/Transparent party funding is important – now more than ever

Transparent party funding is important – now more than ever

2019-07-25 05:00

Despite the lack of integrity and incompetence Public
Protector Busisiwe Mkhwebane has displayed, the question of whether any
political party candidate or public office holder should disclose their private
funding sources must not be ignored.

On Monday the Constitutional Court exercised its pivotal
role in holding those who abuse their power to account. The Office of the
Public Protector was established in the interest of the public and to protect
the public from the abuse of power. In June 2018, in the matter between My Vote Counts and the Minister of Justice, the
ConCourt ruled in My Vote Counts’ (MVC) favour. The ruling was a victory for
South Africa’s constitutional democracy and the public at large.

The court confirmed that the right to vote is not a right in
isolation. In order to protect the right to vote, information on represented
political parties and independent candidates private funding sources must be
recorded and made public. Coinciding with the delivery of the party funding
judgement, Parliament adopted the Political Party Funding Bill in June 2018.

Regrettably, President Cyril Ramaphosa only signed the
Political Party Funding Act (“the Act”) three months before this year’s
elections. Although the IEC speedily drafted the regulations and invited
written submissions, various constraints on the IEC halted the act’s
implementation. The regulations are a natural extension of the act and contains
pragmatic details on how the act would be implemented. When the act was first
drafted, MVC expressed the need for the drafters of the legislation to put more
“flesh on the bones” of the act. The thinly outlined content of the act
warranted more details which would inevitably be left for the regulations,
delaying implementation.

The road towards political party funding transparency
continues on 1 and 2 August, when the IEC is scheduled to host the public
hearings, on the draft regulations of the act.

Time and time again, the IEC has proved to be a world class
institution. In consideration of the constraints the IEC faced before the
elections, this early post-election engagement with public is welcomed.
However, the product of the final regulations can still determine to what
extent the IEC values its own organisational values of integrity,
accountability, transparency and impartiality.

The act repeals existing public funding legislation and
establishes the Multi-Party Democracy Fund (MPDF), a slush fund of private
funding for all political parties. A donor has the option of directly
allocating funds to a political party. Alternatively, the act also allows a
donor to donate to the MPDF, managed by the IEC. If a donor opts to donate to
the MPDF, the donor would have the option to make a “non-disclosure”
request to the IEC, in order to conceal one’s identity and the amount donated.

By administering this new regime, the IEC is being placed in
a position that it may seem to be politicised. To assuage these fears and to
avoid being seen to be biased, the IEC must inform the public of decisions it
has made and be as transparent as possible.

The IEC’s regulations have not relayed credible scenarios
upon which non-disclosure requests could be accepted and/or rejected. The MPDF
was created with the intention of providing donors who sincerely want to donate
for the sake of enhancing multi-party democracy to donate to a fund for all
political parties. However, if a donor donates under R 100 000 directly to
a political party, a political party would not be obligated to report such a
donation to the IEC and the same donor could look towards the MPDF as a means
to conceal more donations made. In such a case, the donor is surely more
interested in manipulating the rules to shy away from the public eye. At this
point, the draft regulations do not require of any donor who makes a non-disclosure
request to inform the IEC of any donations made directly to any political

There is also the risk that the IEC may receive false,
inaccurate and/or misleading information from either political parties or the
donors, who are also expected to furnish the IEC with records on any donation
above R100 000 made to a political party. Chapter 5 of the act allocates
the IEC the power to investigate complaints of non-compliance. However, the IEC
has explicitly excluded drafting any regulations on this chapter and has stated
that it will be addressed in the regulations at a later stage.

Civil society will question the IEC on
how and when the IEC envisions that it will be equipped with investigative and
enforcement powers to deter and sanction non-compliance with the act.  Further, the act requires each represented
political party the power to appoint their own accounting officer and auditor
to report on their directly received private donations. Shocking revelations on
the role of KPMG in state capture, as well as role of Deloitte in the Steinhoff
and Tongaat Hulett sagas shone light on the damaging role of compromised
accountants and auditors in South Africa.

It is crucial that the IEC is funded sufficiently to pull
together any financial intelligence skills necessary to vet the credibility of
information the parties’ accountants and auditors as well as the donors provide
to the IEC. A whistleblowing entity, independent of the IEC, can assist the IEC
in receiving complaints and encourage witnesses to safely report

The president signed the act without gazetting a date for
promulgation and it appears as if the road towards party funding transparency
is merely in the hands of the IEC. Uncertainty has been generated in light of
recent statements made by senior officials of the Democratic Alliance and the
African National Congress, on their intention to call for the act’s review in
Parliament. If
this were to happen, the IEC’s role would be paused and the secrecy of private
political party funding would continue to prevail.

If the president seriously wants to tackle corruption, the
public needs to be assured that party funding transparency and accountability
will be delivered well before the 2021 local government elections. Otherwise,
the secrecy enjoyed by politicians, political parties and wealthy donors will
allow corruption to fester at the expense of the poor and marginalised.

– Zahira Grimwood is a researcher at My Vote Counts, a non-profit company founded to improve the accountability,
transparency and inclusiveness of elections and politics in the Republic of
South Africa.

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