• Arms Deal
• Food for Oil
• Hitachi/Eskom/ Chancellor House
• Karoo Gas/ANC Trust
7.1. 1999 – The Arms Deal Scandal In 1999, the South African government signed contracts of approximately R30 billion to modernise the country’s defence equipment. This modernisation, popularly known as “The Arms Deal”, involved the purchase of corvettes, submarines, light utility helicopters, lead-in fighter trainers and advanced light fighter aircraft. The Arms Deal has been the single largest – and one of the most controversial – public procurement deals in post-apartheid South Africa.
Controversy around the Arms Deal spread as allegations of irregularities in the tendering process and the lack of transparency in subsequent investigations became known in the media. Doubts were cast on the intentions of a number of senior ANC members.
The national outcry had not resulted in the cancellation of any Arms Deal contracts and the saga continues. The institution of a judicial commission of inquiry, yet another promise made in 2011, has yet to start its work.
The nation was promised that a 150 000 jobs would be created with this deal, but we are yet to see them!
7.2. 2003 – Oilgate/PetroSA In 2003, the Oilgate scandal broke after the state-owned oil company PetroSA gave an ANC aligned businessman, Sandi Majali, an advance of R15 million, to be used by his company (Imvume Management) of which R11 million was diverted to ANC coffers ahead of the 2004 elections. We would never have heard of this if not for our media’s effort in exposing corruption.
7.3. 2005 – UN Oil-for-Food Programme (OFF) Once again, in 2005, Imvume Management cropped up with Oilgate’s Sandi Majali using the names of both former President Thabo Mbeki and then ANC Secretary General, Kgalema Motlanthe, when he sought crude oil from Saddam Hussein’s Iraq.
7.4. 2005 – Travel Gate In 2005, forty South African Members of Parliament (MPs) were to be charged with fraud in one of the biggest corruption scandal in the country’s post-apartheid history. These MPs were charged with illegally using parliamentary travel vouchers worth millions of Rands to pay for lavish trips for themselves and relatives. The majority of the culprits had been from the ANC.
In May 2008, the UDM expressed its disgust over the cynical manner in which the Travelgate MPs were let off the hook. The stealthy attempt to cancel their debt to Parliament made a mockery of the concept of accountability.
7.5. 2006 – Hitachi/Eskom/Chancellor House Holdings In 2006, the ANC stood to gain from state contracts by being both player and referee when its investment arm, Chancellor House, bought a 25% stake in Hitachi Power Africa. Hitachi Power Africa and its parent, Hitachi Power Europe, jointly won contracts worth R38,5 billion in 2007 to supply Eskom with power station boilers. In October 2010, the Minister of Finance announced that government would guarantee up to R300 billion in loans for Eskom up to 2017.
The implication of this deal is that the taxpayer is helping Eskom to fund the ANC. In other words, the ANC benefits from Eskom’s electricity price hikes through Chancellor House. Reports indicated that Chancellor House will receive R50 million over eight years in profits from Eskom’s Medupi and Kusile Power Stations.
7.6. 2011 – Karoo Gas Exploration An ANC trust established twenty years ago by struggle veterans stands to earn a potential fortune from shale gas exploitation in the Karoo. The Batho Batho Trust has a 51% stake in Thebe Investments, the local empowerment partner of Shell SA. Thebe is well placed to benefit from an industry that could be worth an estimated $200 billion (R1.6 -trillion) should Shell succeed in a bid to tap the reservoir of natural gas beneath the Karoo.
7.7. 2012 – Gautrain/SACP The South African Communist Party (SACP) opposed the construction of the Gautrain. However, recent media reports (which the SACP has yet to publicly deny) show that its investment arm benefited from the train’s construction and operation.
According to media reports, in July 2008, the J&J Group (co-owned by former trade unionists Jay Naidoo and Jayendra Naidoo) bought an 8% stake in the Bombela Concession Company, which had been awarded the contract by the Gauteng government to build and operate the Gautrain – and the SACP’s investment vehicle, Masincazelane, has shares in J&J.
Are our communist brothers showing a thirst for the benefits of capitalism?
7.8. 2012 – e-Tolling Despite strongly contesting the controversial e-Tolling system, the Congress of South African Trade Unions (Cosatu) has apparently benefited from the project to the tune of R24 million. Cosatu’s investment arm, Kopano Ke Matla, reportedly holds a 3% stake in road construction company Raubex, and Raubex received R800 million from a project which forms part of the Gauteng Freeway Improvement Project or the toll roads.
7.9. Correctional Services Scandal/Bosasa The SIU has been investigating the correctional services department for a number of years on claims of multimillion Rand tender rigging and is now ready to act against the politically connected Bosasa group of companies. SIU chief Willie Hofmeyr told Parliament that the Unit has uncovered evidence of corruption involving R1.7 billion and implicating the department’s former national commissioner Linda Mti and ex-finance head, Patrick Gillingham.
7.10. Independent Electoral Commission (IEC) On the 3rd of October 2011, the UDM reported suspected irregularities in the IEC lease agreements to the Public Protector. We wrote a letter to Advocate Thuli Madonsela asking her office to investigate the matter – please see Annexure A for the details (page 11).
Thus far, her office has given us no progress report on the matter. On the 14th of March 2012, we sent her a follow-up letter asking for a progress report. To date, her office is yet to acknowledge receipt of the correspondence.
This proves beyond reasonable doubt that the venerated Public Protector selectively tackles corruption and maladministration in government. It would appear that her office prioritises cases that strengthen the arm of the dominant faction in the ruling party, whilst dragging feet to investigate legitimate requests such as the one contained in our letter. For example, she was quick to confirm that her office would investigate allegations of bribe solicitation against Deputy-President Kgalema Motlanthe’s partner.
Regarding the suspected corruption, on the 29th of April 2012, the City Press reported that it had confirmed that one of the Manaka directors was a business partner of IEC Chair Pansy Tlakula. Tlakula played a role in the IEC’s new lease-acquisition. Parliament’s finance portfolio committee chairperson Thaba Mufamadi’s company, Manaka Property Investments, owns a 20% stake in the trust that owns the Riverside Office Park.
This once more demonstrates the shocking level of corruption in government when the chairperson of IEC ensures that her business partner is awarded with an IEC tender. In fact there is a clear conflict of interest.
Sadly though, it would appear that the Public Protector has turned her office into an animal farm, where some are seem more equal than others.