Editor’s Desk: Agrizzi, Cohen, and the fight against corruption

DUBLIN — As South Africa's three commissions of inquiry grind on, there has been a flood of testimony from dozens of key witnesses. It can be overwhelming to keep track of everything that has been revealed, and there hasn't been much room for processing and reflection. This week, Alec Hogg and I take a step back from the noise to discuss Agrizzi's testimony and his recent interview on Chai FM. We look at the global backlash against corruption, from Brazil to the US to South Africa. As people worldwide start to make the connection between corruption at high levels and their own day-to-day economic problems, we are seeing real moves to hold the corrupt to account, no matter how highly placed they may be. Ahead of May's elections, the ANC is betting that its bold exposure of corruption within its ranks will make a difference with fed-up voters. – Felicity Duncan.Hello and welcome to this week's episode of The Editor's Desk here on Biznews Radio. I'm Felicity Duncan. With me, is Alec Hogg. .___STEADY_PAYWALL___.Alec, we had an interesting week in the ongoing and increasingly difficult fight against corruption on the US side. We had a lot of testimony coming from Trump's former fixer – I think we can call him – Michael Cohen and in South Africa, former Bosasa boss turned whistle-blower –Angelo Agrizzi – gave a very interesting interview giving some insights into his experience and his thoughts on his testimony back in January and just where the process is and what's going on. And I know you've been paying a lot of attention to that interview. Do you want to tell us a little bit about it?.Yeah, it was on Chai FM in Johannesburg, done by a forensic investigator called Chad Thomas and they've given us permission to republish them. I'm doing a deconstruction of the interview and it should certainly be ready in the next day or so. But it was a long interview – 45 minutes – and in it Agrizzi is now almost positioning himself as this whistle blower/good guy who came to tell the world about the problems that were caused by Bosasa, but Bosasa was actually a good business. He ran it and you know, really, yes, there was lots of corruption and he was involved in the corruption but he's almost trying to paint himself as a good guy. That's why I've been paying so much attention to it because having gone through all his testimony to the Zondo Commission where it is affidavit's and this guy's crooked as anything, the reason why he decided to turn was because he had a tumour on the heart and went into a coma and after that he came back and said, "Dammit, I've got to make good with God.".Basically, that was his motivation, which is interesting because Michael Cohen's motivation appears to be something similar where his father was a holocaust survivor who finally got hold of Cohen and said to him, "You are protecting the wrong man. Change your story. Start telling the truth." So, it's interesting that you've got these two very, very deep, almost spiritual, jolts that that went to the individuals who are not getting a lot of attention both in South Africa and in the United States. But, going through this interview with Agrizzi has been fascinating when you go through it in lots of detail because you can then see what he isn't saying. And that's what I've been putting in there. And also doing more research into the man himself. Agrizzi is richer than Croesus. He's made so much money out of this corrupt enterprise. He says in the interview for instance, that the place that they had for illegal immigrants, that Bosasa ran: the cost was R9m a month and they had between 350 and 700 inmates in there at any time..Now, if you work on 350 inmates at R9m a month, you're talking about people being paid R25,000 rand per inmate, which could probably give them a hotel bed. For context, it's nearly 15 times what the social grant is in South Africa, and those are two competing interests in the fiscus. So, it's unpacking it in that way and saying, you know, how did this thing get out of control to the degree that it has, how deep does it go, and where is the snake's head going to be chopped off? Similarly, then with Michael Cohen where you have these Trump supporters who just refuse to believe anything – you were seeing it in the testimony that was given before Congress where the Republican representatives were trying to attack Cohen, trying to attack the messenger, and not the message. Trying to defend Donald Trump at all costs..Whereas Trump has clearly (of Cohen) and the evidence that he's given in the same way that Agrizzi's evidence that he has given – hard evidence – it shows that these very powerful people are corrupted, would do anything to retain their power or to achieve and, gain their power and as a consequence of that, they need to be brought to account. So, a little point that, that falls into this quite well was I was reading something on the World Economic Forum's website this week where they interviewed young people and 70% of them said the most important issue in the world today is corruption. In other words, the status quo is corrupt. People are abusing the system and they don't want to have a world going into the future where you have a similar/continuation of this..So, it's not just the South African situation. We're seeing it in America. We've seen it in Malaysia where one 1MDB, sorry. 1MDB was put together by Goldman Sachs who $600m in fees to raise a $6 fund, which was then mostly as a stolen from the people of Malaysia buy a guy called Joe Lowe from a Chinese interloper plus the crooked politicians. We've seen the same thing happening in Mozambique and it's all now coming to the surface by SARSA in South Africa with the Guptas, et cetera. It's all coming to the surface because it's almost like a transformation is occurring with the pressure coming from the people who are now so sick and tired of being abused by those who have power and then absolute power corrupting absolutely. The reflections are there for all of us to see..Yeah. And it's interesting, you know, I saw a survey recently of South African sentiment ahead of the election, just looking at what's going to be happening. And South Africans put corruption second after unemployment as the most important issue – and this was all ages of South Africans. And to me, I mean that's really striking because, you know, unemployment in South Africa is a complete it… I don't think we even can fully explain the scope of how bad it is and what it does to communities that there's no work, right? So, unemployment is just a real social ill in South Africa and the fact of corruption – and it was a very close margin, I think it was by a couple of percentage points – corruption is almost as important as that to communities in South Africa. It just goes to show. I think people are drawing a connection now between the corrupt actions of politicians and business people who collude with them and the economic realities that they face, right..So, you know, your points about how much money was being wasted on these prisoners – and I think prisons around the world are a real major centre for corrupt activity because no-one in society cares about prisoners – so a lot of nefarious things go on in prisons everywhere. The fact that so much money is being siphoned off into these people who are being held at these places, these illegal immigrants or whatever… People are starting to say, "That money is going into lining pockets instead of being invested productively into the economy where it's going to create jobs and it's going to make a difference for the average person in the country. Making the connection, I think, is going to make all the difference over the next few years..And that connection is deep. If you consider people taking money and investing it outside of South Africa rather than within South Africa; 99% of the times when I speak to businessmen who are doing that and who have control over these decisions, they say that they have been confronted by corrupt officials somewhere along the line. So, you have BEE for instance, which in theory is a good thing. But in practice what's happened is that you, when you get corrupt officials in between, they tell you who your BEE partners have to be and as a consequence of that, it lines more pockets and then adds another cost to the system. Then the business person who is thinking of investing R100m or whatever says, "Well, I'm not prepared to go along the rules of that society. Let me take that many to a different destination" and it's lovely..The point that you're making there is that the South African society is starting to get the connection is joining the dots as Pravin Gordhan has been telling us for a long time, is making a note of this and starting to absorb how it all works in one big cycle. You get the flywheel of growth going by investment, but you only get investment going if capital says that it's happy to be invested there and if it goes into a corrupt society, well clearly, that capital is going to be filched by somebody like Russia. That's why Warren Buffett will never invest in Russia because he said last time he invested there (it was an exploration company): the minute that they found what they were looking for, the Russian government (or it's lackeys at the time), came in and stole everything and they had to run for their lives..We saw the same thing with Bill Browder, Putin's number one enemy as he calls himself. In a corrupt society, no sensible investor or investor with integrity is going to get involved..But there were two things that came out in what Agrizzi said [inaudible 0:10:22.0] Radio Show} that are worth kind of dwelling on. And one of the big ones was he said that the Watson's believed that they were Christian. They had prayer meetings every morning but that this was the way you did business in Africa. So, you had to pay people to do business in Africa and then you extrapolate that to the second thing, which is they weren't the only ones doing it. KPMG, McKinsey, SAP, BAIN – big international names – were also following this line. This is the way you do business in Africa. Credit Suisse, who have now gotten caught with their fingers in the cookie jar in Mozambique – This is the way you do business in Africa..This is the way you do business in Africa. And if you then step away from it for a moment, how can you be more racist than taking that approach? It is absolutely shocking that the people who come from these Mahogany roads or these esteemed positions apparently in their own country where they wouldn't dream of doing anything along these lines think that, well, because it's Africa, we can actually play that way. And I think this is where Africa as a continent and as the leaders (and you're seeing it with Ramaphosa and Buhari in Nigeria and others who are coming to the fore. Certainly, in Rwanda as well) are saying, "Rubbish. We're not corrupt. This is not a place where you can come and play as you like. If you can it be engaging in corrupt activity, we're going to make sure that you will pay the price and pay the penalty for it. So hence the Mozambican government is now suing Credit Suisse for the full $2bn of that loan. And Africa. having three commissions of inquiry and the Nigerian election being one on a corruption ticket, etcetera. These are really, really good developments for a continent that is perhaps finally starting to have the confidence to do things right..Yeah. And it was interesting, I saw some speculation about the potential that Mozambique will say that this debt is illegal and therefore that the people of Mozambique should not be on the hook for it. I think that's very interesting also because if they go ahead with this – I mean, you know, obviously, they're trying to get the money out of Credit Suisse in and all the rest of it – but if they were to say this was obtained illegally and we're not going to pay it, I think that would be such a big wake up call for international investors to say, "Geez, you know, not only do we expose ourselves to reputation risk, but if we do these bad deals, well maybe we're just actually not going to get any money out of it." You know? And that, to me, is very interesting because it would create like a bottom-line impact that then maybe really focuses minds.And puts people into jail. It's not that long ago that the Germans, for instance, would allow the multinational companies to have a line which was, written off to bribe bribery and corruption in Africa because that was the way that they did business in Africa. It was an expense that they could write off against their income taxes. So, and that's not long ago that they changed that. Of course, today Germany is one of the most vociferous attackers of corruption. Thank heavens we have the United States and the DOJ, which has really been the flag bearer in all of this. But the reality emerging markets were… It was justified that corrupt activity by multinationals could occur there because that was the way that they did business..Now you can't think of anything more awful from a rich north in the way that they treated the developing countries and you can understand why developing countries or the leaders of developing countries have taken a pretty dim view about all of this. It's a very, very important development that the world is going through right now where even in the rich north, you have people who are saying, "We will not allow the powerful to corrupt our system." And what you seeing in the United States at the moment with the whole process that's going through congress against Trump and with Michael Cohen, who really was his attack dog. He was the guy who acted for Trump and threatened to sue people (not threatened) and actually did sue people and take them to court and tie them up abusing the legal system on behalf of a man who is now President of the United States..And yet the, the fake news, the nonsense that comes out around that is to say, well, this is all a political process. Of course, it's not political. Of course, they are real crimes that have occurred that need to be identified rather than this blind loyalty towards somebody who, who might be supporting some prejudice that certain voters have. To me, this is a very, very positive situation that we're seeing in the world and especially in South Africa where you have to admire Ramaphosa and the ANC today (or his group of the ANC) who are exposing the dirty laundry. Not In one, not in two, but in three commissions of inquiry. And they're saying to the voters, "We think this is up to you. There's an election coming in a couple of months' time. Do you think that we are going to change? We believe we are going to change.".We're exposing all the dirty laundry so we can get this out of the system and we can fix this country. We did do wrong. You must decide on it but the verge is at the end of the day, could very easily turn against the ANC, turn against the exposes if you like, of all this malfeasance and vote them out of office. It's possible. My heart says it's unlikely that there is a renewal within the party itself. And in fact, the opinion polls are saying that the people of South Africa really appreciate what's going on, but it remains a very high political risk. And to do that, you have to applaud the courage of Ramaphosa and those around him.

Editor’s Desk: Agrizzi, Cohen, and the fight against corruption

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