Political party

The historic report on the financing of political parties is more lax …

Illustrative image | Sources: (left to right) Herman Mashaba of ActionSA. (Photo: Gallo Images / Luba Lesolle) | ANC president Cyril Ramaphosa. (Photo: EPA-EFE / Nic Bothma) | DA President of the Federal Council Helen Zille. (Photo: Gallo Images / Mlungisis Louw / Netwerk24) | AD leader John Steenhuisen. (Photo: Gallo Images / Ziyaad Douglas) | Harry Oppenheimer’s daughter, Mary Slack. (Photo: Gallo Images) | Adobe Stock

The first political party funding declarations have arrived and are as interesting for what they don’t say as for what they do. They suggest the DA is the only party still able to rely on high net worth individuals for massive donations, while questions need to be asked about the EFF’s non-disclosure and possibly other parties as well.

Anyone who hoped that the first files published by South Africa on the financing of political parties would provide a revealing key to the levers of power in that country was disappointed.

When the IEC published its first report on the financing of political parties On Thursday, it turned out that it only contained accounting entries for only three parties: Herman Mashaba’s Action SA, the DA and the ANC. This is because they are the only parties to disclose receiving donations of over R100,000 between April and June 2021.

The most striking donation was certainly the R15-million recorded as having been given to DA by Mary Slack. This was, by an order of magnitude, the most significant donation in the report. Slack, 77, is the daughter of Harry and Bridget Oppenheimer, mining tycoons who have long funded liberal politics in South Africa.

It should be noted that R15million is now the cap on donations from a single donor within one year, so Slack’s scholarship will be closed to DA until 2022. Of course, it probably exists. as many ways to overcome this regulation as there are loopholes. in the tax system: another member of the Slack family, for example, could presumably make their own donation without a problem.

This laxity appears to be a problem for the reporting system as a whole. Here again, the architects of the legislation faced a difficult task in creating a legal framework that did not completely deter donors. As it stands, the The ANC says it is in financial difficulty due to the withdrawal of donors due to the new law.

Even taking into account the R100,000 threshold, ways to circumvent the declaration and the fact that the reporting period is only three months, it should still raise eyebrows that only three parties claim to have received this amount in one-time donations. The IEC has stated that “not all political parties have responded” to the reminder to submit declarations, and it is apparent from the formulation of the IEC that even all political parties represented in Parliament – in other words, the most big – did not respond.

What will happen next? There has been no publication by the IEC of the names of the parties who simply did not respond to the request for statements. And one of the main sanctions available to the CEI – that these parties do not benefit from funding from the Multiparty Democracy Fund – has now proven to be utterly toothless.

In a tragicomic turn of events, it appears that a single donation of just 2,000 rand was made to the Multiparty Democracy Fund, by former Idasa boss Paul Graham. This is a far cry from what the drafters of the legislation had in mind: that South African companies, in particular, would line up to deposit millions into the fund to be distributed among all the parties represented. In this way, these companies could not be accused of playing the favorites politically.

Instead, precisely one person across the country answered the call. While the IEC “would like to appeal to the public and South African businesses, to open their stock exchanges and to support multi-party democracy”, it seems that the general appetite to donate money to political parties in general, in in a focused way, is extremely weak – and no one should be surprised at this, in today’s polarizing climate.

This does mean, however, that the threat to parties that do not cooperate with reporting regulations – that they miss multi-party funds – no longer makes sense. So, how, in concrete terms, will the CEI enforce the law? The commission still has other sanctions at its disposal, including the administration of fines through the electoral tribunal, but on Thursday there was no indication that the IEC was planning to follow up on possible non-disclosures.

Among the parties to be wondered about: on the opposite side of the political spectrum, the EFF and the Freedom Front Plus. EFF is known to have had big donors in the past like tobacco trader Adrian Mazzotti, while it seems unlikely that FF + does not have a few Afrikaner billionaires on its contact list.

Among the funding reports to which we have access, it is interesting to see that Action SA makes relatively large donations. At the very least, it suggests a buzz around the party that could translate into more votes in the November local election than one might expect.

Action SA’s main donor turns out to be Martin Moshal, an extremely wealthy Durban-born entrepreneur who would have more than 45 patents worldwide and has been an investor in many tech startups. Moshal was exposed by the British press in 2020 as an investor in controversial online gaming giant Betway. He is describe as having also made “significant contributions to Israel” in terms of both philanthropy and technological investments.

On the ANC side, party staff, suffering from delayed salaries and insufficient UIF contributions, could eye with some interest the R10,720,000 provided between April and June. Missing from the ANC’s shortlist of donors during this period is the name of a certain Cyril Matamela Ramaphosa, who at various times has been supposed to bail out his party from his personal fortune.

Ramaphosa would not have to disclose a donation of more than R100,000 if he made one in his personal capacity, as only “legal persons” should disclose donations – in other words, companies – and not ” physical persons “. However, the donation is yet to be disclosed on the ANC side.

The two largest donors to the ANC – companies called Majestic Silver Trading and United Manganese of Kalahari – are related entities that are partly owned by the ANC’s investment vehicle, Chancellor House. United Manganese is 49% owned by Russian oligarch Viktor Vekselberg’s Renova group, which means the ANC lovingly receives some of its funding indirectly from Russia.

Since this is the first report on political party funding, we have no way of knowing whether the numbers listed as donations are roughly representative of all quarterly periods, or whether funding fluctuates significantly. From this perspective, the second report in a few months may be even more revealing. DM

CORRECTION: This article originally stated that it would be possible for a donor to donate R99,999 to a party every three months and remain invisible. This is incorrect: any donor who gives more than 100,000 Rand cumulatively in a fiscal year must be declared.

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