The major holes in the political funding framework revealed by the Brenthurst Foundation's apparent funding of Rivonia Circle and RiseMzansi

Pre-registration funders can be concealed, independent candidates will not disclose before the 2024 election (and individuals can bypass maximum donation limits by using multiple entities)

In a previous article I revealed that the Brenthurst Foundation is apparently the funder of Rivonia Circle and was the seed funder of RiseMzansi – both founded by Songezo Zibi when he was a director at the Open Society Foundation. I then discussed the potentially very serious implications of this revelation for South African democracy, examining the composition of the Brenthurst Foundation’s board and also Zibi’s links to others through a lesser known organisation registered as CitizensZA. In this third piece I discuss what it would mean for South Africa’s party funding legislation and regulations if the Brenthurst Foundation – or indeed any other major funder – has been playing this role. Essentially: this reveals a massive loophole in that legislation.

Those familiar with the legislative process over the last five years will know that the legislation - Political Party Funding Act and Electoral Matters Amendment Act - has received a huge amount of attention from ‘civil society organisations’ and the media. So how is it possible that these massive failures were missed? I will argue that this must have happened deliberately. And the funding sources for virtually all the civil society organisations and ‘elections experts’ involved supports that: their funders can be traced to billionaires, and the front/intermediary organisations for those billionaires, who have been pouring money into opposition parties and candidates that benefit from these ‘oversights’.

Wealthy individuals lobbying to influence such dynamics is almost inevitable, but what is disturbing about what has taken place in South Africa is how individuals and organisations loudly claiming to represent the public interest have actually been advancing particular political interests instead.¹ As a result, the public has been horribly misled.

[Note: as I was completing this article I read that MyVoteCounts had just won an urgent court application clarifying funding limits in the original legislation: while much noise may be made out of this, it in fact appears to be a remarkably trivial issue compared to the concerns raised below. And that further supports the conclusion that MVC and other organisations have been deliberately distracting from bigger holes in the funding framework.]

What are the loopholes in political funding legislation?

There appear to be (at least) three major flaws in the political funding disclosure framework that currently exists. Civil society organisations like Rivonia Circle, CASAC, MyVoteCounts and others have made a lot of noise about the legislation being flawed in other respects but, incredibly, none of them have referred to any of these in the lead up to the elections.²

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1. The legislation does not cover funding obtained before a party is registered. This means, hypothetically, that all the leaders of a party could receive a lifetime’s worth of funding from powerful and wealthy donors without ever having to declare it.

For example, a billionaire could give R10billion to a person they want to be elected as president to serve their ideological and commercial interests. That person would then have a range of options open for distributing the money in order to finance a political party without actually having to declare that – or they could declare it as money from ‘my own pocket’, but the original source of the funds would never have to be known by the public.

2. Independent candidates in the 2024 election can avoid disclosing funding until after the election. Because Ramaphosa only signed the amendments covering independent candidates into law on 7 May 2024, 3 weeks before the election, independent candidates will not have to make the relevant declarations before the election. So voters will not know who has made large donations to them. The IEC website on private funding still only refers to political parties and not independent candidates.

A third hole that I came to realise in writing this piece is:

3. Allowing for ‘entities’ without clearly defining these in relation to individuals creates a loophole through which one individual can violate the upper limit on donations by using multiple entities. The most obvious example appears to be Michiel Le Roux, who seemingly donated R30million to the Democratic Alliance in 2023 through two different entities (the upper limit for a single individual would be R15million).

I will not discuss this second loophole much here, partly because it seems to have turned out to be less important in the current election than I feared. Nevertheless, given the extensive powers of the president under the current South African law, any avenue through which a deeply compromised person could be appointed to that post is a serious matter of concern. And it should be noted that even though the second problem will not apply in subsequent elections, the first loophole could still benefit independent candidates. (The dubious circumstances of one independent candidate have already received some coverage; if I have time I will publish a piece tomorrow about independent candidate Zackie Achmat’s possible funding sources).

The third loophole is remarkable because it is widely known, and has been widely reported, that Michiel Le Roux is the person behind both ‘Fynbos Kapital Proprietary Limited’ and ‘Fynbos Ekwiteit’, yet it appears none of the civil society organisations providing ‘oversight’ of these issues has seen fit to challenge that. (I checked the company records and there is only one other active director of these two entities: Johan Le Roux, Michiel’s son). This is less surprising when you discover that many of these organisations receive funding from Le Roux through his more-anonymised Millenium Trust. Nevertheless, it looks like a blatant violation of the intention of the law that is enabled, basically, by bad legal drafting and those responsible for oversight wilfully ignoring this.

Parties that may have benefitted from the loopholes

The political party that drew my attention to this problem was RiseMzansi. There was already the obvious question of who was financing RiseMzansi’s predecessor, Rivonia Circle, which clearly had a lot of money for a new civil society organisation – hosting its functions in expensive venues, giving out lots of branded merchandise, seemingly able to pay the salaries of individuals who likely would have expected fairly significant sums, and so forth. That Rivonia Circle kept hiding its funders only amplified these concerns. Then RiseMzansi was established and had very similar characteristics: lots of money but concealed funders. RiseMzansi only made its first public funding declaration at the very last minute when it reached the point where its first post-establishment funders would have to be declared by law. It declared a large donation (the maximum allowed) by one member of the Oppenheimer Family, but that clearly did not explain its initial funding. Then I was told by a very reliable source that the Brenthurst Foundation – an organisation created by the Oppenheimers - was the core funder of both. That would make RiseMzansi likely the biggest beneficiary of this loophole.

If this is what took place, then RiseMzansi could have received tens of millions, even hundreds of millions, in pre-registration funding. For instance, that could have been the source of funds for the thousands of ‘paid organisers’ the party has had bulking up the attendance numbers at its events, campaigning and putting up posters. In one interview Songezo Zibi mentioned 1,000 full-time ‘paid volunteers’ with the intention of expanding to 5,000. At a monthly wage of merely R4,000 those would cost R20million in one month: the amount rapidly exceeds any donations the party has declared.

What other parties may have benefitted? ActionSA (Herman Mashaba) and BOSA (Mmusi Maimane) may be other examples. Maimane also played the game of establishing a ‘civil society platform’ (the ‘One South Africa Movement’) that he was keen to emphasise was not a political party, but inevitably ended-up registering a party. To my knowledge, the funders of OSAM remain unknown and undeclared. As regards ActionSA, Mashaba made a number of dubious claims about financing ActionSA himself that have never been supported by solid evidence and it seems likely he concealed the seed funder(s) of the party.

What we can learn about ‘civil society’ and the media about the concealment of these loopholes

As I already mentioned, the legislation on political funding has received a lot of attention and scrutiny from so-called civil society organisations and the media. So has the legislation on independent candidates. And such scrutiny has happened in Parliament and the courts – all the way to the Constitutional Court. Some of those involved are very experienced lawyers and activists. So there are two main options here:

1. All those involved are basically incompetent because they missed three major loopholes that could be used by malovelent actors to fatally undermine the democratic process

2. The oversight was not accidental but deliberate on the part of some of those involved – and those groups steered others away from these issues through litigation and ‘activism’ on other aspects.

I believe 2. is the most likely explanation. Given the calibre of those involved and the resources thrown at the legislation, option 1. is extremely implausible. Consistent with this view is the evidence that all the major ‘civil society organisations’ involved, and some of the media outlets reporting on the process, are funded by individuals or entities who would want these loopholes to be overlooked.

I will discuss these organisations and their funders in the next article. Here is a list of some of the key CSO players with funders or conflict of interest in brackets:

One South Africa Movement [funders undeclared but founder went on to start Build One South Africa potentially benefitting from the first loophole, received subsequent funding from Martin Moshal, Mary Slack (Oppenheimer) and Rob Hersov]

Rivonia Circle [Brenthurst Foundation/Oppenheimers]

CASAC [Michiel Le Roux, Oppenheimers, Open Society Foundation]

MyVoteCounts [Michiel Le Roux, and a director with links to Rob Hersov]

OUTA [Michiel Le Roux]

DemocracyWorks [full funders unclear, lists the Open Society Foundation and US Department of State as ‘partners’; director William Gumede ran trips to Israel for the Jewish Board of Deputies, subsequently became coordinator/chairman for the ‘Moonshot Pact’ coalition of opposition parties]

Inclusive Society Institute [funders undeclared and unknown]

Independent Candidates Association [funders undeclared and unknown]

Helen Suzman Foundation [funders not currently declared but the former CEO who oversaw this work left to join ChangeStartsNow and is now working with RiseMzansi which apparently benefitted from the first loophole]

1. I should note that the parties I raise concerns about here are ones who have benefitted from serious biased in the media and civil society. I am not writing about concerns with funding of parties like the ANC and EFF because the media and civil society can generally be relied on to interrogate those extensively. For example, the EFF election campaign appears to have cost much more than it has declared and the party has been funded by a known tobacco smuggler in the past (Adriano Mazzotti). The ANC, and the ANC’s president Cyril Ramaphosa, have been involved in a range of funding scandals and of course the party has in the past been best-placed to secure funding using promises of reciprocation because it has been the governing party. One particular interesting link is Patrice Motsepe, Ramaphosa’s brother-in-law, who has significant interests in renewable energy and has donated large sums to the ANC at a time when Ramaphosa’s energy transition policies appear to have rushed the green transition for the benefit of private and foreign interests.

Then there are parties like BOSA, ActionSA and the Democratic Alliance whose leaders have very concerning ties with a foreign state (Israel) and have received extensive funding from a billionaire (Martin Moshal) worryingly close to that state. All of this is well-known and I do not have much insight to add to that at present. In other words, there are many serious threats to South African democracy at the moment but I am focusing on those that even South Africans who follow these issues closely are unlikely to know about because they have been actively misled.

2. Some of the formal submissions included the need to extend disclosure requirements and the associated restrictions to independent candidates, but I have not seen any indication of the urgency of doing that soon enough to ensure disclosure before the 2024 elections. Moreover, the litigation and other interventions from many of these organisations slowed down the process and thereby contributed to the very late signing into law of the legislation.