Party political, candidate and faction funding: An entry point of corporate-capture not only as sordid form of rampant looting and criminality


[Jeremy Cronin. Source:]

In Part One last week, we noted the large sums political parties spent in the August 3 local government elections. The ANC’s official budget was R380 million, and the DA budgeted R350 million, but both parties certainly spent much more. In the case of the ANC, we further noted that it was not just the official Treasurer General’s budget that benefited from campaign donations. There is evidence of considerable campaign funding going to individuals and groupings within the ANC, with all of the obvious dangers of factionalism, patronage and clientelism. The lack of transparency and public regulation of this funding has serious implications for the health of both the ANC itself and of our hard-won democratic dispensation more broadly.

But there are further problematic features of these hundreds of millions of rands spent by South African political parties in the local government election campaigns. It is money diverted from productive and developmental investment into consumables with built-in redundancy – posters now fading on lamp-poles, media advertising in the major monopoly-controlled outlets, T-shirts mostly imported from outside, and razzmatazz mass rallies. In the case of the ANC, this is money that might more usefully have been expended on social campaigns, for example against the predatory behaviour of loan sharks, or abuses of garnishee orders, or illegal evictions.

In short, we are spending hundreds of millions of rands on politics as spectacle in which the monopoly-controlled media-advertising complex reaps millions with little or any developmental impact. (For useful studies focusing on the US in this respect, see Robert W McChesney and John Nichols, “The Bull Market. Political Advertising”, Monthly Review, vol.63, April 2012; and Mary V Wrenn, “Surplus Absorption and Waste in Neoliberal Monopoly Capitalism”, Monthly Review, vol.68, July-August 2016 – both available on the Monthly Review website

The significant sums South African political parties are now spending on election campaigns pale, of course, when compared to electoral spending in what is probably the most corporately-captured political system on earth – electoral politics in the US. By the end of August, Hillary Clinton had raised $795m (R11bn) and Donald Trump had raised $403m (R5,6bn) for their respective presidential campaigns.

This money comes overwhelmingly from the big corporates, who often hedge their bets by supporting both candidates. More importantly, the enormous sums required not just to win presidential races, but even relatively minor local positions in the US system, has the effect of marginalising progressive alternatives.

In the current US presidential elections it is easily forgotten that there are two other candidates besides Clinton and Trump, one of whom, Jill Stein of the Green Party, is an eminently likeable and progressive politician when compared to the unpopular Clinton and the demagogically dangerous Trump. But lack of corporate funding means that Stein gets very little coverage in the corporately dominated media.

In the case of the Democratic Party itself, Bernie Sanders mounted a surprisingly successful challenge on a left-leaning programme for that party’s nomination. To compensate for the lack of major corporate funding, Sanders used innovative approaches like crowd-funding that drew in donations from hundreds of thousands of individual citizens. But, in the end and despite Sanders’ evident greater popular support, the sheer weight of Clinton’s corporate establishment defeated the Sanders’ initiative.

In the current South African reality, when we speak of “state capture”, or more accurately “corporate capture” of key parts of the state, we tend to be referring specifically to the parasitic looting of state owned enterprises, or serial loitering at a certain family’s Saxonwold Headquarters on the eve of key appointments.

However, the US example reminds us that corporate capture does not necessarily have to take the sordid form of rampant looting and criminality. In the US, capitalist corporate culture is now so deeply embedded within the DNA of the political system, the revolving door between Wall Street and Washington and back again is so well-oiled, that brown envelop bribes are largely redundant. Despite (or rather because of) the hard-wired nature of corporate capture there, the US scores relatively well in Transparency International corruption-free ratings when compared to South Africa or Brazil.

It is, therefore, useful at this point to introduce a distinction between the interests of corporate capital-in-general, and the particular interests of a specific corporate entity, let us say a family-controlled Oakbay Investments, or, for that matter, the globalised Naspers-Media 24 octopus, which has been very adept at capturing well-located politicians and leading personalities in the SABC.

It is, of course, a good thing that in the past months the widest range of South Africans has spoken up against brazen “state capture”. This groundswell from within and from well beyond the ANC-led movement has, in effect, forced the National Prosecuting Authority head Shawn Abrahams to back down (at least for the moment) on his shameful attempt to charge Comrade Pravin Gordhan on entirely spurious grounds.

But, as the US case reminds us, there are other less brazen, more subtle forms of corporate capture of the state than the clumsiness of an Abrahams or the reckless piracy of the Guptas and their ilk. Yes, it is a positive thing that some 130 South African CEOs have spoken out in recent weeks against the politically-inspired attempt to charge the Minister of Finance. Together, let us hold the line against corruption, against the most venal forms of money-laundering, looting, and abuse of positions in the state. What has been demonstrated in the past weeks, just as in a notorious four days back in December last year, is that there are significant anti-bodies across our society to repel what some of us once referred to as “Zanufication”.

However, let us also not become strategically naïve. From the side of the 130-odd CEO signatories  against state capture we are lectured on “leadership morality”, on “the rule of law”, and on constitutionality – but many of these business-people, black and white, are senior players in market dominance abuse, and in price collusive activities. How many of them are hiding their wealth in shadowy tax havens? How many have actively engaged in capital flight, or speculatively shorted the rand? Much of this might not be illegal, but is it moral?

Monopoly capital objects to the Guptas (capital-in-particular) deciding on ministerial appointments, but they believe it is their god-given right (as capital-in-general) to decide who should be Minister of Finance or Reserve Bank governor.

Let us unite across ideological boundaries in condemning the abuse of state power whether by the NPA or the Hawks. However, at the same time, it is important to distinguish public interest from corporate interest, and it is important to distinguish between the interests of capital-in-general and the interests of this or that Individual Corporation.

The behaviour of Oakbay is rightly condemned by capital-in-general – hence the possibility of the current, broad-based, multi-class outcry. It is often less obvious, but even more important to understand, that the public interest – or, to put it less neutrally, the strategic interests of the working class and poor – and those of capital-in-general do not coincide.

It is critical in the immediate situation to hold the line against rampant corruption. If key state owned corporations like Transnet and Eskom are pillaged then the ability of a democratically elected government to carry forward its popular mandate, including confronting private monopoly capital-in-general, will be seriously compromised. But the march against “state capture” today, must not goose-step us backwards to the late-1990s neo-liberal heyday of GEAR, privatisation, and mindless market liberalisation.

Introducing public transparency and effective regulation of party political funding is one small but important element in the overall struggle to defend hard-won, popular, democratic sovereignty in our country.

By Jeremy Cronin



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