Than Corruption
Our experience had made us acutely
aware of the possible dangers of a
government that is neither transparent
nor accountable. To this end our
Constitution contains several
mechanisms to ensure that
government will not be part of the
problem Nelson Mandela, 1996
The Power Elite Anchored at the
Top
If it were up to me and I made the rules,
I would ask for six months as a dictator.
You would see wonders, South Africa
would be straight. Thats why if you give
me six months, and allow Zuma to be a
dictator, you would be amazed.
Absolutely. Everything would be straight.
Right now to make a decision you need to
consult. You need a resolution, decision,
collective petition, Yoh! Its a lot of work.
and above)
#1 & #2: Capturing the
SOCs
2015: Seemingly Ultimately,
Evidence has
in a bid to gain according to
also emerged of
access to the media reports,
how the
lucrative Transnet has
proceeds of
Regiments paid Trillian
March 2014: about R170-
these contracts
consulting have been
Transnet contract with million for
spirited out of
awards Transnet, the unexplained
the country
R50bn loco Guptas try to consulting work.
through various
buy Regiments, Evidence has
tender to four emerged of how
Gupta-linked
but fail. They shell companies.
train builders. then buy into Transnet paid
Trillian Chairman
advisory firm both Regiments
Tokyo Sexwale
Trillian after (apparently non-
launched an
which a material Gupta linked)
investigation into
portion of the and Trillian
the allegations
Regiments work (Gupta linked)
against Trillian
is redirected to hundreds of
but the company
them, apparently millions for the
was
with the help of same pieces of
uncooperative
their friend Eric consulting work.
and the
Regiments is
#2: Capturing the SOCs
Denel overhaul between July 2015 and May 2017
The use of the Heath and Safety law, for example, is then
used to achieve the firesale of existing assets in favour of
sectional business interests.
#1, #2 & #3: Capturing the SOCs:
Coal
How the law appears contracts
to have been used in favour of the
Guptas.
IDWALA & BRAKFONTEIN No water licence & weeding out of skills
2006: Tegeta Exploration and 2014: News breaks that March 2015: Three months However, shortly
Resources, Tegeta Resources, Tegetas Brakfontein Colliery in later, the Brakfontein Mine thereafter, Eskom
Idwala Coal are registered and Mpumalanga has apparently secures a coal supply contract informs Tegeta that it is
obtain prospecting rights in also started mining coal worth R400-million per year. suspending the supply
Mpumulanga, Limpopo, Free illegally and that polluted Despite, apparently not having contract to investigate quality
State, KZN. water is draining into an a water licence, the mine is inconsistencies following
adjacent wetland. The contracted to supply Eskoms problems at Majuba
Department of Water Affairs Majuba power station in Five days later, Eskom
issues a directive to the mine Mpumulanga for 10 years lifts the suspension
for failing to take reasonable bringing the total value of the after the Group
measures to prevent pollution contract to R4-billion. Executive for
2011: News breaks that and for using water without Generation
Idwala Coal is mining coal near authorisation, but apparently Matshela Koko
a sensitive wetland on the the company is able to apparently intervenes.
Vierfontein Farm in continue its mining without The Eskom employees who
Mpumulanga, apparently resistance. found inconsistencies with the
without the requisite water-use coal are coincidentally
licence. 2014: News breaks that Zola suspended and the two
Tsotsi (then Eskom chairman), In the lead up to the laboratories contracted to
2011: News reports state that has approved a R500-million Brakfontein contract being test the Brakfontein
despite not having a water coal supply contract with awarded, the following things coal are also suspended.
licence, Idwala has continued Idwala Coal in Mpumalanga. happen, according to the While Eskom, it
to mine and has by now The contract doesnt go media: appears, is going out of
damaged the area to such an through after some senior Four laboratory tests its way to bend the law to
extent that Department of Eskom executives express show that Brakfonteins enable the Gupta-
Environmental Affairs concern over Idwalas illegal coal is not of a high owned Brakfontein mine to
documents show that there mining operations. Shortly enough quality to use at continue, the power utility is
exists the possibility that thereafter, President Zumas Majuba power station. using the full might of the
protected species were Cabinet announces that the A fifth test finds the law against one of
destroyed. entire Eskom board will be coal to be marginally Eskoms oldest coal suppliers.
replaced, many of whom are within specification, but This is the Tegeta /
Gupta-aligned (see slide 4). still high risk Eskom Optimum scandal and
accepts this test and allows perhaps encapsulates the
story of state capture
#1, #2 : Capturing the SOCs:
Coal contracts
How the law appears to have been used in favour of
the Guptas.
TEGETA / OPTIMUM How one company was forced out of business
in favour of a Gupta company
July 2013: Glencore, which July 2015: Four things August 2015: Glencore November 2015: Zwane
owns Optimum Holdings, happen: announces that they are travels to Switzerland to
writes to Eskom because i) Glencore asks Eskom placing Optimum Coal meet Glencores Ivan
they are losing nearly R1bn if they will consider paying Holdings and Optimum Coal Glasenberg. Thuli
per year based on their R300 per tonne of coal until Mine under business Madonselas State of
1993 coal-supply contract the end of 2018, and then rescue. Capture report cites an
of R150 per ton of coal. R570 between 2019 and independent source
They invoke the hardship 2023. Instead of saying that Rajesh Gupta
clause, which means that considering this and Salim Essa were
Optimum and Eskom could request, Eskom imposes a present at the meetings.
enter into negotiations if fine of R2,1-billion on Days after Zwanes return,
either party felt that the Glencore for supplying poor Optimums business rescue
coal-supply contract was no quality coal, ironically the practitioners conditionally
longer in their best interest. same month that it lifted agree to sell the mine to
the suspension on the September 2015: Tegeta for R2,15-billion.
May 2014 they sign a Co- Guptas Brakfontein Mosebenzi Zwane is
operation Agreement, Mine which had been appointed Mines Minister. In her report, Madonsela
which paves the way for a found to be of poor notes: It is potentially
new coal-supply contract to quality; unlawful for the Minister to
stop Glencores losses. ii) Glencore then use his official position of
announces authority to unfairly and
April 2015: Brian Molefe that it has to unduly influence a contract
becomes Eskoms acting retrench 380 employees for a friend or in this
CEO. because of its instance his bosss son at
financial troubles; the expense of the state.
May 2015: A month after iii) KPMG approach (Duduzani Zuma is a
his appointment, Molefe Glencore with shareholder in Tegeta). This
apparently meets with an offer from an scenario would be further
Optimums CEO to say that anonymous client later complicated if his actions
Eskom would continue confirmed to be the were sanctioned by the
#4 Securing control over the countrys fiscal sovereignty and #5
Securing control over strategic procurement opportunities by intentionally
weakening key technical institutions and formal executive processes.
January 2015: Ntlemeza May 2015: Presiddent June 2015: Zuma appoints March 2017: Hawks head
suspends Major General Zuma agrees to let Advocate Shaun Abrahams Berning Ntlemeza loses his
Shadrack Sibiya, former Nxasana resign. He is paid NPA head. appeal and is ordered out of
Head of the Hawks in R17 mill the balance of his his position by the High
Gauteng. At the time he ten-year contract. Civil September 2016: Jiba Court based on his lack of
was investigating Mdluli. society groups file a case to struck off the roll of South integrity to hold such an
review the R17m golden African advocates for her office.
March 2015: Police handshake. In 2017 role in a number politically
Minister Nhleko suspends Nxasana drops a bombshell related cases. She is placed March 2017: Fikile Mbalula
Robert McBride, Executive in his responding affidavit, on special leave. is appointed police minister
Director of the Independent effectively claiming
Police Investigative President Zuma lied under
Directorate (IPID), also for oath when he said (in his
alleged links to deportation affidavit) that Nxasana
of Zimbabweans. wanted to leave out of his
own volition. Nxasana said:
It was never my intention
to make a request to leave
the office, nor did I ever
make such a request to the
President ... The presidents
version in this regard is
false.
#7 of 7: Undermining of Collective
Political Institutions in the
Executive
There appears to be concerted efforts underway that undermine
collective political institutions in the Executive, including Cabinet. It
appears that critical decisions are delegated to handpicked groups,
masked as Inter-Ministerial Committees, that are able to function in
an unaccountable manner. Recent examples include:
The IMC on Banks (purportedly set up to investigate the
regulations and legislation that govern them, but strangely
chaired by Mines Minister Mosebenzi Zwane and set up after the
Banks closed the Gupta bank accounts);
The IMC on Communication, unusually chaired by the President;
The National Nuclear Energy Co-ordination Committee (NNEECC),
as already stated above, and chaired by President Zuma.
The nature of IMCs is that in and of themselves they lack
transparency, in that they do not report to Parliament (which
individual members of Cabinet are required to do) and they are not
formulated in legislation (as is the case of formal Cabinet
Structures).
In essence, we must ask the question whether Cabinet is
still able to function as a forum for honest deliberation on
matters of public policy.