South African party funding under the spotlight
With two weeks before the most hotly-contested election since the end of apartheid, party political advertising is on the increase.
From innovative television and radio advertisements, massive billboards across the major cities and highways across the country, political parties are going all out to win the hearts and minds of millions of South African voters.
- “Parties burn through money when it is election time… and it is extremely important to see where they get their money from”, says director of MyVoteCounts (MVC) Joel Bregman, a transparency NGO.
In 2016, the ANC said it spent over R1bn for the 2016 local government election.
- The ANC’s Nomvula Mokonyane said the party had spent the money on buying T-shirts, holding rallies and paying party volunteers. It later said it spent over R350 million.
- The same Nomvula Mokonyane is alleged to have received monthly payment of 50,000 rand a month during the recent Zondo Commission
The DA told the Sunday Times in July 2016 ‘ said its own election budget of R350m was likely to be exceeded thanks to private funders.”
So who funds political parties?
A new report by MVC details who is financing the major parties. And it is not easy reading.
From the big bucks paid by Bosasa for access to state contracts, to the big donations from India and China to the ANC, to the chunk of cash given by telecoms operator MTN to the Democratic Alliance (DA), to the money that flowed from VBS Mutual Bank to the Economic Freedom Fighters (EFF)
‘Highlights’ from the report:
African National Congress
- The ruling party has been receiving regular gifts up to between 4-6m rand monthly from Bosasa
- A company awarded almost R2-billion in tenders from state-owned enterprise, Impulse International, paid R1.7-million in two instalments into an ANC affiliated bank account. One of the instalments were transferred three days before the ANC’s “January 8” birthday event at the Orlando Stadium in Soweto.
- Robert Gumede is a South African billionaire who developed his career as a businessman through business consulting, investing and various other corporate ventures. Gumede is most popularly known for establishing the ICT company, Gijima Group. According to a report in the Sowetan, Gumede is even believed by some to be a “state capturer” of the ANC as it has been rumoured that he has, on occasion, paid salaries of municipal officials in Mbombela, Mpumalanga.
- LTE Consulting, provides consulting services in various sectors, including IT, health care, mining, energy, marine and shipping.19 The quid-pro-quo relationship is evident in that ANC Minister of Water & Sanitation, Nomvula Mokonyane, delayed constructions of the Lesotho Highlands Water Project, in order to award contracts to the LTE Consulting, who donated R3.5 million to the ANC over two months in 2016.
- VBS mutual bank, based in Limpopo, has been in the public eye for what has been dubbed “The Great Bank Heist” by Advocate Motau and Werksmans Attorneys, who conducted a forensic investigation into the bank. Various state and political officials have been exposed for the looting of the bank’s funds, resulting in the subsequent collapse of the bank. ANC Treasurer General has openly confirmed that his party received R2 million from Vele Investments, a company owned by VBS’s owners.
- Stephen Nel is a director of the Gupta-owned Sahara Computers and an enthusiastic supporter of the DA. Although the DA approached Sahara computers for donations in 2009, according to the party, they were not aware that Sahara computers was owned by the Guptas. On 13 February 2009, the DA met with Nel at the Gupta’s home in Saxonwold, Johannesburg. At this meeting, Nel confirmed that he would provide R200 000 to the DA. Following the meeting, the DA’s fundraising department made a request for more donations from all its funders and subsequently, Nel provided another R100 000. The next R100 000 donation was made in 2010, after Premier Hellen Zille met with Nel at Saxonwold to raise funds for the municipal elections in 2011.
- Nathan Kirsh is a South African born billionaire. In an interview with Business Times, Kirsh admitted that he funded the Democratic Alliance and Agang with a “marginal amount” of money.
- The Sanlam board approved a R350 000 donation to the DA in 2004
- In 2004, Kumba Resources, a company that merged with Anglo American, announced that a R1 million donation would be made to various political parties. The DA received R200 000 of this donation
- Anglo American, referred to earlier, is a mining company, producing iron-ore. In 2004, Anglo American announced that it would donate R6 million to political parties contesting the 2004 elections. The DA received R1 500 000 of the R6 million
Economic Freedom Fighters
- An amaBunghane investigation revealed that Afrirent, a company which bid for a tender to the value of R1.26 billion from the City of Johannesburg, transferred R500 000 to Mahuna. Mahuna is a front company managed by the cousin of EFF’s Commander in Chief (CIC), Julius Malema. Mahuna is reportedly used as a “slush fund” by the EFF and Malema.
- VBS Mutual Bank, referred to earlier, was exposed for funds accrued to EFF’s Floyd Shivambu and the party’s CIC, Julius Malema. In 2018, it was revealed that Floyd Shivambu’s brother, Brian Shivambu, was allocated R16 million. R10 million of these funds was allocated to Floyd Shivambu and the party’s account was allocated at least R1.8 million.
- Adriano Mazzotti is a businessman and the co-director of Carnilinx, a company that manufactures cigarettes. Mazzotti has admitted to, ‘smuggling, corruption, fraud, money laundering, tax evasion and attempted bribery of SARS officials.’59 In 2013, Mazzotti donated R200 000 to the EFF which was used for the party’s registration to contest the 2014 general elections prior to the party’s registration.
Prof Mia Swart, Research Director of the Democracy and Government Unit at the Human Sciences Research Council told a local television station ENCA:
- “First of all the information has been in the public domain so there are no new revelations – some data stems from 2004 and 2008.”
- “There are gaps in the knowledge – But it is a good start and we need to see more disclosure and we need to see it as soon as possible. [When it comes to] perception of corruption voters are still loyal – people are still loyal to the ANC despite negative information being out there in the media.”
Most opinion polls have predicted that ANC will hold onto its majority in the May 8 election followed by the DA and the EFF.
In January, President Cyril Ramaphosa signed the long-awaited Party Funding Bill into law. The bill was meant to start operating on 1 April, but has not yet been put into effect which MVC says is very ‘regrettable’
Bottom line: With the 5th Parliament closed we will now have to wait until later this year to see any progress on campaign finance reform.