The law that compels political parties to disclose the names of their big donors does not go far enough, the Western Cape High Court will hear next week.
Civil society organisation My Vote Counts (MVC) is challenging the constitutionality of the Political Party Funding Act, saying all private donations to political parties, big and small, should be publicly disclosed.
MVC has raised several other alleged constitutional flaws in the act, including that the law prohibiting donations above a certain amount — originally R15m — which it says is set too high. MVC also argues the law allows the same donor to circumvent the donation cap by using different legal entities (“related parties”) to donate.
The act is “woefully inadequate”, said MVC’s lawyer Vlad Movshovich in written legal argument. It fails to “safeguard against the scourge of corruption (and in fact leaves the door wide open for such corruption), undue influence ... and the insidious effects of patronage in our democracy”.
In 2018 the Constitutional Court said private donor funding information was “essential” for the effective exercise of the right to make political choices. It ordered that “information on private funding of political parties and independent candidates must be recorded, preserved and made reasonably accessible”. It gave parliament 18 months to fix the problem. The result was the Political Party Funding Act.
The government argued in their written legal submissions that MVC’s case was “overly ambitious” because, while the ConCourt had set out the “broad principle”, it deliberately and expressly left the mechanics to parliament. MVC was now trying to dictate the mechanics to parliament, in breach of the separation of powers, said Ngwako Maenetje SC in his legal submissions.
Maenetje argued that what the Constitutional Court sought to address in its judgment was the risk of improper influence that large donors could exert on political parties. The court was also clear that what was required was “reasonable access” to donation information. “MVC ignores the court’s repeated references to ‘reasonable’ rather than absolute access to funding information”.
Gillian Benson, counsel for ActionSA, which is also opposing MVC's case, said reasonable access would “logically” mean funding at a level “where it could feasibly result in influence over a political party for an ulterior purpose or support the concept of ‘state capture’".
The DA's counsel, Michael Bishop, said MVC did not give “a single example of another democracy” that required all donations to be disclosed.
But Movshovich said that on a proper reading of the constitution and the ConCourt’s judgment, all information concerning private funding should be disclosed. The ConCourt did not give parliament “open-ended discretion to exclude wide swathes of information from seeing the light of day”. The approach by the other side was a “creative reimagining” of what the ConCourt said.
MVC also argued that there were constitutional imperatives to limit the amount that private funders could donate. R15m per year was too high: a lower maximum limit was “imperative for the effective protection of all persons from malfeasance in governance”.
The prospect of a political party being beholden or grateful to its donors — especially substantial donors — creates considerable scope for corruption
— MVC’s lawyer Vlad Movshovich
“The prospect of a political party being beholden or grateful to its donors — especially substantial donors — creates considerable scope for corruption if indeed that party is elected into a position of public power,” said Movshovitch.
However, Bishop said the ConCourt never held that the constitution required a donation cap at all. The judgment’s focus had been on the secrecy of the donations: “Throughout the judgment, the court describes the problem to be large, secret donations (and not large donations, per se)”.
He said the ConCourt found disclosure of these large donations would be effective at curbing the risk of corruption and undue influence. There was therefore “no basis for this court to hold that the constitution requires an additional mechanism — a ban on large donations”.
A further alleged constitutional defect raised by MVC was about “related party” donations. Movshovich gave a “glaring example”, saying that in the year ending March 2022, two companies “connected to” Capitec founder Michiel le Roux, Fynbos Ekwiteit (Pty) Ltd and Fynbos Kapitaal (Pty) Ltd, donated a total of R30m to the DA. Le Roux is listed as a director of both Fynbos companies, he said.
“It is evident that the Fynbos entities do not represent separate and distinct interests. Rather, they serve as vehicles for Mr Le Roux to circumvent the upper limit on donations,” said Movshovich.
But Bishop said the act caters for a scenario where a person tries to circumvent it, as it says “no person may circumvent ... any of the provisions of [Chapter 3]”. The remedy lies in the act's proper enforcement, he said.
On MVC’s example about Le Roux, Bishop said the details of the claim were made in a replying affidavit, so the DA was not able to properly respond to it. But on its own terms, the example “goes nowhere”.
“Mr Le Roux is only one of the two directors of each company. Absent special voting rules, he does not control either company. And MVC does not tell this court about who each companies’ shareholders’ are. Without this information, this court cannot conclude that the two companies are merely Mr le Roux’s alter egos”.
The case is scheduled to be heard tomorrow and Tuesday.
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