Zondo: What must happen now

The moral arc of the universe is long, but it bends towards justice, US civil rights leader Martin Luther King once said. 

South Africans, at this point, would struggle to believe it. For years, the country has yearned for justice in the wake of the “national trauma” of state capture, as President Cyril Ramaphosa called it this week.

The unravelling of those years — reckoning with the wholesale corruption and gutting of state institutions — has been a long time coming. And it has come at a steep cost: Raymond Zondo’s commission of inquiry into state capture has a price tag of nearly R1bn, lasted almost four years, and involved hundreds of hours of testimony — often exhaustive, granular detail of the ways in which the state was repurposed to enrich a coven of business people and politicians.

But now that it’s over, is the country any closer to seeing the bend of that moral arc? 

Sadly, justice will take time — but there is some low-hanging fruit that the National Prosecuting Authority (NPA) can pluck to begin the process of accountability. 

In a report released this week titled “Wanted: The State Capture Conspirators”, nonprofit organisation Open Secrets lays out exactly where the NPA can start.

The report ­— shared exclusively with the FM — is timely, given that chief justice Raymond Zondo handed his final report from the commission of inquiry to Ramaphosa just last week.

The commission was set up as part of the remedial action recommended by then public protector Thuli Madonsela in her report on state capture back in 2016.

This week, Madonsela tells the FM she has no doubt the inquiry was worthwhile.

“The revelations are beyond what was expected ... It has been extremely valuable in showing the systematic hijacking of our democracy,”  she says. “We should be shocked, we should be scared ... there was a brazen, systematic capture of government systems that went beyond procurement.”

Zondo’s report pegged former president Jacob Zuma as the mastermind of a scheme that benefited the Gupta family, and numerous other compromised officials.

On Sunday, Zuma’s spokesperson Mzwanele Manyi railed against Zondo, accusing his “toothless” inquiry of “investigating a phantom thing called state capture”. Manyi said Zondo should never have presided over the inquiry, given his “historical relationship” with Zuma. 

It’s deeply ironic, underscoring the former president’s hypocrisy. For as Madonsela points out, it was Zuma himself who first appointed Zondo to head the inquiry — and then expanded the scope of the investigation she had initially recommended. And that’s before you factor in that Zuma’s family, along with the Guptas, benefited directly from state capture. 

Without Zuma’s decision to expand the commission’s scope, SA may not have had any idea “that the spider web of state capture was so mammoth”, Madonsela says.

She reiterates Martin Luther King’s sentiment about justice, however. “I think we will see consequences ... but I am not sure things will happen as fast as they could. We must continue to push to make sure those responsible will account.” 

And yet, when it comes to a push for accountability, there’s a rather glaring hole in Zondo’s report: many who should be held responsible aren’t even named, Madonsela says.

Take, for example, Zondo’s findings on the State Security Agency (SSA). These don’t deal with the “foot soldiers” involved in the looting and abuse of the intelligence services to serve factional and ruling party interests, but name only the political heads of these bodies — such as former SSA director-general Arthur Fraser. It’s a big lacuna.

“There is no way the heads of these institutions operated by themselves ... to rig tenders and procedures to ensure that only your own people are appointed,” Madonsela says. “You need foot soldiers ... who reported to Arthur Fraser.”

Ensuring accountability on this level, she adds, may require the authorities to give individuals an opportunity to “come clean” in exchange for immunity from prosecution. 

A failure of parliament

A depressing reminder of the extent of the rot is Zondo’s recommendation that a permanent anti-state capture & corruption commission be established. Such a body, he says, should step in where parliament fails to hold the executive to account — as it failed to hold Zuma to account for years. It should be empowered to investigate and make findings, and hand these over to the president, Zondo recommends.

“Anyone involved in acts of state capture and corruption must dread the day he or she may appear before the commission and be subjected to intense questioning in front of the nation and in full view of television cameras,” Zondo writes. “Part of its job will be to expose acts of state capture and corruption, and hopefully help to contribute to the significant lowering of the level of corruption in the country.” 

It is recommendations such as these that are more likely to be acted on and which, in the long run, could add more value than simply seeing those responsible for state capture under Zuma wearing orange overalls. 

What we know, says former Corruption Watch director David Lewis, is that many of those implicated — even if they’ve been arrested and charged — will employ long, drawn-out “Stalingrad” tactics to delay their comeuppance. As Zuma has done. 

Lewis, who was a vocal campaigner against state capture ahead of the commission’s appointment, says we have to “cut law enforcement some slack”, given the “complex, well-resourced, white collar crime” that constituted state capture.

“These guys will use every trick in the book to prevent their day in court and employ Stalingrad tactics. So I am afraid the satisfaction people will derive in seeing these guys in orange overalls is still a long time away,” he says.

The “more immediate returns” are the policy interventions that can be put in place to prevent state capture from taking hold in the first place. 

Public enterprises minister Pravin Gordhan tells the FM the Zondo commission revealed a “well-designed and -executed campaign” to loot billions from taxpayers.

“It was a sophisticated machine put together to repurpose institutions,” he says. “Almost 75% of what was extracted in money terms came from state-owned entities [SOEs].”

The project involved disrupting governance mechanics of SOEs, and picking boards and management teams specifically to facilitate bribery, kickbacks, overpayment and even no payment for goods and services.

The end result: SOEs couldn’t do their jobs — to the detriment of  SA.

“Vast sums were diverted,” says Gordhan. “All of this had a long- to medium-term impact on the sustainability of these institutions. To put these institutions back on their feet is a formidable task ... and right now, if you look at the mix of policy missteps and corruption under the previous administration, the result is a toxic mix.” 

Eskom, which this week plunged SA into stage 6 rolling blackouts, is a case in point. 

Gordhan knows this better than most. As finance minister in the heyday of state capture, he was at the receiving end of Zuma’s wrath, and was ultimately fired as a result of a bogus intelligence report. 

As the keeper of the purse, the National Treasury was at the heart of the fight against state capture. One of the defining tales of the time came from Mcebisi Jonas, Gordhan’s deputy between 2014 and 2016, who told how the Guptas offered him Gordhan’s post — along with R600m to do the family’s bidding.

But Gordhan says those responsible for state capture have adopted a “scorched-earth” approach in a desperate attempt to retake power in the ANC. While he doesn’t mention names, the inference is that this begins with Zuma and Fraser.

Combating such an approach “will take an even greater effort on the part of society, business and the political space”, Gordhan says. “The critical issue now is to push forward with recommendations on who should be investigated.”

Whether Zondo’s commission will ultimately be deemed a success depends on whether his recommendations on “rebuilding” are implemented.

Here, Gordhan says his public enterprises department is “a step ahead” of the commission in implementing reforms around SOE governance. These include setting up a holding company for all SOEs and improving the way in which directors and executives are appointed. 

Can the NPA get it together?

Many critics are sceptical that Zondo’s findings will ever be ventilated with the architects of state capture in the dock.

Political analyst and University of Joburg political economy professor Mcebisi Ndletyana, however, has a more positive view about potential prosecutions. He believes prosecutions boss Shamila Batohi can pull it off, despite the odds.

“It is not just about skills; emotionally, she has to stay the course. She knows that as hard as it is, she can’t pull back; she knows if she does, we have lost the fight. The fact that she stayed up to this point is remarkable, given the context,” he tells the FM.

“When she does prosecute, we want her to win. This is not about instant gratification, it is about the ultimate win and, so far, I think she has done well. If two years down the line there are no prosecutions, then, yes, we have a problem.”

The NPA’s issues are well documented: it’s denuded of skills, racked by low morale and short of the resources required for the herculean task of converting Zondo’s findings into legally admissible charge sheets.

Open Secrets, however, says there is low-hanging fruit — and Batohi should start there.

In its report, the nonprofit focuses on the specific charges, for example, that could be brought in the cases of the Passenger Rail Agency of SA (Prasa), arms company Denel, SAA and the SA Revenue Service (Sars).

When it comes to Prasa, the Hawks and NPA “have failed to act” despite the volumes of clear evidence implicating senior officials of derailing SA’s passenger rail system.

“It was once envisioned that trains could help South Africans, particularly poorer black people, access more economic opportunities by allowing easier and more affordable access to urban centres. That dream is burning down, even as the people and companies who captured and looted Prasa continue to be free and live in comfort,” says Open Secrets.

Start with Sfiso Buthelezi, Prasa’s former chair and a current ANC MP, it says. In Open Secrets’ view, Buthelezi violated Prasa’s board charter, which regulates the board’s conduct, and stands accused of having many conflicts of interest. He ought to face criminal charges for violating sections 50 and 51 of the Public Finance Management Act (PFMA), in relation to the dozens of dodgy contracts he and his board oversaw, the report argues. 

Open Secrets also takes aim at former Prasa CEO Lucky Montana, arguing he could potentially face criminal charges for violating section 4(a) of the Preventing & Combating of Corrupt Activities Act (PCCAA) by allegedly accepting payments for property in relation to a security systems contract. 

As CEO and signatory of dozens of contracts declared corrupt by forensic investigations, Montana could have violated “countless provisions of the PFMA”, Open Secrets says. 

Equally, international rail technology and infrastructure company Vossloh AG should be investigated for its relationship with local firm Swifambo Rail Leasing, which seemingly acted as a front company to secure Prasa contracts. These contracts saw the state pay extra-high prices for rail stock, ultimately leading to a loss for the fiscus.

Turning to SAA, Open Secrets identifies former director Dudu Myeni for prosecution for fraud and corruption and for violating the PFMA. Her key partner, Yakhe Kwinana, should also be investigated for fraud and corruption linked to several contracts, the report recommends. 

And Pule Mothibe and Thuto Masasa, auditors from PwC and Nkonke who were deployed to SAA, should face censure for various violations of the Audit Professions Act, it says.

Open Secrets believes former public enterprises minister Lynne Brown should be charged for her conduct in connection with arms manufacturer Denel. Brown allegedly bypassed normal processes to appoint a board to do the bidding of the Gupta family. She could be charged for violating the PFMA, and in terms of the PCCAA, says Open Secrets.

Former Denel board chair Daniel Mantsha should also face censure, it says. Mantsha allegedly did everything he could to assist the Guptas in their Denel Asia venture. He should be investigated for failing to declare R513m in irregular spending, and for sharing confidential documents with Gupta associate Ashu Chawla.

‘Prosecute Moyane and Zuma’

While Open Secrets lists a number of specific charges that could be brought over the gutting of Sars, the reality is that the Hawks and NPA have dithered over this for years already. Before Zondo, a commission presided over by Robert Nugent had made a number of damning findings — and prosecutors sat on their hands.

Open Secrets argues that the authorities should start with multinational consultancy Bain & Co and its former representative in SA, Vittorio Massone.

Bain exerted “undue influence” to obtain the Sars contract, potentially violating section 52 of the PFMA as well as the PCCAA. 

In particular, Tom Moyane, the former Sars commissioner appointed by Zuma, should face the music. He should be investigated for violating the PFMA and the PCCAA, and could face perjury charges for lying to parliament about his role in the dismantling of Sars, the report says.

Then there is Zuma himself. On the Sars issue alone, Open Secrets says he should be investigated for violating the Public Services Act and other laws through meeting Massone to discuss the undermining of the tax authority.

“To disrupt state capture, there needs to be a reckoning for those implicated in the looting. The evidence exists. It is now up to the Hawks and the NPA to do their jobs,” Open Secrets says. “It is possible to hold the perpetrators of state capture to account. The time for action is now.”

To be fair, there has been some movement recently. The arrests of Atul and Rajesh Gupta in Dubai this month, as well as former Transnet CEO Siyabonga Gama and Gupta associate Eric Wood, are steps in the right direction —  though extraditing the Guptas from Dubai is likely to be a long process.

The prosecuting authority says it has an “experienced team of internal and external experts” working on this case, though it acknowledges the complexity of the process, and the numerous players involved. 

It all means there’s still a long road ahead, says Lawson Naidoo, director of the Council for the Advancement of the SA Constitution. 

“There has been some indication of a pickup in momentum. But the Hawks and the NPA have to do their own investigations and cannot simply rely on the Zondo report — so this could take time,” he tells the FM. 

Another hurdle is that those implicated by the commission will surely take Zondo’s report on review — though Naidoo says this shouldn’t stop the Hawks from continuing their own investigations. 

Zuma, through Manyi, was clear at the weekend that he’ll be first in line with his review application. But that surprised nobody. 

And as Naidoo adds, any legal review shouldn’t stand in the way of Zondo’s recommendations being implemented. 

“Who the bad guys are, and whether they are investigated and prosecuted, yes, that’s important and a future deterrent,” he explains. “But if you don’t put in place the structural changes, you are setting yourself up for failure. These will determine the long-term success of the project.”

It’s likely to take a long time before justice is properly realised against those complicit in state capture. But as a new Open Secrets report makes clear, there are some ‘low-hanging fruit’ the NPA could focus on in the meantime

—  What it means:

ANC’s moral bankruptcy laid bare

It’s been a long slog — and dispiriting at times — but the value of the Zondo commission of inquiry into state capture is bigger than simply putting Zuma, the Guptas and their enablers in jail. 

As independent political analyst Ralph Mathekga tells the FM, besides “orange overalls”, the inquiry’s value lies in its policy recommendations on electoral reform, governance over SOEs and parliamentary oversight. 

“Beyond prosecutions, we need a government programme to plot institutional reforms, for example electoral reform towards increasing accountability,” he says.

Another critical reform is the tightening of the rules governing procurement.

“There is a lot from Zondo that can realign our institutions to make them more accountable and to prevent capture from recurring in the future,” Mathekga says. “Prosecutions are going to be lengthy and arduous, let us leave those to the NPA. Let us fight the battles we can win now, [starting with] fixing the state.”

For now, Ramaphosa has a lot of explaining to do. As president, he’s set to respond to the entirety of the Zondo commission report in the coming month. But the chief justice was scathing of Ramaphosa’s own conduct.

Specifically, Zondo said Ramaphosa had been less than honest about the SSA, telling the commission a “major review” of the agency was at an advanced stage, when it turned out the investigation had completely “stalled”.

Zondo also found it “difficult to understand” how Ramaphosa could consider appointing compromised former state security minister David Mahlobo and Fraser to key roles in his administration, given revelations putting their “competence and integrity” into question.

Overall, Ramaphosa’s explanation of what happened during the state capture years was “somewhat opaque”, said Zondo, while his claim that he was in the dark about how his ANC presidential campaign was funded “has potentially troublesome implications”.

Read as a whole, the report is an indictment of the ruling party, painting a picture of the ANC’s complete collapse as a moral force of any legitimacy. “The party itself — or at least significant parts of its leadership — at least facilitated state capture by hampering oversight and accountability processes,” said Zondo.

If the commission were a trial for the ANC, the party would have been found unequivocally guilty.

Analysts hope that when Ramaphosa does respond, he’ll present a detailed plan for structural reform that could thwart future attempts to compromise the state. 

“Its best use would be as an anchor for institutional reform,” says Mathekga of the commission’s report.

Gordhan, however, tells the FM that “the cards are on the table”, and it’s now up to society to keep up the pressure to ensure the much-needed reforms take place. 

“The rebuilding process applies to us all. It is time for a Madiba-type approach, where good people in SA should stand up for the right things,” he says. “Instead of cheap politicking, we should push for the right reforms, we should have a common agenda. The future is at stake.”

 A billion-odd rand has been spent, hundreds of hours of testimony heard to identify the culprits of institutional corruption, and five tomes of a report presented. But if the reforms don’t take root, it will all have been for nothing. 

Roll up your sleeves, says Gordhan. The work is only just beginning.

The fatal flaw in SA’s democracy

Perhaps the most vital of chief justice Raymond Zondo’s recommendations in his state capture report involves reform of SA’s electoral system.

On this count, Zondo recommends that the country’s president be elected directly by voters, rather than through the current party list approach.  

It’s a far-reaching proposal — audacious, but necessary. 

As Zondo puts it: “After this commission heard the kind of evidence it heard over a period of about four years, including the role played by Mr [Jacob] Zuma in helping the Guptas loot taxpayers’ money the way that they did, together with their associates, we are bound to ask the question: how did this country end up having as president someone who would act the way president Zuma acted?” 

The answer, he adds, is that Zuma became president of the country simply because he ascended to the position of president of the ANC in 2007. When the  party won the 2009 national elections, it voted him into the presidency.

However, if voters had an opportunity to vote directly for Zuma or another presidential candidate — rather than simply voting for political parties — it’s possible the people of SA would have steered the country in an entirely different direction, given the 700 corruption charges Zuma had already accumulated over the arms deal.

Lawson Naidoo, director of the Council for the Advancement of the SA Constitution, says the spirit of the recommendation is spot on, but he cautions that direct presidential elections may not work too well in SA. It’s something Zondo himself alludes to, when he writes that a direct system may not be the silver bullet some believe it is.

Nonetheless, the debate about electoral reform is urgent, as legislation is already being considered by parliament to allow independent candidates to contest elections (thanks to an earlier Constitutional Court ruling). 

A direct vote for the president would be a vital step forward for one reason in particular: it would make the incumbent accountable to the country rather than the party.

This has never been clearer than in the scandal over the 2020 burglary at President Cyril Ramaphosa’s Phala Phala farm. Given that he is president only because the ANC has decided so, Ramaphosa’s main incentive is to manage the fallout in the party, rather than being truly accountable to the electorate. 

It’s a fatal flaw in our democracy — and, in part, the reason state capture could take hold so easily.