Weekly Worker 701 Thursday December 13 2007 Subscribe to the Weekly Worker

Shaky SACP tries to steer ANC

Next week the African National Congress holds its conference, where president Thabo Mbeki is being challenged for the leadership by Jacob Zuma, who is supported by a faction of the South African Communist Party. South African socialist Terry Bell looks at the financial problems of the SACP and the party’s role within the ANC

The South African Communist Party denies allegations that it meddled in the affairs of the ANC in the run-up to the critical national conference in Polokwane. But the simple truth is that this party of fewer than 20,000 members exercises tremendous influence throughout the governing alliance.

SACP general secretary Blade Nzimande also denies claims that the party is in financial difficulties or that it is involved in financial impropriety. But a swirl of rumour, allegations and evidence of financial wrongdoing now surround a party that is still struggling to come to terms with the present. The SACP has a long history of clandestine operations and ‘struggle accounting’ and these habits persist, especially on the financial front.

When the Berlin wall fell in 1989 and the Soviet Union imploded, the SACP not only lost its ideological moorings: it also lost its financial lifeline. For decades, the party had been able to rely on support in one way or another from Moscow. This was often not in the form of direct handouts, but, especially after the party reconstituted itself underground in 1953, there was access in terms of resources, training and business opportunities. Commercial committees of the SACP arranged everything from tours to eastern Europe to commodity trades with the Soviet Union and its satellites, with the profit - or much of it - going into party coffers.

All that changed as the wall fell and the Soviet Union fragmented. But there was still China, the growing Asian economic giant that professed a brand of social and economic organisation that roughly fitted with concepts held dear by the SACP. So it was to China that a new generation of SACP entrepreneurs turned. But this was at a different time: with a negotiated settlement in South Africa, many SACP members saw this as heralding an end to an era of secrecy. They were wrong and many of the party’s actions and its various financial dealings remain very much ‘in the family’.

Despite the protestations of Nzimande that “We are poor, but not in a mess”, the party is deeply in debt. Nzimande also maintains that the finances of the party and associated organisations are “in order” and that “the books have been audited”. He blames “disgruntled people who have lost their powerful positions” in the SACP for any claims to the contrary. This is primarily a reference to suspended former party treasurer Phillip Dexter and effectively axed party politburo member and embattled Cosatu president, Willie Madisha. They are said to have personal axes to grind.

Dexter in particular has been scathing about the lack of financial accountability within the SACP and its related structures. Evidence also exists about substantial debts ranging from as much as R2 million (£154,000) owed to the South African revenue service to still unexplained irregular transfers of funds to the SACP from organisations such as the Chris Hani Institute.

In a reference to the Polokwane succession battle, Dexter maintains that the only factions within the SACP with axes to grind are those “who have led a sustained, factional campaign to ensure that comrade Jacob Zuma is elected president of the ANC”. However, SACP chairperson Gwede Mantashe also blames “disgruntled groups”, among them “minorities who take a moralistic stand”, for much of the information and allegations now circulating about the SACP. While he admits “there are problems”, he says the SACP leadership is “working round the clock” to correct them.

But Mantashe, a former general secretary of the mineworkers’ union, also states bluntly: “We cannot continue to operate like an underground party. We have to clean up this place.” The hope, as another politburo member puts it, is that mature discussion will replace “expulsions and suspensions”. However, Mantashe is also convinced that the timing of the revelations, coming in the weeks leading up to the Polokwane congress, is evidence of a conspiracy.

The controversy broke in August when businessman Charles Modise laid a complaint about the claimed theft of R500,000 (£38,000) at the Bedfordview police station in Gauteng. He said he had given the money, in two black plastic rubbish bags, to Madisha. Modise added that he was subsequently thanked by Nzimande for the donation. But Dexter, the party treasurer at the time, knew nothing of the donation and the money apparently disappeared. So Modise, who is now in jail on fraud and corruption charges unrelated to the donation, went to the police.

Says Mantashe: “Modise was told to lay the charge. By whom I don’t know, but he was told so there could be an entry point and information could be fed to the media.” It was here, he claims, that investigating journalists came “to be used”.

What this event did do was trigger a very public row between Nzimande and Madisha. This tied in with the bitter differences that emerged between Dexter and Nzimande. “But if Blade is a monster, Dexter and Madisha helped to create him, because they were inseparable a few years ago,” says Mantashe.

It is true that Madisha set up the now controversial and secret Kopano Solidarity bank account with Nzimande, which was registered at Nzimande’s home. Madisha says he had nothing more to do with it. However, R124,500 (£9,500) in cash was withdrawn from the account.

Dexter, as party treasurer, also played a leading role with Nzimande in establishing entities such as the Dora Tamana Cooperative Centre (DTCC) and the Chris Hani Institute. Both of these organisations are now embroiled in financial controversy, including a possible fraud investigation. They were established, under SACP control, to enable the party to “leverage resources” and to provide vehicles to extend SACP influence.

The insistence on control was fiercely argued about and eventually led to the resignation from the DTCC board of one of the SACP’s rising young stars, Mazibuko Jara. In his letter of resignation, Jara noted: “In my view, the SACP is obsessively preoccupied with crude control of the DTCC and a narrow approach on how it can benefit from DTCC resources.” Jara would not comment, but other party members maintain that this is a reference to arguments that financial resources were often “plundered” or diverted into propping up financial shortfalls within the SACP or to pay for party campaigns.

There is a long history of such diversion of funds and lack of transparency which was, in the underground past, justified on the grounds that “the enemy” should not know where funds originated or where they went. Today, with creditors hovering, cash transactions and a general lack of transparency in financial matters may also be deemed essential.

Such ‘struggle accounting’ has carried on for more than 50 years, particularly during the exile period. Then, large amounts of cash were often transported in holdalls or suitcases by individual party members. Such cavalier attitudes to money persisted even after the unbanning of the SACP in 1990, with at least one confirmed case of a bag of - uncounted and unreceipted - money being left at the home of a Cape Town party member, where it was picked up two days later.

This was at the time that China stepped into the commercial breach, with trading prospects brokered through party contacts. Two well-known Eastern Cape businessmen, one of them an SACP member, used these contacts to arrange the import, at very favourable rates, of T-shirts from China for the 1994 ANC election campaign. These were printed by other party business contacts in KwaZulu-Natal. Only the deal seems to have turned sour when the importers and printers failed to pay the agreed commission to the SACP.

With a dearth of subs-paying members and little external financial support, there were also other attempts at getting legitimate business ventures off the ground to fund the SACP. Rows still rage about why these failed, but fail they did. This meant that the party was often forced to operate on a hand-to-mouth basis, while at the same time maintaining a high - and costly - national profile. Cash donations and ‘struggle accounting’ may have been seen as the only solution.

According to Mantashe, this led to “fights in the party”. He adds that it is a situation that not only must change, but is changing. However, given what is already known of the extent of the problems facing the SACP, this may be a lot easier said than done.

This article first appeared in the Cape Times

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