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This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

Political party funding

ANC reluctant to legislate on political party funding

Nearly two years after it made a public commitment to do so, the ANC has made no progress in developing legislation to regulate private funding to political parties.

The ANC's pledge to develop legislation followed the dismissal in April 2005 of a high court application by civil society group Idasa aimed at forcing the DA, the ANC, the IFP and the former New National Party to reveal major private financial donors.

Idasa took the litigation route, using the Promotion of Access to Information Act after failing to convince Parliament to pass legislation that would compel parties to disclose such information. The political parties argued that a legislative process was the best way to design the regulation of private donations. The ANC said that such legislation should embody national policy perspectives and balance the interests of all people, including the electorate, political parties and their donors.

The ruling party buttressed its argument with reference to Article 10 of the African Union Convention on Preventing and Combating Corruption of 2003. As a signatory, South Africa is obliged to adopt measures to "incorporate the principle of transparency into funding of political parties", it says.

In his 2003 ruling, Judge Benjamin Griesel found that access to records of private donations was not required to exercise the constitutional right to free political choice. But the court also held that the judgement did not mean "that political parties should not, as a matter of principle, be compelled to disclose details of private donations made to their coffers". The judgement emphasised that private donations should be regulated by means of specific legislation.

This week, ANC spokesperson Smuts Ngonyama said: "I'm not sure where that issue is at this present moment in time," and referred the question to Parliament. ANC parliamentary spokesperson Moloto Mothapo said he was unaware of whether any progress has been made in developing the legislation.

While it is equally the responsibility of other political parties to set the legislative ball rolling, it is general practice that the ruling party leads the way.

The DA argues that it submitted a private member's Bill to Parliament in 2002 that calls for the prohibition of donations above a certain threshold, as did the IFP, but it also appears to be biding its time, waiting for the ANC to take the first step.

The ANC has been promising to legislate the private funding of parties since 1997, when the Public Funding of Represented Political Parties Bill was enacted.

At the party's national general council in July 2005, a proposal was floated suggesting more rigorous regulation of party funding amid growing awareness among the party's membership that it was at risk of selling its policies to the highest bidder.

An ANC task team -- consisting of Minister of Finance Trevor Manuel, deputy ANC secretary general Sankie Mthembi-Mahanyele, Director General in the presidency Frank Chikane and businessman and ANC national executive committee member Saki Macozoma -- has been discussing how to regulate private funding in the context of the -ongoing debate that certain party members are making fast money on the strength of party connections. Their proposals will be tabled and discussed at the ruling party's policy conference in July.

The reluctance to legislate on political party funding goes to the heart of the private party funding debate in South Africa: while political parties seek to protect the identity of their benefactors, they are nurturing the danger posed to South Africa's democracy by the corrupting influence of undisclosed funding.

Judith February, manager of the political information and monitoring service at Idasa, said: "When we decided not to appeal [the 2003 court decision], we took the ANC [pledge to develop legislation] in good faith.

"It's disappointing that this has never happened. The corrosive impact of party funding on the country's democracy is coming to a head and needs to be debated."

(ANC reluctant to legislate on political party funding, Vicki Robinson, M & G Online, 02 March 2007)

Fundraising scheme allows businesses to buy access to government information

The ANC is selling "face time" with Cabinet ministers and senior government officials for up to R60000 in a controversial new effort to raise funds .

The new scheme already has 2000 paid-up members and promises them knowledge of "upcoming government decisions".

The scheme offers businesses "silver", "gold" or "platinum" membership for between R3000 and R7000. Big corporates are charged between R12 500 and R60 000.

Known as the ANC's Progressive Business Forum, the scheme is run from the party's Albert Luthuli House headquarters, where a call centre processes applicants.

An agent at the call centre, who identified herself as a "business consultant", told the Sunday Times the forum was a "private ANC business initiative to assist businesspeople to network with ANC policymakers".

Asked whether these included civil servants such as directors-general, the agent said: "Yes, it includes all the decision-makers in the country, from the President downwards."

At its most recent event, Deputy Finance Minister Jabu Moleketi was the guest speaker and National Treasury officials were present.

The agent said members of the scheme were better placed to succeed in business than those who were not members. They gained insight into "what government is doing and why" and learnt of "upcoming government decisions".

New members of the scheme received a "starter pack", comprising a certificate of membership signed by ANC secretary-general Kgalema Motlanthe and a certificate of appreciation from the ANC National Working Committee.

Members also received an "invoice" signed by ANC treasurer- general Mendi Msimang.

Membership fees for small-business people range from R3000 for silver membership, R5000 for gold and R7000 for platinum.

Big corporations pay from R12500 up to R60000, according to Renier Schoeman, the ANC's national coordinator of corporate liaison.

Schoeman, the former deputy minister of Health, is in charge of the scheme.

According to the call- centre agent the platinum membership for small businesses brought extra benefits such as being put in a draw to win a one-on-one meeting with Finance Minister Trevor Manuel after the Budget speech in Parliament.

Msimang this week confirmed that ministers and government officials, including directors-general, were invited to functions organised exclusively for members of the scheme.

He also confirmed that members had to pay fees to attend the functions.

However, he denied that this amounted to selling access to government officials.

"I do not see anything wrong with it. It is meant to facilitate networking between ordinary business people and those in government. It is all about bringing people together."

Msimang added that government officials benefitted as they were able to learn about "bottlenecks that may be there" by networking with business people.

"What is wrong when those in government network with ordinary business people? That is a way of popularising yourself," Msimang said.

According to the ANC call centre agent, the scheme was aimed at "giving support and a networking system to businesses in order for the country to reach the goal of 6% economic growth" set by President Thabo Mbeki.

Tom Boya, a Limpopo businessman , said he paid R3000 a year for membership of the scheme.

He said the Deputy Minister of Sport and Recreation, Gert Oosthuizen, had briefed members of the scheme about business opportunities linked to the 2010 Soccer World Cup long before the issue had become public.

The scheme made it "easier to be closer to politicians".

"It opens doors and you also get invited to high-profile ANC activities," he said.

Richard Calland, a party funding expert from the Institute for Democracy in South Africa (Idasa) this week described the scheme as "plain wrong" and said it underlined "the urgent need for regulation of party funding".

Calland said: "If the ANC is selling access to Cabinet ministers in return for cash or cash-in-kind then that is plain wrong.

"To do so in the case of public servants is even worse.

"Selling access to power merely serves to allow already privileged people to buy influence in a way the great majority of South Africans cannot.

(Wisani wa ka Ngobeni and Dumisane Lubisi, Sunday Times, 18 February 2007)

African democratic states need to create regulations governing private political party funding to promote transparency in their governments, South Africa's chief electoral officer Pansy Tlakula said yesterday.

The call for these regulations comes just weeks after the ANC was slated for its fund-raising campaign, where it sold government data by buying "time" with ANC Ministers and office-bearers for between R3 000 and R60 000. This was slated as a clandestine fund-raising gimmick that would open up government only to those who could afford it. The ANC has vehemently defended the scheme called the Progressive Business Forum. In 2003 the Institute for Democracy in South Africa (Idasa) tried to compel the four biggest political parties to reveal their private donors, but without success. Idasa researchers Judith February and Richard Calland have both slated the scheme, saying the ANC is selling public office for private party gain.

(Africa needs party funding rules: summit,  Xolani Mbanjwa, Citizen, 08/03/2007)

There is no law regulating private funding to political parties in South Africa. As a result, the private funding of political parties remains one of the last 'legitimate' avenues by which the private sector, foreign governments or even organised criminals can extract influence over the political process and public policy. Estimates in the 1999 election were that the unregulated secret private funding of parties may have outstripped transparent public funding by 4 - 1.

Most South African political parties have had the whiff of scandal linked to party funding – it is an issue that is not unique to any one political party. One such case case is the former New National Party (NNP) Western Cape MEC for Environmental Affairs, James Malatsi, who has been criminally charged with altering important decisions to benefit controversial developer Count Ricardo Agusta (himself linked to organised crime networks). In addition senior NNP members, including the chairperson of Parliament's public accounts committee (SCOPA), Francois Beukman, are alleged in media reports to have offered kickbacks to developers in return for funding in the run-up to the 2004 elections. The other is German fraudster Jurgen Harksen who provided funding for the DA at the time that he was a fugitive from justice. Although no link to corruption was identified by the Desai Commission of Enquiry, this highlighted the nature of the problem. The ANC has most recently come under the spotlight following the 'Oilgate' scandal according to which state funds were allegedly channelled to the ANC. The Independent Democrats (ID) did not escape its first nationally contested election (2004) without allegations of abuse of party funding by a former provincial leader. This includes allegations of funding received from a well-known Western Cape 'gang figure'.

(©2005/2006 Institute for Security Studies, www.whofundswho.org )

This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. Return to the Nelson Mandela Centre of Memory site.