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Regulating funding for political parties 'imperative'

Analysts in South Africa recently discussed ways to manage and regulate political party funding, an area of contest in election times.
Head of the Centre for the Study of Democracy Steven Friedman, speaking at a discussion organised by the Helen Suzman Foundation, said the failure to manage the relationship between money and politics “could well be the biggest threat” to democracy.
Parties were spending more than R500m to contest next Wednesday’s elections, but the source of much of the funding remains a closely guarded secret — something that raises the need to regulate party funding.
In the past financial year, the state fund disbursed about R80m to 19 political parties. But parties spent an estimated R300m- R500m during the 2004 election, according to Shameela Seedat of the Institute for Democracy in South Africa (Idasa).
“So the questions are who put up this money and what exactly is the deal?” she said.
Seedat said although the bigger parties were publicly funded, it was private funding that drove party activities. Idasa was lobbying for regulation in order to reduce the potential for corruption.
Controversial donations to political parties have included revelations that the late businessman Brett Kebble gave money to the African National Congress (ANC), while German fugitive Jurgen Harksen funded the Democratic Alliance. Also raising eyebrows was Chancellor House, a company through which the ANC raised money through government tenders and mineral rights.
In 2005, Idasa failed in its bid to compel parties to disclose the source of their donations of over R50,000. Recently, Idasa set up a corporate guide to encourage companies to disclose their donations.
However, Business Leadership SA CEO Michael Spicer said some corporates saw transparency as risky, citing AngloGold Ashanti’s recent move to withhold its donation. He said regulations should also be extended to encompass individuals and foreign donors.
Institute of Security Studies analyst Hennie van Vuuren suggested the establishment of a general democracy fund through which all parties’ donations would be channelled. But Friedman said all individuals had the right to donate to a party of their choice.
He proposed a three-point model encompassing total disclosure, a cap on donations and a matching-fund principle through which privately raised funds would be matched by public money.
Head of the Helen Suzman Foundation Raenette Taljaard said although the issue had fallen off the radar, the ANC’s Polokwane resolution to review private party funding gave reason for optimism.

This article, written by Wilson Johwa, first appeared on the Business Day website on April 16 2009 (http://wwww.businessday.co.za)

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Election Watch is a project of the Institute for Public Policy Research in Windhoek, Namibia. Election Watch is funded by the European Union and the Canadian Fund for Local Initiatives.