Political funding bill: Be careful of what you wish for

Martin van Staden says legislation is likely to hurt opposition parties most

Violations of the Rule of Law undermine the Political Party Funding Bill

The Political Party Funding Bill appears to be well on its way to becoming law in South Africa. Its intention to shed light on the identity of those who fund political parties is noble, and arguably essential in a free and just society. But our legislators’ irresponsibility in their law-making stands to undermine these good intentions and lead to severe consequences for our democracy.

Very few people disagree with the fact that the taxpaying public has a right to know who funds political parties. Indeed, the maxim ‘nothing about us, without us’ and that the legitimacy of government depends upon the consent of the governed, both imply that those who seek to and who do rule over us must be completely transparent with us. Practically, we want to know who funds our political parties so that we know whether they are representing us, or representing other group interests that are not in the public interest.

Parliament’s conduct, however, will have an adverse impact on the bill. In an ideal society with a constitutional government, the bill will simply inform the public about who funds political parties. In our reality, however, the bill is likely to cause potential financiers of opposition parties to withhold their funds and to empower nefarious elements within government to take punitive action against those opposition funders who have not been scared into submission.

Imagine, for instance, a company whose directors are card-carrying members of the opposition Socialist Party. They have been funding the party for the past decade, as it squares up against the governing Farmers’ Party. This funding has up to now been anonymous, as the company carries on with its business and the Socialists enjoy the extra funding. The new Political Party Funding Bill, however, passes, and suddenly this relationship between the company and the Socialist Party is public information. Not only does the public now know, but so do the company’s regulators. Those regulators are, of course, all card-carrying members of the Farmers’ Party.

Three things can now happen. Ideally, the regulators would disregard the newfound information. Secondly, the regulators take action against the company by, for instance, refusing to renew some or other licence to operate, thereby undermining the funding of their opposition political group. Or finally, the company simply thinks the regulators are going to bully them, and decides to withhold funding from the Socialist Party going forward. In two of the three scenarios the opposition party will be severely undermined by the ruling party.

How can this be? Succinctly, because of discretionary powers.

The Constitution provides in section 1(c) that the Constitution and the Rule of Law are supreme in South Africa. The Rule of Law, among other things, means that the law governs society, not the arbitrary whims of officials. This means that when legislation gives discretionary powers to officials, those powers must be narrowly and strictly defined, and not open-ended. Open-ended discretionary powers enable officials to pursue hidden and corrupt agendas.

In our present-day reality, Parliament has taken no heed of section 1(c) of the Constitution, and our courts have unfortunately endorsed this irresponsible behaviour under the cloak of deference and separation of powers. Practically every new piece of legislation that is passed empowers some minister, regulator, or petty official to make substantive and wide-ranging decisions based on nothing more than their own subjective whims. Industrial regulators can summarily suspend, refuse to renew, or even refuse to issue licences or permits or certificates on flimsy grounds dressed up in the language of “the public interest”. Practically every sector of our economy is governed by such legislation, and thus labours under the thumbs of officials, virtually unrestrained by law.

If the Political Party Funding Bill becomes law in South Africa while Parliament and the courts continue to pass and endorse such legislation, the future of our democracy is in trouble. Opposition parties stand to lose a substantial amount of their funding because currently-anonymous financiers will wish to avoid getting on the bad sides of their regulators. Even if said regulators are of impeccable moral character and have no intention of engaging in such corrupt behaviour, financiers’ fears that such corruption may occur will be enough to cut the funding.

The African National Congress is not the target of this article. Even where the opposition governs, similarly-irresponsible provincial legislation and municipal bylaws are passed. Besides, there is no guarantee that the ANC will always be in government.  It too could in the future become the victim of this phenomenon. The Political Party Funding Bill will presumably be law for quite a while yet, regardless of who is in government and who is in opposition.

South Africans should not support the bill simply because, on paper, it is noble and constitutionally sound. We must be awake to the real-life consequences the bill may yield, and what the implications of those consequences may be for our democracy.

Martin van Staden is Legal Researcher at the Free Market Foundation and is pursuing a Master of Laws degree from the University of Pretoria.

This article was first published by the FMF.