Apex court rules parties must disclose funding for internal campaigns

The Constitutional Court on Tuesday ruled that members of political parties’ executive must disclose donations received for internal party campaigns, a move that’s likely to change the country’s political landscape.  

The case on the constitutionality of the Executive Ethics Code was brought by the amaBhungane Centre for Investigative Journalism.

In an unanimous decision, the apex court confirmed an order of the high court declaring the code, which currently does not require members of the executive to declare the donations they get for party campaigns,  unconstitutional and invalid.

It suspended the declaration of invalidity for a period of 12 months to enable President Cyril Ramaphosa to remedy the defect. The court also ordered the president, who did not oppose the application, to pay amaBhungane’s legal costs.

The ruling comes after the country’s top court had heard a second round of litigation arising from Public Protector Busisiwe Mkhwebane’s report on donations to Ramaphosa’s CR17 campaign, which saw him elected ANC president at the party’s Nasrec elective conference in 2017.

The report was set aside by the Constitutional Court last year when it found there was no duty to disclose under the Executive Ethics Code because Ramaphosa did not personally benefit from the funds.

amaBhungane had argued the code unconstitutionally narrowed the disclosure requirements on the president, deputy president, ministers and members of provincial executives.  

The Pretoria high court set aside the code as unconstitutional, but suspended its order for 12 months “for the defect to be remedied”. The case then came before the Constitutional Court court for confirmation.

In its judgment, the top court held that the purpose of the Ethics Act’s wide-ranging provisions is to ensure that members of the executive do not place themselves in compromising positions that may impair their ability to discharge their duties without any undue influence, which includes the acceptance of undisclosed financial contributions.

The court held that concomitant with the need to enact legislation to fight corruption is the need to regulate, by legislative means, the funding of candidates and political parties.

Until now, the duty to disclose imposed by the code was only activated once a benefit is given to a member of cabinet in his or her personal capacity. 

The court found that this partial disclosure obligation is insufficient to meet the relevant constitutional and statutory obligations because that allowed ministers and MECs to avoid having to make disclosures by structuring their campaign funding so as to place them outside the scope of the “personal benefit” requirement. 

Such a disclosure obligation could be easily evaded by the member of the executive by setting up a separate legal entity to collect donations to support his or her campaign and then ensuring an arms-length relationship with that entity, which he or she could do by ensuring that he or she exercises no control over the funds and does not receive them directly.

The Constitutional Court said section 2(2)(c)(ii) of the Ethics Act must be interpreted to go further than the code by its inclusion of the words “any financial interest”.

It found the exclusion from disclosure of donations for internal political-party elections undermines the Ethics Act and the conflict of interest regime that is essential to promote transparency and to deal with the pervasive corruption bedevilling the country.

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