Comrades in Corruption
The real State of the Nation
“A looter continua”
This document, “Comrades in Corruption III” expands on the United Democratic Movement (UDM) previously published discussion documents: “Comrades in Corruption I” (issued in 1997) and “Comrades in Corruption II” (issued in 2001), in which we shed light on the extent of corruption in government in post-apartheid South Africa.
Corruption in the African National Congress (ANC) government is rife and widespread despite its assurances to the contrary. This high level of corruption in South Africa handicaps service delivery, which results in many violent service delivery riots around the country. Even prospective investors shun South Africa as an investment destination due to high levels of corruption and our people are paying the price.
With Comrades in Corruption III we aim to give a bit of a history lesson in the corruption scandals that have hit our Nation and who the role players were. We all know that history teaches us about the mistakes of the past so that we can avoid making them in future, but the ANC seems to be avoiding such lessons if one looks at their track record. However, the jury is still out whether the level in the ANC government either matches or surpasses that of the apartheid government.
Even former President Nelson Mandela admitted to the widespread existence of corruption in the ANC when he said in August 1998 that: “We have learnt now that even those people with whom we fought the struggle against apartheid’s corruption can themselves be corrupted.”
In 2011 Transparency International ranked South Africa as the 64th most corrupt nation in the word, out of 183 countries, and the blame for this shocking statistic can be laid squarely at the door of the ANC.
2.1 Corruption in South Africa – the big picture A few months ago, the Special Investigating Unit (SIU) made a shocking revelation in Parliament about the state of corruption in South Africa. Responding to a Parliamentary question, the SIU said the extent of fraud and corruption in the State procurement process was R25 billion to R30 billion per year, confirming fears that institutionalised corruption has taken root.
As Dr Sipho Pityana, chairperson of the Council for the Advancement of the South African Constitution, once put it: “It is now beyond doubt that corruption and patronage are so pervasive, rampant and crippling in our society that we are on the verge of being deemed a dysfunctional state.”
The existence of corruption in government distresses because it slows GDP growth, causes distortions in the economy and results in inefficiencies that increase the cost of doing business. It also discourages the culture of paying tax.
Established democracies make it their mission to root out corruption in all sectors of society but in South Africa government’s soft approach on corruption seem oblivious to the dangers corruption pose to long-term socio-economic and political stability. In fact, this culture of corruption is celebrated and those involved are viewed as heroes to be idolised and emulated and ANC deployees who are found guilty of corruption are rewarded with re-deployments, and rarely pay for the consequences of their actions.
2.2. The role of government in this corruption
Corruption is so prevalent in our government, that we have name for it: institutionalised corruption. To make matters worse, our government shows a fondness of engaging in ‘elite projects’ (amongst many others, building soccer stadiums, the Gautrain, Gauteng’s e-Tolling system, etc.). Whilst some of these serve a good cause, we are doubtful of other. The UDM believes that government has its priorities all wrong. How can these elitist projects be a priority whilst millions of South Africans still need access to a basic thing as clean water?
The priority must be to use the resources of state to deliver basic services. Instead government seems hell-bent on their elite projects that often seem designed as nothing more but a way for the ruling party and its cohorts to get their hands on lucrative state tenders – as we saw with the Arms Deal.
In the past year, we have witnessed wave upon wave of service delivery protests, some very violent, with people complaining about the lack of jobs and services in their communities. Unfortunately the ANC government responds to legitimate grievances by sending in the police, instead of constructively engaging the community. This mentality reminds us of the Apartheid regime.
This same “securocrat”-mentality also reared its ugly head with the introduction of the Protection of Information Bill and the ANC’s planned Media Tribunal. Never before has proposed legislation caused so much negative local and international publicity. Contrary to the propaganda of the ruling party, there has never been a single instance where a newspaper or media organisation threatened national security by publishing leaked information. However, there are countless examples of leaked information exposing the scandals and wrongdoing within Government. It is patently clear to any right-minded observer that these proposed laws are a heavy-handed attempt by government to prevent the public from knowing about the scandals in which it and/or its members are involved.
It is the media that showed us lies and deception of those in power! There are Tripartite Alliance leaders in cabinet who have portrayed themselves as champions of the poor but who live in imperial opulence. If it had not been for the media we would not know that these so-called pro-poor hypocrites drive million Rand cars and stay in the most expensive hotels in the land.
Nor is the problem restricted to individuals – we will cite a number of examples of this phenomenon later in this document which prove that the ANC is engaged in looting state resources for its coffers.
2.3. The role of the ANC in government corruption We have unfortunately not seen decisive leadership from the ruling party during any of the corruption scandals that involved government (therefore taxpayer) money. The ANC remains defiant – it seems hell-bent on silencing the media and vilifying opposition parties by calling them counter-revolutionaries.
In addition to the confusion and dissatisfaction these ANC shenanigans are causing, they make matters worse with their constant policy changes.
3.1. Economic policies to confuse a nation Surely after nearly twenty years of economic experimentation, it must be clear that the ruling party has run out of ideas. They are merely tinkering with policy in the blind hope that they will somehow stumble upon a solution. With the latest so-called New Growth Path we once again have policy that was written behind closed doors and foisted on the nation. We are again witnessing the posturing and bickering among the Tripartite Alliance members as they did with GEAR. It seems that this latest policy is an attempt by President Zuma to get around his earlier statements that there would be no change in economic policy from the Mbeki government to his.
3.2. Other departments have been affected To see the dangers of personalising policy, we need only look at the disasters that followed in the wake of new education policy adopted by every new minister since 1994.
President Zuma’s big cabinet has one big consequence for South Africans, especially the taxpayer, we are just paying more. Not only are we paying more in salaries and expenses, we also pay for some of their inadequacies, their ineptitude, and in too many cases, their blatant corruption.
Our parliament should empower itself to prevent the president from appointing such an excessively big cabinet. There should be a clear-cut policy on an agreed-upon number of cabinet posts. The president should not be able to just willy-nilly appoint more than this number without the approval of Parliament. What we are really witnessing is the creation of countless ministries simply to reward political allies.
Given the fact that approximately twenty four ministers and a number of senior government officials come from the same region (i.e. most of the security cluster departments, economic development and finance clusters, judiciary and key social departments) it stands to reason that people perceive it as the most favoured region in the country when it comes to resource allocation. This laager mentality has even affected the relationship between the Tripartite Alliance partners, the ANC and its Youth League.
Our cabinet must be representative of the demographics and regions of the country. If the president had chosen to draw the these twenty four ministers from right across the country, we could have maybe understood the concept of having a large cabinet representative of all regions, but as it stands, it looks as if President Zuma had to create posts in order to repay his political debts in KwaZulu-Natal.
Under the President Mbeki’s leadership it was common to talk about the “Xhosa nostra”. The Public Service Commission has failed to prevent the appointment of civil servants along ethnic and racial lines. In fact, it has become a tradition for the executive and senior government officials to fill their departments with members of their ethnic groups once they take office.
The evil of ethnicity was warmly embraced in the period leading up to the ANC Polokwane Conference in 2007 when those who campaigned for Zuma used slogans such as “100% Zulu Boy” with impunity. The victorious cabal openly declared that it was its turn to eat. The deployment of cadres along tribal lines even surpasses what the Mbeki administration had been accused of.
Today, political pundits and fundis agree that the ANC has veered from the values embodied by its former Presidents, Chief Albert Luthuli, Oliver Tambo and Nelson Mandela. It has degenerated into a regional party with people expressing concerns about a disproportionate share of South Africa’s resources being allocated to one region.
One forum user on Facebook summed it up nicely: Nelson Mandela : South African Agenda? Thabo Mbeki : African Agenda? Jacob Zuma : Zulu Agenda?
Resource allocations and appointments based on ethnicity and tribalism are the root cause of civil wars in Africa and many parts of the world. Such tendencies are what caused mass killings of the Tutsis and Hutus in the Rwandan Genocide of 1994. Necessarily, the ruling party, the mother of non-racialism in South Africa, should not take these concerns lightly.
When trying to find examples of the ANC’s political infighting which spills into government, one does not have to look far. Just recently the former acting national police commissioner Nhlanhla Mkhwanazi alleged that there is an “ongoing plot to discredit the management of the police”. This is just one case, but there are stories abound of the ANC’s passion for fighting their political battles in the public service.
Each move made by government, when it gets to the hiring and firing of senior officials, seems to be an “internal political intervention”. If an appointee is not the flavour of the day ór seems to be doing a good job, he/she is simply removed in favour of sycophant (competent or not) that will dance to the ANC’s tune.
The rot starts at the top and it will continue as long as we allow ministers, MECs and councillors to appoint senior and junior civil servants. What happens is that these political heads often appoint friends and acquaintances (to pay their political debts and/or hedging bets on their future political ploys).
We have seen too many instances where ministers override the decisions of their accounting officers and the budgets of state departments are abused to pursue the elite projects mentioned earlier. This happens at the expense of valid service delivery projects, which is why communities complain that the projects they were promised never happen or were halted out of the blue. There are a number of examples of this phenomenon, but most recently it was reported that the Minister of Women, Children and People with Disabilities, Ms Lulu Xingwana, interfered with the work of her DG, Ms Nonhlanhla Mkhize. Once again, the media was the nation’s friend; otherwise we would have been blissfully unaware of this unhealthy situation.
DGs and senior civil servants, who are committed to service delivery, do not enjoy protection against the hyenas who want to loot the resources of state departments. If these appointments were independently made and they were encouraged to report all “political directives” to Parliament a large portion of the corruption we witness will be stopped.
As we can see, this culture of political interference in the daily administration of our government causes bureaucratic chaos. Ministers seem to not know where to draw the line between accountability and interference (or maybe they choose to ignore it). Several ANC Ministers have made this mistake at the expense of our people.
Some examples:
• Arms Deal
• Oilgate
• Food for Oil
• Tavelgate
• Hitachi/Eskom/ Chancellor House
• Karoo Gas/ANC Trust
• Gautrain/SACP
• e-Tolling/ANC/Cosatu
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.
Our police service is beleaguered with its own set of problems with the ANC’s political interference. How ironic that the very body that should be a shining example of honour and honesty goes laden under suspicion and distrust.
We first had Mr Jackie Selebi who was put on extended leave as national police commissioner, and resigned as president of Interpol, after he was charged with corruption. Selebi, testified against the Scorpions before the Khampepe Commission, but he was exposed for having dubious relationships with drug lords and organised criminals. He ended up in jail.
Bheki Cele, who did not last long after the President questioned his suitability, replaced Selebi. However, the jury is still out on whether Cele can be accused of not doing his job or that he was corrupt. So far there has not been any evidence that proves that he is guilty of corruption. However, Cele’s strategy to reduce crime seems to be working as is evidenced by the current crime statistics.
We cannot rule out the possibility that his being fired can be linked to Richard Mdluli’s report that Cele and Housing Minister Tokyo Sexwale were involved in a plot to replace Zuma as president of the ANC. Yet Mduli is another example of the abuse of state resources. In fact, many South Africans expressed concerns that this officer thought himself justified in illegally tapping the phones of many people who were deemed to be “the enemies of Zuma”.
At the moment, the National Prosecuting Authority (NPA) is investigating the serious charges of corruption and murder against Richard Mduli. Another aspect of this mess is that the Minister of Police has not yet adequately responded to allegations that the secret fund administered by Mduli was misused to improve the security in the Minister’s private home.
This shocking level of corruption in the ANC government affects us in the following ways:
• Subsidies, which were used to support labour intensive industries, such as textile and agriculture/farming, were removed, leading to the destruction of many industries. This means that our unskilled labour force could not be absorbed into these labour intensive industries.
• Corruption diverts resources that government should use for job creation and the fight against poverty, into the coffers of the ruling party or politically connected individuals.
• No attention is paid to improving the poor quality of our education system.
• Hospitals and clinics regularly run out of medicines and lack proper equipment.
• Doctors, nurses, teachers and civil servants (such as soldiers and police officers) are paid paltry salaries, which is the reason why they leave for greener pastures.
• South Africa looses billions of Rands because of the capital and skills flight.
• Infrastructure, government buildings and roads fall apart due to neglect and inadequate maintenance.
• Most importantly, the gap between the rich and poor widens exponentially.
For seventeen years the ANC has stubbornly continued the use of a system that seems nothing more than an incentive scheme for those in power (including their friends and family) to accrue even more. Not only are the blunders these inappropriate appointees make costly (both in financial and credibility terms), but prosecuting those that make themselves criminally culpable also use resources that surely could have been spent on bettering the lives of all South Africans (not only the cadre elite).
This culture of Comrades in Corruption shows that the ANC is either wilfully ignoring the problems cadre deployment creates, or they are just plain naïve. No matter their motivation, if the ANC cannot stop themselves from abusing power, the electorate must make that decision for them.
During election time COSATU and the SACP perpetuate the myth a pro-poor ANC notwithstanding all evidence to the contrary. After elections they complain and talk of a ‘predatory state’ and ‘hyenas’ – it is not the state that is predatory, it is the ruling elite. It is COSATU and the SACP who continue to deceive the public to vote for an ANC which has since the Arms Deal of 1999 been characterised by self-enrichment. 11. What to do? This is a wake-up call for our members! We must go out to our communities, our families and friends and tell them what is really going on. The information we have given in this document is not something the UDM is making up – they are facts.
In order for us to make a change, we must go out and create awareness and educate our people about the reality: corruption is alive and well and our people are paying the price. We must engage our fellow citizens and civil society organisations to get the nation talking. The question they should answer is: How much longer will we allow this situation to continue? How much longer do we want to suffer?
This is not what South Africans fought for! Drastic change is needed!
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