Guest Column

Transparent party funding is important – now more than ever

2019-07-25 05:00
Ballot box.

Ballot box.

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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 party.

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 misinformation.

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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