Corporate capture, money and electoral politics in South Africa


[Jeremy Cronin. Source:]

Among the more important announcements in the Alliance Political Council statement issued earlier this week is the intention to consider introducing legislation to regulate party political funding. But why is it an important consideration?

In July, ANC campaign coordinator, Nomvula Mokoyane gave an off-the-cuff figure of a massive R1-billion rand when asked how much the ANC had spent on the local government election campaign. The ANC Treasurer General (TG) subsequently indicated the figure was “less than that”. I’m told the official figure of what passed through the TG’s books was some R380-million.

However the R380-million doesn’t include a wide range of other funding that went to ANC individuals and groupings for the elections. Mpumalanga premier David Mabuza, for instance, enjoyed the use of an ANC- (and “Premier Mabuza- “) branded helicopter for ten days on the eve of the elections (City Press 31 July 2016). I assume that neither the helicopter nor the further donation to Mabuza of R7,5-million by businessman Robert Gumede were accounted for in the ANC’s official election spend.

It will be argued de-centralised fund-raising for the ANC shows positive initiative and should be encouraged. That’s not entirely wrong, provided there’s transparent accounting. However, while a branch fund-raising raffle is one thing, millions of rands of corporate sponsorship to individuals or specific groupings is quite another. The threat of factionalism, personality cults and of corporate capture then becomes serious. Equally serious is the potential loss of collective national capacity by the ANC to pool funding and strategically direct it to where it’s most needed. The DA, incidentally, appears to have a much greater strategic control over its funding.

These are some of the internal reasons why the ANC should endorse transparent public regulation of political funding. But there are also other equally important considerations.

Interestingly, the DA’s electoral budget was not much less than the ANC’s official R380m. According to a Sunday Times report: “DA officials said its election budget of R350m was likely to be exceeded thanks to private funders.” (July 31, 2016). A party with less than half the electoral support of the ANC was able to fund-raise almost the same amount. We don’t know who the DA’s “private funders” are but we can all guess they will include the major corporates in South Africa, along with foreign-funding from a London-based, South African émigré network with wealth stashed away in tax havens.

One major DA funder is likely to be London-based Natie Kirsh. An ex-South African, Kirsh is now a Swazi citizen with residency status in the UK and the US. With a global property empire, Kirsh was listed in 2015 by Forbes as the 435th richest person in the world. His companies are listed in tax havens like the British Virgin Islands and Liberia and he is the largest shareholder in Magal Security Systems involved notoriously in the supply of electronic fencing for the apartheid wall in the West Bank, Palestine. It was Kirsh who was the money behind the abortive attempt to float Mamphela Ramphele as the DA’s presidential candidate for the 2014 elections.  Talk about corporate capture!

Indeed, the major corporates and émigré circles have been seriously encouraged by the DA’s take-over of three more major metros. Reportedly large sums are pouring into DA coffers with the 2019 national elections in sight. According to Peter Bruce: “Ever since the local government elections in August, I’m told, money has been pouring into the DA’s coffers – more than R400m of it – as people back them to build a strong and durable campaign for 2019.” (Business Day, 30 September 2016).

If the ANC is to remotely live up to its claim to be a disciplined force of the left, then there’s no way, in any medium-term scenario that it can ever win the private corporate fund-raising race against the DA.

This leads to another danger – that the ANC will be tempted to fund itself covertly out of state-owned enterprises. If SOEs have a principled, transparent and even-handed approach to contributing to multi-party democracy in SA, that’s fine. However, consider Brazil and the current fate of the formerly ruling party, the PT, to understand the dangers of covert party political (and personal) funding derived from state-owned corporations.

What about the EFF? On the evidence of a relatively prominent, nation-wide poster campaign and the logistical costs of several large rallies, the EFF clearly also had significant funding.  A figure of “not more than R10m” mentioned by one EFF spokesperson is certainly an under-statement. However, it’s clear EFF funding was significantly less than that of the ANC and DA, which explains the R30m election campaign debt one EFF leader has mentioned, as well as the EFF’s attempt to tax newly elected EFF councillors 50 percent of their salaries for the first three months.

Apart from the proportional party political allocation made from public funds, the actual sources of EFF funding are not publicly available. There are, however, occasional glimpses of where some of it might be coming from. In a 2015 City Press article, Adriano Mazzotti, an Italian with underworld connections and an associate of the convicted criminal Glen Agliotti, admitted it was he who donated R200,000 to enable the EFF to register as a political party ahead of the 2014 national elections.

While the EFF may also have benefited from more mainstream monopoly capital funding – some reports have nodded in the direction of Malema’s cosy interaction with Lord Renwick and other neo-colonial barons in the UK – it’s unlikely big capital will fund the EFF to the hilt. It is, however, distinctly possible they will be happy to drip-feed the EFF just enough for it to perform a “useful” 8 to 10 percent electoral role in 2019. From a neo-colonial perspective, the EFF unwittingly played its “useful” role to perfection in the August 3 polls.

These are some of the key reasons why, as a matter of urgency (if belatedly), we should support tight regulation of and public transparency in party political funding. Stringent caps on what corporations and wealthy individuals may contribute must be introduced. To safeguard national popular sovereignty, foreign funding of South African electoral politics should be banned.

By Jeremy Cronin. Money and Politics in South Africa.



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