ActionSA has declared its intent to initiate legal proceedings against the Independent Electoral Commission (IEC), accusing the body of a “reversal” on its initial promise to investigate a contentious debt settlement between the African National Congress (ANC) and Ezulweni Investments. The settlement, exceeding R150 million, has sparked significant concerns over compliance with the Party Funding Act.
Michael Beaumont, the national chairperson of ActionSA, voiced growing alarm over what he perceives as a weakening of the Party Funding Act due to widespread non-compliance and the IEC’s hesitance to exercise its investigative mandate. Beaumont pointed out that the IEC had recently taken multiple political parties, including the ANC, to court for their failure to submit audited financial statements, which are crucial for ensuring transparency and accountability in political funding.
While the court imposed a R40,000 fine on these parties, Beaumont highlighted that ActionSA had invested double that amount to maintain clean audit outcomes for three consecutive years. The crux of ActionSA’s concern lies in the legality and transparency of the ANC’s financial dealings with Ezulweni Investments.
“Just yesterday, the IEC’s legal team backtracked on their previous commitment, now asserting that there is no prima facie case warranting an investigation,” Beaumont remarked.
The settlement in question, formalised in December 2023, involved a debt that should have been significantly higher than R150 million, accounting for accrued interest from 2019. ActionSA further noted that the ANC disclosed only R10 million in the relevant quarter—a period marked by severe financial strain and an inability to meet payroll obligations. Beaumont underscored that any contribution exceeding R100,000 towards the settlement should have been declared as a donation in kind, yet no such declaration was made.
Beaumont also raised a red flag over the fact that Ezulweni Investments is a registered vendor for at least one municipality in KwaZulu-Natal, where it has been awarded tenders. This situation raises the specter of South African taxpayers inadvertently footing the bill for the ANC’s settlement.
Despite numerous attempts by ActionSA to engage the IEC on this issue, the Commission has failed to provide any substantial updates since March 2024, when it claimed to be managing the matter in line with the Act.
ActionSA’s legal strategy will unfold in two phases: first, to secure the IEC’s record of decision in order to scrutinize its rationale, and second, to challenge the validity of that decision if deemed necessary. Beaumont emphasised the critical importance of upholding the principles of administrative law, insisting that the IEC’s exercise of public power must be subject to rigorous examination.
Beyond the Ezulweni controversy, ActionSA has lodged fresh complaints with the IEC against the Economic Freedom Fighters (EFF) and the Umkhonto weSizwe Party (MKP). The party contends that the financial disclosures made by these parties are inconsistent with their actual campaign expenditures.
“In the case of the EFF, a mere R3.5 million has been disclosed since the start of the 2022/2023 financial year, despite the party reportedly spending over R100 million on stadium events alone during the election cycle,” Beaumont stated.
He also pointed to glaring discrepancies in the MK Party’s financial reports, noting that since its registration, it has disclosed less than R400,000, even though it emerged as one of the most well-funded parties, with rumours swirling about foreign funding. ActionSA argues that the IEC is the sole governmental authority capable of investigating these discrepancies and that it cannot rely solely on political parties’ self-reporting before taking decisive action.
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