Political Party Funding Bill: A closer look at the loopholes 

[Opinion piece]

By: Zahira Grimwood, Party Funding Researcher at My Vote Counts

The Political Party Funding Bill is before the National Council of Provinces (NCOP). Criticism on the Bill in its current form should be invited. If Parliament approves amendments to the Bill, amending the Bill should not be an excuse to prolonging its adoption, preventing the Bill from being implementable before the next elections.

Political parties will be expected to disclose donations above R100 000 directly paid by donors into their bank accounts and report the donor’s names and the amount donated to the Independent Electoral Commission. In the interest of trying to curb the influence of big private donations on parties, the Bill also prohibits certain sources of donations. Public funding legislation is retained in the Bill, but the Bill establishes a “private fund,” called the Multi-Party Democracy Fund (MPDF). Donors who wish to remain anonymous and would prefer not to be affiliated to any one political party can donate to the MPDF instead of directly allocating money to a political party. The IEC will distribute all donations amassed by the MPDF, to all political parties represented in the National Assembly and provincial legislatures on a proportional and equitable basis.

Parliament is to be commended for quickly drafting this legislation in just under six months and for the almost unanimous support for the Bill expressed by political parties when it was passed in the National Assembly. Although it would be worrisome if there are hurdles that will prevent the Bill from being effective before the 2019 national elections.

In November 2017, civil society made various suggestions for amendment to the Ad Hoc Committee established by the National Assembly. Not all the suggested amendments were accepted by the Committee, leaving the Bill with various defects and loopholes. To draw attention to some of the issues with the Bill, I shall focus on three crucial ones.

Firstly, at odds with the motivation of the Bill is a clause that allows donors who donate to the MPDF to keep their identity and the amount they donate a secret. The idea behind the MPDF is that a donor who does not want to be affiliated to a particular political party but wants to support multi-party democracy can donate to this fund instead of donating money directly to a party’s bank account. The option for a donor to remain anonymous however goes against the spirit of the Bill and it is not clear why a Bill that aims to ‘incorporate the principle of transparency in the funding of political parties’ would allow this. This clause must be removed to allow the public the right to comprehensively monitor and evaluate relationships political parties have with companies and wealthy individuals.

Secondly, if the Bill aims to prevent influence and corruption through prohibiting certain sources of donations directly to political parties, it should prohibit companies that do business with the state from donating to political parties. The Bill is an opportunity for Parliament to enhance public trust in the political system. If foreign governments were allowed to donate and disclosure regulations made the public aware of this, there would be pressing concerns that an external influence is able to gain favour over the interest of the electorate. Similarly, if it was brought to the public’s attention that political parties receive donations from companies that do business with the state, there would be further concern as to whether companies are gaining undue influence from a political party. Public trust in our political system needs to be strengthened and all avenues to curb the influence of “big money” are important if Parliament is serious about engendering a healthy funding regime.

Thirdly, the Bill sets the donation limit for a single donor at the ludicrously high amount of R15 million in any financial year. Exorbitantly high cash injections may be welcomed by political parties, despite the risk that such big donations could be a bargaining chip or means for a donor to control a party at the expense of the public’s interests. In a highly unequal society such as South Africa, this Bill should protect the citizenry from wealthy elites’ interests, which are intent on diluting voters’ interests. Another concern related to South Africa’s economic context, is the issue of the disclosure threshold. Political parties only have to report on donations above R100 000. R100 000 might not be enough to fund an election campaign, but it is still a significant amount of money far beyond what the average South African earns. Especially at the local level, an amount of or below R100 000 is surely enough for a property developer to twist the arm of a local councillor to approve a construction plan that goes against the interests of a community. Another scenario one can imagine is that a donor could donate just below the threshold and avoid any scrutiny. A company may be able to donate an amount just under R100 000 and then donate under sub-entities of the company, avoiding any risk of disclosure and effectively donating more than R100 000.

In light of the identified defects and loopholes in the Bill, one would think that it requires considerable changes. There are various other issues civil society organisations have identified with this Bill. In an ideal world, Parliament would seriously consider these amendments and push for this Bill to be effective before the 2019 elections. However, one could argue that if these amendments are made and the Bill is instituted before the 2019 elections, there will be at least be some disclosure where before there was none.

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My Vote Counts NPC is a non-profit company founded to improve the accountability, transparency and inclusiveness of elections and politics in the Republic of South Africa. We work to ensure that the political and electoral systems are open, fair and accountable to the public and that they remain relevant in the changing South African socio-political context.