Clarity on party funding

THE donations received by political parties has always been controversial, because, as the adage goes, “he who pays the piper calls the tune”. Donations to political parties and politicians frequently come with invisible strings attached, and often private corporations and foreign benefactors can exert undue influence on government decisions, compared to the voice of ordinary citizens which can become muted.

This compromises democracy and accountability. In many countries, there is a lack of transparency about such donations, with increasing demands for public disclosure, as the potential for corruption escalates.

The International Institute for Democracy and Electoral Assistance (IDEA) contends there are increasing indications that corruption and unfettered donations are wielding undue power on politics and undermining free and fair elections. In some countries, proceeds from crime are being used to influence electoral outcomes and undermine democracy.

According to IDEA, the “role of money in politics is arguably the biggest threat to democracy worldwide… from huge corporate campaign donations in the United States and drug money seeping into politics in Latin America, to corruption scandals throughout Asia and Europe”.

A major concern of the Global Commission on Elections, Democracy and Security is that “if large corporations and rich individuals are able to buy greater influence through large campaign donations, then citizens can lose faith in, or be marginalized from, the political process”. Not surprisingly, citizens are becoming cynical of politicians, and “recent research shows that more than two-thirds of Americans trust government less because of the influence of big donors”.

In India, Milan Vaishnav, senior fellow at the Carnegie Endowment for International Peace, suggests that the “political finance regime is plagued by three major infirmities. First, there is a steady torrent of undocumented cash that lubricates the activities of both parties and candidates. Second, there is virtually no transparency regarding political contributions. In the majority of instances, we are ignorant about the identities of both the giver and the receiver. Third, political parties are not subject to any form of independent audit, which renders their stated accounts both fictional and farcical”.

In Africa, where abuse of state resources for party and personal gain is a major problem, there is a view that “how political parties and candidates raise and spend money can have a more significant impact on the fairness of an electoral process than anything that happens on election day”. A major concern, according to IDEA, is the “impunity with which African political actors can completely ignore existing political finance regulations probably does more to erode confidence in controlling the role of money in politics than any other factor. It also weakens Africans’ trust in political parties”.

Government spending priorities is skewed, away from addressing the basic needs of the poor, towards those with deep pockets. The crumbs are left for the poverty-stricken masses, and analyst Nkwazi Mhango warned: “Of all the chicaneries, fear the politics of the tummy like leprosy. For, it is through this sort of politics, corrupt and venal politicians bribe voters with nonsense such as drinks, meals, khangas, small amount of money, T-shirts and whatnots”.

The lack of accountability and transparency for political party “investments” is extremely serious in SA. President Zuma has frequently stated that those businesses that support the ANC prosper, as for example, on January 11, 2013: “… I have always said that a wise businessperson will support the ANC… because supporting the ANC means you’re investing very well in your business… your business will multiply. Everything you touch will multiply”.

Defending Zuma, ANC spokesperson Jackson Mthembu said: “If the state does not come to the party and fund political parties, as happens in other democratic countries, then they cannot force parties to disclose who their funders are… But until all of us feel comfortable that the state is funding democracy and democratic expression from the public purse… those who are calling for the regulation of donations to parties are dreaming.”

And that former bastion of colonial righteousness, Helen Zille (who also accepted a donation from the rulers at Saxonwold) argued that the DA will only support financial regulations for party political donations when it “comes to power” – until then (or when Jesus Christ returns) – surreptitiousness was acceptable.

Influence

However, by May 2017 the political landscape had changed significantly with serious allegations of state capture, and compelling public evidence from leaked emails revealing the Guptas’ influence on various levers of power, and especially their stranglehold over state owned enterprises. ANC chief whip, Jackson Mthembu, was forced to change his tune: “We must… ensure that any funding that political parties derive from private funders is made transparent and that there is disclosure from the beneficiaries”.

On June 6, 2017, the National Assembly approved the establishment of an ad hoc committee to investigate political party funding, and ANC MP Vincent Smith was subsequently elected the chairperson. The mandate of the committee was to “consider a model of public and private funding for political parties; and the need for, and possible means of, regulating private funding in all its forms as well as investment entities owned by political parties”.

According to Smith, “it’s important that… the voices and interests of the electorate are not diluted by undue influence exerted by private funders who look after their narrow interests”. Smith and his committee may want to also consider critical issues posed by Constitutional Court Judge Edwin Cameron: “whether information on private funding of political parties is… required to exercise the right to vote… The sources of a candidate’s financial support also alert the voter to the interests to which a candidate is most likely to be responsive and thus facilitate predictions of future performance in office”.