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Churches lift lid on state capture

Publish date: 19 May 2017
Issue Number: 4224
Diary: Legalbrief Today
Category: General

The SA Council of Churches has gone where the ANC feared to tread on state corruption, and warned that the country risks collapsing if the governing party does not act on the ‘systematic siphoning of state assets pivoted around President Jacob Zuma’, notes Legalbrief. ‘The country is going to collapse. It is difficult to rebuild once you go into lawlessness,’ SACC secretary-general Malusi Mpumlwana is quoted as saying in a News24 report. The SACC has launched its Unburdening Panel report that puts together damning allegations of corruption in various multi-billion rand tenders, including the R50bn Transnet locomotives, nuclear deal, Eskom's coal contracts, and the partnership between VR Laser and Denel. It was launched at the historic Regina Mundi church in Soweto. The SACC began compiling the report after the ANC’s failed probe into allegations of state capture. It was triggered by former Deputy Finance Minister Mcebisi Jonas’ allegations that the Gupta family had offered him R60m to take up the Finance Minister post, and Vytjie Mentor, who alleged that the family offered her the public enterprises post if she would drop the SAA flight route to India in 2016. Mpumlwana said the Unburdened Panel offered a ‘safe space’ for individuals who had been pressured to participate in corruption. ‘It soon became apparent that there were discernible patterns of the systematic undermining of governance that go beyond petty corruption, so as to seriously threaten the constitutional democracy,’ Mpumlwana said.

Full News24 report

The report detailed these seven ways through which the President’s power elite undermines the state, notes a City Press report. These are:

1. Securing control over state wealth, through the capture of state-owned companies by chronically weakening their governance and operational structures.

2. Securing control over the public service by weeding out skilled professionals.

3. Securing access to rent-seeking opportunities by shaking down regulations to their advantage, and to the disadvantage of South Africans.

4. Securing control over the country’s fiscal sovereignty.

5. Securing control over strategic procurement opportunities by intentionally weakening key technical institutions and formal executive processes.

6. Securing a loyal intelligence and security apparatus.

7. Securing parallel governance and decision-making structures that undermine the executive.

The seven points go into detail to show how Zuma and the various state-owned companies had made strategic Cabinet and board changes that would facilitate state capture, with particular focus on Transnet and Denel. A section titled ‘How one company was forced out of business in favour of a Gupta company’ outlines how Glencore was forced to sell its Optimum Coal Mine operations to the Gupta-owned Tegeta Exploration and Resources. To show how institutions were weakened, in a bid to control strategic procurement opportunities, the report uses the nuclear deal as an example. It details specific events from May 2010 through to April 2017 when the Western Cape High Court ruled that the nuclear deal was unlawful because government did not follow due process. The report concludes by asking ‘whether Cabinet is still able to function as a forum for honest deliberation on matters of public policy.’

Full City Press report

SACC presentation

‘Instead of prioritising job creation and economic growth, decisions are taken for the benefit of a particular company, faction or group,’ Mpumlwana is quoted as saying in a Daily Maverick report. ‘The problem is bigger than corruption, it’s chaos,' he said. He ran through the movements and activities of ‘key players’ in the network, such as Ministers Malusi Gigaba, Lynne Brown and Mosebenzi Zwane, as well as orbiting Eskom CEO Brian Molefe, and how they served the Gupta empire. He also explained how former Finance Minister Nhlanhla Nene made a presentation to Cabinet on the unaffordability of the nuclear build programme and was then fired hours later. Mpumlwana also sketched how some of the Gupta companies were lined up to benefit from contracts from the state and state-owned enterprises. ‘There is an untold amount of money that leaves South Africa. We don’t know the impact it has on the fiscus.’ The information was sourced from whistle-blowers and ‘terrified people’ who were afraid to approach the authorities. The panel was set up in April last year and ‘offered a safe space’ for people who wanted to relieve themselves of the burden of their experience of corruption. ‘This was a pastoral process for the people, not an investigation,’ Mpumlwana said. But he warned that SA was on the brink of becoming a ‘Mafia state’ and that government had lost its ‘moral legitimacy’.

Full Daily Maverick report

The information received won't be used to take legal action against those reported, said Mpulwana, according to a report in The Mercury. He said this was not the focus of the panel. ‘No one is getting charged; our focus is on the environment influencing the perpetrator’s actions,’ he said. Despite this, Mpulwana added that this was not the end of the process, as it formed part of a large research project which would soon go public with its results. He urged citizens feeling pressured to participate in state capture activities to open up to their Unburdening Panel process.

Full report in The Mercury