Who pays the piper?

2011-07-23 08:44

‘Amigos’ case to expose hidden world of politics and business

The corruption trial of Uruguayan billionaire Gaston Savoi and his co-accused in the “Amigos” case is about far more than a businessman allegedly paying off public servants and politicians in return for lucrative state tenders.

When the case against Savoi and his – thus far – 16 co-accused finally gets under way in the KwaZulu-Natal High Court next month, it will provide a unique insight into the hidden world of how South Africa’s political parties are funded by the business sector.

It will, in its own way, tell the story of the dangerous dance between those who run the country and those who, behind the scenes, lobby them and fill the political purses.

Savoi, Northern Cape ANC chairperson and economic affairs MEC John Block and other senior provincial officials are also facing similar charges of corruption, money laundering and fraud to the tune of R112 million in Kimberley.

Savoi’s Intaka Holdings’ operations in Limpopo are also being probed by the Hawks.

The bulk of the tender corruption cases before South Africa’s courts have been about cash flowing into the pockets of public servants in return for illegal preferential deals.

This case, which sees Savoi charged for donating R1 million to the ANC in return for a R44 million contract to supply water purifiers, is very different.

This is about cash being given to the governing party’s KwaZulu-Natal structures, allegedly in return for the tender.

It is also one of the rare cases in which the accused include not only business people and civil servants, but leaders of the ANC, its functionaries outside government and its “friends” in the law fraternity.

The accused in the case, along with Savoi, are former KwaZulu-Natal treasury head Sipho Shabalala and his wife, Ntombi; advocate Sandile Kuboni; two former health department director-generals, Busi Nyembezi and Yoliswa Mbele; and the head of Rowmoor Investments, Lindelihle Mkhwanazi.

Mkhwanazi is the former boyfriend of KwaZulu-Natal Speaker and former health MEC Peggy Nkonyeni, who, along with economic development MEC Mike Mabuyakhulu, has been added to the list of accused.

There are also several corporate accused: Intaka, Rowmoor, and a company owned by Sipho and Ntombi Shabalala called Blue Serenity Investments.

Hawks officials are preparing to swoop on several ANC officials involved in that end of the transaction, with the entire cast of accused appearing in court again on August 1, when a consolidated charge sheet will be served.

According to the “draft charge sheet” issued last year, Savoi took Shabalala and other government officials on a trip to Brazil in 2004 to view his company’s water purification units, called Watakas.

Shabalala allegedly secured an inflated quote from Intaka for R44 million and pushed a process of the provincial cabinet bypassing tender procedures.

The money was secured from the province’s poverty alleviation fund at the instigation of then economic affairs and finance MEC Dr Zweli Mkhize, Shabalala’s boss, with the authorisation for the project signed off by Mkhize and Mabuyakhulu.

Mkhize, now the KwaZulu-Natal premier and ANC chairperson, has not been charged, but is expected to be called as a state witness.

Savoi was also punted by Mkhize, in a letter to Mabuyakhulu in 2005, as a potential investor in the province as Intaka had undertaken to open a manufacturing plant there.

In return, Savoi paid R1 million to the ANC, allegedly laundered by Ntombi Shabalala, Kuboni and Mkhwanazi through their company accounts before making its way into the ANC’s coffers.

Intaka was paid the R44 million by the province in 2007.

Outside court, both Mkhize and Savoi have confirmed a R1 million “donation’’ to the ANC, but have denied any corruption.

Who pays the piper remains a closely guarded secret among political parties. Their opposition to legislation forcing disclosure about who backs whom is, ironically, one of the few issues on which the parties competing for the electorate’s votes are agreed.

Current legislation, including the Electoral Act of 1998 and the Public Funding of Represented Political Parties Act of 1997, says nothing on private funding of parties. As a result, donations are never publicly disclosed.

A 2004 challenge in the Cape High Court to force the ANC, DA, IFP and African Christian Democratic Party to open their books to public scrutiny by the Institute for Democracy in SA (Idasa) was opposed by all four.

Idasa withdrew the case after the parties undertook to draft legislation on the matter, rather than leaving it to the courts, but the matter remains unregulated.

Whatever happens in the Savoi case will present a unique view of how money flows in South Africa’s political world and how businesses move cash to the politicians.

The case is important in other ways. The alleged corruption took place during 2005, at a time when South Africa – and KwaZulu-Natal, in particular – was on fire over the rape and corruption cases against then ANC and South Africa’s deputy president Jacob Zuma.

The ANC in KwaZulu-Natal was the first of its structures to come to his defence, with court appearances and government events being turned into pro-Zuma rallies and shows of strength. This all cost money – lots of it.

Frenzied fundraising was taking place around the province and the rest of the country to put together a war chest for both Zuma’s defence and his nascent presidential campaign inside and outside the ANC.

The Savoi transactions may or may not have fed into this campaign fund, but they certainly took place in the context of the political upheaval at a time when activists and business people were lining up to pledge cash to what was seen as a “cause”, particularly in KwaZulu-Natal.

The case will also show how the regional power blocs that make up the ANC today secure their money from the private sector and how business interests and those of the political elite cross over. It will also show how the business dealings of the top dogs in the civil service – even if they are done through spouses – work.

The case also has great political significance for the ANC in KwaZulu-Natal. Mkhize is set to give evidence against two of his fellow provincial ANC leaders and cabinet members in the form of Mabuyakhulu and Nkonyeni at a time when tensions are escalating over the succession race both nationally and in the province.

The governing party in the province is awash with rumours and distrust over the case, with Nkonyeni and Mabuyakhulu’s backers claiming it is aimed at taking them out of the elective process ahead of the ANC’s provincial conference next year as part of a programme to end Zuma’s bid for a second term.

All three were part of the ANC leadership which, from 2005, publicly drove the Zuma Tsunami. Now they will take on the roles of accused and state witness in what promises to be a brutal trial.

How the ANC manages the fallout from them becoming protagonists in court when so much is at stake politically will speak volumes about the nature of the party in the province and what holds it together.

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