Crooked characters may use haritable Foundations and Trusts as political slush funds!

24 Feb 2019

In the run up to the Botswana Democratic Party (BDP) primary elections, former Assistant Minister of Education Patrick Masimolole complained to the Office of the President alleging that Mr Tshephang Mabaila was using his Mabaila Foundation to engage in illegal campaigns for Mogoditshane constituency. BDP Labour Sub-Committee Deputy Chairperson Kgang Kgang also complained about the motive of the activities of Mabaila Foundation.

The complainants alleged that Mr Mabaila was using his Foundation to position himself for the constituency’s primary elections much against the party’s rule that bars aspirants from campaigning before the party officially set a date on which campaigns could start. At the time of the complaints, Mr Mabaila was still a civil servant and as expected he denied having any political ambitions. However, Mr Mabaila would later resign from the civil service and went on to compete in the primaries and registered a convincing victory.

In the Bobonong constituency incumbent MP and Minister of Defence, Justice and Security, Shaw Kgathi also registered fears that his primary election’s competitor had founded a trust that was going to be used to engage in unfair or illegal campaigns. Mr Kgathi feared that the Francisco Malesela Kgoboko Trust was a political enterprise dressed in charity outfit. Mr Kgathi is reported to have attempted to block the area’s Dikgosi from attending the launch of the trust. In response Mr Kgoboko retorted that he has been in the business of helping members of the community for some time.

The controversies generated by the activities of the two charitable organizations shows that it is possible for some people to use charitable organizations for other things than provide basic goods and services or promote the interests of the poor. Yet, the need for charity foundations and trusts cannot be overemphasized. A lot of Batswana are in dire need and require urgent help. Thus, the need for wealthy individuals to help out those in dire need may lead to an upsurge in the establishment of charity foundations and trusts.

While such a revolution may be welcome, it also brings with it the risk of a mushrooming of sham charities that often serve as pass-through for donations to other groups which perform front-line charitable functions. These pass-through charities often receive huge donations to distribute to other groups only to hand out a tiny fraction of the largesse while the rest is used to finance the lavish lifestyles of the founders. Essentially, charity foundations and trusts offer convenient side benefits especially for founders with a taste for finer things or those who nurse political ambitions.

In the last couple of years, Botswana witnessed a radical shift in charitable giving patterns wherein charitable activities are accompanied by all the pomp to give credit to those who run charities even if their role was simply to hand out goods and services donated by others. The complaints against the activities of the two charities highlighted herein stemmed from the fear that the founders use them to buy votes and/or buy off competitors with charitable goods.

In other words, the upsurge in the establishment of charity foundations and trusts is most likely to be accompanied by a corresponding increase in scams or sham charities that operate as slush funds for aspiring politicians. In any case, the arena of civil society organizations has always been dogged by briefcase enterprises about which the public knew very little and could find out very little. It is therefore not surprising that charity foundations and trusts have come home and have come to be associated with crafty philanthropists keen on distributing goods and services for personal gain.

Many aspiring politicians are always going to be enticed to use charitable activities to enhance their images more especially because it is always difficult to determine whether someone’s charity work is genuine or just a springboard for a political career. Since charitable work may be used to channel money and exert influence on behalf of their founders, there is always an opportunity to establish and use charities in an inappropriate way. When charitable foundations and trusts engage in activities that cross over into politics resulting in people being lauded for being compassionate, we all have to get very worried.

In a world beset by seemingly overwhelming and intractable challenges, virtually every problem undergirds a much bigger challenge. That there is likely to be an increase in the number of crafty philanthropists who would want to benefit financially, exert influence and/or derive political mileage from charitable activities portends some bigger challenges ahead. While charity work can never eliminate poverty, it does mitigate the effects of extreme poverty and suffering hence it will always be appreciated.

Since people have a different mental model of reality and since our purpose in life differ substantially, there is a chance that some dishonest people will have ulterior motives in starting charity work. In the context of the Botswana society where income inequalities are radical; where the wealthy has a propensity to publicly boast about their riches in ways that make the poor fellow envious, charitable foundations and trusts may come to be used by envious persons to generate easy wealth for themselves and their families and ultimately refashion them into big time extortion rackets. Thus, charities are at risk of being used by cynical people as black-boxes for channelling dirty money and other assets or for evading tax in order that they live in luxury.

Presently, charitable foundations and trusts in Botswana operate with little or no regulatory oversight. Yet, it has been highlighted that charities can operate as a slush fund for individuals and groups; that their activities sometimes overlap into the realm of politics; that they offer convenient and irresistible side benefits mainly to the founders; that the public knows very little about their operations and can find out very little about what they actually stand for.

In short, there is nothing that stops charities from fronting for terrorists and those who want to topple democratically formed governments. This being the case, the integrity and credibility of charitable foundations and trusts will always be queried, rightly or wrongly, as has been the case with Mabaila Foundation and Kgoboko Trust.

Going forward and taking cognizant that fraudulent charities are likely to flood our space and become the equivalent of operating an offshore account for the purpose of money laundering and avoiding tax, the government should urgently establish an institution to regulate and monitor the operations and activities of private charitable foundations and trusts.

The current regulatory framework governing private charities by simply categorizing them as accountable non-state actors motivate and incite unscrupulous characters to extort, defraud and exploit donors and compassionate people for personal gain. Fundamentally, it allows charities to engage in double dealing, evade scrutiny and get away with murder. Private charitable foundations and trusts are at risk of being used by crooked politicians to advance their interests or to engage in illegal activities in the name of charity.

As a matter of logic, private charitable foundations and trusts must be subjected to annual audits whose results are made public so that those that default or engage in illegal or inappropriate activities are blacklisted or have their tax-exempt status revoked and/or shut down. Private charitable foundations and trusts must be required by law to develop and make public a data base of grants they receive and how such was distributed. This will go a long way in restoring public confidence in charitable foundations and trusts.