POLITICAL FUNDING: Scathing judge slaps R90,000 fine on Good party for attempt to hide donation

The Electoral Court in Bloemfontein has found the Good party and its secretary-general, Brett Herron, guilty of contravening the Political Party Funding Act for not declaring a R900,000 donation, made in the lead-up to the 2021 local government elections.

In a scathing judgment, the court found that the party had made a “deliberate attempt to conceal the donation” and then tried to explain the payment through “far-fetched and untenable” denials. The court made its ruling in chambers, off court papers, an issue Good intends to challenge on appeal. 

The decision comes as Herron runs for Cape Town’s mayoral seat in a joint bid with Rise Mzansi. 

The Electoral Court judgment surrounds an order of T-shirts and marketing materials the party made from Kairos Communications in the run-up to the 2021 municipal elections. Another company, Electrox Properties, paid R900,000 towards the total cost of R1,972 365.

The donation wasn’t disclosed to the Electoral Commission (IEC) by either the party or the companies involved. The scheme was revealed by Shaun August, a former party member who was expelled in May 2023. He rejoined the DA and in the same year disclosed the details of the deal to the IEC. 

“Mr August was also the official at the Good party who, at the relevant time, was the person responsible for negotiating the procurement of the T-shirts and who was directly responsible for securing the donation. Importantly, his unequivocal assertion that the R900,000 was not paid by the Good party, but by a sponsor, was not seriously challenged by the party in their answering affidavit in this application,” Judge Leicester Adams wrote in the judgment. 

Judge Adams noted that the IEC corroborated August’s initial report by conducting its own investigation into the payment. It found that while Good had ordered the T-shirts and marketing materials, Electrox Properties paid R900,000 to Incorp Trade and Investment CC, a company linked to Kairos Communications. 

“Moreover, the payment of the R900,000 is confirmed by the invoice from Kairos Communications. In that regard, the evidence indicates that Electrox Properties paid R900,000 to Incorp Trade and Investment, but the paperwork recorded that the said sum was received by Kairos Communications.

“This, in my view, can safely be interpreted as Electrox Properties having made payment to Kairos Communications of R900,000 on behalf of the Good party,” the judgment said.

Far-fetched denial  

Adams was critical of Good’s response, saying the party’s explanation “should be rejected out of hand”.

“What is more, the denial by Electrox Properties of this payment to Kairos on behalf of the Good party rings hollow. The explanation by Electrox Properties that the payment was in respect of ‘a commercial transaction’, the nature of which it has chosen not to disclose, is so far-fetched that it can be rejected out of hand if regard is had to the evidence as a whole.

“Importantly, the payment of R900,000 followed enquiries by Mr Govender (the owner of Kairos and Incorp) to Mr August, during their written communications, as to when the payment would be made for the T-shirts. When the payment was made, Mr Govender also acknowledged receipt and confirmed same with Mr August. That, for me, puts paid to the version of the Good party,” the judge said. 

Adams also noted that Herron, who is the party’s accounting officer, “was copied in most of the correspondence relating to the payment of R900,000 and the donated T-shirts”.

The court also had regard to what the Electoral Act defines as a donation, saying it includes a “donation in kind”.

What’s considered a donation in kind?

• Any money lent to a political party, independent representative or independent candidate other than on commercial terms;

• Any money paid on behalf of the political party for any expenses incurred directly or indirectly by that political party;

• The provision of assets, services or facilities for the use or benefit of a political party other than on commercial terms; or

• A sponsorship provided to a political party, independent representative or independent candidate. 

The court said that in considering the appropriate fine it noted that “this is not a minor case where respondents may have overlooked their obligations and unwittingly contravened the Act”.

“According to the investigation report, it appears that there was a deliberate attempt to conceal the donation. I agree that this is material,” Judge Adams said.

“In my view, after weighing up all the relevant factors in the matter, including the requirement that a strong message must be sent out to role players in the electoral justice system that there should be transparency, the penalties to be imposed should range between R40,000 and R50,000,” he concluded.

The party and Herron were fined R90,000 while Electrox Properties was fined R40,000 for violating sections 9 and 12 of the Funding Act. Acting Judge Steyn and Professor Moses Phooko concurred with the judgment. 

Good has said it will appeal the decision.

“The party operates on a very modest budget and scrupulously adheres to requirements of the Act. The Electoral Court reached its judgment without hearing argument or evidence.

“The judgment reflects the court’s reliance on the fabrications of a ‘whistleblower’ – who happens to be a disgruntled former party official who was expelled for pocketing party donations. Our legal advice is that the court erred in several respects, directly impacting the outcome,” Herron said in a statement on behalf of the party.

The DA and August have welcomed the judgment, saying that “hiding political funding is a serious offence in South Africa”.

“There is no credibility left in that party, and now the Electoral Court has finally ruled that it is actively falling foul of the law,” August said. DM