Money launderers will be hung out to dry

THERE was something about the evidence of former ANC MP Vytjie Mentor cited in Thuli Madonsela’s report on state capture that struck me.

She recounts how she was invited to Johannesburg in October 2010, thinking she would be meeting President Jacob Zuma at his office, but was picked up at OR Tambo by two men who drove her to the Gupta compound where she met members of the family.

They offered her the position of minister of public enterprises (then occupied by Barbara Hogan) on condition she cancelled the route SAA was flying to Mumbai. She declined and on her way out bumped into Zuma.

Obviously his presence is deeply troubling. But there was something else. Hogan told Madonsela she had been on a state visit to India with Zuma in June 2010. This was the famous trip where the Guptas took over the itinerary, disappearing into rooms with Zuma and associates.

Hogan remembers that the CEO of a big Indian airline, Jet Airlines, made a concerted effort to meet her. She asked then SAA chair Cheryl Carolus about it and Carolus said Jet had been pestering SAA to drop the route so that it could fly it.

Hogan ignored Jet and a few months later Zuma fired her.

It all raises a serious question. The Guptas were once interested in buying into SAA, but they are not in the airline business. So on whose behalf were they lobbying Mentor to influence SAA to drop the Mumbai route?

Put another way, if they are indeed laundering money, whose money is it actually? Or were they just showing off to the Indian business elite on that visit the extent to which they were “in” with the president of a major country?

In a way it doesn’t matter. The thing is that the most powerful countries in the world — the US, China, the UK, France, Germany and Russia — all belong to a grouping called the Financial Action Task Force. It is housed in, but not part of, the Organisation for Economic Development and Co-operation in Paris. South Africa is the only member in Africa. India is a member.

The task force’s mission is to combat money laundering and the financing of terrorism.

“The mandate of the FATF,” it says about itself, “is to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system.”

It last updated its standards earlier this year and they are embodied in a bill passed by both houses of our parliament, the Financial Intelligence Centre Amendment Bill, which is on Zuma’s desk but which he has so far declined to sign.

We risk being removed as a member as a result. The prospect terrifies our big banks because it could see them lose correspondent agreements, the basis upon which a bank in the UK might accept a transfer from one in South Africa.

But the FATF has a vast database of what it calls politically exposed persons.

Its analysts scour the international media for the names of people involved in financial scandal and research them and their banking relationships, and the Guptas and everyone else implicated in Madonsela’s report will be on their radar now if they weren’t already.

As the Guptas boasted to Mcebisi Jonas when they tried to offer him the job of finance minister about a year ago, the bulk of their money is in Dubai.

How it got there is hard to say and harder to find out. Dubai is not a member of the FATF. The Bank of Baroda, the bank the Guptas now use, has at least seven offices or branches in Dubai.

My point, which I’ve made before, is that Madonsela’s report may only scratch the surface of a much bigger international corruption scandal.

The Guptas arrived in South Africa with very little money and much of their business here has been done on the back of helpful state financing from, among others, entities like the Industrial Development Corporation and, more recently, Eskom.

Members of the FATF, many of whom face real terrorist threats funded by money launderers, are absolutely determined to snuff it out.

And while the people implicated in Madonsela’s report may not even be aware of it, they may one day discover, to their great cost, what the weight of a disapproving world feels like.