Wednesday, June 12, 2024

South Africa: Court Bid to Reform Political Party Funding

“We simply do not know if the ANC or the DA obtains the majority of its funds from small donors or the big corporates” says My Vote Counts

  • My Vote Counts has launched an application in the Western Cape High Court to reform the disclosure of funding by political parties.
  • In the application the organisation says sections of the Political Party Funding Act and some of its regulations are unconstitutional.
  • Political parties are not obliged to disclose all private donations they receive, says My Vote Counts.
  • As a result voters are left in the dark about how many donations have been made and to what extent donations are likely to influence the party’s platform, says My Vote Counts.

My Vote Counts, which campaigns to reform South Africa’s electoral system, has launched a court application to reform disclosure of political party funding to “safeguard against influence-peddling, corruption and state capture”.

The non-profit organisation wants an order declaring that sections of the Political Party Funding Act (PPFA) and some of its regulations — which came into effect on 1 April 2021 — are invalid and unconstitutional because they fail to force political parties to disclose all private donations received and to impose adequate controls on private funding of political parties.

In the application, filed with the Western Cape High Court on Tuesday, executive director Minhãj Jeenah says the objective is to strengthen democracy by giving meaningful effect to the constitutional imperatives of transparency, openness and accountability.

Included in the right to vote, Jeenah says, is the right of voters to have information “to mitigate against the undue influence exercised by private interests over elected representatives and political parties”.

The Act falls short of the constitutional standard, he says, in that it

  • limits the disclosure of a single donation or a combination of donations by the same donor to amounts over R100,000;
  • does not regulate cumulative donations by donors related to one another;
  • entitles political parties to accept private direct donations up to an “excessive limit” of R15-million; and
  • only requires juristic persons (e.g. corporations), to the exclusion of natural persons (humans), to disclose donations made above the threshold.

The President is the first respondent in the application. Others cited include the Independent Electoral Commission and all political parties with seats in Parliament.

Jeenah, in his affidavit, says the thresholds set are arbitrary and unreasonably high. It means that people are left in the dark as to how many donations have been made, how solvent and liquid a party is, and to what extent donations are likely to influence the party’s platform.

“For instance, we simply do not know if the ANC or the DA obtains the majority of its funds from small donors or the big corporates and thus it is not reasonably possible to gauge the influence that large individual donors may yield.”

“Even if a minimum limit of R100,000 was constitutional, the limit is too high and donations far below this limit may have a material impact on political decision making.”

He said this was borne out by the fact that only 12 of the 1,540 registered political parties disclosed any donations since the inception of the Act.

“These parties must thus be receiving no donations or donations below the limit. A donation below R100,000 will clearly be material to their operations. Without full transparency, however, voters are unable to evaluate what is and is not material.”

He said apart from the ANC and the DA, which have received donations totalling millions, it was noteworthy that the EFF, a political party with 53 of the 400 members of the National Assembly, only received two donations above R100,000 totalling R352,000 and donations below the threshold were “plainly material in this context”.

“Even the other smaller political parties which have received some donations above R100,000 have not received much more than one or a few hundred thousand rand in total in donations above R 100,000.”

“Thus, donations below that amount would clearly be very material to such parties and potentially their policies. They can also be influenced in an outsized manner by even relatively small donations.”

Jeenah said donations below R 100,000 “would be material to all parties, including ANC, DA and ActionSA, and should be disclosed”.

Over the financial year 2021/2022, for instance, certain political parties received large portions of their private funding from donations below the prescribed threshold, he said.

The African Democratic Party received R255,817 in donations above the threshold, but R550,991 in donations below the threshold; the Democratic Alliance received R47,895,770 in donations above the threshold, and a substantial amount of R17,350,810 in donations below the threshold; and the Inkatha Freedom Party received R787,588 in donations above the threshold, but R1,600,054 in donations below the threshold.

Jeenah said there was no evidence that the R100,000 limit was determined through any studies, data or analysis.

The limit could be changed by majority resolution of the National Assembly, “leading to political abuse”, and the ANC had already indicated its intention to raise it to R500,000.

Similarly, the R15-million threshold for donations from a single person was “excessively and unjustifiably high” and failed to mitigate the risk of political parties being dictated to by private interests.

Furthermore, there were also no restrictions or limits to donations by related persons or entities “effectively rendering the limit meaningless as business persons and others can, and do, operate through and can set up a number of companies, even shelf companies”.

Patrice Motsepe

Jeenah used the example of businessman Patrice Motsepe as someone who, through donations through various entities he owns, had been able to donate millions to the ANC, circumventing the R15-million upper limit.

“Thus, the upper limit for entities and individuals with great wealth and influence, such as Mr Motsepe, is only limited to the number of entities or companies they are in control of.”