Patel must tackle patronage allegations
Economic development minister Ebrahim Patel’s star appears to be rising in the government of Cyril Ramaphosa. But the president’s unequivocal stance on rooting out corruption is at odds with Patel’s softly-softly approach to what appears to be an entrenched patronage network in the Competition Commission.
Patel looks to have Ramaphosa’s ear, judging from the starring role he was given in co-ordinating the investment summit last month and the fact that the president’s economic recovery plan includes a specific carve-out for the clothing and textile industry —a special interest of Patel’s, who led the Southern African Clothing and Textile Workers’ Union for a decade from 1999 to 2009.
To get growth going, Ramaphosa is relying on a range of interventions. Among them is the idea that lowering barriers to entry through increased competition will stimulate small business growth, especially that of black businesses, helping to transform and grow the economy at the same time.
The main vehicle through which this is to be achieved is Patel’s flagship piece of legislation, the Competition Amendment Bill. It will give new powers to the commission to break up industry concentration in the interests of stimulating competition and hence growth.
So it couldn’t be more inconvenient that just as parliament is debating the bill, the commission has been exposed by the auditor-general as having run up more than R128m of irregular expenditure over the past two years. A significant portion of this went to a single private law firm, Ndzabandzaba Attorneys, headed by Anthony Ndzabandzaba, a former division head in the commission’s cartels section.
In total, Ndzabandzaba has raked in R72m in payments from the commission since January 2015. Between then and January 2017, his firm was channelled 31 out of 44 (70%) of the cartel cases outsourced by the commission.
According to Patel, the commission’s explanation for this state of affairs is that the “traditional law firms in Sandton” (read mostly white firms) normally act for the litigants who appear before the commission (read big business) and this leaves only “a small pool” of firms the commission believes are not conflicted.
It is astonishing that someone as astute as Patel could lap up the commission’s risible rationale so unquestioningly. Pestered on this issue in parliament by DA MP Michael Cardo, Patel in effect told Cardo to back off and not impugn the integrity of an otherwise effective institution over a minor slip-up.
“We have an institution that worked well,” said Patel. “There are some challenges here and there that we must address, but in dealing with those we don’t break down institutions in order to solve little problems that the commission may have or to deal with the issues that [the] auditor-general has raised.”
So, instead of establishing an independent inquiry into allegations of corruption at the commission, Patel has tried to defuse the issue by appointing a panel to review the effectiveness of his entire department as well as the competition authorities, particularly insofar as the implementation of the bill is concerned.
In so doing, the panel must address any gap or weakness in the commission’s current governance arrangements, but Patel stresses that this must be done in ways that constructively build the commission and protect its independence.
However, sweeping the Ndzabandzaba issue (one of alleged corruption) into a broad panel review of the effectiveness of the competition authorities and the department (which’ “He s is fobbing an issue me of off capacity) and smacks of evasion and obfuscation. sweeping a serious matter under the carpet,” says Cardo. “The patronage network involving Ndzabandzaba Attorneys needs to be dismantled and minister Patel is not helping the cause by burying his head in the sand.”
Patel needs to wake up. Whistle-blowers allege that Nzabandzaba’s firm is just the tip of a patronage iceberg and, with Cardo on the warpath, the matter is unlikely to end there.
Ramaphosa will be sorely displeased if senior commission officials are ultimately exposed as having benefited from systematised corruption while Patel shielded them to protect his pet project.