Sudden wealth

2007-12-28 00:00

The African National Congress conference at Polokwane was so dominated by the succession battle that other important matters received scant media attention. One of these was the report by outgoing treasurer, Mendi Msimang, indicating that the party had suddenly become very wealthy.

Its investment portfolio has a current market value of R1,75 billion, yet as recently as 2004 the ANC was struggling to make ends meet and had lost staff whose salaries it could not pay. The treasurer’s report refers to this period as a “hurtful journey” — strange terminology that could be interpreted as an attitude of entitlement. The hurt has presumably disappeared as a surplus of over R200 million was recorded in the last two financial years.

ANC officialdom is tight lipped about this reversal in fortune, but there is enough information in the public domain to raise serious concerns. The party’s new-found solvency from 2005 onwards is explained by the emergence of a front company named Chancellor House Trust. Among its subsidiaries is a firm with a R3 billion stake in the state contract for the massive Medupi Power Station project, to which it will supply boilers.

It now transpires that the notorious Oilgate donation from Imvume was quietly returned in mid-2005 after 18 months, although not directly to PetroSA, the original donor. There remains a shortfall of R1 million and lack of clarity about the interest accrued. It means that the ANC’s general election campaign of 2004 was in effect publicly funded with a belated, partial acknowledgement that the process was improper.

Msimang’s conference report reinforces the ANC’s right to establish investment companies, but admits a lack of policy and guidelines. This will worry those who value good governance. Historically in South Africa the links between party organisation, state intelligence services, various shady business operations and criminal activity have been too close for comfort.

The arms deal swiftly destroyed any faint hope that a new democratic broom would sweep clean. Clear and observable limits between party and state are essential for a modern democracy committed to socio-economic justice and true nation building. The alarm bells should be distinctly audible.

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