The unseen influence of political funding on South Africa's democracy

Although money is essential for political participation, non-transparent funding could allow affluent vested interests to exert undue, disproportionate, or even criminal influence on politics and policymaking.

Global anti-corruption organisation Transparency International (TI) revealed this in its Standards for Integrity in Political Finance publication.

The standards are a holistic set of measures that describe the effort needed to mitigate corruption risks and promote the integrity of, at a minimum, the financing of national-level political parties and election campaigns.

Political parties and candidates require financial and other resources to organise themselves, formulate their ideas, and communicate them to the public. 

However, according to Transparency International, unchecked or opaque funding can allow affluent vested interests to exert undue, or even criminal influence on politics and policymaking. 

This lack of transparency and controls could lead to the capture of laws and resources by a powerful few, and undermine the quality of government and erode public trust in institutions.

The United Nations (UN) General Assembly in 2021 recognised that to address challenges to prevent and combat corruption, countries must protect the integrity of the electoral process, promote its accountability to voters, transparency and impartiality in domestic electoral institutions and oversight mechanisms, and transparency in the funding of candidatures, political parties, and electoral campaigns.

The organisation said these commitments have not been adequately translated into universal standards or international obligations.

It stated that the public has the right to know how money influences politics, as well as the information about sources of funding and expenditures, which provides important context for making informed decisions at the ballot box and holding officials accountable. 

This also deters illicit interests from seeking to buy political influence.

In South Africa, the Political Party Funding Act (PPFA) regulates the funding of political parties, aiming to increase transparency and accountability. The act mandates disclosure of private donations above a certain threshold and prohibits funding from foreign governments, state-owned enterprises, and organs of state. 

However, concerns remain regarding the effectiveness of these regulations and the need for increased transparency, particularly regarding smaller donations and the use of funds.

Several individuals and entities have also been linked to questionable funding practices or faced allegations of corruption related to political donations.

Some prominent examples include the Gupta family, Patrice Motsepe, gambling entrepreneur Martin Moshal, and the Oppenheimer family, who have donated to multiple parties.

Political analyst and governance expert, Sandile Swana, said it was important for the public to know the funders of political parties and candidates to avoid being used.

He said poor people in rural and townships are always in danger of ignorantly voting for well-funded candidates who, after being elected, neglect their plights in favour of either corrupt tenderpreneurs or organised crime syndicates. 

This, according to Swana, could also include big South African companies and multinational corporations.

“The last danger could be that some of our candidates may even be funded by in one way or another by foreign interests. For instance, we have a group in South Africa – a spectrum of political actors who appear to be funded by the Make America Great Movement in the US, and are in alliance with this movement. There is a lot of danger that flows together with money,” Swana said.

Transparency International added that to protect democracy from corruption and undue influence, political finance must originate from legitimate sources and use legal channels. 

“Promoting clean money in elections means closing opportunities for covert, secretive or criminal actors – foreign or domestic – to gain undue political leverage over public discourse and election outcomes.”

The organisation stated that anonymity allows illicit and illegal funds to enter politics in over 60 countries around the world.

“But even in countries where anonymous donations are banned, companies can funnel dark money into politics if there are no beneficial ownership disclosure requirements for donations made by legal entities, in potential circumvention of rules.

“Foreign interests can also circumvent bans and cloak their donations or other support – such as online advertising, advisory services, or transfers of cryptocurrency assets – through foreign-controlled corporate vehicles, straw donors or third parties,” said the organisation.

It added that independent candidates could also be used by other vested interests, domestic and foreign, to fake grassroots support or co-opt inauthentic groups, as majority of countries do not regulate their financing.

“Political parties, candidates, and their campaigns must check that the sources of donations are permitted to make political finance contributions. In compliance with their own internal policies, recipients should also assess the reputational and conflict-of-interest risks created by accepting substantial donations and loans from eligible sources.”

Cape Times