Court Challenge Over Secret Political Donations

On Monday, My Vote Counts will argue in the Western Cape High Court for an overhaul of how parties disclose donations and funding.

• My Vote Counts has gone to court to seek an overhaul of the Political Party Funding Act as amended by the Electoral Matters Amendment Act to compel parties to fully disclose all donations.
• Currently, political parties don’t have to disclose donations under R100,000, and individuals can donate up to R15-million per year to a party.
• My Vote Counts argues that small donations to smaller parties can have significant influence while multiple related companies can make undisclosed donations just below the threshold
• The Democratic Alliance, Action SA and government ministers oppose the application, arguing that full disclosure would discourage donors who fear recrimination.

My Vote Counts will argue in the Western Cape High Court on Monday that the Political Party Funding Act (PPFA) as amended by the Electoral Matters Amendment Act (EMAA), which requires donation and funding disclosures by political parties, needs an overhaul.

The case is set down to be heard for three days this week.

My Vote Counts argues that four years after the enactment of the PPFA, and considering the disclosures published by the Independent Electoral Commission (IEC), the Funding Act is not meeting its constitutional goals of transparency, openness and accountability.

In its current form, My Vote Counts says, it allows donations below R100,000 to go undisclosed, ignores cumulative donations from related entities, exempts natural persons from disclosure, allows excessive individual donations of up to R15-million per year, and grants the President unchecked discretion over funding limits.

It is seeking an order from the court that political parties and independents are obliged to disclose all private donations, regardless of the amount; that both natural and juristic persons are obliged to disclose donations in excess of the annual threshold, and that the annual upper donation limit of R15-million be lowered.

Further, it wants cumulative donations made by related donors to be regulated and limited and that political parties and independents be required to disclose the expenditure of all private donations.

My Vote Counts says that if granted its application will be “a vital step in curbing elite influence over our politics, strengthening voter accountability over public representatives, and upholding the right to access the necessary information to exercise the vote”.

The matter is opposed by the Minister of Justice, the Minister of Home Affairs (“the ministers”), the DA, Action SA and Parliament.

The EFF initially opposed the relief, but now abides by the decision of the court. The president also abides, but has filed an explanatory affidavit.

My Vote Counts argues that even though the Act was amended by the EMAA, the constitutional concerns it has raised were still not addressed and, in fact, the amended act introduced a significant change, removing the limits and caps set by parliament and giving the president the sole discretion to set the upper limits and disclosure thresholds.

When the EMAA came into effect in May 2024, it resulted in the removal of the previous upper limits of R15-million and threshold of R100,000, leaving a “lacuna” in the law.

My Vote Counts went to court and eventually secured an order restoring the status quo.

In heads of argument, My Vote Counts says the upper limit and thresholds – set without any supporting studies, research or evidence – are irrational and unlawful.

“The PPFA (as amended by the EMAA) is woefully inadequate in respect of providing access to and full disclosure of all private funding information and further fails to safeguard against the scourge of corruption, undue influence exercised by private interests over elected representatives and the insidious effects of patronage in our democracy,” it says.

For example as matters stand, nothing stopped a series of connected entities, with identical shareholding and directorships from donating multiple times under R100,000 adding up to a vast total while remaining undisclosed, it says.

“The multiple connected corporate or other donors who donate below this threshold will never be known … Similarly, donors who donate to multiple political parties below the threshold will never be known, with the result that their outsize influence across the spectrum of political parties goes undetected by the electorate. This can undoubtedly distort the political landscape and erode public trust in the democratic process.”

Regarding contentions by the DA and the ministers that donations of less than R100,000 are “insignificant” – that they constitute a small fraction of political parties’ total revenue and income – My Vote Counts says that argument “oversimplifies the nature of political influence”, especially in the case of smaller parties, which in most cases relied entirely on donations below the threshold.

“What might seem like an insignificant donation in absolute terms becomes highly influential in relative terms,” it said.

For a voter considering supporting a smaller party or independent candidate, understanding the sources of even the smallest donation is crucial to casting an informed vote.

My Vote Counts noted that even established parties relied significantly on donations below the threshold. In 2022/23, more than 20% of all private donations received by the DA were below the threshold.

The MK Party, since its registration, had declared just one “in kind” donation of R380,555, indicating that its funds come from individual members and small businesses. Voters were left in the dark about their identities and their possible influence on the party’s policies.

The DA, Action SA and the ministers, in opposing the application, say the Act is not unconstitutional and My Vote Counts has failed to show that all funding information is required for the effective exercise of the right to vote.

The limitations, they argue, protect the rights of donors and political parties. The disclosure of private funding information would violate their rights to privacy. If there had to be full disclosure, private funders would withdraw support for fear of recrimination.

But My Vote Counts says these arguments had been raised before in previous litigation and the Constitutional Court had found that the right to access information must prevail over the right of privacy and associated rights invoked on behalf of donors.

“What the Constitution guarantees to take place in secret is the citizens’ vote. It does not guarantee the secrecy of financial contributions made to political parties.”

My Vote Counts says political parties can and indeed have, received a multitude of donations from entities linked to the same people or group, each donation falling below the upper limit.

“This loophole effectively allows a single donor, or a tight circle of donors, to circumvent the cape, thereby undermining the very purpose of having a limit in place.”

Donors with “truly noble” intentions would logically donate to the Multi-Party Democracy Fund. But in the first quarter of 2024/25, this fund received only R25-million from a mining company, Exxaro Resources Limited.

With regard to the unfettered discretion given to the president to set the upper limit and threshold, My Vote Counts says a president, as the leader of a political party, inherently possesses a vested and one-sided interest and an ability to influence the financial dynamics of political competition.

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