Showdown over political party donations

Since the start of the 2021/2022 financial year, political parties have declared nearly R812 million in private donations. However, this does not give a complete picture of private party funding.

The Political Party Funding Act (PPFA) requires the disclosure of all donations above R100,000. Individuals can donate up to R15 million per year to a party.

This legislation is under scrutiny in the Western Cape High Court. Lobby group My Vote Counts’ (MVC’s) application, initiated in 2023, seeks to have the court declare the PPFA invalid and unconstitutional.

MVC argues that the legislation, amended by the Electoral Matters Amendment Act (EMAA), fails to ensure transparency and accountability in political party funding.

The lobby group contends that the Electoral Matters Amendment Act (EMAA) fails to ensure adequate transparency and accountability in political party funding.

It allows small donations to smaller parties to wield significant influence, while related companies can make undisclosed donations just below the threshold.

Additionally, the act does not require comprehensive disclosure of private donations or impose sufficient controls on private funding.

This is seen in large political parties, like MK and the EFF, which have a very small pool of declared donations compared to others.

Since the start of the 2023/24 financial year, the EFF and MK Party declared a total of R3.2 million and R380,555 worth of private donations, respectively – money that would have been burnt through quickly during the fierce election campaign.

“We argue that the law in its current form does not go far enough to promote the right of access to information and the exercise of political rights from an informed position,” MVC previously said.

“The annual donation cap should be reduced, and all donations should be disclosed,“ it added.

According to MVC, the application aims to realise constitutional imperatives such as:

• Citizens’ access to information for informed voting.
• Free and fair elections.
• The state’s duty to promote and fulfil the Bill of Rights.

It is important to note that parties have multiple sources of income besides donations, and the majority are not shown in this data or easily available. 

This data does not, for example, show income received from the state via the Multi-Party Democracy Fund.

Political party funding

Not the first time in court

MVC was instrumental in putting pressure on parties to disclose donations, which resulted in the implementation of the PPFA—although not as transparent as they fought for.

This is not the first time MVC has taken the government to court. Recently, MVC won a legal standoff that traces back to the drafting and signing of the EMAA.

Despite concerns voiced by civil society, opposition parties, and a Parliamentary Legal Advisor about its constitutionality, President Cyril Ramaphosa implemented the EMAA, which amended the PPFA, weeks before the elections.

The EMAA, signed into law by the President on 7 May 2024, allowed independent candidates to run for positions in the National Assembly and provincial legislatures and access the Multi-Party Democracy Fund.

The PPFA previously set donation thresholds and requirements for parties to declare their external income, which included a R15 million a year limit from a single donor and a R100,000 declaration threshold.

However, the EMAA contained amendments that removed the disclosure thresholds in the PPFA, which could only be set by the President after a resolution from the National Assembly—a matter that, despite promises, remained unset.

When this happened, MVC took the President, the Speaker of the National Assembly, and the Ministers of Home Affairs, Justice, and Correctional Services to court to immediately fill this lacuna.

The Court delivered its first judgment on 27 May, making a prima facie finding that there was indeed a lacuna in the law.

In August, the Court reinstated the repealed provisions of the PPFA, which set a R15 million annual donation limit of a single entity to a political party within a financial year and the R100,000 disclosure threshold.

“This is a victory for transparency and accountability,” said MVC.

“While it does not advance our party funding laws, it reinstates the two key limits in the PPFA that, since their removal, had rendered the law virtually meaningless and, on a practical and constitutional level, created a dangerous gap in our legislative framework,” added the group. 

Independent elections and political analyst Michael Atkins wrote that “the three-month ‘gap’ in the donations limits and reporting threshold is a stain on our democracy that is receiving almost no comment or concern.”

“A challenge to political parties: Will you declare all donations received between May 8 and August 16 as though the law had been in place?” he added.

MVC said that while they are pleased with the judgement, they believe that a lot more needs to be done to deepen transparency and accountability in the private funding of politics.

“This is why, in a separate process that began in 2023, we filed papers challenging the constitutionality of several aspects of the PPFA.”

Arguments Against the Application

Opponents argue that the limitations of the act protect the rights of donors and political parties. They claim that full disclosure would violate privacy rights and deter private funders.

Democratic Alliance (DA) federal finance chairperson Dion George argued in a responding affidavit that private funding is essential for political parties to function effectively.

He noted that the DA’s income decreased significantly after the PPFA came into effect.

George also contends that MVC’s application disregards the rights of donors and political parties, arguing that the current arrangement balances voters’ right to information with the rights of privacy, free association, and freedom of expression.

He suggests that donors may not donate if anonymity isn’t guaranteed due to potential victimisation.

ActionSA echoes these concerns, arguing that requiring disclosure of small donations could deter individuals from supporting emerging parties because they fear reprisal.

ActionSA’s Michael Beaumont believes the focus should be on non-compliance rather than donor thresholds, arguing that throttling party funding impacts electoral democracy.

Home Affairs Minister Leon Schreiber, also representing the justice minister in the case, described MVC’s case as “wide-ranging and overambitious,” asserting that private funding is vital for South Africa’s democratic politics.

All this comes as some parties call for even looser donation laws.