“Most, if not all state entities were led by the chief executive officers and boards of directors who would have been approved by the ruling party through its national deployment committee.”
How Zondo tore a hole in the ANC
For a party that has repeatedly insisted it was ‘not on trial’ at the Zondo inquiry into state capture, the ANC is front-and-centre in the commission’s report. And the findings are damning. But with so many of those implicated holding key positions in the party, and with preparations for an elective conference in December in full swing, is the ANC likely to pay more than lip service to accountability?
Source: Financial Mail
20 JANUARY 2022 – 05:00 CARIEN DU PLESSIS
Political influence used for malign purposes. Party funding through tender kickbacks. Entrenched nepotism arising from factionalism. Patronage in the public service. These are just some of the damning findings in the recently released report on state capture — and all took place “under the watch of the government of the ruling party, the ANC”.
Just four days into the new year, acting chief justice Raymond Zondo handed the first of the three volumes of his report on state capture to President Cyril Ramaphosa. The remaining two will be handed over before the end of February — and already it’s placed the ANC front-and-centre in corruption that, by some measures, cost SA R50bn.
Take, for example, the report’s finding so far on the various entities implicated in state capture: “Most, if not all … were led by the chief executive officers and boards of directors who would have been approved by the ruling party through its national deployment committee.”
The ANC, insistent that it was not on trial at the state capture commission, has now all but been found guilty.
It may have benefited the ruling party to pay closer attention. When the commission launched in 2018, the ANC followed proceedings closely, tasking then deputy minister of state security Zizi Kodwa with a watching brief. But what was supposed to have been a six-month stint for Zondo turned into a four-year saga (partly the result of Covid), and Kodwa’s brief came to an end.
The FM’s interviews with party leaders suggest that the ANC lost track of testimony at the commission after that; not everyone, it seems, appreciated the seriousness of the claims. So they may have been caught flat-footed by Zondo’s findings — including the link between the corrupt granting of tenders, and funding of the ANC from the proceeds of this crime.
This, the commission found, “can represent an existential threat to our democracy”.
Despite the magnitude of the findings, the ANC has been slow to respond. Ramaphosa’s pronouncement at the party’s January 8 birthday rally suggested a vague plan: putting in place “mechanisms to process any part of the commission report that pertains to the organisation, its deployees, or members”. But what form these “mechanisms” will take, and who will be responsible for taking the process forward, have yet to be discussed.
ANC treasurer and acting secretary-general Paul Mashatile tells the FM the Zondo report will feature on the agenda of the national executive committee (NEC) meeting this week — alongside discussions about the party’s 10-year renewal plan.
But the FM understands that the ANC will wait for all three parts of the report to be delivered before discussing it in the NEC in early March. Meanwhile, even the National Prosecuting Authority (NPA) — roundly criticised for its glacial progress on corruption cases — is a step ahead of the party. It’s already processing the report, and could start laying charges before Ramaphosa formally tables the final version in parliament by the end of June.
“Thus far the noises are that the NEC will accept the report and call on implicated members to report to the integrity commission,” a party insider says.
And ANC members charged with serious offences such as corruption will probably be asked to step aside — as secretary-general Ace Magashule was, after being charged with corruption relating to an allegedly dodgy asbestos tender in the Free State. (In the end, he had to be suspended after he refused to heed the directive.)
But it seems the integrity committee isn’t up to date with plans either. Committee chair George Mashamba says he isn’t aware of the ANC’s plans for implementing the report’s recommendations, or “whether the integrity committee will be part of the mechanism that they will implement”.
He does, however, note that the ANC should see to it that its deployees in government comply with the report’s recommendations.Zizi Kodwa: Initially tasked with a watching brief on the Zondo commission but his brief came to an end before the commission did. Picture: Sunday Times/Masi Losi
Still, broader issues related to organisational design, such as the ANC’s deployment committee and party funding — including the internal funding of presidential campaigns — will be tricky to deal with in an internal election year, insiders say. As a result, these issues are only likely to be discussed after the party’s December elective conference.
Ramaphosa is expected to run for a second term as party president at the conference. He enjoys the advantages of incumbency, leading some party insiders to claim he — like Jacob Zuma in 2012 — will win a second term with ease.
But early indications are that his detractors could launch a serious challenge — if not for the top job, then for top party positions and places on the powerful NEC. Some campaigners fear a stalemate worse than the one after the 2017 Nasrec conference, where Ramaphosa’s allies managed to secure just half of the top six party positions.
The fact that some of Ramaphosa’s allies also feature in the report poses a dilemma for the leader, who wants to be seen as a corruption-fighter. Any prosecutorial inaction is also likely to strengthen claims by his detractors that the criminal justice system is being used for factional purposes.
Still, he could use the report as an incentive for keeping his allies loyal, one of his campaigners says.
“If Cyril is clever about it, he will use this as a carrot-and-stick towards his re-election in December, and get them to kiss his feet in exchange for being more circumspect in how he deals with the state capture report,” he says.
But the trade-off — that Ramaphosa sees to it that the prosecuting authorities work diligently to get convictions for those prominent leaders who have already been charged, like Magashule — could backfire. Magashule has already claimed in court papers Ramaphosa is acting factionally; even the whiff of politically targeted prosecutions could strengthen that claim.Jacob Zuma: The report points to evidence of how he assisted his friends, the Gupta brothers, in their ‘efforts … to capture the National Treasury’. Picture: Sunday Times/Esa Alexander
In the dock
The ANC and a raft of its leaders, from former president Zuma to Ramaphosa, are implicated in the state capture report.
Zuma, for example, is said to have interfered with the appointment of the boards of state-owned entities (SOEs). The report also points to evidence of how he assisted his friends, the Gupta brothers, in their “efforts … to capture the National Treasury”. These moves were resisted by former finance ministers Nhlanhla Nene and Pravin Gordhan, as well as senior officials.
Ramaphosa’s name appears just three times in the 874 pages of the report’s first part — all in relation to evidence he gave before the commission. But as deputy president of the ANC, he headed the party’s deployment committee from 2012 to 2017, and it comes in for a drubbing.
It was the deployment committee that enabled state capture, the report finds, and Ramaphosa himself said in an affidavit before the commission that SOE board appointments (which would prove central to the looting of the lucrative entities) had to be approved by the deployment committee.
That decision was resisted by former public enterprises minister Barbara Hogan, who testified about “behind-the-scenes” manoeuvring in parallel with official appointment processes. There was a lack of transparency, conflicts of interest and, Hogan said, factional battles that “encouraged and entrenched nepotism and patronage, which compromised the integrity of the deployment process and damaged SOEs”.Jeff Radebe: Allegedly put pressure on former public enterprises minister Barbara Hogan to appoint Siyabonga Gama as Transnet CEO. Picture: Business Day/Siyabulela Duda
For example, fellow cabinet ministers and other senior ANC leaders — among them Jeff Radebe, Gwede Mantashe and Siphiwe Nyanda — allegedly put pressure on Hogan to appoint Siyabonga Gama as Transnet CEO. At that point, the board had already selected another candidate after an extensive recruitment process — never mind the allegations of misconduct around tender irregularities hanging over Gama at the time.
But Gama, who had links to the Guptas, was Zuma’s first choice. When Hogan was replaced by Malusi Gigaba, Zuma got his wish.
Those implicated in that sliver of testimony still occupy important positions in the ANC. Mantashe, who was secretary-general at the time, is now party chair and minister of mineral resources & energy; Radebe remains the party’s head of policy, and led the ANC delegation when Ramaphosa testified at the state capture inquiry last year; Nyanda is SA’s ambassador to Mozambique.
Zuma, too, remains an ANC member and sits on the NEC in his capacity as former president, despite a 15-month prison sentence for contempt of court, after he ignored a Constitutional Court order to testify before the state capture commission.
Then there were the deployment committee’s discussions, revealed in its own minutes, around preferred judicial appointments.
But it wasn’t just appointments; it was procurement too. Here, Zondo found a “pattern of abuse [which] extended through various stages of the procurement cycle”. It was evidence, the report says of an “embedded corrupt relationship” between private companies and SOEs such as Transnet and Eskom. The SA Revenue Service (Sars) and City of Joburg were also implicated.
Taken together, these instances show “the use of political influence for malign purposes, the appointment of pliable officials to oversee the improper granting of tenders or contracts, the bullying or replacement of officials who objected to irregular practices, [and] the diversion of money, being the proceeds of corruption, to the benefit of the ANC”.Siphiwe Nyanda: Allegedly put pressure on former public enterprises minister Barbara Hogan to appoint Siyabonga Gama as Transnet CEO. Picture: Gallo Images/Netwerk24/Felix Dlangamandla
Three examples of high-value tenders — “more than enough to sound the alarm” — are singled out by Zondo.
The first involves the dealings of late Joburg mayor Geoff Makhubo with technology company EOH Holdings, through which “it appears that a front company was used as a vehicle to channel money to the benefit of the ANC”. In short, evidence suggested Makhubo had solicited a R50m donation to the ANC ahead of the 2016 local government elections.
The second involves the Free State provincial government’s dealings with Blackhead Consulting, which received a number of lucrative contracts, including a 2014 asbestos audit tender worth R255m. (Former Free State premier Magashule has been charged in relation to this tender.) Between 2013 and 2018, Blackhead is said to have paid the ANC millions of rands.
Third is facilities management company Bosasa, which is expected to be dealt with more fully in a later report.
“The evidence heard by the commission revealed that Bosasa was deeply involved in corruption for many years, which involved tenders from government departments or government entities such as the department of correctional services (prisons) and the department of home affairs and the Airports Company [SA],” the report found. “The evidence also revealed that Bosasa made donations to the ANC in cash and in kind.”
As a first step, the report recommends prosecutions on these counts. But it also suggests changes to the law that will go further than the Party Political Funding Act, which came into effect in April, and criminalise such behaviour.
Finally, SA’s four big banks — Absa, FNB, Standard and Nedbank — told the commission they were summoned to the ANC’s headquarters at Luthuli House to explain why they had closed the Guptas’ bank accounts in 2016, and how Mantashe and the head of the ANC’s economic transformation committee, Enoch Godongwana (now finance minister), initiated the meeting. Party deputy secretary-general Jessie Duarte was also in attendance.
Godongwana and Mantashe went on to become supporters of Ramaphosa’s presidency and still hold key positions in his cabinet and the party; Duarte remains deputy secretary-general.Gwede Mantashe: Mentioned in Zondo’s report but is a key Ramaphosa supporter. Picture: Sunday Times/Esa Alexander
With the various patronage taps being turned off, the ANC is feeling the pinch — the organisation is cash-strapped, and staff salaries have not been paid for months. Already, many in the party are blaming the Political Party Funding Act for a steep drop-off in donations for its elections campaigns.
Losses in last year’s local government elections — including the loss of control of all the metros in the economic hub of Gauteng — have compounded the party’s problems, by leaving many former public representatives out of work.
The focus now, however, is on the ANC’s leadership contest ahead of the December conference. It kicked off in earnest soon after the state capture report’s public release on January 4.
Tourism minister Lindiwe Sisulu appears to be making a play for a presidency position again, and looks set to use opposition to the inquiry as leverage for her campaign. Shortly after the hand over of the report, Sisulu published a column on the IOL website in which she used strong language to criticise black judges — an attack Zondo described as “rich in insult but very poor in substantiation and in any analysis”.
Sisulu’s name doesn’t feature in the first part of the state capture report, and she wasn’t called to testify. In fact, she was mentioned just once during proceedings — as a shareholder of Dyambu Holdings, the company that birthed Bosasa (it’s a claim she’s denied). But her attack on black judges could be a boost to those who have been implicated in the report.
Sisulu has long been outspoken about the inquiry, saying in a tweet last March that it is an “expensive way of dealing with corruption” (the commission has cost taxpayers about R1bn), with “absolutely no guarantee of consequences”.
Sisulu did not respond to written questions from the FM through her spokesperson, Mphumzi Zuzile.Lindiwe Sisulu: Appears to be making a play for a presidency position and looks set to use opposition to the inquiry as leverage for her campaign position. Picture: Freddy Mavunda
Ramaphosa, of course, looks set to run for a second term, after not resisting an endorsement by Limpopo leaders at the party’s January 8 rally. But some analysts suggest his detractors might be planning more disruptions, like the large-scale July riots that gripped KwaZulu-Natal (KZN) and Gauteng, to knock his campaign off-balance.
Meanwhile, Mashatile says the party’s real work on the commission’s recommendations will only start once the NEC has appointed a “small committee” to consider the report and its recommendations, and determine how the party should deal with it.
That committee will also look at how to get the message to lower structures. “This is a comprehensive approach — not nit-picking areas, but looking at the entire report so that the report is implemented,” he tells the FM. “Even where it criticises us, we should be able to say: ‘How do we change the ways we do things?’”
Mashatile says this was what Mantashe meant when he told journalists the party shouldn’t use the report “to hunt each other down and destroy everything that is in the movement”, but rather to “look into the mistakes and weaknesses that are in that report and try to correct them”.
Says Mashatile: “It is possible that, where you have factions, people will view the report in a way to bash one another. You cannot have that. Where the report says somebody is involved in wrongdoing, the law must take its course.”
It isn’t correct to shield people from prosecution in the name of unity, he adds.
Interestingly, given the commission’s findings, Mashatile suggests the ANC won’t do away with the deployment committee. Instead, it’s likely to “fine-tune” its processes, and apply them to public representatives alone. “It wasn’t meant to take people to various positions for them to siphon state resources, but to put the best cadres in areas where they would be able to take the country forward,” he says. “The intention has always been noble.”
The deployment committee doesn’t impose, says Mashatile, but allows ministers to choose their appointments, and the Judicial Service Commission to pick judges independently.Geoff Makhubo: Allegedly solicited a R50m donation to the ANC ahead of the 2016 local government elections. Picture: Business Day
Another insider suggests there will also be an effort to structure the deployment committee’s minutes better, presumably to ensure transparency and to avoid embarrassment should these be published. (The commission released deployment committee minutes from 2018-2021 as part of the bundle of documents related to Ramaphosa’s testimony.) A “renewal commission” will also look at corruption in the party, as part of developing a vision ahead of the ANC’s 120th birthday in 2032.
“It is about going back to proper values, dealing with corruption and deploying capable cadres,” Mashatile says.
“You also look at what the state capture report is saying and then you factor those issues in as part of that process of renewal. So [implementing the report’s recommendations] won’t be an abrupt thing.”
The ultimate aim, in Mashatile’s view, is “to turn the ANC around to be the party that people can trust”, and ensure ANC leaders care about the problems facing communities, such as water and electricity provision, and growing the economy to create jobs.
Backs to the wall
Rebuilding trust with voters will be a priority. Last year, the party’s national share of the vote fell below 50% for the first time. There’s no doubt that four years of revelations of the rot in government would have played some part in this.
It’s left the ANC uncertain of where it may be after the 2024 general elections. In its worst-case scenario, the December conference could be the last where the selection of SA’s president is up to ANC delegates.
Still, governance is unlikely to improve in the year ahead, as internal ANC squabbles are expected to keep leaders busy.
“The ANC is a party in decline and this has become significantly apparent even to its leaders after the last local government elections,” says political analyst and talk-show host Lukhona Mnguni.
The electoral patterns in the two most populous provinces, KZN and Gauteng, in both the 2019 national and 2021 local government elections, point towards a loss of majority support for the party. “That will significantly [affect] the national outcome for the ANC,” Mnguni says.Enoch Godongwana: SA’s four big banks say he and Mantashe initiated a meeting at Luthuli House to explain why they had closed the Guptas’ bank accounts. Picture: SUNDAY TIMES/ESA ALEXANDER
“Whatever power-broking configurations are going to be made towards this next [ANC] conference, it’s going to be much more difficult because it’s apparent that the ANC will see a significant shift in its power come 2024.”
Some would like to make a last bid for high-ranking government positions before the ANC loses power, which will up the stakes, he says.
Oscar van Heerden, political analyst and deputy vice-chancellor at the University of Fort Hare, says people are expecting to see action from the state capture report. “The question is: will Ramaphosa have the manoeuvring capabilities?” he asks.
Van Heerden says while Ramaphosa has managed to get institutions such as Sars and the NPA back on track, there is some uncertainty over whether the NPA is fully equipped for the prosecutions. Even if it is, “it won’t be a quick fix”, he says, adding that those in the ANC targeted by prosecutions are likely to step up their response.
“They feel the only way they can avoid prosecution is if they can unseat Cyril Ramaphosa,” he says. “They want to make it a bloodless coup … it is not in their interest to destroy the ANC because they still need it to have access to the public purse. They are astute enough to know that an ANC without Ramaphosa as president is going to suffer significantly in 2024.”
Some reckon Ramaphosa’s detractors will try to cause as much disruption as possible, continuing from the July riots and arson in KZN and Gauteng. He is aware of this, and has added the fire that gutted the National Assembly during the first weekend of the year to his list of “attacks against SA’s democracy” — even though it’s not yet clear how the blaze started.
Those who want to influence conference outcomes might also be up to their usual tricks, such as the bulk-buying of party membership to try to sway voting patterns. With Magashule suspended and Duarte on extended sick leave, this might prove easier than before.
Eastern Cape premier and ANC provincial chair Oscar Mabuyane — a staunch Ramaphosa ally — says the province has already detected a “syndicate” targeting the party’s new electronic membership systems ahead of the provincial elective conference.
“There are people who are pushing back at renewal at all costs,” Mabuyane says.
A high-ranking pro-Ramaphosa ANC official says conference years are always characterised by tense moments.
“You’re not going to have an easy year, it will be hectic and full of action, negative and positive, and sometimes full of tension, with or without the Zondo commission,” he says.
“But it is a fight against corruption, and it will not be smooth in that context. There are leaders who appeared before Zondo and know what recommendations the commission is going to make, and it might just add fuel to this.”