PARTY FUNDING & DEMOCRACY
In the article by Stephen Grootes presented below, published by the Daily Maverick last week, Grootes states the following: “Money is power. And it’s much more powerful if it’s secret money. In the end, politicians simply cannot resist that.” This certainly seems to be true about the state of affairs in South Africa, as well as in the United States, and also in numerous other countries around the world. Sadly, it seems to be the rule rather than the exception.
To what extent the statement is also true for traditionally non-corrupt, highly-transparent, very-democratic and most-happy-in-the-world Denmark is a good and relevant question. Having worked with the nine Danish political parties in Parliament during my six years as the first Director of the Danish Institute for Parties and Democracy/DIPD, my impression is that Denmark is in a different league than countries like South Africa and the United States. It has also been documented that the role of money in politics is a serious challenge to democracy in several of the countries Denmark is cooperation with – like Nepal, Zimbabwe, Zambia, Kenya, Tanzania and Ghana, just to mention a few.
So NO, secret money does NOT play the same role in Denmark as we see in many other countries. However, this does not imply that Denmark is also in the frontline regarding openness, transparency, regulation, clarity and honesty in the field of political party funding. We are actually not doing nearly as well as some of us would like to see. This is also one reason that party funding was never a major area of work during my time with DIPD. I felt that we could not legitimately give this high priority unless our own rules and regulations were as good as the international community of party support organisations call for.
Denmark has actually been critisized for having a rather relaxed system of controls on contributions to the political parties. Some parties argue for a much stricter system that will allow full transparency about the individuals, organisations and companies supporting the various political parties, including the exact amounts. A few years ago, a commision with experts and academics presented a number of proposals that would contribute to this, but disagreement among the two major parties – the Liberal Party and the Social Democrats – about how to do it practically has so far prevented real progress that would bring Denmark to the forefront.
It should also be mentioned that without large contributions from the state, the Danish political parties would not be able to function very effectively on a daily basis. The contributions from individuals and companies will normally be spent on the election campaigning rather than on the daily running costs. This is what contributions from the state can cover, with the level of support for the parties being calculated on the basis of the number of votes a party received in the most recent election. Personally I strongly support this type of state support. In Denmark we offer various forms of support for areas and groups that we consider to be important for our social and cultural fabric. Farmers receive state support, as do civil society organisations, artists and writers. So why not the political parties, considering the important role of maintaining a strong political and democratic culture and a reasonably level playing field.
Party Funding: Follow the Power
BY STEPHEN GROOTES
Originally published by Daily Maverick on 18 May 2017
On Thursday the ANC’s Chief Whip in the National Assembly, Jackson Mthembu, announced plans to form an ad hoc committee to tackle the issue of political party funding. He says that his party wants to create a system where there is the transparent funding of parties, and where everyone knows who private donors actually are. To bolster his case, Mthembu has also quoted at length from ANC conference resolutions. But there are many questions to ask here: why is this happening now, what is the real aim, and then the most interesting question of all – could the ANC actually survive as a ruling party, or political entity at all, if all of its funding were to become transparent?
In many democracies political party funding is about as contentious an issue as nuclear power. It’s the kind of thing that has recently troubled the US Supreme Court (which decided that money is the free speech, Tony Blair’s government was distracted by funding scandal after funding scandal , and links between gangsters and politicians have brought down governments in other places, such as Italy. To fix this problem in a sustainable way would be one of the holy grails of our, or any, politics. If you could do it, it would remove a huge incentive for corruption, it would allow citizens to make much more informed choices, and generally improve the sum of human happiness.
There is a reason why so many countries have not been able to achieve this state of political sub-nirvana. Parties always need money, dollops of it. Not everyone who supports a party to the tune of $10-million wants to do it in public, and the amounts on offer are massively tempting for those who lust after political power. To make things more complicated, there are always plenty of people keen to grease the wheels in the hope of taking some of the lubricant for themselves. And of course, if you are a political party with real power, you have achieved and must maintain that power through a system. You are unlikely to try to change that system because it simply works for you.
So, when a party with political power starts to propose changes like this, we have to sit up and take notice.
Such are the battles within the ANC at the moment, it is probably a good place to start by asking who in the ANC would benefit from such a change. It seems incredibly likely that the patronage network around President Jacob Zuma would not benefit from any transparency. Certainly, he and his supporters appear unbothered with a strict interpretation of the line between party and state. Those in the ANC who oppose him at least appear to be more principled, and would certainly benefit if these sources of funding were exposed and cut off.
Then there is the political situation between the different parties more generally. Business organisations, and private companies, appear to be getting more politically assertive. Certainly the public posture of organisations like Business Leadership SA and leaders such as Jabu Mabuza is that they are incredibly critical of Zuma. Should Nkosazana Dlamini-Zuma win the ANC’s conference in December, businesses may feel that they are at risk. Considering the recent revelations about how Brian Molefe and Ben Ngubane tried to force former Mineral Resources Minister Ngoako Ramatlhodi to cancel Glencore’s mining licenses, many firms may feel that the entire future of a law and rules-based system is at risk. To avoid this, it would be rational for them to fund the DA, or other opposition parties, as much as they possibly can. If they feel that a Dlamini-Zuma-led ANC is an existential threat to them, there are very few limits to the amount of money the DA would receive.
Perhaps then, the ANC is in dire need of placing some limits on that.
Then there is another possibility, which Mthembu may have already considered around 2019. Political analyst Lukhona Mnguni has already suggested that it’s entirely possible that some in the ANC have already decided they are going to lose. And thus they are trying to place certain boundaries around those who will be in power, to help the ANC when it moves to the opposition benches.
One of the big questions that needs answering is what would happen to our political parties without the funding they currently get. Even if, as Mthembu proposes, government should step in and fund them, it seems unlikely to fill the gap. The ANC’s elections head Nomvula Mokonyane said during last year’s local elections that their budget for those polls was one billion rand, before party Treasurer Zweli Mkhize tried to dial that back, but didn’t give an alternative figure. Just to put things into perspective, the ANC spent a billion rand and lost three metros. The UDM spent, according to its leader Bantu Holomisa, less than R4-million. The difference is absolutely huge.
The ANC is a big beast to run. Luthuli House is a plush place, the lifts are fast and nifty, the media centre fantastic, the reception area smart. And yet the party is often in the financial dwang, and suffers “cash flow problems”. Sometimes, those blow up in its face. This is surely one of the reasons that it keeps Chancellor House around. This is an investment vehicle that has led to scandal after scandal. (In just one of the deals, the Japanese firm Hitachi paid $19-million in a US court to settle charges stemming from the fact that Chancellor House had benefited from a deal with Eskom.)
There is a word that describes behaviour like that. Corruption.
All of this means that the ANC as it currently behaves would be unlikely to survive a legal demand that it be transparent about its finances.
It is important to remember here that while the DA is in a very different situation, it too has long refused to release the details about who its funders are. It has always argued that firms who give it money could be punished by the ANC in government. There is one other motive that could be behind Mthembu’s move. There is a weakening of power in the centre at the moment, Zuma is distracted by other things and, generally speaking, there is a leadership vacuum. This provides a space for factions to push for their own projects. They know that they are unlikely to be punished for trying, and that there is a chance the conditions are right for them to succeed. Mthembu, the honest man that he is, may simply be trying this because he thinks it is the right thing to do, it will clean up our politics, and such a chance will not occur again for some time.
If that is the case, he is to be applauded. If he succeeds, we will remember this time for decades to come. But, on balance, considering the context around us, it seems, unfortunately, unlikely. Money is power. And it’s much more powerful if it’s secret money. In the end, politicians simply cannot resist that.
Database from International IDEA
If you want to study political financing globally in more detail, I suggest that you start by visiting the database developed by International IDEA in Stockholm. This is the best place to get an overview, as well as to get specific documentation on the rules and regulations governing individual countries.