What is regulated?
The private funding of political parties is a necessary to ensure that political parties can fund campaigns designed to reach the voting public during national and local elections. All parties represented in Parliament do receive funding from the State via the Independent Electoral Commission as outlined in the Represented Political Parties Fund Act. It is however argued by parties that this is not sufficient to run a successful election campaign and they are therefore compelled to raise money privately. Estimates in the 1999 election were that the unregulated secret private funding of parties may have outstripped transparent public funding by 4 - 1.
Who are the donors?
Many large donors may be well intentioned and disposed to the development of democracy – and the contribution by many donors may well be motivated by such intentions. However, a lack of control over the private funding of political parties may allow the wealthy to ‘buy' influence and access through secret donations, drowning out the citizens' voice and undermining the equal value of each person's vote. South Africa has a powerful range of legal mechanisms to combat corruption, but the lack of regulation in favour of transparency leaves open the back door for organised criminals and rogue business people to effectively corrupt the political process through party donations. As long as the public cannot see the link between donors and political parties, a real threat exists that party funding could become a tool to undermine internal party democracy and the democratic process as a whole.
Is this a South African phenomenon?
There are a number of instances of impropriety that have demonstrated that it is unhealthy for a democracy when private fund-raising is allowed to continue unregulated. Examples range from the German Christian Democracy Party (CDU) and its links with French oil giant Elf, to the effect that large corporate interests have had on the war in Iraq (the links between the US Republican Party and large corporations such as Halliburton and others) or the relationship between the Bush Government and Enron. The USA is an example of a country were campaign finance remains a conduit for influence peddling despite regulation in favour of transparency. This outlines the many challenges South Africa will face to monitor party funding even after the practice is regulated.
Has South Africa had party funding ‘scandals’?
Most South African political parties have had the whiff of scandal linked to party funding – it is an issue that is not unique to any one political party. The Party Finance Monitor lists media reports of some of these. One such case case is the former New National Party (NNP) Western Cape MEC for Environmental Affairs, James Malatsi, who has been criminally charged with altering important decisions to benefit controversial developer Count Ricardo Agusta (himself linked to organised crime networks). In addition senior NNP members, including the chairperson of Parliament's public accounts committee (SCOPA), Francois Beukman, are alleged in media reports to have offered kickbacks to developers in return for funding in the run-up to the 2004 elections.
The other is German fraudster Jurgen Harksen who provided funding for the Democratic Alliance (DA) at the time that he was a fugitive from justice. Although no link to corruption was identified by the Desai Commission of Enquiry, this highlighted the nature of the problem.
The African National Congress (ANC) has most recently come under the spotlight following the ‘Oilgate’ scandal according to which state funds were allegedly channelled to the ANC. The Independent Democrats (ID) did not escape its first nationally contested election (2004) without allegations of abuse of party funding by a former provincial leader. This includes allegations of funding received from a well-known Western Cape ‘gang figure’.
What to do?
After nearly ten years of democracy, the secrecy surrounding the private funding of political parties has not been pierced because there remains a glaring lacuna in South African law: There is no law regulating private funding to political parties.
As a result, the private funding of political parties remains one of the last ‘legitimate' avenues by which the private sector, foreign governments or even criminals can extract influence on public officials.
Following the country's third democratic elections it is important to now give urgency to the debate on the necessity to regulate the private funding of political parties in South Africa and eventually impact on the debate in other democracies in the region.