South Africa's bruising battle against corruption
National Director of Public Prosecutions (L) Advocate Shamila Batohi with President Cyril Ramaphosa
South Africans entered February still reeling from the explosive testimonies of former Bosasa ex-employee Angelo Agrizzi as well as Richard Le Roux.
The revelations about how Bosasa funnelled millions of rands to top government officials to ensure Bosasa’s preferential treatment in state procurement contracts has shocked citizens.
Le Roux is the current regional technical coordinator for Bosasa subsidiary Global Technology Systems, while Agrizzi is the former Bosasa Chief Operating Officer.
Among cabinet members implicated in the testimony are Environmental Affairs Minister Nomvula Mokonyane, Minister of Mineral Resources Gwede Mantashe, Deputy Minister of Justice and Correctional Services Thabang Makwetla as well as ruling party MP Vincent Smith.
For most of February, the Judicial Commission of Inquiry into allegations of State Capture chaired by Deputy chief Justice Raymond Zondo heard testimony by witnesses who delved deeper into the impact of state capture at state owned power generator Eskom.
There was also testimony by journalist Adriaan Basson who said he had suffered intimidation for reporting on Bosasa’s dealings with ruling party officials, and AfriTrade Distributors managing director Gregory Lawrence who testified about how catering company Equal Trade 4 would avoided bank costs by taking large wads of cash to Bosasa.
Lawrence alleged that Bosasa would transfer the money back to Equal Trade 4 electronically - with a commission.
Current Eskom Board Chairman Jabu Mabuza’s representations at the commission speak about to the lack of a culture of consequence management that seemingly became the norm at the state owned enterprise.
The new board swiftly finalised seven out of eight disciplinary hearings against executives who faced allegations of serious misconduct with some linked to state capture related transactions.
The eight are are all former employees including Acting Group Executive Matshela Koko, Chief Information Officer Sean Maritz, Chief Financial Officer Anoj Singh, Head of Group Capital Prish Govender, Chief Procurement Officer Edwin Mabelane, Acting General Manager for Sourcing Charles Kalima, Group Executive for Group Capital Abram Masango and suspended Company Secretary and head of Legal and Compliance, Suzanne Daniels.
Only Abram Masango and Suzanne Daniels went through disciplinary proceedings. The rest reigned before the proceedings began. In Koko’s case, it was the day before.
Masango subsequently resigned with immediate effect on November 16 2018 after additional charges were brought against him.
Suzanne Daniels is challenging her dismissal at the Commission for Conciliation, Mediation and Arbitration.
Eskom is still yet to determine whether to institute claims against the eight while criminal charges are being investigated against all eight executives.
Testimony on the impact of state capture at National Treasury kicked off with former director general Bongani Fuzile who was subpoenaed to appear a second time at the commission to face cross examination by Des van Rooyen’s legal team.
Van Rooyen became a national laughing stock after taking over as Finance Minister for three days replacing then Finance Minister Nhlanhla Nene before giving way for Pravin Gordhan after Nene’s axing on December 2015.
In his testimony Fuzile detailed how the expenditure ceiling imposed under the constrained fiscal situation caused by poor growth during former president Jacob Zuma’s era led to resentment directed at Treasury’s unwillingness to fund new programmes.
In a scathing remark on his statement, Fuzile said the in the pursuit of objective to repurpose the state to enable rent seeking, rhetoric purporting to promote transformation was used.
“There was a process within the presidency which used the National Planning Commission to ask that they should assess whether the budget is aligned to the priorities,” Fuzile said.
According to Fuzile there were also concerted attempts to move the budgeting function to the Presidency at the same time as the widespread sharing of classified budget documents with persons not in the employ of government.
In the wake of the 2008 global financial crisis government debt escalated from about R525 billion for the year 2008/2009 to R2.28 trillion for the 2017/2018 financial year.
This was largely due to reluctance to raise energy tariffs to fund Eskom’s build programme after previous increases of 23-25% per annum raised the cost of doing business and left household incomes severely strained.
Animosity between members of the presidency and treasury grew worse when treasury indicated it was reluctant to endorse proposed tax exemptions and flagged how the draft nuclear agreement with Russia, the United States and South Korea would be financially crippling. Apparently it was the refusal to allow the nuclear agreement to go ahead that led directly to Nene’s axing as Finance Minister.
BOTCHED NUCLEAR DEAL
The R1 trillion deal, which the Western Cape High Court subsequently set aside as illegal, failed to comply with provisions in section 127 of the constitution requiring procurement processes to be fair, equitable, transparent, competitive and cost-effective.
Fuzile’s submission alleged that the deal also flouted electricity regulations, as well as disclosure requirements imposed on government and did not involve proper public consultations, among other weaknesses.
Treasury continued to draw the ire of the presidency when it was seen to frustrate, or even scupper, deals such as PetroSA offer to buy Engen, the South African Airways Airbus deal and the South African Social Security Agency deal with Cash Paymaster Services which was ruled to be invalid by the Constitutional Court in 2014.
The Zondo commission has also heard testimony from National Treasury economist Catherine MacLeod who explained how the firing of Nene affected the markets and corroded pension funds.
President Cyril Ramaphosa moved to address constitutional court concerns which were outlined as far back as 2011 about the independence of the Hawks, South Africa’s Directorate for Priority Crime Investigations.
Ramaphosa’s announcement to form a special directorate in the NPA to deal with serious corruption also coincides with the tenure of new NPA head, Shamila Batohi.
There are still further developments in Ramaphosa’s apparent drive to ramp up the fight against corruption.
SPECIAL STATE INVESTIGATIONS TRIBUNAL
In a move which could see many of those implicated in State Capture brought forced to pay back money siphoned from state coffers, Ramaphosa announced a Special State Investigations Unit Tribunal to be presided over by Judge Thami Makhanya.
The Tribunal’s aim is to fast-track assets lost by the state through irregular expenditure and corruption. Importantly, the independence of the Special investigations Unit will be in the spotlight.
The Special Tribunal will rely on the SIU bringing evidence before it. Two test cases for the SIU will be the VBS bank corruption saga which saw politicians from both the ruling ANC and it fiercest opponent the EFF implicated, along with municipal managers and mayors in what is regarded as an elaborate scheme that saw them pocket money from the VBS Mutual Bank.
Former treasury director general Lungisa Fuzile
The North Gauteng High Court ordered the liquidation of VBS bank on recommendations from the South African Reserve Bank’s Prudential Authority which described the bank in Limpopo province as hopelessly insolvent.
It remains to be seen how far the state enforcement agencies will assert their independence and go after high profile wrongdoers, particularly those connected to politicians.
The public will get a sense of this while trying to wrap their heads around even more running battles between senior law enforcement officials.
The latest being Independent Police Investigative Directorate (IPID) head Robert McBride’s bid to take the fight to Police Minister Bheki Cele following the decision not to renew his McBride’s contract.
McBride’s troubles at IPID started in 2016 when former Hawks boss Anwar Dramat, Gauteng provincial Hawks head General Shadrack Sibiya and Lieutenant-Colonel Leslie Maluleke were charged with the illegal rendition of Zimbabweans in 2010.
McBride, Innocent Khuba and Matthews Sesoko were subsequently charged with fraud and defeating the ends of justice for allegedly altering reports in order to clear Dramat.
The NPA withdrew against Dramat and Sibiya after they made representations.
McBride’s tenure at IPID has not been smooth sailing as he was recently suspended for 18 months by former Police Minister Nathi Nhleko. Constitutional Court Judge Chris Jafta declared Nhleko’s decision to suspend him in 2015 invalid and set it aside.
Mcbride has now vowed to testify before the Zondo commission on how the independence of IPID was compromised during his tenure.