Democratic Alliance leader and Western Cape Premier Helen Zille
Democratic Alliance leader and Western Cape Premier Helen Zille

DEMOCRATIC Alliance (DA) leader Helen Zille’s decision this week to go public about funding the party received from an "executive" in a company owned by the Gupta family back in 2009, has again brought to the fore the controversial issue of private funding for political parties.

The controversy this time around is largely around the alleged "hypocrisy" of the DA leader and the relationship between The New Age Newspaper, the African National Congress (ANC) and the Gupta family.

Ms Zille last week pulled out of The New Age Business Breakfast because the event was sponsored by state-owned enterprises. The New Age then hit back and released a video clip on its website of Ms Zille thanking Telkom for sponsoring The New Age Business Breakfast in Cape Town last year.

The Guptas are the majority shareholders in The New Age and it is understood the family are benefactors of the ANC and have strong ties with President Jacob Zuma.

In her newsletter this week, Ms Zille says there is "absolutely" nothing wrong with the Guptas giving money to any political party they choose, "as long as they do not request or receive favours from a government using taxpayers’ money as a reward".

Ms Zille said on Wednesday that she would write to Mr Zuma to request that he appoint a judicial commission of inquiry, headed by a retired judge, to investigate the funding of The New Age and the legality of using public money to fund a "pro-government" newspaper that was presumably started by a benefactor of Mr Zuma and the ANC.

Also this week, Ms Zille said the DA had made a "commitment of confidentiality" to its donors, but media reports claiming that she had solicited funds from the Guptas had prompted her to speak out on the issue. She said the donor, who is an executive in a company owned by the Guptas, had suggested she fetch a R200,000 cheque from the Guptas’ house in Saxonwold. Ms Zille said she had decided two years ago to ban any further donations being accepted by the DA from the Gupta family and their companies.

The simmering tension between the New Age and the DA took another twist yesterday when the paper quoted the donor, who is said to be a senior executive at Sahara Computers, a company owned by the Guptas. The donor is quoted as denying Ms Zille’s version of events, saying that at no stage was there a handing over of cheques to Ms Zille at the Gupta residence.

"In fact quite the opposite occurred. There were various meetings at the family home between Zille and members of the Gupta family. The first electronic funds transfer (EFT) was done by Sahara. The rest of the EFTs were also made through Sahara," the executive says.

"Yesterday (Monday) I received four frantic calls from Zille seeking information on the donations to her party. It was clear that she could not remember what had transpired in her engagements with the Gupta family," the donor is quoted as saying by The New Age.

Political party funding has been a prickly issue in South African politics for some time now. Unlike countries such as the US and UK, South Africa does not have legislation or regulations governing private party funding.

Safeguarding democracy

In 2011, Parliament stymied an opposition proposal that aimed to enact legislation regulating the private funding of political parties. The portfolio committee on private members’ bills and special petitions ruled that the proposal by Independent Democrats MP Lance Greyling to regulate political party funding would, if passed into law, be unconstitutional as it would violate parties’ rights to privacy and possibly freedom of association.

However, according to the Institute for Security Studies and democracy advocacy group Idasa, the lack of regulation of party funding in many African countries may allow the rich to wield undue influence on a government’s policy choices, and for this to go largely undetected. Idasa argues that the regulation of party funding — primarily to make it public "who funds whom" — will strengthen democracy, curb opportunities for corrupt practices and promote several constitutionally enshrined rights. These objectives depend on public access to information and the right to know being exercised, which is reliant on a regulatory system being implemented.

Prof Kwandiwe Kondlo, of the Centre for Africa Studies at the University of the Free State, says introducing regulations and legislation regarding political party funding would have a detrimental effect on businesses’ funding of political parties. He says there is "nothing unusual" about the Guptas or any other business funding two different political parties at the same time.

"A number of businesses fund different political parties in order to stimulate political competition. Most of these businesses do not want to be named. And once legislation to promote transparency in political party funding is introduced, we may see these businesses withdraw their funding," Prof Kondlo says.

He says such a scenario could hamper competition in South African politics and subsequently compromise democracy.