Behind our Political Landscape in South Africa: Who Holds the Purse Strings?

By Glenn Ashton · 20 May 2008

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Our government is well known for making bizarre decisions. Lets not even go into Eskom, ARVs, the HIV and AIDS ‘debate’, or the arms deals for that matter. Even the small things like why a perfectly good policy on plastic bags was undermined by vested interests, how market related interests constantly trump social interests in seemingly obscure ways all are actions that force us to ask just what was behind that decision?

One of the major swings of policy by our new government was the casting aside of the Reconstruction and Development Project (RDP) for the Growth, Employment and Redistribution macro-economic model. While Mandela was the titular head of our first free democratic government, much of the deeper policy was already in the hands of the then vice president Thabo Mbeki. His business-friendly approach, projected as being the most able to supply the needs of all through market driven trickle down economic theory ensured that the new democratic empire was built on some flawed foundations.

Despite having one of - if not the - best constitutions in the world, South Africa has one blind spot, the elephant in the corner that nobody really wants to either notice or care for. The elephant in our blind spot is how the political process is funded in South Africa.

We all know how international political funding works. Every government in the world has - to a greater or lesser extent – fallen under the siren song of free market dogma. From the time of the British, French and Dutch East India companies, the corporate model has had inordinate influence on government polity. The Randlords, the Robber Barons, the Lords and Earls have all historically played inordinate roles in shaping the political landscape.

Even in exemplary democracies, the wishes of a single voter are hopelessly diluted and compromised by corporate interests that do not get to vote yet which have direct influence in choosing who runs for office. Not recognising this danger led to our failure to properly frame this important matter of constitutional oversight.

In order for political power to be controlled it needs to be held responsible. This demands transparent governance and funding. So too for the new South Africa.

Why did this not occur during the Codesa negotiations? One reason may well be that from the outset of negotiations leading to our democratic settlement, business had a front row seat, both directly and indirectly. A strong argument can be made that powerful business did not wish to put any sort of transparency for party political funding in place.

The old National Party was funded by the party faithful, those it had assisted to wealth, and they were legion. The Democratic Party was funded by the wealthy, largely English, interests. The poor old ANC, and here I speak only in financial terms, after years of isolation from the corporate world, chose to rather work with supportive governments and states but was also seduced by the charms of industry. The initial discussions with the ANC included strong business components. The ANC signalled its market friendly approach, possibly as appeasement to the ruthless influence of the so-called free market, where capital is as skittish as a filly. There is also the reality of going this route for reasons of self-interested pragmatism.

The military industrial complex that Eisenhower warned of in 1960 has come to pass in the USA. That nation did not use proper oversight to limit the power of the military industrial complex. What many people are not aware of was Eisenhowers simultaneous warning of that public policy was equally at risk from the interests of the scientific technological elite. He emphasised this by stating that we should be on guard against the power of money that “is gravely to be regarded.

That even as powerful and sophisticated political system as exists in the USA under its constitution failed to rein in the power and influence of money shows that Eisenhowers wish may have been well meaning but naïve. Today the global political system, as espoused in the concept of globalisation, is inordinately influenced by the power of money, primarily from military, scientific and industrial interests. If the mighty USA cannot resist the charms of industry, what chance has smaller countries, especially when the gears of globalisation grind gradually at the body politic?

Certainly, in some smaller nations corrupt money corrupts already corruptible leadership, but this is hopefully not directly applicable to the psyche of the national body politic in South Africa, which we all believed held itself to higher standards than to be corruptible. But the reality is that money has indeed corrupted our own body politic.

At the heart of this issue is the matter of direct and indirect payments to political parties and to those who enjoy prominence in those parties. Politics has always attracted the vain and the greedy; it’s an occupational reality. But what really counts is what I has emerged to become the corporate political nexus. In South Africa this nexus is possibly the most dysfunctional and problematic aspect that stymies the democratic experiment in our nascent democratic state.

Only the naïve could believe that money would neither touch nor taint the political landscape. Even mature democratic societies are constantly riveted by the salacious details of improper relationships between political funders and elected politicians. But most mature democracies have fairly strict transparency laws that control funding, payment and gifts given to politicians and officials. Even the USA has strict and transparent funding rules.

We have only a parliamentary register of benefits for members as a democratic oversight mechanism. But the reality is that any money paid to political parties is invisible from public oversight. There is no transparency at all. Money has effectively moved into a parallel universe where its influence can only be guessed at.

This all makes guessing a fun game to play when trying to explain some of the bizarre decisions our government has made. We must be clear we refer not only to the governing party but also by opposition or coalition partners, that are equally at risk of this contagion, simply because it exists.

When IDASA, the Institute for Democracy in South Africa took the ANC, the Democratic Alliance, Inkatha and the now defunct National Party to court in an attempt to gain access to information related to party political funding there was, for once, total unanimity amongst all four parties who all strenuously opposed this application. On technical grounds the judge ruled that such information could not be obtained retrospectively or by legal order and that the best way to deal with this matter would be through parliamentary legislation.

The oversight of processes like party political funding should be covered in our Constitution under Section 32, which grants access to information held by the state or private entities that is needed to protect any right. The Public Access to Information Act (PAIA) and its regulations give effect to this section of the constitution.

Given that political parties described themselves as private entities in the IDASA court case, these were deemed to lie outside the ambit of PAIA and instead were governed by different protocols covering public entities. That the two cannot be equated led to dismissal of the case.

The judge did not feel that the case had no merit; on the contrary. However he felt that it was not in his power to influence legislative process. The political parties involved indicated, without any subtlety, that they clearly remain disinterested in making their funding sources part of public knowledge. Although some hints emerged from the ANC that the matter may be followed up in parliament, this has not been a matter that has been actively pursued in the intervening years. In fact it remains decidedly off the agenda, a stillborn lost hope. This is the nub of the problem.

So lets instead play the guessing game and share some speculation.

Why were huge changes made to our arms orders at short notice using questionable processes? Why do we not act more strongly against criminal interests like drugs and seafood smugglers – after all, who says the corporate political nexus has to only involve legitimate corporations and not other even less caring company?

Then there is the guess about genetically modified crops. Why on earth has our government embraced GMOs in the most bizarre, undemocratic and lopsided manner? Given that almost all of the GMOs in South Africa are licensed to a single corporation, Monsanto, could it be that it may have managed to unduly influence the political regulation process? This is a question that we would be more able to analyse and answer if a transparent political funding regime was in place.

Monsanto and its compradors are inevitably present when it counts are and intimately familiar with the political lobbying processes. But what goes on behind the scenes? If they had unduly influenced this process it would certainly explain much that is otherwise inexplicable. Certainly such speculation may not be healthy but can one avoid thinking the unthinkable given these co-incidences?

After all we had a president and cabinet who questioned the science behind HIV and AIDS, anti-retrovirals and the like, out of fear of the bogeymen of corporate influences and untested scientific theories. Why the hell was the really poor science and issues of corporate control of the food chain related to GMOs not similarly interrogated?

The present CEO of Monsanto, Hugh Grant, was the man on watch when his company was fined US$1.5million by the US Securities Exchange Commission for bribing significant numbers of Indonesian official in the Agriculture and Environment ministries, while he headed up Monsantos South East Asia office. This case is also alleged to be connected to South African GM cotton being spirited through Indonesian defence force facilities.

Monsanto has on several occasions, been found guilty of lying, of spreading misinformation and even of “behaviour so outrageous in character and extreme in degree as to go beyond all possible bounds of decency so as to be regarded as atrocious and utterly intolerable in civilised society.” It has unwillingly paid and may be found liable for a total of more than a billion US dollars in reparations in cases that have and are working their way through various legal systems.

This question then follows: Would this sort of entity, driven purely by the profit motive, the primary driving force behind any corporate motivation, have any second thoughts about funding partisan political party interests in South Africa or anywhere else in the world, if these funds would offer beneficial returns and an untraceable investment? Given that corporations like Monsanto routinely fund political parties in nations where funding laws are more transparent, it seems naïve to believe that they would not have done the same here. If this is the case it would go a long way to explaining why almost all of our political parties are as supportive of GM crops – directly in conflict with a groundswell of public opinion - as they are opposed to legislating for public transparency of party political funding.

Hidden party political funding would equally explain some other really strange decisions. Take the bizarre recent change of heart regarding the tender process for the turbines for the proposed new coal power stations. After a flawed process only two bidders made offers, Alstrom and Hitachi. Alstrom won because there were problems with the Hitachi bid. Shortly after initial announcement of the winning bid, the bid was reversed and it went to Hitachi. Notably, Hitachi Africa is 25% owned by Chancellor House, evidently a company used to promote black economic empowerment but which is also tied intimately to the ANC inner circle.

The Russian oligarch, Viktor Vekselberg, paid South Africa a high profile visit not too long ago. He too had dealings with Chancellor House and its ‘treasurer’, ANC stalwart Mendi Msimang, according to research in the Mail and Guardian newspaper. Vekselberg and Chancellor House interests entered into a joint venture to extract and process manganese, a mineral of which we hold around 80% of the world’s exploitable reserves. Mr Vekselberg has been alleged to have engaged in racketeering and asset theft. What good company our politicians keep.

However it’s quite heartening that since the ANC conference in Polokwane that the new guard has embarked on investigations around what has happened inside the Chancellor house corridors. We need to monitor and encourage these and other shifts toward transparency of party political funding.

It also adopted a resolution calling for "an effective regulatory architecture for private funding of political parties and civil society groups to enhance accountability and transparency to the citizenry." Instructions are out to "urgently develop guidelines and policy on public and private funding, including how to regulate investment vehicles.” This progessive step must be encouraged and if implimented any such ‘architecture’ shoud be made retrospective.

Some may say that implications that the ruling party is corrupt is a racist construct. The reality is that direct access to any ruling party in any nation anywhere in the world is a  better bet than access to number two. It has nothing to do with anything except money and power, and to imply it is racist or anti-democratic is nothing less than egregious dissemblance that serves to distract us from the issues. It is fine and well that moves are afoot to change the status quo but we, the people, need to push for it to happen with alacrity.

This is not to say that number two (or three or four) are not on the political take as well. Financial interests routinely hedge their bets, and the Democratic Alliance, Inkatha or any other party is equally at risk of being compromised by their relationships with money attached to long and strong strings. They have all be extremely lax in pushing for transparency in this matter.

If none of these parties are asking questions then we, the electorate need to demand just why they are not making a collective hullabaloo about party political funding and its shortcomings in South Africa? It is clear that the political opposition has been extremely lax about raising this particular flag. The attitude seems to be, “Oh well, let’s not upset the free apple cart then shall we? Ho hum.”

Except this is not ho-hum. This is the de facto sale of democratic ideals to the misnamed ‘free market.’ It’s only free if you can pay your way. Money talks while the people walk.

Extrapolating about the possible effects of obscured money transfer to political parties from corporate or private coffers, be it legitimate or no, may be interesting, either through inference or through actual proof of malfeasance. But any sort of speculation that is driven by this practice is extremely dangerous in that it erodes pubic confidence in public institutions. This was not the dream we fought for in South Africa, it is a perversion of the dream that we must check forthwith.

We should also be clear about one other thing. This analysis is not directed towards victimising Jacob Zuma. There are strong indications that the rot goes much deeper than him and that a not insignificant number of the slings and arrows of outrageous fortune directed toward Mr Zuma come from a place of double standards. Zuma may not be perfect but so aren’t lots of others who are ensconced in the corridors of power. At least the ANC, under his leadership has pledged to pursue financial transparency. That is a start. Zuma has seen how this issue can create problems and is cannily moving to prevent future scandals.

We need to place solid safeguards on our de

Ashton is a writer and researcher working in civil society. Some of his work can be viewed at Ekogaia - Writing for a Better World. Follow him on Twitter @ekogaia.

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J. Nic
19 May

Funding of Political Campaigning

The current system of electioneering by political parties is flawed insofar that it favours the campaigns of wealthy parties and restrain the abilities of poor parties to efficiently promote their policies to prospective voters. At the root of the flaw is the receipt of campaign donations from sources outside the political sphere, such as large business enterprises. This defect opens the gateway to a host of adverse possibilities like political deceit and corruption. America is a prime example and as SA progressively endeavours to become americanised the same disposition is noticeable here.

Cash donations from businesses, especially from those businesses that have major stakes in the economy, are not unconditional goodwill gestures for the benefit of the state but rather to establish control over the political party that is elected into a position of governmental authority. Donations are the manner in which private enterprises create obligations that have to be honoured by the recipients of their donations and borders on bribery and corruption.

It is debateable whether an independent electoral authority such as the IEC can function effectively within such an unsound environment. The cost of maintenance attached to the authority further questions the need for its existence.

The legal requirement of disclosure of receipts by political parties does not effectively prevent hostile intentions and the problem has to be addressed through the legislation of conditions that levels the playing field for all participating political parties.

A good start would be to outlaw billboard sloganism and restrict campaigning to the newspaper medium only. Campaigning articles should be limited to a fixed number of newspaper pages within a fixed period of time before Election Day and should contain a clear description of the political party

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