POLITICS

ANC cash crunch behind Russian nuclear deal?

Politicsweb.co.za |
31 October 2014
DA leader Helen Zille suggests it is, defends her party's stance on party funding transparency

The Mail & Guardian newspaper announced on its front page on Friday that "The ANC is broke." The paper reported that the party had been unable to pay some of their staff their salaries for over two months, while others had repeatedly been paid late. There were also rumours circulating that the party was planning to lay off close to half of its staff in a bid to cut costs (see here).

The immediate cause of the party's cash crunch, the newspaper stated, was the decline in the ANC's support in the 2014 national and provincial elections. This had left the part with 16 fewer seats in the parliament and 13 fewer seats in the provincial legislatures. This had resulted in an R20m decrease in electoral funding from the Independent Electoral Commission. The newspaper further reported that:

"Earlier this month, angry staff members confronted senior ANC leaders, demanding salary increases. "We said to them: ‘Comrades, please bear with us ... the ship is tight'," [ANC Secretary General] Mantashe told the M&G. "When things turn around we will look at what option we have."

The newspaper added that apart from the decline in state funding the party has also being struggling "to raise money from private funders over the past few years. It now faces liquidation threats from suppliers who are owed millions of rands for services they rendered to the ANC."

The M&G's front page was tweeted by Grubstreet editor Gill Moodie as part of her daily front page round-up:

In reply DA leader Helen Zille commented:

To this Gill Moodie replied:

Zille responded:

To which Moodie replied:

Zille answered:

DA MP Geordin Hill-Lewis also commented:

Moodie commented in reply to Zille:

Whether the ANC's cash crunch is indeed a driving force behind the Russian nuclear deal is an open question. However, the organisation certainly has form in this regard. In the past similar funding shortages have been followed by major corruption scandals.

The ANC had first run short of funds soon after coming to power in 1994 after the huge flow of foreign funding it had received in the early 1990s had declined after its accession to power. It had subsequently struggled to make ends meet. The Treasurer General's report to the ANC's 50th National Conference in December 1997 put the problem as follows:

"The ANC had largely depended on friendly countries and institutions for its funds. Most of these donors were in foreign lands. The 1994 elections created the perception or expectation that a ruling Party had access to the country's resources. Also, the purpose for which we were funded, to defeat apartheid, had been accomplished. So our erstwhile donors were reluctant or unable to continue funding us. Our members' contributions were and are negligible."

The report noted however that "We are pleased to report that at last a firm foundation has been laid for long term self-sufficiency." It was shortly afterwards that the ANC government pushed through the notoriously corrupt arms deal, having decided upon it in principle at cabinet level in 1997.

In late 2003 again the ANC was strapped for cash, ahead of the 2004 elections, after former President Nelson Mandela had stopped foreign fund raising for the organisation after his fall out with President Thabo Mbeki. In May 2005 the Mail & Guardian reported that:

"...R11-million of public money was diverted to African National Congress coffers ahead of the 2004 elections. In what may be the biggest political funding scandal since 1994, the M&G has established that South Africa's state oil company, PetroSA, irregularly paid R15-million to Imvume Management-a company closely tied to the ANC-at a time when the party was desperate for funds to fight elections. The M&G possesses bank statements and has seen other forensic evidence proving that Imvume transferred the lion's share of this to the ANC within days. PetroSA this week said it was unaware of this. The ANC denied impropriety and said it was not obliged to discuss its funders."

Carol Paton subsequently reported in the Financial Mail (January 19 2007) that "Imvume made the controversial donation at a point when the ANC was in a deep financial crisis. The salary bill - then around R7m/month - had not been paid for six weeks. When the Imvume payment came through, just before Christmas, it was instantly swallowed to pay salaries for the last two months of the year." Paton quoted an ANC staffer as commenting: "The Imvume money paid our salaries. Everybody thought it was for the ANC's election campaign, but R12m would never have come near to covering a fraction of our campaign costs."

Click here to sign up to receive our free daily headline email newsletter

 

Should consumer benefit guide merger decisions?: Zakhele Mthembu on the Compeittion Commission
André Pienaar: Sibanye Stillwater, the future of nuclear energy, space investments, and cybersecurity
The Handmaid’s Tale: A chilling reflection on women’s autonomy and control
🔒 The Economist: The opportunities—and dangers—for Elon, Trump’s disrupter-in-chief
Mailbox: Digitising governance – A path to transparency and prosperity for SA

iSERVICE FEED