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The ANC’s party funding rule is simple: We do not accept donations we cannot divulge – Zweli Mkhize

Zweli+MkhizeThe comprehensive nature of our input as the African National Congress to Parliament’s ad-hoc committee on political party financing arrangements in our country must serve to clarify all issues regarding our stance on this important, but controversial subject.

Let us state from the onset that as the ANC we do not accept money from criminals or proceeds of crime, a position we have always made very clear. Consequently, we have pointed out to potential funders that donating to the ANC does not offer protection or immunity against investigations of irregular transactions.

Our rule is simple: We do not accept donations we cannot divulge.

It is in this context that we have been readily forthcoming with an answer when the media speculated about the extent of support the ANC had received from the Gupta family. We  confirmed receipt of R5-million which, as we have pointed out, is a small fraction compared to the percentage of ANC scale of fundraising.

As we do with all our donors, we believe it is common decency for us to write to them to acknowledge their contribution and, importantly, express our gratefulness. The Gupta’s were no exception in this regard and we can confidently state that the ANC as an organisation does not have dealings with them.

In the context of the controversy raging in the media, we are clear that this donation is not linked to any of the transactions being cited.

In fact, there has never been any other communication between the Treasurer General’s office in relation to other transactions playing out in media. We are, however, aware that other parties have received donations from the same source.

Those who follow ANC politics closely will recall that it was part of the resolutions of our 53rd Conference in Mangaung that the Treasurer General must devise systems to protect the ANC from unscrupulous and unauthorised agents. For years prior to that, the ANC had become aware of the practice by some people to raise money ostensibly on behalf of the organisation when they had not been duly authorised to do so. 

Our approach to fundraising is that it should be done with transparency, accountability and integrity. It follows then that we expect that all transactions will be based on voluntary contribution and as a party, we insist that support for the ANC is a matter of principle and good faith to assist the ANC as the champion of our democracy.

Our view is that donations support democracy and the ANC champions that democracy for the good of all. That has always been the historic mission of our organisation and it continues to play that role even after liberation.

We have also used the occasion of our presentation to Parliament to clarify the issue of party investments and explain how it came about in the first place.

In the early 90’s, with the advent of Black Economic Empowerment through which our democratic government sought to speed up the integration of black people into the country’s mainstream economy, our leaders established companies and stood as directors as a means to assist the ANC with fundraising.

As our codes and regulations regarding good governance evolved, changes were made to the boards and today not a single company will exist with direct ANC shareholding.

Of course, some of the companies have retained their relationship with the ANC by donating while others opted to server ties with us entirely.

We have explained how we treat all our donors, and those that previously had formal relations with us are handled no differently.

That is why when issues around Chancellor House and Hitachi were raised in the public domain, we were able to account and explain that the ANC had no direct involvement.

Both companies were investigated by the African Development Bank and no criminal wrongdoing could be established. 

Similarly, the ANC exerted no undue influence on the Eskom deal and, in fact, several professional audits were conducted to ensure that there was no irregularity in awarding the contract.

As the ANC we have learnt many lessons and we offered submissions to Parliament as general advice for other parties.

We believe it is important to create a framework that must guide our political parties’ conduct in fundraising. This should be an institutional arrangement that serves the country in future with proper systems and benchmarks.

Our view as the ANC is that parties should be discouraged from getting involved in elaborate businesses, whether they run government or are in opposition.

But where there are investments from which parties derive funds, or party-linked vehicles that pursue such investments, these should also be regulated. At the least such regulation should include stringent transparency requirements. A code or guidelines for appropriate investment activities could also be considered.

The general South African public would be aware of the controversy around political party investments and the serious concerns raised about the practice.

We are aware of a number of laws that are problematic in this regard, a case in point being the new Financial Intelligence Centre Act (FICA) bill signed into law by the President recently.  There is still a lot of discomfort, particularly among sections of the black business community, around the definition of politically exposed persons.

There is a real risk that some business operations could possibly be identified as risky and be sequestrated with political parties’ investments.

Under legislation to curb corrupt practices, any investment can be investigated on suspicion of improper conduct of business, thus making political parties which make such investments similarly vulnerable.

In our submission to Parliament we have made an appeal for a guide to deal with the management of savings of party donations, subscriptions and management of property and other assets, such as trusts and endowment funds.

Across various political parties, there is general acknowledgment that we cannot reasonably be expected to live within our own means – hence the need for external financial support.

We are all also equally alive to the fact that some potential donors prefer to remain anonymous for a range of reasons, and impose this as a condition for their contribution. We have factored all these considerations into our input.

Our starting point is the establishment of a democracy fund by the fiscus from which political parties represented in our legislative bodies will draw financial support in proportion to their popular support.

Corporate donors, the list of which would be published, would contribute to this fund to support our democracy. It is our considered view that it is in the interests of our corporate partners to come on board and openly and generously finance the sustainability of our political parties which are an indispensable cog of our democratic system.

Our Independent Electoral Commission is a universally respected institution with more than enough capacity to play an oversight role in the administration of this Democracy Fund under Parliament. This Chapter Nine body under our Constitution executes this function under the current arrangements that we seek to improve.

The ANC appreciates the sensitivity around private donations and the disclosure of donors. That is why we propose the capping of private sources as a proportion of a party’s total funding. This will ensure that the bulk of the funds is received publicly in order to protect our parties from undue private influence.

As stated in Parliament, the ANC is willing to consider capping this as a percentage of total revenue for the simple reason that absolute amounts would not be workable.

Our solid proposal is that Parliament should consider a threshold for each donor to avoid one donor manipulating a party through disproportionate influence. We shudder to think of the implications of one party being funded 100% by a single donor. While the impact might be negligible with very small special interest parties which usually pop up in some Western democracies, it would be a disaster  for our democracy if any of our major political formations were to be in the pockets of single benefactors.

The ANC would support the exclusion of membership subscription programmes from private donor lists.

In our submission to Parliament recently we spelled out clearly that:

  • anonymous donors to any political party whatsoever are prohibited entirely;
  • Private or corporate donors to the Democracy Fund must be disclosed to the authority administering it, which then has discretion not to publish the identity on request. Importantly, we propose that no funds should be accepted if the source has not been divulged to the administering authority; and
  • Donations to political parties must be non-transactional and absolutely no conditions must apply. This is important in an environment such as ours where there are perceptions that party funders receive preferential treatment in the awarding of tenders by political parties in power.

On foreign funding we have made these critical inputs:

  • We want an absolute prohibition of funding from foreign governments;
  • South Africa should also not allow foreign political parties to make donations to our parties;
  • For obvious reasons, donations from intelligence or quasi intelligence bodies should also not be allowed; and
  • While the ANC would not stand against donations from foreign corporate and private individuals, it would insist that these be capped and disclosed.

We have indicated to Parliament our support for the current distribution formula for funds allocated to political parties. While we are not opposed to a reasonable negotiation, we think a 50-50 split would be a distortion of our democracy and the preferences of the people as demonstrated by their choices in the polling booth.

We would not want to see funding being used to moderate democratic outcomes of voter preferences.

The ANC would also want to see legislation to cover both the national and provincial spheres of government in order clarify once and for all the constitutionality of provincial party funding. We remain with the challenge of producing a model for local government funding, but that requires a separate study.

For now, we are convinced that the ANC’s comprehensive input to Parliament will assist the country immensely in producing a party funding model that will not only enhance our democratic dispensation, but will also safeguard the integrity of our politics in an environment where faceless donors could potentially undermine the will of the people. 

Dr Zweli Mkhize is the Treasurer General of the African National Congress

 

DM

 

 

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