loudly about the un­fair com­pe­ti­tion that cor­rupt State prac­tices pro­duce. Is com­plic­ity with dodgy fund­ing schemes re­ally in the long-term in­ter­ests of busi­ness or is there a more prin­ci­pled path to take?

Now is the time for a con­sid­ered re­sponse. New stan­dards must be set for the fu­ture. Cor­po­rate SA must de­cide what sort of party fund­ing sys­tem it thinks will de­liver the stable po­lit­i­cal and eco­nomic con­di­tions most likely to de­liver pros­per­ity for all. • Cal­land heads Idasa’s Eco­nomic Gov­er­nance Pro­gramme. Idasa’s Cor­po­rate Guide to Po­lit­i­cal Party Do­na­tions will be launched in March.

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