IEC releases first party funding report
Centurion – The Commission is pleased to publicly release the 2021/22 first quarter Party Funding Disclosures Report.
This public pronouncement is in terms of the Political Party Funding Act 6 of 2018 and its supporting regulations. This is the first report since the promulgation of the Act, the Commission had six months within which to publicly issue it: this First Party Funding Disclosure Report. However, in the interests of openness and transparency which are the primary objective of the Act, the Commission has expedited the processing of the report enabling the release today.
Our political parties funding regime makes it peremptory for all registered political parties to disclose to the Commission all donations above the R100 000 threshold in a year. Regarding the upper end of the threshold, no donations may be made by a single donor above R 15 million in a year.
The Act also put specific restrictions on sources of funding for political parties, including the proscription of donations by government departments, state-owned entities and foreign governments and agencies.
Further restrictions have also been put on the amount and purpose for which other foreign entities can make direct donations to registered political parties. This proscription requires that such donations are for the purpose of facilitating skills development, training and policy development. The pecuniary limit in this regard is R 5 million per annum.
Value of Quarter 1 direct donations
In respect of this reporting quarter, three (3) political parties made declarations of qualifying donations received from donors. The total value of these declared donations in the first quarter is R 30 008 841.74 (Thirty million, eight thousand, eight hundred and forty-one rands and seventy-four cents).
Which parties made declarations?
Two represented political parties and one unrepresented political party made declarations of qualifying direct donations. These are the African National Congress (ANC), the Democratic Alliance (DA) and ActionSA. The ANC and the DA declared individual donations received of R10 720 000.00 (ten million seven hundred and twenty thousand rands) and R15 983 751.48 (fifteen million nine hundred and eighty-three thousand, seven hundred and fifty-one rands forty-eight cents), respectively. ActionSA declared total direct donations amounting to R 3 305 090.26 (three million three hundred and five thousand and ninety rands twenty-six cents).
Value of donations in-kind?
Of the submissions received, the two political parties (namely DA and ActionSA) declared donations in-kind – the total value of which is R 855 685.41 (eight hundred and fifty-five thousand six hundred and eighty-five rands forty-one cents). This is made up of R 499 595.15 (four hundred and ninety-nine thousand five hundred and ninety-five rands fifteen cents for the DA and R356 090.26 (three hundred and fifty-six thousand and ninety rands twenty-six cents) for ActionSA.
Donations from foreign sources
Two foreign entities made direct donations to a political party, the DA, during this period. These donations were compliant with requirements set out in section 8 (4) of the Act, namely, that such donations must only be for the purposes of “training or skills development of a member of a political party; or policy development by a political party”. There was no breach or contravention of the Act in this regard detected at this stage.
How was compliance encouraged?
As part of the Commission’s efforts to foster compliance with the Act, all registered political parties, both represented and unrepresented, were sent reminders to submit their declarations before the due date of 31 July 2021. Although not all political parties responded, a significant number of them, especially among the represented parties, reported in writing that they did not receive qualifying donations in the reporting period. Qualifying donations being those above the threshold amount of R100 000.
Did all parties and donors submit qualifying declarations as required by section 9 of the Act?
Section 9 of the Act requires that both political party receiving donation and its juristic donors (corporates and entity) must declare such donations. In this regard, two (2) donors had failed to comply with the dual disclosure requirement. The donations affected are in relation to the ANC. Although the political party has made the declaration and therefore complied from its end, the donors had not complied with the requirement to separately declare the donation made. This means that the record includes what is referred to as single-legged donation reports.
In this regard, the Commission has issued a directive in terms of section 15 of the Act for the party to further pursue the donors for compliance. Failure to comply may have led to investigations and possible actions being pursued for non-compliance in relation to the specific donors in terms of section 14 (3) of the Act. Since the publication of the report, there has been the necessary compliance.
Lessons learnt and remedies
Despite section 9(2) of the Party Funding Act, 2018 providing that only juristic persons are required to declare their donations, there have been instances where some natural persons have declared their donations. This is not mandatory in terms of the law; however, it is welcomed.
In terms of section 9(1)(a) of the Party Funding Act, 2018, read together with regulation 9 of the Presidential Regulations, only those amounts above the prescribed threshold of R100 000 are required to be disclosed. Some of the parties have declared amounts that are equal to and not above this prescribed threshold. Such disclosures form part of this report.
Some donors have not submitted their declarations via the online portal. In such cases, proof of donation in the form of bank deposit or electronic funds transfer (EFT) slips and declarations that were made from the political parties’ side were used to confirm source of such funds. The Commission will look into ways of making it less cumbersome for donors to submit declarations so as not to inadvertently discourage direct donations.
Some of the political parties and donors waited until the end of the quarter or until they were reminded before they should make their disclosures. In future, the Commission will encourage political parties and donors to make prompt declarations to avoid bottlenecks or finding out in the last minutes that their declarations were not compliant.
Multi-Party Democracy Fund (MPDF)
In the first quarter of the 2021/22 financial year, the Fund received a single contribution from a member of the public, Mr Paul Malcolm Graham. He made a contribution of R2 000.00 (two thousand rand) on 5 May 2021 via Magtape Credit and this remains the only contribution received. Mr Paul Graham was kind and proud enough of his support for multi-party democracy that he waived his right to anonymity.
Regulation 5(3) of the Presidential Regulations, read with sections 6(7) and 26(2) of the Act, provides that money in the MPDF will only be due for distribution once the amount in the fund reaches a total of one million rand. The effect of this is that to date there have not been any political party allocation from the Multi-Party Democracy Fund.
The Commission would like to make an appeal to the South African public and corporates alike, to open their purses and support multi-party democracy. The sustainability of the Multi-Party Democracy Fund is a critical step towards a healthy democracy as envisaged in our Constitution.
For more information please visit www.elections.org.za/pw/party-funding