‘Mr Ten Percent’: How Ace Magashule captured the Free State

2019-03-31 07:00
Ace Magashule (File)

Ace Magashule (File)

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ANC secretary-general Ace Magashule has stood at the "head of a well-organised state-capture network" in the Free State for almost a decade.

This network has scooped millions of rands of taxpayers’ money in schemes seemingly presided over by Magashule and has allegedly seen people like former president Jacob Zuma, the Gupta family, some of the Magashule children, the former provincial premier himself and a host of connected ANC politicians benefit from various government schemes.

According to a new book, Gangster State: Unravelling Ace Magashule’s Web of Capture by journalist Pieter-Louis Myburgh, the governing party’s secretary-general also has:

  • used undemocratic means to cling to power in the Free State;
  • helped facilitate government business for at least one of his children, while another worked for the Guptas;
  • met the Guptas on various occasions to discuss business dealings and even took the mayor of Bloemfontein along; and
  • used his position as premier to influence and direct spending of R2bn in housing contracts to politically connected businesspeople.

The book also investigates whether Zuma received a "thank-you" fee from one of the Free State’s myriad failed provincial housing projects while it also alleges that the ANC benefited directly in the form of payments in cash and in kind.

Myburgh, who spent more than a year solely focused on Magashule's networks, also links the ANC heavyweight to a number of seemingly irregular and illegal payments, including instructions to the beneficiary of a provincial contract to ensure payments are made according to his wishes.

Gangster State by Pieter-Louis Myburgh

Moroadi Cholota, Magashule’s personal assistant while he was premier, wrote to Igo Mpambani, a known Magashule associate whose company scored more than R230m from the provincial government: "Following the discussion with Ipeleng Morake [an employee in Magashule’s office], premier requested that you pay the full amount of R470 000 and the remaining amount of R30 000 to one of the SRC president in Cuba."

According to other documents obtained by Myburgh, one “AM” was also to be paid off to the tune of R10m by Mpambani, who emerges as a classic bagman, distributing the proceeds of his provincial government contracts to various people seemingly in Magashule’s orbit. He also disbursed hundreds of thousands of rands directly to the ANC in the Free State, including money to help pay for rallies in support of Zuma, and regularly withdrew large amounts of cash whenever he was in the vicinity of Magashule.

Mpambani and his partner scored around R230m in "pure profit" from his dealings with the Free State government related to a R255m contract to audit RDP houses with asbestos in the ceiling. Myburgh's sources in the provincial government say this spend was unnecessary. The money was spent on paying off various individuals, including more than one alleged payment to an individual listed as "AM". 

The lucky tenderpreneur and his partner also splashed millions of rand on property and vehicles, including an Aston Martin, Porsche Cayenne, Maserati, Range Rover and a Bentley. Myburgh believes his investigation shows Magashule "was an active participant in the asbestos auditing scheme". 

Magashule was sent a list of more than 60 questions by Myburgh but declined to comment on any of the allegations in the book.

Another possible beneficiary of an irregular government contract is Zizi Kodwa, a senior ANC leader, who was also allegedly paid by a tenderpreneur. Kodwa, too, refused to comment on the allegations.

Gangster State is the first comprehensive audit of Magashule’s activities as one of the ANC’s most powerful figures. The controversial former Free State premier has been accused of various illegal dealings over the years but has never been charged or convicted of any crime. According to Myburgh, the Scorpions - an elite corruption-busting unit - was however close to arrest Magashule in 2008 shortly before it was dismantled by the ANC.

Myburgh describes Magashule as a strongman politician whose influence over provincial party matters and government affairs was left unchecked and grew omnipotent over the course of almost a decade. According to Myburgh’s sources Magashule ensured that pliant officials were appointed to the most important positions in the Free State government, he knew what contracts and tenders were the most valuable and had final say over the Free State’s biggest disbursements.

A former member of Magashule’s provincial government executive told Myburgh: "Ace kept tabs on all the large and medium-sized payments made by the municipalities and provincial departments. He knew exactly when most of the companies were due to receive money from his government and he would very quickly collect his share once the payment had been made."

Associates and former political colleagues of Magashule told Myburgh that the ANC’s secretary-general was careful to cover his tracks by always dealing in cash.

"This is how Ace operates. A similar thing happened with another Free State Department of Human Settlements contractor in the Riebeeckstad area. After the businessman got paid by the province, Ace himself collected the cash from the guy at an Engen garage."

Another source told Myburgh: "Ace deals in cash. He knows that by doing so it will be very difficult for someone to catch him red-handed."

Myburgh believes Gangster State clearly implicates Magashule "as the head of a well-organised state-capture network".

"More than a few sources in the Free State’s political set-up referred to Magashule as ‘Mr Ten Percent’ for allegedly demanding a 10% cut from each government contract in the province," Myburgh writes.

Many of the allegations Myburgh details were known previously, but the ANC has refused to act against Magashule. "The ruling party’s appointment of its very own ‘secretary-gangster’ to a position as visible and important as the one Magashule now occupies can be seen as a broad endorsement of criminality," Myburgh believes.

Read more on:    zuma  |  jacob  |  ace maga­shule  |  state capture  |  politics

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