‘Parties profiting from dirty money’

Major political parties are surviving on tainted money from donors, cuts from shady contracts from government and handouts from politically compromised businesses and individuals in exchange for future business deals.

Such lack of tangible income, according to studies and interviews, make the parties susceptible to corruption and money-laundering.

A fleet of UTM vehicles: The movement says it is funded by well-wishers

In December 2017, Parliament passed the Political Parties Bill that would see political parties disclosing the source of their income, go through audit and have a well-structured secretariat with the party’s secretary general as a responsible officer, but Minister of Justice Samuel Tembenu is yet to operationalise the Act, making the parties get away with murder.

Former United Democratic Front (UDF) strategist Humphrey Mvula said in an interview political parties, mainly in government, get money from government contracts.

“The parties in government are financed by companies that get contracts from government, mainly from the companies that get government contracts to supply fertiliser and in road constructions,” said Mvula.

DPP leaders receive party cloth for distribution to party followers

He said some companies get money by inflating the existing cost while others declare a cut.

Mvula added that sometimes money gets out of government to political parties through compensation claims against government.

He said there were three sources of political financing in opposition, claiming companies that feel left out, or disgruntled in government contracts fund a party that would help them with contracts when in government.

“Typical of some businesspersons in the country, they do not invest in one basket. When they donate to, say DPP, they also put some percentage to MCP or any other party that has the potential to win. At the moment, they are already double-dealing,” he said.

Mvula: There are already double-dealings

Mvula said opposition parties also get money from external donors that have interests in Malawi resources, such as minerals and arms.

“They lobby for perspective business deals in political parties that have the potential to win the elections,” he said.

But Mvula added that in most cases, the money does not go directly to political parties, but rather individuals connected to the parties, mainly party leaders.

A study by political scientist Henry Chingaipe confirms Mvula’s assertions, disclosing that political financing in the country was a big source of corruption as most individuals and companies involved in political financing look for favours from those in charge of government.

Chingaipe’s study, necessitated talking to at least 21 respondents, including former Cabinet ministers, retired and serving public servants in departments and ministries or government agencies and business captains and associations. It shows how parties are at the mercy of donors and the extent they can go to to ensure steady funding.

Said Chingaipe: “Government contracts are one source of political financing, especially for the political party in government. They build all sorts of corrupt schemes of getting money. We have heard so much about money being built in those contracts and being remitted to individuals in the party or party accounts.”

Ndanga: We have introduced party membership fees

In 2015, Director of Public Prosecutions Mary Kachale told the High Court in Lilongwe how Cashgate convict Leonard Kalonga claimed the money he stole was meant to fund the then ruling People’s Party (PP).

Chingaipe also said parastatal organisations are another source of funding for a party in government, adding that at one point each one of the parastatals had to give parties money through contracts or outright donations.

He cited Escom, and the waterboards as examples of parastatals at the receiving end of ruling party’s machinations.

Chingaipe further explained that third mode of political financing in the country was through the private sector.

“Entities in the private sector provide money to the political parties. And they are entities in the private sector that provide money to more than one political party. Usually, they provide money to the party in government and then to those in the opposition, either because they support that party or they strongly believe that party has a potential to form the next government.

“We found out in my PhD research that business entities provide money to politicians either to buy favours so that when they are building contracts they should be winning, so they support political parties, even funding their campaigns. Sometimes, it is not about the campaign favours but that they should not be disturbed by political whims. For example, are they having issues with MRA [Malawi Revenue Authority]. MRA does not go to them,” he said.

Chingaipe said government was also obliged to fund political parties that got 10 percent representation in Parliament, which is supported under Section 40 (2) of the Constitution.

Assistant Clerk of Parliament, Protocol and Public Relations Leonard Mengezi said the total amount being shared per year was K150 million—which was being shared among the Democratic Progressive Party (DPP), Malawi Congress Party (MCP) and People’s Party (PP).

“DPP gets K15.1 million representing 40.32 percent, MCP gets K14.5 million (38.71 percent) while PP gets K7.8 million (20.97 percent),” he said.

He said through experience, he knows that the main political parties’ accounts have no money, apart from what comes from Parliament.

Kasungu North East MP Wakuda Kamanga, who has been secretary general at both DPP and PP, said members do not know the source of parties’ income.

“Even when you are a secretary general of a party, you cannot know where the funding of a political party is coming from. No money goes to political party accounts other than those coming from Parliament.

“May be the treasurer general may know, but our political parties are founder-based and the presidents are the main funders of the parties. How they get their money not many people would know. The secretary generals or the party treasurers only control funding that that comes from Parliament, if the party qualifies. Funding from well-wishers goes direct to the president,” he said.

Interviews with several politicians show that each political party rally costs between K2 million and K30 million; hence, political parties need billions of kwacha to go around canvassing votes.

There is, however, hope on party funding as political parties which have been playing hide-and-seek on financing because Tembenu said he will soon operationalise the Act ahead of the 2019 tripartite elections.

In a telephone interview with Nation on Sunday last week, Tembenu said he will be signing off the Act to start operating in Malawi and that it would be applicable to political parties immediately.

In the absence of the Political Parties Act, political parties in the country, have no obligation to disclose their income with political analysts observing that the political financing was the geneses of corruption in Malawi.

However, in interview with Nation on Sunday, political parties refused to disclose their source of funding, saying they are only ready to disclose when the law, the Political Parties Act, has been operationalised.

Who is funding them?

New entrant on the political arena, United Transformation Movement (UTM) president Saulosi Chilima, in one of his high-profile rallies promised that the movement will pay for all aspirants at constituency and ward levels.

On average, UTM would need about K96 million for the exercise based on Malawi Electoral Commission (MEC) fees for various aspirants in the tripartite race.

UTM interim spokesperson Joseph Chidanti-Malunga said the movement was counting on well-wishers to finance its candidates.

He further said some of their activities are also funded by individuals.

“Right now, it will be naive for me to say UTM has a concrete source of funding. We don’t have. It is all from individuals of goodwill,” he said.

He said the movement will compile names of all individuals donors and money spent and publish the list for people to know who funds the movement.

UDF spokesperson Ken Ndanga also said his party has also been getting funding from the well-wishers, but said it intends to introduce membership fees.

“We have introduced party membership fees which are in categories, and we intend to make that as our main source of funding. The three-year fees ranges from K100 000 for platinum, K75 000 (gold), K50 000 (silver), K10 000 (Ung’ono ung’ono), K2 000 (ordinary members) and K500 (Chipani Changa),” he said.

Ndanga said the party has not decided yet whether it will pay for aspirants, saying the party is divided as some were of the view that they should use that money—meant for paying nomination fees for aspirants—to procure party material.

DPP treasurer-general Jappie Mhango said the party has not budgeted for any political rally, saying the rallies that are taking place are sponsored by the individual conducting them.

He said the party cannot disclose the source of its funding until the law is in operational.

“DPP has income-generating activities which followers donate to. The party has a membership and the membership has the duty to make the party work,” he said.

MCP was yet to respond to our questionnaire three weeks after it was sent to them.

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