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ActionSA has filed an application with the North Gauteng High Court to compel the IEC to disclose its record of decision refusing to investigate the African National Congress' (ANC) R102 million debt settlement agreement with Ezulweni Investments.

This follows a protracted exchange between ActionSA and the Independent Electoral Commission, culminating in the latter refusing to investigate the matter unless ActionSA essentially provided them with the evidence – something the Act requires of the IEC with its investigative powers.

In December 2023, the ANC announced that it had settled a substantial debt of R102 million with Ezulweni Investments for election material procurement. Given the Funding Act’s requirement of a market-related interest, this amount would have escalated to approximately R150 million at the time of the settlement.

The agreement between Luthuli House and Ezulweni raised significant concerns:

That the settlement was unlikely to be lawful in terms of the Party Funding Act given that the ANC only had R10 million in disclosed donations and was unable to pay its striking workers at the time.

Any failure to apply a market-related interest to the original R102 million amount owing in 2019, and in terms of any period for ongoing payments, would be regarded as an interest-free loan and unlawful in terms of the Act.

Any discount on the amount including interest, exceeding R15 million, would be an unlawful donation-in-kind to the ANC by Ezulweni Investments.

Any funds received or involved in the settlement of this debt could not be received from foreign individuals or entities.

Essentially, only a series of disclosed donations approximating the amount owed would be a legitimate explanation for how the ANC settled this debt in a manner that adheres to the Act and other laws of our country.

Of particular concern is the discovery that Ezulweni Investments is a registered vendor to the state that received state contracts in at least one municipality in KwaZulu-Natal, raising the additional concern for any non-market related debt settlement being compensated with taxpayers money.

ActionSA reached out to the IEC to request an investigation into the matter. In March of 2024, we received formal correspondence from the Electoral Commission indicating that they were handling the matter under the Political Party Funding Act (PPFA), implying that they were investigating the matter. Later in 2024, the IEC denied any investigation and claimed to have resolved not to investigate the matter.

Our application aims to uncover the IEC’s rationale for deeming an investigation unnecessary given that it is compelled to act in a manner that gives expression to the Constitutional Court’s stipulation for transparency in party funding. This includes the IEC’s record of decision and the settlement agreement itself, without which the IEC could not have rationally declined to investigate. Should ActionSA receive a record of decision that reveals, as we suspect, that the Commission's decision to not investigate was irrational – ActionSA will challenge this in the courts.

This legal initiative underscores our belief that the PPFA must be enforced rigorously and without fear or favour. It is evident that some parties cannot be trusted to self-disclose and to act in a lawful manner and that this has created an uneven political playing field which advantages those willing to break the law. The reluctance of the IEC to investigate the ANC, along with other parties reported for potential non-disclosure, raises serious questions about the purpose of the Funding Act.

Our application is a step towards enhancing accountability in political party funding. South Africans have the right to know who finances the parties they support, and it should be expected that the opposition would step in in to provide this information when electoral bodies fail to meet their obligations.

Issued by ActionSA National Chairperson Michael Beaumont