Book Extract | A blueprint for bribes: How Free State asbestos money was split

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Pieter-Louis Myburgh’s “Gangster State” is one of South Africa’s top sellers. (Charles Leonard)
Pieter-Louis Myburgh’s “Gangster State” is one of South Africa’s top sellers. (Charles Leonard)

BOOKS


In this extract from his book Gangster State: Unraveling Ace Magashule’s Web of Capture, Pieter-Louis Myburgh uncovered a spreadsheet that details how those involved planned to divvy-up the earnings from government and how much politicians and businesspeople would get.

Gangster State: Unraveling Ace Magashule’s Web of Capture

By Pieter-Louis Myburgh

Penguin Random House

332 pages

R290

One of the most damning documents in the IgoFiles is an innocuous-looking Excel spreadsheet titled Free State Asbestos.

One cannot imagine that many corrupt tenderpreneurs would be reckless enough to create a document detailing exactly how they intend to share their earnings from government with officials and politicians, yet this spreadsheet appears to be exactly that.

It is not clear whether Igo Mpambani or Edwin Sodi created the document, but its creation date – November 2014 – is reflected in the file’s metadata. It was later emailed between the two businesspeople, and went through various revisions.

In essence, it appears to be a blueprint for the distribution of bribes to Ace Magashule and officials from the Gauteng, Free State and national housing departments who played a role in the asbestos auditing contract.

Its very existence may explain why Magashule and others wanted the Free State human settlements department to pay the Blackhead-Diamond Hill joint venture, despite concerns from mid-level officials that the deal looked suspicious.

Read | Fraud and corruption: ANC SG Ace Magashule faces 21 counts, out on bail

Emails contained in the IgoFiles show that Sodi sent a version of this document to Mpambani under the subject line “fees calculation”. Mpambani then altered the document.

Later, in March 2015, in a draft email intended for Sodi, Mpambani wrote the following: “Sho Eddie, please note that payments in yellow are the ones you will take care of and rest, us. As discussed, I have effected the payments in two batches. Kindly find attached the updated schedule with minor adjustments.”

By this point, Blackhead-Diamond Hill had received its upfront payments worth R51 million.

The spreadsheet, on face value, provides rare insight into how corrupt government deals involving millions of rands are put together. Under the heading “cost of business”, the document lists several names, many of them abbreviated, with the amounts that each was due to receive.

A certain “AM”, for instance, was to be paid R10 million. “TZ” would receive R10 million, while “TM” would receive R5 million. “JT” was to get R3 million, “MEC” R2.5 million and ‘OM” R1 million. Those unabbreviated included a company called Mastertrade (to be paid just over R44 million) and an individual called Diedricks (R1 million).

The “total cost of business”, reflected on the spreadsheet, amounted to R82.6 million. The “project value” of R255 million minus this “total cost of business” left an amount of R172.4 million.

This was the profit Blackhead and Diamond Hill would split after settling their expenses – R86.2 million in pure profit each.

According to the spreadsheet, the third parties were set to receive their “fees” in staggered tranches coinciding with payments received from the Free State department of human settlements in the Blackhead-Diamond Hill joint FNB account.

Mpambani’s Diamond Hill would be responsible for making most of the payments to third parties, according to the spreadsheet.

This may explain why Mpambani did not pay Sodi’s company exactly half of each of the first three payments from the Free State department of human settlements, seeing as he would have needed to settle the third parties’ claims first.

MEC Leeto harbours no knowledge of her name being used in any documents by Igo Mpambani and further denies that she received a payment of R2.5 million from Igo Mpambani.

I showed the document to a source who had been privy to certain aspects of the asbestos auditing scheme. Working through the spreadsheet, he suggested the initials “AM” stood for Ace Magashule.

The source thought that “MEC” could be Mathabo Leeto, the former mayor of Matjhabeng and current Free State MEC for sport, arts, culture and recreation.

My source explained that Leeto maintained close ties with Mpambani after her tenure as mayor, and that she sometimes acted as a facilitator for some of Mpambani’s deals in the Free State.

This may have been the reason she was included in the asbestos auditing scheme, the source suggested. After Mpambani’s death, Leeto posted the following comment on her Facebook page: “I am so hurt. Igo was like a younger brother to me.”

Leeto sang a different tune after I asked her about her ties to the late businessperson. “There is no relationship between MEC Leeto and Igo Mpambani, including his family, other than the former being known as a person who grew [up] and stayed in her neighbourhood in Welkom,” said her spokesperson.

Leeto denied that she had ever influenced a contract awarded to Mpambani, and she claimed she was unaware of the asbestos audit deal. “MEC Leeto harbours no knowledge of her name being used in any documents by Igo Mpambani and further denies that she received a payment of R2.5 million from Igo Mpambani.”

A senior ANC figure from the Welkom area told me that the Leeto family was almost certainly involved in the asbestos auditing scheme. “When that deal was being put together, Mathabo’s husband, Lehana, spoke about how he was going to be involved in the project,” said this source.

“He went into quite a lot of detail, such as the proposed sites near Welkom and Odendaalsrus where the asbestos roofs would be safely disposed of once the audit was finished.”

Leeto denied this. “The MEC has established from her husband that the said allegations are devoid of any truth,” said her spokesperson.

The source with whom I shared the spreadsheet suggested that “TZ”, “OM” and “Diedricks” were also government officials involved in the asbestos saga, and that “JT” was most likely retired soccer star Jimmy Tau. I asked this person how Tau had got involved.

Apparently, the former Kaizer Chiefs player had represented Nomvula Mokonyane, under whose reign as Gauteng premier Blackhead had first started clinching major government contracts.

This sounded a little far-fetched, but I then remembered having seen something about a link between Tau and Mokonyane before.

In fact, it was EFF leader Julius Malema who first claimed at a press conference in August 2016 that Tau was one of the younger men with whom Mokonyane was allegedly romantically involved.

The spreadsheet is compelling, but it does not prove that Magashule and the others received their share of the asbestos auditing contract loot.

Read: Ace Magashule and his men declare war

Luckily, further information and documents in the IgoFiles show that Mpambani did indeed make payments in accordance with the spreadsheet’s payment schedule.

Bank records in the trove of documents reveal that Mpambani channelled payments totalling exactly R19 983 427.16 from the Blackhead-Diamond Hill joint FNB account to several recipients on December 23 2014. This was a day after the Free State department of human settlements made the first payment of R20 million.

That exact amount, to the very last cent, appears in the spreadsheet under the heading “first payment”.

According to the spreadsheet, it was the sum of 10 separate payments that Mpambani had to make to third parties after Blackhead-Diamond Hill received its first payment from the Free State department of human settlements.

The document lists a payment of almost R13.3 million to Mastertrade; R1 million each to AM, TZ, TM and MEC; R500 000 to Diedricks; R200 000 to OM; R1 million to “others”; R500 000 to “Martin”; and R500 000 to Diamond Hill, Mpambani’s own company.

This all equalled exactly R19 983 427.16. This amount is captured as a “consolidated payment” in bank records for Blackhead-Diamond Hill’s joint FNB account, meaning it is the sum of several payments.

Sho Eddie, please note that payments in yellow are the ones you will take care of and rest, us.

According to bank statements in the IgoFiles, Mpambani transferred almost R13.3 million to Mastertrade’s FNB account on December 23, exactly as listed in the spreadsheet.

Despite the payment records, Mastertrade’s director, Sello “Sydney” Radebe, flatly denied that his company had received the money.

He also denied that he had in any way participated in the asbestos project. Radebe’s behaviour only fuelled my suspicions about the entire affair.

Mastertrade’s company records showed that it was operated from an office in Sandton, but I established that Radebe hails from the eastern Free State.

According to his CV, Radebe grew up in Phuthaditjhaba, in QwaQwa. He worked at the QwaQwa Development Corporation, which has since been incorporated into the Free State Development Corporation.

A source who worked with Mpambani told me that Radebe was close to then Gauteng ANC chairperson Paul Mashatile.

A noteworthy observation is that Mpambani was in Bloemfontein when he effected these first payments.

Records from the Grasmere toll plaza south of Johannesburg and the Brandfort toll plaza near Bloemfontein show that he passed through these points on December 23.

The following day, he withdrew a few thousand rands in cash from an FNB ATM in Bloemfontein’s Brandwag suburb. This ATM is located 2.3km from Free State House, the official residence of the premier.

Records show that Mpambani frequently withdrew money from this and other ATMs near Magashule’s residence shortly before or after his company received a payment from the Free State department of human settlements.

So often, in fact, that it became a pattern.


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