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Corrupt people are stealing before our very eyes, says Pravin Gordhan

JOHANNESBURG — Corruption in South Africa has become so blatant that the Zuptas are stealing right before our very eyes. This is what one can gleam from Pravin Gordhan’s latest comments on the matter. Gordhan says that up to R250bn has been pilfered from South African taxpayers – a shocking number that will get bigger unless something is done soon. It’s a free-for-all and one wonders if it will ever end. – Gareth van Zyl

By Donwald Pressly*

The former finance minister said he had to put it bluntly, the story of the capture of Eskom was “part of a story which is reflective of the fact that R150 billion to R250 billion has disappeared from South Africa’s overall fiscal system”.

Donwald Pressly

It was a matter of finding a spot around the world – “your favourite geography” – and you will find a bank where there is “some of your taxpayers’ money, money borrowed by the sovereign… when big sums of money are involved.”

He said South Africa was at an important inflection point. Civil society had to stand up and continue what he called “a struggle” to expose corruption at every front. People had to be prosecuted and sent to jail.

Cape Messenger specifically asked Gordhan when the man at the pinnacle of all the rot – President Jacob Zuma – would go. In the audience at the launch of the Eskom booklet aimed as a state capture resource for Parliament’s public enterprises’ inquiry, civil society, journalists and engaged citizens, the former finance minister – who was fired in March – defected the question to his parliamentary colleague Derek Hanekom.

Hanekom asked himself the rhetorical question: “Why are we still in the ANC?”

Painting a picture of a long commitment to the values of integrity which gave rise to the ANC, he said: “It does not mean we are there for ever and ever. For the moment we are there. We are (still) there with pride.”

It was easy to forget the good things.

“We can list the achievements… but right now we are in trouble.”

Former Minister of Tourism Derek Hanekom

South Africa was not reaching the economic growth that was needed to solve the troubles that South Africa had – including the fact that 14 million people lived in extreme poverty and 55% were living in poverty. “We have got to turn that around.”

Referring to the question about when “the ghastly man” – a description of President Zuma – would be out of the way, he said: “I am going to get to the… What was it the ghastly… ? To turn that around, a few critical things need to be done. It is not going to be that easy. We can’t just wish it happens.”

Hanekom said: “We can’t say we will deal with you in 2019. What kind of country will we have in 2019 if we don’t deal with the problems now?

The problem has to be dealt with in the ANC,” he said. “It doesn’t mean that those outside of the ANC shouldn’t raise their voices, they should,” he said. They should be vigilant “and hold us to account”.

But he believed the country was on the verge of turning around a political corner. That would take place within the ANC.  “The person whose fingerprint is on many of these things (President Zuma)… there is not (only) one (corruptor) by the way … many ministers are captured, many in the NEC (ANC national executive committee)  are … in some way or another captured (by corruption)”.

Those who remained in the ANC – like himself – had already asked the president to step down. That had first occurred in November and then again in May. He described this as “the right thing to do”.

“The elected leadership of the ANC that we currently have has not been able to do those things that you know that Pravin asked for… but it doesn’t mean that the entire elected leadership is happy.” The very fact that so many in the elected leadership wanted change “is positive”. This had been reflected in the vote of no confidence in parliament recently. “That is a positive development,” he said.

In three months there would be the ANC national conference where new leaders would be elected. “In three months’ time, I am firmly of the view that the change we are all yearning for … desperate for … will come. I believe that the man who disposed of Pravin Gordhan and (deputy finance minister) Mcebisi Jonas … and by the way, there was a minister of tourism there as well … will have to step down very soon after December. I really believe that.” Hanekom was also fired as Tourism Minister earlier this year.

“Those are internal battles we will have to fight,” said Hanekom. Turning to the audience he said they would have “to support us (the ANC insiders) because … you will pay the price if we don’t succeed”.

Hanekom said he was positive that a new leadership would make the appropriate reforms required to eradicate structural corruption which had seeped into Eskom and other state institutions.

Gordhan said he stood by everything that Hanekom had said, but he did not specifically make a point about whether President Zuma would step aside and be gone.

But he differed slightly with Hanekom on time frames for change. He said that the time for fence sitting from all parties was over “because if we don’t handle (these problems) correctly” it could take up to 15 years for the country to start recovering. “We are beginning to enter a dismal path”.

Gordhan said earlier that the bad people in South Africa had developed “a fantastic ability to produce so many Houdinis in one country where they were repeatedly … trapped and detected and (are) seen to be transparently filling their pockets … yet nothing happens (to them).”

Demonstrators carry placards as they march to protest against corruption in Cape Town, South Africa September 30, 2015. REUTERS/Mike Hutchings

He said the new struggle for integrity and the end of state capture of institutions like Eskom required patience. People needed to plug away to ensure that people were brought to book and were prosecuted for wrongdoing.

Anton Eberhard of the University of Cape Town’s business school, introducing the Eskom inquiry published by the school, described it as being part of a network of academic activities which was beginning to show “conclusively that we are not dealing with random acts of corruption… but a systematic political project to repurpose the state to facilitate the concentration of rent seeking and corruption” involving the Gupta family, the Zuma family with a network of cabinet ministers, Eskom board members.

Eberhard, a former member of the National Planning Commission, tracks the gradual capture of Eskom, its board and management team, over the two terms of President Jacob Zuma. It appears to have been fully captured and the dirty hands of the Gupta family appear to have reached right up to the various ministers who have served as Minister of Public Enterprises.

At the start of the Zuma presidency, which began in 2009, Barbara Hogan was Minister of Public Enterprises. When she resisted the president’s wishes to transform the Eskom board it was tickets for her. She lost her job in November 2010 and left formal politics.

In came Malusi Gigaba – now Finance Minister – as Minister of Public Enterprises in 2010. He proved to be “more yielding” said Eberhard. “We see the major repurposing of governance where wholesale change (occurs) at the Eskom board.” From being highly respected internationally, the board had little Eskom or corporate experience.

The previous board, which had been led by some time by Reuel Khoza included three respected CEOs of international utility companies, said Eberhard. “Yet for Zuma this experience was not fit for purpose.”

Brian Dames, the CEO of Eskom, who had been appointed while Hogan was minister, came under tremendous pressure from Gigaba. “He was treated appallingly by Gigaba. Letters were delivered to his office indicating that his services were to be dispensed with… then extended… and then terminated … all with scant notice. He also received a number of death threats delivered to his office,” reported Eberhard.

It was during that time that Gigaba intervened in Koeberg’s procurement pushing aside Westinghouse.

By March 2014, Collin Matjila – seen as a Gupta clone – was appointed. Gupta leaked emails showed that Matjila’s CV had been circulated by Salim Essa, a Gupta associate, to President Zuma’s son Duduzane Zuma.

Eberhard reported that the second term of President Zuma – from 2014 – was a time of facilitation “to grease the wheels of rent seeking at Eskom”. It went into turbo-charge mode.

Public Enterprises Minister Lynne Brown

Lynne Brown was appointed as Minister of Public Enterprises in May 2014. While she appeared to do the right thing by appointing DTI director general Tshediso Matona as Eskom CEO, she also reshuffled the board. “She appointed in December (2014) a new board packed with Gupta associates”, reported Eberhard. “We have confirmed reports of meetings at Brown’s (ministerial) residence where the Guptas were in fact present.”

Matona sought to issue a tender for a corruption investigation at Eskom so it was soon “clear that he could not survive”.

In March 2015 four executives in the Eskom team – including Matona – were booted and the Eskom chairman Zola Tsotsi was pressured to resigned. Ben Ngubane, the president’s friend, was appointed Eskom chairman “despite allegations of unethical and improper conduct” and despite a lot of resistance from the ANC itself, reported Eberhard. “The shock suspension of four executives including Matona … was clearly not the work just of a fledging new board … (it) was orchestrated at the highest level.”

President Zuma “not only personally called the DG of Public Enterprises to put this in motion (while Minister) Brown was abroad … He also summonsed Tsotsi to his Durban residence where Dudu Myeni (the SAA chairperson) relayed the president’s instructions.”

State capture goes into a high gear with the appointment by Brown of Brian Molefe from Transnet as Eskom CEO in April 2015.

Molefe came along with financial officer Anoj Singh from Transnet. “This is a significant moment… both piloted and perfected schemes at Transnet to benefit the Guptas and their associates through large procurement contacts…they carried this experience into Eskom.”

From there it is free flowing rent seeking. Tegeta – a Gupta company – was given lucrative contracts, relaxed terms on supply agreements and on April 13 2016 a prepayment of R659 million.

South Africa’s former finance minister Pravin Gordhan. Photographer: Waldo Swiegers/Bloomberg

In April 2016 Eskom paid Trillian R495 million for consulting services, including R30.7 million paid on 14 April of that year. “Minister Brown tells parliament (in December 2016) that Eskom has no contractual engagements with Trillian.”

Since then Molefe has gone. Anoj Singh admits in July 2017 that Eskom has paid Trillian R495 million since 2016. He has been suspended. Charles Kalima and Edwin Malebane, executives, were suspended in August this year in connection with the Trillian payments. They were later reinstated.

The Guptas have sold Tegeta coal interests to Amin Al Zarooni, a connection of the Guptas.

The saga continues.

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