Court bid to reform political party funding

Wealthy private donors acquire an undue ability to influence political parties, says My Vote Counts in its court application.

• 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 shadowy about how many donations acquire 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 scheme, 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 accurate to vote, Jeenah says, is the accurate of voters to maintain information “to alleviate 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 bleak as to how many donations maintain 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 carry out not know if the ANC or the DA obtains the majority of its funds from small donors or the huge corporates and thus it is not reasonably possible to gauge the influence that large individual donors may surrender.”

“Even if a minimum limit of R100,000 was constitutional, the limit is too high and donations far below this limit may maintain 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 gain 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 gain received some donations above R100,000 gain 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 considerable 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 alleviate 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 execute, 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 distinguished wealth and influence, such as Mr Motsepe, is only limited to the number of entities or companies they are in control of.”

“This gives wealthy private donors the undue ability to influence political parties … it leaves the door wide open for the private interests to direct the course of politics when the purpose of donations is simply to ensure that South Africa has vibrant political discourse.

“Insidious influence of large corporations and well-to-do individuals is a threat to democracy and creates space and creates the space for corruption to proliferate.”

Jeenah said the decision as to the upper limit was left to political actors who could “regulate it as it suits their finances from time to time” and again it had been widely reported that the ANC wishes to increase the upper limit to R50-million or even R100-million.

He said My Vote Counts was not calling for a total halt to private funding of political parties but rather for more transparency.

“It is imperative that all political parties are required to account for both public and private donations and provide a full accounting of their expenditure to ensure transparency and accountability.”

To this cease, he said, certain sections of the Act, and its regulation should be declared unconstitutional and invalid. Parliament should be given 12 months to amend the Act, and in the meantime, My Vote Counts is seeking an order that the R100,000 threshold be immediately scrapped.

The respondents acquire 15 days to indicate if they will oppose the application.

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