ActionSA has announced its intention to take legal action against the Independent Electoral Commission (IEC) over what it describes as a "flip-flop" on the Commission's initial commitment to investigate a debt settlement agreement involving the African National Congress (ANC) and Ezulweni Investments.
According to ActionSA this comes after the agreement, worth over R150 million, raised serious concerns regarding adherence to the Party Funding Act.
ActionSA’s national chairperson Michael Beaumont, emphasised the Party’s increasing concern that the Party Funding Act is being undermined due to non-compliance and the IEC’s lack of investigative authority.
Beaumont said that the IEC recently took several political parties, including the ANC, to court for failing to submit audited financial statements.
These financial statements are crucial as they safeguard against undisclosed donations he said.
Despite the court imposing a fine of R40,000 on these parties, ActionSA spent double that amount to achieve a clean audit outcome for three consecutive years.
Beaumont noted that ActionSA’s concerns centre around the legality of the ANC's settlement with Ezulweni Investments.
“Yesterday the IEC’s legal team responded to a letter of demand reversing their earlier position and claiming now that there is no prima facie case to investigate.”
The settlement, which was confirmed in December 2023, involves a debt that should have been significantly higher than R150 million, given the market-related interest from 2019.
ActionSA also noted that the ANC only disclosed R10 million in the relevant quarter, a period during which the party was financially distressed and unable to pay striking workers.
Additionally, any donor who paid more than R100,000 towards the settlement should have been declared as making a donation in kind, but no such declaration was made Beaumont said.
The settlement would have required at least ten donors to be disclosed, yet no such disclosures occurred, Beaumont said.
‘’It is necessary to observe that ActionSA has discovered that Ezulweni Investments is a registered vendor to at least one municipality in KwaZulu-Natal where it has been awarded tenders.’’
This raises concerns that South Africans might indirectly foot the bill for this settlement he said.
Despite ActionSA’s repeated attempts to engage the IEC on this issue, the Commission has not provided any substantial updates since March 2024, when it claimed to be handling the matter in accordance with the Act.
ActionSA’s legal team now plans to initiate a two-part legal action: first, to obtain the IEC’s record of decision to assess the rationality of their decision, and second, to challenge the rationality of the decision if necessary.
Beaumont also stressed the importance of administrative law principles, which require that the exercise of public power by the IEC be subject to scrutiny.
In addition to the Ezulweni matter, ActionSA has lodged new complaints with the IEC against the Economic Freedom Fighters (EFF) and the Umkhonto weSizwe Party (MKP).
The party argues that these political parties' disclosures do not align with their campaign expenditures.
“In the case of the EFF, R3.5-million was disclosed since the start of the 2022/2023 financial year. This in the context of an election in which the EFF is estimated to have spent over R100-million on stadium events alone.
“Perhaps even more absurd are the disclosures by the MK Party. Since its registration, it managed disclosures of less that R400,000. This in the context of an election in which it emerged as one of the most well-funded political parties. Also with speculation of foreign funding,” Beaumont said.
ActionSA contends that the IEC is the only government body empowered to investigate such discrepancies and that it cannot rely solely on parties self-incriminating before taking action.
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