Since 2004 ABSA bank has been providing regular funding to the political parties in parliament (the precise formula is, as far as I am aware, not in the public domain.) However, it seems that in late February these parties were informed by ABSA that, unlike in 2004, they would only receive their allocation after the elections had been held. This decision provoked an indignant letter (see here) from UDM leader Bantu Holomisa to the bank's CEO, Maria Ramos, in which he complained that his party needed the funds for campaigning and they had had a legitimate expectation that they would be disbursed beforehand. Holomisa commented:
"One is puzzled about this change of policy. It would be tragic for multi-party democracy if you arrived at this stance as a result of the recent publicity stunt of the ANC, who created a fracas and queried ABSA's supposed support for COPE. Why must all the opposition parties be punished because of the infighting in the ruling party and its conflict with its defectors?"
In reply ABSA's executive director for communications, Happy Ntshingila, issued a statement saying that: "Absa remains committed to supporting our young democracy through financial contribution to political parties which are registered with the Independent Electoral Commission, which parties further obtain three parliamentary seats or more as a result of an election. This year we have decided to provide this funding after the forthcoming general election because of a possibility that some parties currently in this parliament may not be returned after the election. Absa contributes to parties meeting the criteria stated above and not political campaigns."
One wonders whether this is the whole truth. In particular, which of the parties "currently in parliament" is ABSA alluding to? The bank's criteria already exclude parties (such as NADECO) which are the product of floor crossing - and which are the least likely to be "returned after the election." The parties which - after two floor crossing periods - are on the margins are the UDM which has six seats in the national assembly, the ACDP (four), the Independent Democrats (four), the Freedom Front Plus (four), and the United Democratic Christian Party (three). The ACDP, ID, FF+ and UCDP all have an additional seat in the National Council of Provinces. It is not clear whether ABSA still provides funding to the Pan Africanist Congress which won three seats in 2004, but is only left with one after floor crossing.
To reach the three seat threshold just in the national assembly a party needs to win 0,75% of the vote. The most recent national poll conducted by Markinor in November 2008 indicates that the ACDP, UDM, and ID are all likely to meet this goal comfortably. The FF+, UCDP and PAC seem to be in a more iffy position. All have a good chance of pulling through in the end, given that opinion polls are not very accurate when it comes to measuring such low levels of support. In any event their situation was no less marginal in 2004 - when ABSA was quite willing to provide funds before the election. If none of these three parties make it back into parliament with the requisite three seats the sums they would have received from ABSA would, in any event, have been nominal.
Could there just be another consideration at play? The arrival of COPE onto the political scene presented ABSA - perhaps more than other corporates - with an acute dilemma. The bank's existing formula for allocating funds is dependent upon the party having contested the previous election. As a result COPE - which was only finally registered with the IEC in December last year - would not have qualified for any funding at all (whatever its current levels of popular support). Yet, to have paid out funds to all parties before the election but not COPE would certainly have attracted controversy - particularly given the close historical ties of certain top ABSA officials to the ANC. The bank's chairman Gill Marcus is an ex-deputy finance minister in the ANC government and a former member of the party's national executive and national working committees. Ramos meanwhile is a former director general of finance and is married to current ANC finance minister and NEC member, Trevor Manuel.
However, if ABSA did change its formula to accommodate the anomaly thrown up by the formation of COPE, this would have attracted the wrath of the ANC Youth League (and others). In November last year the ANCYL warned the bank against allowing Mbhazima Shilowa's wife, Wendy Luhabe, to use "ABSA platforms to mobilise and galvanise support for the rebel group" "ABSA should be come out very clear on its relations and engagement with political formations in South Africa, so that we can have a thorough understanding on what ABSA really represents," it said in a statement. No doubt Julius Malema & Company would have taken a dim view of any changes in the rules, in the run up to the elections, to allow for payments to be made to the "rebel group."
The decision to delay payment until after the election may annoy Holomisa, but this is a small price to pay in the circumstances. By delaying the disbursement the existing formula won't have to be changed, while COPE will effectively be accommodated. Quite apart from anything else this solution (if it is one) is fair. Of course it could just be coincidence that this change in the payment timetable allows ABSA to extricate itself from a rather thorny political dilemma. It may simply be that, as Ntshingila suggests, it was simply occasioned by a deep concern that the UCDP (et al.) was not going to make it back into the next parliament.
Click here to sign up to receive our free daily headline email newsletter
