THE LAST WORD

Attempt to capture National Treasury

Part 4 of the Zondo Reports has been delivered to the State President and was released into the public purview. The first part of the Report, comprising 174 pages, is titled ‘Attempted the Capture of the National Treasury’.

By Peter Bagshawe.

Further content includes sections devoted to EOH Holdings, Alexkor, The Free State Asbestos Debacle, The Free State R1 billion Housing Project Debacle and The Capture of Eskom. The Eskom section is ninety-two pages long. What is apparent, off the titling of the sections, is an increase in reaction, by Commission Chair Raymond Zondo, to the nature and impact of evidence presented. In this regard the duplication of the word ‘Debacle’ in the title of both Free State sections is significant, as is the level of evidence which justifies the use of ‘Debacle’.

By far the most important part of the report deals with attempts to orchestrate the takeover of the National Treasury. Looked at in context, Treasury is one of the two departments for which the Minister of Finance is the executive authority – the second being the South African Revenue Services (SARS) – as well as three regulatory bodies, being the Financial Services Board (FSB), the Financial Intelligence Centre and the Cooperative Banks Development Agency, plus the Development Bank of Southern Africa, the Land Bank and Stats SA. Collectivelym these institutions are, amongst other functions, responsible for developing macroeconomic policies for consideration by Cabinet, collection of revenue, enforcement of tax legislation, advising Cabinet on allocation of resources between competing policy priorities and allocating resources from the National Reserve Fund to Government. Simply put, the Minister of Finance, being the executive for Treasury, shapes and – to a large extent – steers the economic direction adopted by Government, and is responsible for financial prudence being implemented.

Evidence adduced at Commission hearings gave credence to allegations made and the orchestrated removal of two Ministers of Finance, and a Deputy Minister, over a period, with these being Finance Ministers Pravin Gordhan, Nhlanhla Nene and Deputy Finance

Minister Mcebisi Jonas, for their refusal to be complicit in abrogating their duty and handing control of the fiscus to the Gupta family. The Commission found evidence that former President Jacob Zuma played an unequivocally central role in the attempted capture of both the National Treasury and Eskom. It was also accepted that Mcebisi Jonas was offered a bribe of R600 million, by Rajesh Gupta, for accepting the offered position as a compliant Minster of Finance. Gupta also advised Jonas that Minister Nene would be removed from office. Nene was terminated shortly after this incident, ostensibly to take up a role in Johannesburg, in the newly formed Brics Bank. Zuma’s justification for this was rejected in the Report, as was his assertion that the removal of Nene was discussed with the African National Congress (ANC) Top 6. That the Guptas were aware of and had input into the dismissal and appointment of Ministers shows the depth of State Capture and the role of Jacob Zuma in this.

Zuma then appointed Des van Rooyen as replacement Finance Minister in December 2015. Van Rooyen is the shortest serving minister in the history of South Africa. The Commission found that van Rooyen’s appointment must have been agreed with the Gupta family. The adverse reaction of local and international markets to Van Rooyen’s appointment forced a spectacular about-face on two fronts, with van Rooyen being terminated and Pravin Gordhan recalled to the position of Minister of Finance. The relationship between the Office of the President and Gordhan continued to be fractious, and ultimately in 2017, both Gordhan and Deputy Minister Mcebisi Jonas were terminated based on an alleged intelligence report that the two were lobbying foreign governments against the Zuma administration. The Zondo Commission found that the alleged report had no credibility and that the removal of Gordhan and Jonas was a result of their refusal to allow the capture of Treasury.

The proposed replacement for the role of Minster of Finance put forward by Zuma was Brian Molefe. Molefe had previously been implicated in wrongdoing at state-owned entities, and five of the African National Congress Top 6 acted in concert to stop Molefe’s appointment. Zondo commented that this is a rare situation where the African National Congress executive deserve credit, as this circumvented a potentially dire situation. Malusi Gigaba was appointed as Minister of Finance by Zuma in March 2017 and served until February 2018, when he was replaced by Tito Mboweni (appointed by current State President Cyril Ramaphosa), who served as Minister of Finance from 2018 until his retirement in 2021. Mboweni was Governor of the South African Reserve Bank between 1999 and 2009. The current Minister of Finance is Enoch Godongwana, with David Masondo serving as Deputy Minister.

Part 2 of the Zondo Report recommended the investigation of Gigaba in relation to State Capture at Transnet during his term as Minister of State Enterprises, which included the appointment of Brain Molefe as Transnet Chief Executive Officer.

During hearings and preparation of reports, Raymond Zondo has correctly identified the weakness in the way boards, chief executive officers and chief financial officers of state-owned enterprises are appointed. The Commissioner also raised the issue of cadre appointment. Further recommendations regarding these are expected in the final report due for release in July 2022.

On 11 April 2022, National Director of Public Prosecutions Shamila Batohi announced that the (NPA) National Prosecuting Authority’s Investigating Directorate will prosecute nine seminal corruption cases related to state capture within six months. There has been criticism on the National Prosecuting Authority’s lack of action and failure to bring the recommendations of the Zondo Commission before the courts and the timeline given brings hope that this will be rectified. However, Batohi referred to capacitation strictures and has indicated that additional funding in the order of R1.75 billion may be needed for conclusion of the work currently tabled. Given the cost of the Zondo Commission, which is estimated to be in the order of R1 billion, costs are mounting. Against the cost of the Commission, the repayment of some R860 million by McKinsey and Company for the work it performed on Transnet and SAA contracts tainted by state capture could be seen as an offset. The repayment was a direct result of the working and recommendations of the Zondo Commission. It can only be hoped that prosecutions follow the timeline given by Batohi and successful recovery actions flow for corruptly paid money.

Commission Chair Zondo was critical of the African National Congress and the African National Congress Government in respect of the state capture of Eskom and stated that they should be ashamed of allowing the institution to be controlled by the Guptas and those the Guptas wanted in place. Former President Zuma’s role received the greatest condemnation. The rhetorical question posed by Raymond Zondo encapsulates his disbelief: an extract from Part 4 of the Commission Report is inserted for context: “There are no words to describe this conduct on President Zuma’s part… Was this the same man that stood twice in front of the people of South Africa and took an oath and said: ‘I, Jacob Gedleyihlekisa Zuma, swear/solemnly affirm that I will be faithful to the Republic of South Africa… I solemnly and sincerely promise that I will always promote all that will advance the Republic and oppose all that may harm it.’? Yes, this was the same man.”

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.