Guptas: The disease or the parasite?

President Cyril Ramaphosa indicated to the Zondo Commission of Inquiry into allegations of state capture that he became aware of the Guptas a decade ago, when current Minister of Transport Fikile Mbalula told the party’s national executive committee in 2011 that he got to hear that he would be appointed as a minister from a member of the Gupta family.

(Mbalula was appointed minister of sport and recreation by former president Jacob Zuma in November 2009).

Discussions around ‘state capture’ and the Guptas’ involvement increased, escalating in 2013 at the time of the infamous ‘Waterkloof landing’ which saw nearly 200 guests of the Gupta family land in a private plane at Pretoria’s Waterkloof Air Force Base, a military base and national keypoint.

A media frenzy ensued, with the government desperately trying to sweep the matter under the carpet.

But the Zondo Commission has not asked Ramaphosa, as far as I can tell, when he became aware of corruption within government.

The Guptas’ state capture activities have cost the country close on R60 billion.

The Guptas were however simply milking every source of cash that they could get their hands on. Corruption did not start with the Guptas, they merely leveraged it.

There for the taking …

The infamous family was no doubt well briefed on the state of corruption, the pliability of officials, and the weaknesses in controls at state-owned enterprises.

They knew South Africa was teeming with corrupt officials ripe for the picking.

More devastatingly, they were most probably well aware that the parliamentary watchdog, Scopa, would be paralysed by ANC cadres acting under instruction, and that their activities would continue with no intervention.

Otherwise, how could it be possible that they managed to influence so many key political figures, and pull the strings at so many major state-owned entities and government organisations?

How far back should we go?

No country is immune to corruption, and South Africa is no exception – but the level of escalation in this country has been dramatic in recent decades.

To recap, South Africa’s democratically elected presidents include Nelson Mandela (in office from May 1994 to June 1999), Thabo Mbeki (June 1999 to September 2008), Kgalema Motlanthe (September 2008 to May 2009), Zuma (May 2009 to February 2018), and Ramaphosa (since February 15, 2018).

Moeletsi Mbeki, in Architects of Poverty: Why African Capitalism Needs Changing (Picador Africa, April 2009), put forward the proposition that the South African black elite, “which describes itself as made up of previously disadvantaged individuals (PDIs), sees its primary mission as extracting reparations from those who put it in a disadvantaged position”.

This resulted in “the transfer of resources from the wrongdoer”. Mbeki took this further: “By this logic the South African state owes the PDIs high paying jobs.”

Mbeki discusses the consequences that flowed from this, but in regard to state-owned entities (SOEs), he came up with a telling argument that assists in explaining the financial destruction of many SOEs.

Mbeki argued that “one of the most destructive consequences of the reparations ideology is the black elite’s relationship with, and attitude to, the South African state”.

“As the state is said to have been a party to the disadvantaging of the PDIs it is therefore also perceived to owe them something. By way of reparations the state must therefore provide PDIs with high paying jobs.

“By extension, the assets of the state are seen as fair game.”

The reader is reminded that Mbeki’s book was published in April 2009, before Zuma had taken office.

Corruption escalated from 2009

Mbeki then dropped what should have been an explosive claim: “Not surprisingly, corruption under the ANC government has grown by leaps and bounds.”

Mbeki referred to the Transparency International Perceptions Index, which ranks 180 countries and scores each country out of 100. Below 50 indicates considerable corruption.

In 2006, South Africa scored 54 (Trevor Manuel was minister of finance from 1996 to 2009). In 2008 South Africa scored 38. The country’s score improved to 43 in 2012, and in 2020 the score was 44.

Corruption Watch South Africa was established in 2012. That year, 1 227 reports on corruption were submitted to Corruption Watch. Around 34% concerned municipalities, 32.5% government departments, 17.6% national government departments, and 3.4% state-owned entities.

The OECD (Organisation for Economic Cooperation and Development) published an economic study in 2013 (available on National Treasury’s website under published documents) wherein one of the main findings was the growing frustration with public service delivery failures and corruption.

It was also mentioned that “corruption appears to be an increasingly important barrier to improved public service delivery”.

“South Africa’s relative standing on Transparency International’s Corruption Perception Index has deteriorated in recent years.”

Plans, and problems

Brief overviews of the National Development Plan (NDP) and the New Growth Path (NGP) were included in the OECD report.

The NDP, published in 2012, set out the growth strategy to 2030. It was produced by the National Planning Committee (NPC). The NGP was released in 2010.

The NPC released a ‘Diagnostics Report’ in June 2011 that identified nine primary challenges facing the economy, including the quality of health care and education, inadequate and poorly located infrastructure, corruption, low employment, an overreliance on natural resources, the uneven quality of public service, and spatial and social divides.

The OECD flagged a potential problem: “It is not clear whether structures have yet been established to monitor progress made in achieving the various targets set in the NDP and NGP, and the extent to which, if at all, government departments will be held accountable should they fail to make progress in achieving the targets.”

The OECD spotted the weakness, there was no monitoring of progress, and government departments have never been held accountable for not achieving targets. 

Official spokesperson ‘removed’

Themba Maseko was CEO of the Government Communication and Information System (GCIS) from June 2006 to February 2, 2009. As CEO, Maseko was the official spokesperson for government and attended cabinet meetings.

In 2010, Ajay Gupta is alleged to have instructed Maseko to divert the government’s entire advertising budget to the family’s media company.

Gupta threatened to have him replaced with someone more compliant. Shortly thereafter Maseko was ‘removed’ from his position.

Ramaphosa was not in government in 2009, so perhaps he was not aware that the government spokesperson – a well-known former student activist and member of the South African Communist Party (SACP) and the ANC underground – had suddenly been replaced in a cloud of Gupta interference.

Maseko has detailed his experience in his book For my Country: Why I Blew the Whistle on Zuma and the Guptas (Jonathan Ball Publishers, May 2021). Maseko was replaced as CEO of GCIS by Mzwanele ‘Jimmy’ Manyi, and was redeployed to the Department of Public Service and Administration as Director-General, where he was sidelined. He left public service at the end of July 2019.

Maseko testified to the Zondo Commission on November 6, 2019.

His ‘Aha’ moment on the Guptas’ influence in government came in March 2013 when South Africa hosted the fifth summit of the BRICS (Brazil, Russia, India, China and South Africa) nations.

Atul Gupta was with Zuma, and in fact walked in front of him and the leaders of the other states, and ushered them to their seats.

This would have traditionally been the role of the minister of international relations and cooperation, Maite Nkoana-Mashabane at the time, and certainly not the role of a private citizen.

While Rome burns our president fiddles

Ramaphosa told the Zondo Commission last week that he will wait for the outcome of the commission’s report before he takes any action.

With respect, Mr President …

Moeletsi Mbeki shouted out about corruption in 2009. Corruption was further flagged by the OECD in 2013, and by Transparency International which published its first perceptions index in 1996, and has done so annually ever since.

For many years the Auditor General’s office has reported on problems at municipalities and SOEs, including key positions vacant, key officials lacking appropriate competencies, no consequence management, problems with supply chain management and procurement, lack of controls, and escalating irregular expenditure.

The Guptas took advantage, and magnified the extent of the corruption. But this was in full view of many state officials, who were willingly complicit. There were far too many red flags to be missed.

The Guptas have gone, but the red flags remain.

The disease is still in government.

It will happen again.

This article first appeared on Moneyweb and was republished with permission. Read the original article here.