Former president Jacob Zuma has been accused of colluding with the private sector in the capture of the country’s revenue service, and then running from accounting when he had to provide answers to the commission of inquiry into state capture.
This is but one of several scathing findings in the first report from the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector including Organs of State, which has come out guns blazing, recommending criminal investigations into several high profile figures, including Dudu Myeni, Brian Molefe and Tom Moyane.
The report was publicly released on Tuesday evening, after it was officially handed over to President Cyril Ramaphosa at the Union Buildings in Pretoria earlier in the day.
The commission had been working to try and complete the entire report by the end of December, but in an announcement just before Christmas, said it would not be able to meet this deadline and that after discussing it with the president, a decision had been taken to hand over the report in three installations.
The second is scheduled to be handed over later this month and the third, next month.
The president’s collusion
As expected, Zuma plays a starring role in several parts of the report, including findings regarding his role in aiding in the capture of the South African Revenue Service (Sars), through his appointment of former Sars commissioner Tom Moyane, and dismantling of several elements critical to the efficient functioning of the organisation.
It finds that Zuma promised the Sars commissioner post to Tom Moyane, and together they had promised American consultancy firm Bain the totally unnecessary contract to overhaul the revenue service.
“The only feasible conclusion is that the organisation was deliberately captured and President Zuma and Mr Moyane played critical roles in the capture of Sars and dismantling it in the way it was done during Mr Moyane’s term as commissioner,” the report states.
The report found that Zuma’s reluctance to appear before the commission was due to knowing he would not have satisfactory answers to questions around his alleged involvement in the Sars matters as well as matters related to South African Airways (SAA) and Dudu Myeni.
Zuma allegedly allowed Myeni to ride roughshod over regulations and governance principles at SAA, while also allowing her to use her proximity to him to gain unlawful access to powerful state security apparatus.
It reads: “Mr Zuma fled the commission completely without any valid reason. He did so in order to avoid having to answer questions in the commission about matters such as this. He did not want to account to the nation. He knew he was not going to have answers to many of the questions that were bound to be put to him.”
Zuma would eventually be imprisoned for contempt due to his refusal to appear before the commission.
Charge Moyane and probe Bain
The report calls for Moyane to be charged with perjury, as he was found to have provided false evidence to Parliament, regarding his role at Sars, and it also wants Bain investigated for its role in the capture of Sars.
A major recommendation is for legislation to be amended, which will see the appointment of future Sars Commissioners be “open, transparent and competitive”.
Additionally, all the US consultancy company’s contracts with government departments and state entities should be re-evaluated to ensure everything is above board and in line with the constitutional requirements for companies doing business with the state.
The probe into Bain’s role at Sars should be undertaken with the view to help the National Prosecuting Authority (NPA) to “decide whether or not to initiate prosecutions”.
“Bain met President Zuma and (former Sars commissioner) Tom Moyane before they had even been appointed as third-party consultants to Sars, and from an early stage it was obvious that they would be given the position, even though no tender process had even begun,” it reads.
Myeni should be prosecuted for fraud
The first of the report’s three volumes deals in detail with SAA and its associated companies, and saw the commission conclude that the national carrier “declined during the tenure of [former board chair] Ms Myeni to an entity racked by corruption and fraud”.
“Despite this, she was retained as its chairperson well beyond the point at which she should have been removed.
“Two successive finance ministers have explained to the commission that this was because of the personal preferences of former president [Jacob] Zuma. This is the antithesis of accountability.”
It also states that those responsible for governance at SAA and its associates had displayed “a wanton disregard” for the standards of accountability required of them.
“Rather than acting in the entity’s best interests, they were motivated by their own personal interest. This should never be allowed to occur again”.
The commission found Myeni had knowingly made misrepresentations to the Minister of Public Enterprises, which caused financial losses to SAA and recommended the NPA “considers, subject to such further investigation as may be considered necessary, whether Ms Myeni should be prosecuted for fraud”.
The report also recommends corruption charges against Myeni, her son, Thalente, and others, related to a scheme to fleece millions for the benefit of Myeni and the Jacob Zuma Foundation.
This related to evidence from the unnamed witness Mr X, regarding “dealings between VNA Consulting, Premier Attraction (Thalente Myeni’s business), Mr X’s business, Ms Duduzile Myeni, and the Jacob Zuma Foundation”.
“The flow of funds from the Free State to these various individuals and entities need to be investigated further in order to establish whether there was a corrupt relationship between any of these parties in terms of which state funds were redirected to benefit private parties, including the Jacob Zuma Foundation.”
It also notes “overwhelming and corroborated” evidence of Myeni unlawfully benefitting from State Security Agency (SSA) resources through irregular protection services from highly trained agents.
This, the report says, is evidence of “how powerful Ms Myeni was and how close she was to President Zuma”.
Her power went as far as having herself and other Zuma acolytes benefitting from access to at least 200 SSA agents even though they were not eligible for such protection.
Molefe’s Saxonwold Shebeen visits coming back to haunt him
The second volume of the report dealt with Gupta-owned newspaper The New Age (TNA), and recommended the country’s law enforcement agencies look into potentially prosecuting ex-Transnet chief executive Molefe over his role in various suspect contracts between the entity and TNA – “particularly his misrepresentation that some of those contracts were partnerships when they were sponsorships”.
Along with Mboniso Sigonyela, General Manager of Transnet Group Corporate and Public Affairs during Molefe’s tenure, they spent millions of rands on advertising in TNA.
“From the above evidence, it is apparent that Mr Molefe and Mr Sigonyela were directly facilitating the use of public funds for TNA spending,” the report says.
Former Eskom CEO Colin Matjila faces similar accusations.
On his role the report reads: “As with Eskom, more junior personnel were asked to justify decisions already taken by their superiors by preparing recommendations that made it look as though proper processes were being followed and that the superiors were merely approving a proposal by their subordinates, rather than driving the process themselves.
“These memoranda again served to give the impression that the expenditure was legitimate.”
Meanwhile, it is also recommended that Tony Gupta be investigated for allegedly offering former SAA chief executive Vuyisile Kona R100,000, and later R500,000, during their meeting at the Guptas’ Saxonwold compound, which Molefe had once referred to as a shebeen in the area, when trying to hide his visits to the family.
Malusi Gigaba ‘prepared to do wrong for the Guptas and Zuma’
Former minister of public enterprises Malusi Gigaba was found to have interfered in operational matters at both SAA and Eskom on behalf of the Guptas and the former president, despite his own evidence at the commission denying these allegations.
“So, Mr Gigaba’s evidence that he would not have been involved in operational matters must be rejected. Mr Gigaba was prepared to do wrong for the Guptas or Mr Zuma. A number of incidents can be pointed out in support of this,” the report reads.
Among the incidents of interference was the reinstatement of Siyabonga Gama as CEO of Transnet Freight Rail, and Molefe’s appointment as Group CEO of Transnet at the admitted expense of a better candidate.
It was also found that he had interfered in Eskom’s operations on “many occasions”.
More details to come as more reports follow
The handover and release of the report doesn’t yet mark the end of the work of the commission, but is an important milestone in the lifespan of the commission – which when it was first established in 2018 was only intended to run for 180 days but has been extended several times since then.
The Organisation Undoing Tax Abuse’s (Outa’s) Wayne Duvenage described it as “extremely momentous”.
“The report will have recommendations that speak to the need for accountability for those who transgressed,” he said, “So it’s big.”
Duvenage believed the country’s prosecuting authorities had been dragging their heels but was hopeful the release of the report would spur them to action.
The Council for the Advancement of the South African Constitution (Casac’s) Lawson Naidoo, meanwhile, was hopeful this was “the beginning of the end for the commission”.