Editor’s Desk: Truth & lies in the Agrizzi & state capture story

The long and ugly story of state capture has been filled with competing narratives – a kind of giant game of he said/she said/they said/he said. Over the last year, the testimony of Angelo Agrizzi – who has claimed that a near-death experience convinced him to speak out on his role and the role of others in state capture – held the nation spellbound at the Zondo inquiry. But Agrizzi's account of what happened is, after all, only one side of the story. In this episode, Alec Hogg reflects on why Biznews got interested in Agrizzi and how the story looks one year later. He discusses his interview with a member of the state-capture-implicated Watson clan, Valence Watson, and what light it sheds on the ongoing investigations into corruption and mismanagement in SA. Alec and I also look at the bad behaviour of big tobacco companies and how large businesses worldwide abuse their power to enrich themselves. – Felicity Duncan.Hello and welcome to this week's episode of The Editor's Desk here on Biznews Radio with me, Felicity Duncan, and with Biznews editor in chief Alec Hogg..___STEADY_PAYWALL___.Well, Alec a milestone today and I guess I should say happy birthday to all of us. Well, not today it's tomorrow but we'll make sure this interview is published on the correct day. Happy birthday to all of us here at Biznews. This is a big deal..It's a big deal for us. We started life on the 3rd of August, actually, so I suppose you could say it's our birthday, but it was late in the evening on the 3rd of August 2013. And we started life as Biznewz.biz – so we've come a long way from that. A couple of URL changes, finally we got the Biznews.com address – bought it from some Russians who'd had it and, I think, abused it a little bit, because we had some tough times in the early days cleaning it up, but here we are six years later and what an adventure..What an adventure it's been. It's been lovely to be with you along the path, Felicity, I mean we go back a long way. And really Biznews has exceeded all expectations and we'll continue to do so in future I'm sure..It's very exciting and if you think about how many changes Biznews has seen with you, you know, being based in the UK and building up that side of things and now returning to South Africa, and all the political developments – it's been a very action-packed six years, not just for Biznews, but for South Africa..It has. And I remember, I was working back then at our projections, hoping that we would one day get to 50,000 unique visitors. We are more than ten times that number now. So, it just shows it's been beyond all expectations. And most of all we've had a great amount of fun doing it and we've managed to make a contribution, I think, to the discourse in South Africa, bringing balance where often there's just chatter and rumour and gossip and also, you know, following our mission to try to help South Africa become a peaceful and prosperous nation. We haven't succeeded in that. But we're moving in the right direction and we'll continue fighting that battle for as long as it takes..Right, it's a long walk. Now, one of the ways that I think Biznews has contributed, or made a meaningful contribution to what's happened in South Africa is, of course, the story of Agrizzi and his involvement in state capture. And you and I were just chatting a little bit about that and about how we came to the story. Because it's been about a year now that Biznews has been covering it and you had, this week, a very interesting interview going into some depth and some detail..But where did that come from? Where did the interest in the story come from?.Well, you'll remember, when you were running the editorial team at Moneyweb, the inimitable Barry Sergeant. He used to give us all a bit of heartache from time to time, but he was an incredible investigative journalist who could always get to the nub of issues..He was very hard for people to sell BS too. He just was an incredible human being. It's sad that he's departed – and clearly for you, wasn't that easy to manage..But on the other hand, Barry went through a period… I remember, one day I was called by another Barry, Barry Davison, who was the Anglo Platinum chairman, and he'd just left Anglo Platinum and he was involved in a company called Vulisango, who were a partner in Simmer & Jack, which was a gold mining company. And Barry was in there, he was exposing things, he was really digging deep and finding quite a lot of warts..So, Barry Davison asked me to get together with him and the shareholders of Vulisango, who were some of the Watson brothers from the Eastern Cape – a fascinating family, a family that were a part of the struggle when very few whites were. They were ANC operatives recruited through their involvement in multi-racial rugby, which again was a most unusual thing for white people to do at that time, in the 70s already. And they had then built up their connections, their contact base, and some pretty good businesses..They're interesting people with a deep Christian background – none of them swear, you just never hear them swear, they don't smoke, they don't drink, you know, they're those kind of people..So, the Watsons became public enemy number one in South Africa as a consequence of testimony that was given to the Zondo Commission into State Capture by one Angelo Agrizzi. And Agrizzi said that he'd had a Damascene conversion after going into a coma in hospital with a growth on his heart that needed to be addressed, and he apparently went to the other side, came back, thought he can't die with all this on his conscience, and he then had this Damascene conversion and kept the nation enthralled for days on end with all the disclosures that he gave..Now, right from the beginning, I thought this was very strange, because he portrayed Gavin Watson – the eldest of the Watson brothers – as being Prime Evil, being the man who told Agrizzi what to do, to pay off this politician and that one..And the more I dug into it, the more I felt it was a bit smelly, not least because Barry Sargent had gone to that meeting with me with the Watson brothers extremely hostile. But then in subsequent periods, after he'd done his research into them and actually gone to the Eastern Cape to meet them, he became a fan, and you can see that by the way he writes about them in one of his books Assault on The Rand..Now, Barry isn't here. He passed away, unfortunately, a few years ago. So, he isn't here to tell us more about it, but I thought that given how good Barry is, this whole thing didn't seem right. And, of course, now we're going to have a whole bunch of books coming out, you can be sure, which are going to reinforce the Agrizzi story, if you like, and not really look on the other end. And what we've tried to do as Biznews is always look for the other side of the story..So, that's what I did this last week, I had an interview with Valence Watson, who is, I think, the third of the Watson brothers – there's Gavin, the eldest, then Ronnie, then Valence, then Cheeky who is the rugby player who famously turned down an opportunity to play for the Springboks to go and play multi-racial rugby..Must listen: Valence Watson – My brother Gavin, Agrizzi and Bosasa.So, these four brothers are pretty successful in their own right. And I had a chat with Valence, and we went through reams and reams of files to double check what he was saying against what was given to the Zondo Commission. And my goodness, there's another side to the story..I think the biggest one for me is following the money. Gavin Watson, who is supposed to be this Prime Evil, or is portrayed as it, lives a very modest life. He has a little townhouse in Krugersdorp and he has a home in Port Elizabeth, where they come from, which he bought in the 90s, and he drives a kind of run-of-the-mill car, whereas the man accusing him of being the master manipulator lives in a palatial suite, has got a palatial home in Fourways, he owns five Ferrari's, a Maserati, a couple of golf carts made out of parts – would you believe – of Maseratis or Lamborghinis and whatever. He has an art collection to die for, an olive farm in Italy, a home in Italy, another home in South Africa..And so I said, well hang on a minute, who's fooling who here? And then when you go through the contracts that Bosasa, which was what the Watson company won, none of those contracts were ever challenged in court. And we know, time and time again, that when there are contractual differences or when there are other parties who are bidding for contracts with the state and they feel there's been some kind of cheating it ends up in court and these things get exposed..So, it just didn't make sense. And I then had this opportunity to talk to Valence Watson – we've got the podcast up there, Premium members can go quickly and read the transcript of the podcast – and there's definitely another side to the story. And I hope, at the very least, that makes people stop and think..And something else turned me onto this, Felicity. I've known Kevin Wakeford literally for decades. He was the whistleblower in the Rand story, now we see it all with Deutsche Bank and what's happened to Deutsche Bank. But Deutsche Bank attacked the South African brand, I think it was in the 1990s, and really made fortunes out of the misery of the South African people. And Kevin was the guy who was a whistleblower. He lost his job as the chief executive of Sacob for it. And he has been named, he was named by Agrizzi as a miscreant in his testimony..Now, this isn't the Kevin Wakeford I know. And on engaging with him, he confirmed to me that that, from his perspective, it's all a bunch of rubbish. I also know a guy called George Papadakis who was named by Agrizzi. I've known George for many years and George is a forensic auditor who has uncovered unbelievable amounts of bad news and George was also named as a bad person, or is a crook..So, to me something didn't smell right. And I think now we we've got the other side of the story. Agrizzi did phone me early on Saturday morning after the interview had been published and he said he wants a right of reply, and I'm really looking forward to speaking with him this week..Interesting and I'm glad that you're going to be following up with him, so that we can get a 360-degree view of the story, and listeners and Biznews community members can really make up their own minds about what's real and what's not. And I think that's been an ongoing challenge with everything that's coming out in the state capture inquiries and everything that's happening at the public prosecutor's office – all of this stuff has been a real exercise in identifying the truth, and separating fact from fiction, and deciding who can be trusted among a group of people that all look very suspicious and are throwing blame on one another freely..And the journalists themselves are almost fighting amongst themselves, choosing sides and that's where Barry was so brilliant, was that Barry never made up his mind about anybody. He would go in there, open his mind, listen to all the evidence, because he was a trained advocate and that's what made him so good..Unfortunately, so often in the media nowadays, people get information from a contact or a source and then they will regurgitate that, because they don't want to make the source feel bad..That's not journalism, that is crusader writing or corporate communications or something else. It isn't seeking out the truth necessarily. And what I'm astonished with, with this whole story, is how few people have gone to the other side and asked people like the Watsons to tell them what's going on..Many of the journalists who have been covering this story have been taking it on single source, listening to what is presented at the Zondo Commission, and then regurgitating that as fact. No, it isn't. It's one person's or a few people's view on what the reality is. It's not necessarily reality until you check the other side. So, there's a lot of noise in our young democracy and it's only going to help us if we start assessing what lies behind that noise..I would say there's a lot of noise just in politics in general. I think it's not necessarily a uniquely South African problem. I think the press in many countries is struggling to do the job of presenting the facts rather than just presenting what was said. And I think that it's come under fire across and around the world for exactly that. .It's not enough to just say, well, so-and-so in this position said X. You've got to say, and we checked it and was x true?.It's a universal problem I think. And not only South Africa, but a lot of western democracies are struggling with this problem: Is objectivity just repeating what people say, or is objectivity going a little bit further, and saying is this a credible set of things that this person is saying? .And not everyone is on the same page, I would say, in what should be done there. .But, just before we wrap up, Alec, I wanted to touch on another story and that's something that's very interesting and has to do with, let's call it, the big guys behaving badly..Now, one of the things that regulators around the world are paying attention to these days is scale. In a lot of business sectors, there are huge, giant players who have accumulated enormous amounts of wealth, and who have deployed that to make sure that they exist in a favourable regulatory environment, and who don't necessarily always behave well. And, you know, we're seeing competition or anti-trust investigations in the US and in Europe of a lot of big companies. And there's renewed interest in this aspect of things. Now, this week you picked up on an interesting side avenue of this bad behaviour when it comes to Big Tobacco. Do you want to tell us a little bit about that?.Yeah. And this is another story I've been following for a few years..There was the fallout at South African Revenue Services over the rogue unit, the alleged rogue unit story, which has shown now by the courts and by pretty much everybody else to have been fake news, but because it was propagated by the Sunday Times over a period of many months, people believed it. One of the victims, or perhaps the biggest victim of that, was a guy called Johann van Loggerenberg, who was a former policeman who became head of the investigative unit at SARS..And, as he wrote in the first book with Adrian Lackay called Rogue, when they started getting a little bit too close to the tobacco industry, that is when he suddenly got fired and suspended as a consequence of political interference by people with a lot of influence..He's followed this up. We haven't heard from Johann for a long time – his Twitter account, for instance, isn't open. He has to give you permission to see what he tweets and so on. So, he's kept pretty much to himself, which is not surprising, because when you read Rogue, you see what he went through, which was really horrific. One of 200 people who were taken out of the revenue services by Tom Moyane during his regime..But he's brought out a new book called Tobacco Wars, and in Tobacco Wars, he completely throws open and changes the narrative, in my understanding anyway, of what's going on in the cigarette industry in South Africa..Now, just by way of background, around 50% of the price that one pays, that smokers pay for cigarettes, goes to tax. So, it's a huge potential area for abuse and also very important for the tax authorities to keep an eye on it. Hence the work that van Loggerenberg and his team at SARS did there..What comes out in this book is that the independents, the small guys – and I've met a chap called Yusuf Kajee, who's one of those who's been vilified in the in the media over the years as being a real big crook – the independents, he said, are half pregnant. As Yusuf Kajee said to me, he said, okay I cheated on my taxes, I've paid it up, I won't cheat anymore..But what Kajee said was that the big guys are far, far worse – through their transfer pricing and through the money that they take out of the country, they take billions away from the Treasury, rather than the few millions that I as an independent took..And there's this narrative that, when he said it, I met him in London and recorded the interview and the claims are so outrageous and so litigious or potentially litigious that I actually just sat on the story and kept it. But now van Loggerenberg has come out and really confirmed all of this in his book, and he has pointed the finger at British American Tobacco, which is one of the biggest stocks on the Johannesburg Stock Exchange – it's a secondary listing from London. And, it is common knowledge that when van Loggerenberg was at SARS, British American Tobacco were being investigated by SARS..Now, I don't know. We don't know who is behind Moyane. We've got our suspicions. But British American Tobacco, one of these big giants, is certainly an unwitting, or perhaps not so unwitting beneficiary of the fact that the investigative unit has been called a rogue unit and that those investigations stopped..So, there's a lot more. What meets the eye is never reality, there's always a little more we learn. As journalists, as you peel the onion, you find more and more information. And this story, this Tobacco Wars book, should be prescribed reading for everybody at SARS, and in fact, any concerned South African citizen, because there is stuff happening here, in this country, which seems to replicate what is going on in other parts of the world, where multinationals are not actually behaving themselves the way they should be..And it's good to be reminded, I think, that corruption is not a government phenomenon, it is a system-wide phenomenon. And that when it occurs, when you see it crop up, it's not just that there are people in the state who are behaving badly, but there are almost always going to be their counterparts in private business behaving badly. .And I think it's important for us to keep that in mind and remind people of that fact, because, I think, there's a bit of a tendency to have this idea that businesses is doing everything right and the government is holding it back, and that's not always true. In some cases, you've got to recognise that business is behaving just as badly. And for the same reasons, right, for the same reasons of greed and a desire to get more than their fair share..Certain people are motivated by share options, make more profit for the company you get more in your bank account..I heard it described once as saying that people are not evil, but corporates will make people do evil things, because of the incentives that they are given..And we've seen this all over the world. Wells Fargo, for instance, where you had people who otherwise, when they went home and engaged in their community, were upstanding citizens. But because of the incentive system at Wells Fargo, they cheated and created fictitious accounts so they could get higher bonuses. They didn't think they were hurting anybody, excepting they really were..And there are many, many examples of supposedly upstanding corporate entities, who spend gazillions on their corporate communications and on their image, but within the organisation, misaligned incentives get their people to behave badly, and as a consequence of that, who's to blame: Is the person who's been poorly incentivised or is it those who create the incentives?.That's why the CEO and other executives at Wells Fargo and Volkswagen, with the scandal on the diesel and metal emissions, and there's any number of them, why the chief executives take the knock in the end, because they're the ones who agreed to the incentives, and by doing so, they are the ones who are maybe sometimes turning people to do evil things.

Editor’s Desk: Truth & lies in the Agrizzi & state capture story

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