Should donations to political parties be regulated?

On Thursday, the Institute of Security Studies hosted a seminar about political party funding. Its invitation explains there is currently “no regulation of private funding to political parties... companies or wealthy individuals are able to donate money to political parties without any form of disclosure. This creates an environment of secrecy, which in turn, could allow corruption to flourish.”

Chaired by Judith February, from the ISS’s Governance, Crime and Justice division, the panel included ANC Treasurer-General Dr Zweli Mkhize, Independent Democrats/ Democratic Alliance MP Lance Greyling, Lawson Naidoo from the Council for the Advancement of the South African Constitution (CASAC) and Greg Solik from the NGO, My Vote Counts.

February kicked off the proceedings by saying that since IDASA’s unsuccessful Cape High court case on the disclosure of funding to political parties in 2005 there hasn’t been much movement on the matter.

First to speak, DA/ID MP Greyling said: “I’ve participated in a number of debates on party funding outside parliament but this debate never seems to reach into Parliament... I’ve used every parliamentary mechanism to enforce a debate on this issue but I’ve been blocked at every turn by the ruling party.”

Greyling explained that over and above achieving greater transparency, South Africa needs a regulatory system in order to reduce conflict of interest – in particular corporate’s buying influence – as well as limiting the scope for corruption. Further, "we need to ensure government decisions aren’t influenced by foreign funding.”

However, he cautioned that regulating private party funding has trade-offs: (1) curbing the right to freedom of association in terms of giving money to a party at your discretion and (2) fear of being victimised by the ruling party. With regards to the latter, he said that the fear exists that if the ANC sees a particular business donating to an opposition party then that company may not be awarded a government contract.

Next to speak, CASAC’s Naidoo said over and above enhancing political competition, party funding strengthens parties as effective participants in the democratic arena. He was particularly interested in how those funds should be used, arguing that it would be better for democracy if the money went towards organising political debates rather than paying for election posters.

My Vote Counts’ (MVC) Solik said that over and above problems with private funding, he has concerns around public funding, namely that the IEC disproportionately allocates money to parties - leading to “political inequality” - but also that it is not given to new parties like the EFF and Agang, putting them at a disadvantage when they campaign.

He added that we needed more oversight over whether provincial funding, which grants an estimated 250 million to political parties, was constitutional.

With regards to private funding and controversial foreign donations, Solik referenced the recent publicity around the short lived DA-Agang merger, arguing that it was worrying that such an important political development could be funded by just one person living overseas.

Solik went on to explain that since launching in 2012, My Vote Counts has engaged Parliament on the party funding issue on numerous occasions in an attempt to get them to debate the matter. In turn Parliament has said they are under no constitutional obligation to do so. The IEC also refused MVC’s request to table a report with National Assembly on the matter.

The ANC’s Dr Mkhize began his speech by pointing to the need to establish common ground on the party funding matter as it will have an impact on all parties. He added that “it is difficult to be able to know how much parties require to run their administrations” but that even if this was audited, parties may not want to publish the findings as it is an issue of “how much information you make available to your opponents”.

Mkhize made mention of his proposal for developing a democracy trust fund in which companies could deposit their donations thus supporting democracy without being partisan.

In response to a question from the floor regarding Chancellor House and whether government contracts are benefiting the ANC, Greyling said that investment arms of political parties needed to be regulated, sighting the example of Hitachi Power Africa who were awarded a boiler contract for Medupi and despite this leading to our current energy crisis because of a failure to deliver, the ANC allegedly profited R50 million from the deal.

Greyling argued that there should also be a ban on government advertising during elections as the government poster slogans were very similar to that of the ANC, putting the ruling party at a distinct advantage when it came to publicity.

While not addressing Greyling’s allegation that ANC profited from the Medupi deal, Mkhize did say “the ANC will never offer any form of protection [to donors]... the recording and acknowledging of all donations are very important, all our statements are audited”.

Later in response to a question from the floor, Solik said that MVC is considering litigation on the party funding issue and mentioned that MVC would be hosting a national conference in April to discuss the matter with fellow civil society organisations.

The constant refrain was that this matter needed to be debated by Parliament.