Net closes on Zuma and his allies
Publish date: 14 October 2019
Issue Number: 845
Diary: IBA Legalbrief Africa
Category: General
Two extraordinary, intertwined developments over the past week have sent ripples through South Africa’s judiciary and around the world. Legalbrief reports that former President Jacob Zuma’s notorious Stalingrad strategy finally fizzled out with a damning court ruling, and, at the same time, the US moved to cripple his former Gupta allies who have fled to safer climes. The paralysis of SA’s institutions was thrown into sharp relief with Washington imposing the first penalty against the Gupta family graft network. It did this by prohibiting US persons from doing business with anyone involved in their network and freezing assets they may have in in the US. As former DA leader Helen Zille noted, South Africa’s institutions haven't even scratched the surface of the Gupta years yet. ‘They are still battling to bring the Shaik-related cases to court, involving what Americans would call "nickel-and-dime" corruption. There is one consolation. Zuma can no longer avoid the day of reckoning by raiding the public purse to protect his personal interests.’ President Cyril Ramaphosa today (Monday) told a gathering of international investors that state capture possibly cost the country more than R500bn. A Fin24 report notes that he was speaking at the Financial Times Africa Summit, in London. Responding to questions following his delivery of the opening address, Ramaphosa weighed in on efforts to rid the country of corruption and measures to be taken against those implicated – including the Gupta family. 'We have been working on how those who are complicit in the widespread corruption can be brought to book,' Ramaphosa assured.
Three KwaZulu-Natal High Court (Pietermaritzburg) judges on Friday gave Zuma what he once claimed was all he wanted – his day in court – by rejecting his claims that his corruption prosecution was so deeply politically tainted it should be abandoned, notes Legalbrief. In a unanimous 76-page ruling, the judges found that there was ‘no evidence’ that former NPA acting head Mokotedi Mpshe’s 2007 decision to reinstate corruption charges against Zuma was politically motivated, a ruling that effectively leaves Zuma legally imprisoned by the Stalingrad strategy he has used so long to stay out of jail. As a BusinessLIVE report points out, Mpshe had reversed that decision in 2009, on the basis that the so-called spy tape recordings of former Scorpions head Leonard McCarthy and former NPA boss Bulelani Ngcuka – on which they here heard discussing the timing when Zuma should be charged, in relation to the ANC’s 2007 electoral conference – showed that there had been political interference in Zuma’s prosecution. His decision was later overturned in court, and Judges Bhekisisa Mnguni, Thoba Poyo-Dlwati and Esther Steyn have now effectively reiterated their support for that decision.
Zuma now faces charges in relation to his allegedly corrupt relationship with his former financial adviser Schabir Shaik, during which the state contends Shaik facilitated a R500 000/year bribe for him from French arms company Thales. The state contends that the bribe was in exchange for Zuma’s ‘political protection’ from any potential investigation of the multibillion-rand arms deal – from which Thales had benefited significantly. Thales’ challenge to former NPA head Shaun Abrahams’ decision to pursue the corruption case against it has also been dismissed, notes the BusinessLIVE report. Zuma and Thales are scheduled to return to court tomorrow (Tuesday) for the beginning of the trial. According to a report on the IoL site, the NPA’s spokesperson in KZN, Natasha Kara, said the authority will go to court tomorrow and see what transpires. ‘The matter has been set down for the trial from 15 to 18 October. We will have to wait for Tuesday to see what will transpire and how the matter will proceed,’ Kara said.
Sanctions imposed against the Gupta family and their business associate Salim Essa mean that the family will have a lot more difficulty doing business in the US and around the world. During a media briefing on Friday, the US Treasury's Sigal Mandelker said any assets owned by the family in US jurisdiction have been blocked. A News24 report says she did not comment on which of the assets would be affected by sanctions, saying only the family would also not be able to do business in the country or internationally. Mandelker said the US would continue to hold ‘connected elites’ to account for allegedly ‘stealing from their people and breaking their trust’. SA approached eight countries, including the US, for mutual legal assistance in an attempt to have the Guptas extradited to face state capture charges. The countries were India, the UAE, Canada, Switzerland, Mauritius, Hong Kong and China, the Justice Department confirmed. Justice Minister Ronald Lamola had asked the UAE to finalise the ratification of treaties, mutual legal assistance and extradition. SA has an extradition treaty with the UAE.
Business Unity SA has described the US Treasury decision as the ‘sort of decisive action we all need,’ saying it will reinforce SA campaigns to combat state capture and corruption. ‘They have done SA huge service,’ said Busa President Sipho Pityana. ‘The US sanctions clearly identify that the Gupta family was at the heart of the most corrupt attack on SA’s sovereignty since the advent of democracy. And it severely curbs their attempts to continue as if they have done nothing wrong.’ According to a Fin24 report, Pityana said it was notable that the three Gupta brothers and Essa had been sanctioned under the Global Magnitsky Human Rights Accountability Act, a 2016 US law that allows the US to sanction foreigners accused of acts of significant corruption or serious human rights abuses. ‘The Global Magnitsky Act highlights the fact that corruption undermines the values that form an essential foundation of stable, secure and functioning societies, has a devastating impact on individuals, weakens democratic institutions, degrades the rule of law and undermines economic markets,’ Pityana said.
Peter Hain has urged the British Government to follow the US lead, notes a Daily Maverick report. ‘I ask that all UK entities are instructed to impose the same ban,’ he said in a letter to British Chancellor of the Exchequer, Sajid Javid. These UK entities include London-based banks such as HSBC, Standard Chartered and Bank of Baroda, which in recent years facilitated money laundering by the Guptas and which Hain exposed in the House of Lords late in 2017 and early 2018. ‘Following the recent decision by the US Government to impose sanctions on SA’s Gupta business family and an associate over their role in a massive corruption and money laundering operation linked to the former President Jacob Zuma, which robbed South African taxpayers of over £500m, I am requesting that the British Government urgently does exactly the same,’ said Hain in the letter. Hain said it was his understanding the Gupta brothers were currently resident in Dubai and their home in Emirates Hills was ‘identifiable by the Gupta gold crest at the entrance gates and purchased with laundered funds’.
Political analyst Ralph Mathekga said the US action might have been aimed to inspire reciprocal action by SA against corruption. ‘But this is surely an embarrassment for South Africa because we should be acting without being told to,’ Mathekga said. The Citizen reports that Wits University’s honorary professor of international relations, John Stremlau, said the anti-Gupta sanctions were a ‘positive step’ and the timing and the results were good for the state capture investigation. ‘But I don’t expect it to change the fundamentals of US-South African relations,’ Stremlau said. The US action prompted a frenzy of criticism against Ramaphosa within SA, with various groups claiming he had failed to act against those implicated in state capture.
In a Sunday Times analysis, Peter Bruce rubbishes these claims. ‘That’s just silly. Under Cyril Ramaphosa there’s been a distinct toenadering between SA and the US. We have not left the International Criminal Court and Ramaphosa has bumped into President Donald Trump and briefly chatted on more than one occasion. Gary Player is one of only two foreigners Trump follows on Twitter. Zuma distrusted the US, preferring Russian doctors when he thought he had been poisoned. So it was not surprising that after Zuma’s final Justice Minister, Michael Masutha, was going to “extradite” former Mozambican Finance Minister Manuel Chang wanted in the US, back to Maputo, the decision was reversed when Ramaphosa won the 8 May election.’ Bruce points out that current Justice Minister Ronald Lamola wants to extradite Chang, who is implicated in a huge fraud involving World Bank loans to Mozambique, to the US. ‘Good political relations help. Of course there was co-operation in this. The Guptas having become overnight global pariahs, Ramaphosa has had a good few days,’ Bruce said, suggesting that when the Guptas are extradited they should be housed at at the Johannesburg Zoo, across the road from their old luxury home. See AFRICA ANALYSES section (below)
