State of Capture: Much More Than Corruption Our experience had made - PowerPoint PPT Presentation

State of Capture: Much More 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. That’s 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! It’s a lot of work.” – President Zuma, July 2016.

7 Ways The President’s Power -Elite Undermines the State 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.

#1 & #2: Capturing the SOC’s and Weeding out skilled professionals Cabinet and SOC board changes October 2010: President TRANSNET- ESKOM – April 2009: Jacob Zuma removes Public Iqbal Sharma Nazia Carrim wife of Zuma becomes Enterprises Minister has brokered Muhammed Noor Hussain, President of the Barbara Hogan after she Gupta deals and family member of Gupta Republic . apparently refuses is in business business associate Salim presidential interference with Gupta Essa. into SOC board associates. Romeo Khumalo co-director appointments. with Essa in a company. October 2010: Vytjie Tembakazi Mark Pamensky former Mentor called to a Mnyaka is the director in Gupta company, meeting at the Gupta Chairperson of Oakbay. Saxonwold residence and the Progressive Marriam Cassim previously offered the Public Professional worked for Gupta company, Enterprise Ministry on Forum. Sahara. condition that she drops Ben Ngubane was in the SAA flight route to business with Essa. Mumbai. Mentor refuses. Kuben Moodley was in November 2010: Malusi business with Pamensky and Gigaba appointed Public advises Gupta-aligned Mines Enterprises Minister. Minister Mosebenzi Zwane. Makes wholesale changes Viroshni Naidoo is Kuben to the SOC boards. Moodley’s husband.

CONT: #1 & #2: Capturing the SOC’s and Weeding out skilled professionals Cabinet and SOC board changes September 2015: December 2015: March 2017: February 2011: Gigaba President Zuma President Zuma fires President Zuma appoints Brian Molefe CEO appoints inexperienced Finance Minister of Transnet. announces wholesale backbencher Mosebenzi Nhlanhla Nene Together with CFO Anoj Cabinet changes, Zwane into the (reportedly hours after Singh, they proceed to sign getting rid of Jonas important position of he presented to Cabinet off huge deals. (See next and Gordhan. He Mines Minister. on the unaffordability of slide). Seot/Oct 2015: Minister nuclear power); replaces replaces them with May 2014: President Zuma Brown appoints Brian him with Des Van Malusi Gigaba and appoints Lynne Brown as Molefe as Eskom CEO, a Rooyen who arrives Sifiso Buthelezi. Public Enterprises month later, Anoj Singh flanked by advisors Ian Minister. C hanges to the Highly experienced joins him as Eskom CFO Whitley, Jessie Duarte’s Denel board, including: civil servants, October 2015: Former son in law, and Nkopane “Sparks” Motseki including Director- Deputy Minister of Mohamed Bobat, who owns a stake in the General Lungile Finance Mcebisi Jonas is former Gupta employee, Gupta uranium mine, offered a R600-million but is forced to reverse Fuzile and Deputy Shiva; Dan Mantsha who is bribe by the Guptas in his decision. He appoints Director-General adviser to Zuma and return for the Ministry Pravin Gordhan. Andrew Donaldson Minister Faith Muthambi. of Finance. He refuses. have now left. Key players Malusi Gigaba Brian Molefe Mosebenzi Zwane Lynn Brown Dan Mantsha Des Van Rooyen Sifiso Buthelezi

#1 & #2: Capturing the SOC’s Between 2012 and 2019 Transnet announced that it would spend R300bn improving its ageing rail network. February 2014: One December 2010: October 2013: June 2011: Gigaba month before the tender Malusi Gigaba moves Transnet announces creates a Special Board is awarded to four train Department of Trade R50 billion locomotive Tender committee, and builders, Iqbal Sharma and Industry official tender. They appoint appoints Sharma chair (who adjudicated the Iqbal Sharma (who is in McKinsey to advise on (this committee oversees tender process), together business with the deal structure and tenders of R2.5bn and with Rajesh Gupta and Guptas) to Transnet funding. McKinsey above) Duduzane Zuma, acquire Board. agrees to subcontract a stake in VR Laser December 2010: The part of the work to Services (ostensibly via New Age reports that Regiments after which VR Laser Property), an Brian Molefe will be the original fixed engineering firm that is appointed Transnet contract for R35m positioned to benefit CEO. balloons to nearly from the Transnet loco March 2011: Three R100m (signed off tender, (through the months later this internally by Molefe supply chain process). happens. and CFO Anoj Singh) Key players Malusi Gigaba Iqbal Sharma Brian Molefe Anoj Singh Rajesh Gupta Duduzane Zuma

#1 & #2: Capturing the SOC’s Ultimately, 2015: Seemingly in a Evidence has also according to media bid to gain access to emerged of how the reports, Transnet the lucrative proceeds of these has paid Trillian Regiments consulting contracts have been about R170-million contract with March 2014: spirited out of the for unexplained Transnet, the Gupta’s country through Transnet awards consulting work. try to buy Regiments, various Gupta-linked R50bn loco Evidence has but fail. They then shell companies. emerged of how tender to four buy into advisory Trillian Chairman Transnet paid both firm Trillian after train builders. Tokyo Sexwale Regiments which a material launched an (apparently non- portion of the investigation into the Gupta linked) and Regiments work is allegations against Trillian (Gupta redirected to them, Trillian but the linked) hundreds of apparently with the company was millions for the same help of their friend uncooperative and pieces of consulting Eric Wood, a the investigation was work. Regiments is Regiments director, stopped. litigating against who moved to Trillian & Wood on it Trillian shortly on this matter. thereafter.

#1, #2: Capturing the SOC’s Denel overhaul between July 2015 and May 2017 July 2015: Public January 2016: Pravin Gordhan calls out May 2017: Finance Enterprises Minister Ntshepe announces the formation of Denel Minister Malusi Lynn Brown the formation of Asia as illegal in terms of Gigaba orders the overhauls Denel Denel Asia, jointly the PFMA as neither he dissolution of VR Board and installs owned by Denel and nor Brown had given the Laser Asia. Dan Mantsha as VR Laser Asia, owned necessary authority. chair. Mantsha then by the Gupta’s and appoints Zwelakhe Duduzane Zuma (and The purpose of the Denel Ntshepe as CEO. registered in Hong deal seems to have been Kong). to give the Guptas/Zuma access to Denel’s intellectual property to develop and sell military products to the Asian market. Key players Lynn Brown Dan Mantsha Zwelakhe Ntshepe Duduzane Zuma Malusi Gigaba

#3 Regulatory shake-down Government ministers acting in concert with private interests use regulatory instruments or policy decisions in an arbitrary manner to “shake down” incumbent businesses – including black businesses – and favour particular interests. Instead of prioritising job creation and economic growth, decisions are taken for the benefit of a particular company, faction or group. The Minister of Mineral Resources Mosebenzi Zwane made this clear when he said: “We are clear that if companies cannot mine safely, they should not be mining at all, and should allow other potential holders, who respect the laws of the country, to continue mining.” 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.