First Zondo report

Former State President Jacob Zuma established The Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State in January 2018.

By Peter Bagshawe

The Commission is better known as the Zondo Commission (titled after the Commission Chairperson, Deputy Chief Justice Raymond Zondo) and served as a public inquiry to investigate allegations of state capture, corruption, and fraud in the public sector in South Africa. The Commission arose from the ‘Captured State’ report by then Public Protector, Thuli Madonsela and, following a failed application to have Madonsela’s report overturned, then Chief Justice Mogoeng Mogoeng selected Zondo as Chair of the enquiry. In the course of hearings, an estimated petabyte of data and some 159,100 pages of evidence was accumulated after interviewing 278 witnesses. The Zondo Commission is estimated to have cost around R1 billion over a period of almost 4 years.

The 1st Report of the Zondo Commission was handed to State President Ramaphosa on 4 January 2022 and comprised 855 pages dealing with three principal areas of the Inquiry: being South African Airways (SAA), the South African Revenue Service (SARS) and The New Age newspaper.

The 2nd and 3rd Reports are due to be released at the end of January and end of February respectively. At this stage it may be as well to affirm that the investigation of state capture was geared around nine broad areas arising from Madonsela’s report. For the purposes of the following discussion, state capture is regarded by me as a course of action involving systemic political corruption in which private interests or individuals significantly influence government processes in contravention of legal norms to achieve economic advantage.

South African Airways former Board Chairperson, Dudu Myeni, featured prominently and the report recommended that she be prosecuted for fraud and corruption together with a number of other members of South African Airways boards and associated companies. The report refers to money diverted and laundered to Myeni from the Free State Provincial Government, systematic weakening of governance and procurement processes, the creation of a climate of fear and intolerance at the carrier and poor operational decisions that led to a decline of the South African Airways’ financial position. Additionally, reference to corrupt and negligent management is contained in the report in respect of Yakhe Kwinana, the former chairperson of South African Airways Technical, Advocate Nontsasa Memela,

the then-South African Airways Technical Head of Procurement, and former Interim Chief Financial Officer of SAA, Phumeza Nhantsi, with a recommendation for investigation by the National Prosecuting Authority (NPA) for fraud and corruption. Additionally, nineteen individuals, companies, bank staff and a bank are identified for similar review by the Hawks for fraud and corruption relating to South African Airways whilst under Myeni’s charge.

The South African Revenue Service was, prior to Tom Moyane being appointed Commissioner, a highly regarded and internationally recognised tax institution. Between 2014 and 2018, Zondo found that Moyane and Zuma were responsible for mismanagement and dismantling the systems of governance to collapse the institution and instilled a culture of fear within SARS. Following from this, some 2,000 staff and investigators were forced out of the Revenue Services, negating the ability for SARS to function. This was in line with what Zondo found to be intentionally done as ‘its (SARS) investigatory and enforcement capacity was a hurdle to people involved in organised crime’ and blocked corruption. The report included reference to the appointment of Bain and Company to ‘restructure’ the entity and Bain’s active involvement in the so-called ‘Rogue Unit’ misinformation. The Zondo Report specifically recommends that all Bain contracts with government departments should be reviewed, investigated by the South African Police Service (SAPS) and reviewed by the National Prosecuting Authority (NPA). Further to this, the Zondo Report found that Moyane should be charged with fraud in respect of false evidence given by Moyane to Parliament.

The final element of the report relates to current Jacob Zuma Foundation Spokesperson and former Government Communications Information System Chief Executive Officer, Mzwanele Manyi, who the Zondo Report found to have enabled the channelling of advertising funds to the Gupta-owned The New Age newspaper. Manyi was transferred to the Government Communications Information System from a position as a DirectorGeneral in the Department of Labour, ostensibly at the behest of then-President Jacob Zuma to replace the then-Chief Executive Officer, Themba Maseko, who had declined to give advertising revenue to The New Age.

Over the period of 18 months that Manyi held the role of chief Executive Officer, some R14,5 million was paid to The New Age despite the newspaper not having an established or auditable readership. Manyi has denied that he enabled the channelling of funds and disputes that evidence of this is available.

The recommendations contained in the Zondo Report are, clearly, recommendations only and require to be decided on, followed through and acted upon by the Legislature. For the criminal charges recommended by the Zondo Commission to be taken forward, the investigation of these by the South African Police Service and National Prosecuting Authority (as well as the South African Revenue Services in some instances) is key. With no ill will and as acknowledged by National Director of Public Prosecutions, Shamila Batohi, the Hawks are ill-prepared and under-funded to follow up on the recommendations made. The same can be said of the South African Police Service. This is despite the availability of data and evidence collected by the Commission and the availability of Commission investigators and evidence presenters to provide consultancy services. Whilst politicians can give assurances that those identified will be pursued and face criminal consequences, Zondo has stated that the Hawks have historically failed to perform in respect of corruption prosecutions. For the Commission to have been effective and the cycle of corruption to be broken, the National Prosecuting Authority and the commercial crime division of the South African Police Service need to be prioritised with the funding and establishment of efficient structures. Failing this, the Commission will, rather like the Nugent Commission of Inquiry into the South African Revenue Service, be remembered as having complied with its mandate without achieving the full effect possible.

Given the duration of the Zondo Commission’s hearings and the cost of the Commission, it cannot be allowed that the reports (once all released) and the sheer weight of evidence summarised in the reports, be allowed to lead nowhere: this is an instance where civil society must maintain pressure and demand transparency in the manner in which it is dealt with by the government. Anything less than concerted action by the state and its organs will be a disservice to the country at large and more particularly will be a failure to bring to an end a sordid period in our history.

PETER BAGSHAWE holds a Bachelor of Law degree from the former University of Rhodesia and a Bachelor of Laws degree from the University of the Witwatersrand.