How State Capture led to human rights abuses – Bosasa and prisons
The impact of State Capture has mainly been assessed in financial terms. But the effects of endemic corruption are also directly felt in ways that amount to greater suffering on the ground — as Bosasa’s case illustrates
Starting in 2004, and extending until 2019, the logistics company Bosasa won many contracts to supply services to South African prisons under the management of the Department of Correctional Services (DCS).
It began with a training contract. From there, Bosasa’s relationship with the DCS expanded to include catering contracts, contracts for IT, TV and CCTV, fencing contracts, guarding contracts and more.
A number of these services – most notably, catering – had never previously been outsourced. Former Bosasa COO Angelo Agrizzi told the Zondo Commission that company founder and CEO Gavin Watson had simply decided he wanted to move away from catering for mining companies because the bribes involved were getting too big.
So Watson set his target instead on South Africa’s prisons, having identified two senior DCS officials – Patrick Gillingham and Linda Mti – who were ripe for bribing.
Watson was no fool: in many ways the DCS was the perfect state department to target for widespread corruption.
Prisons researcher Dr Lukas Muntingh, from Africa Criminal Justice Reform (ACJR), told that in some senses the DCS is “not really under control of the state”.
He described the department as notoriously “opaque”; report-backs to Parliament have long been criticised for being insubstantial, and in general, said Muntingh, it was “hard to find out what’s going on”.
The Judicial Inspectorate for Correctional Services (JICS), currently headed by retired judge Edwin Cameron, does vital work investigating inmate treatment and prison conditions. But as JICS spokesperson Emerantia Cupido pointed out to DM168, “JICS doesn’t have insight into contractual and financial obligations between DCS and its suppliers”.
What the Bosasa saga reminds us of, however, is that a more or less direct line can be drawn between corruption and the human rights abuses that often follow.
Agrizzi put it succinctly to the Zondo Commission: Bosasa ended up having “captured the department”.
One of the most astonishing things about this, Muntingh said, was that the Bosasa contracts “represent the second capturing of DCS within a few years”.
He was referring to the findings of the Jali Commission of Inquiry into Corruption and Maladministration in the Department of Correctional Services, which was established by former president Thabo Mbeki in 2001 after concerns were raised as early as 1996 regarding corrupt activities occurring within the department.
DCS: history steeped in corruption
ACJR summarised the corruption-related findings of the Jali Commission as follows: “It was found that certain companies were consistently being awarded tenders… the required number of quotations for work was not adhered to, and officials were issuing orders without them having the authority to do so. The commission found that the department suffered substantial financial losses.”
But the Jali Commission also felt there was reason for hope: the national prisons commissioner at the time of the report’s release had not been in place when the major corruption occurred, and he was “endeavouring to reverse the situation”.
But prisons commissioner Linda Mti – with the department’s chief financial officer Patrick Gillingham – would turn out to be the primary enabler of Bosasa’s corruption.
Mti’s support was viewed as so critical to Bosasa that the Zondo Commission heard he was still being paid off by Watson’s company a decade after Mti’s resignation from the top job in prisons.
Gillingham was eventually receiving R110,000 a month from Bosasa, and was “entitled” to an overseas holiday each year. Bosasa paid Gillingham’s divorce settlement and threw money at the problem when Gillingham’s son Patrick was implicated in fraud by his employer.
Both Mti and Gillingham received extras from Bosasa in the form of specialist golf clubs, imported Italian shoes, home furnishings, renovations, cars and even houses.
The cash cow catering contracts
When Watson set his sights on the DCS in earnest, one of his primary targets was to get Bosasa involved in prison catering. Just one problem: South African prisons had always produced their own meals.
But Watson had Gillingham and Mti onside. Agrizzi testified to the Zondo Commission that, at the beginning of 2004, Bosasa officials toured prisons to do research to draw up the “blueprint” for an outsourced catering contract.
Agrizzi said he thought at the time that Bosasa was merely acting as a consultant for the DCS. But the research undertaken would actually become a specifications document, released by the DCS to invite bids for the outsourced catering of seven large prisons. Bosasa, of course, would win the contract.
The catering contract had what Agrizzi estimated was a 35% net profit for Bosasa baked into it. Pricing was manipulated, records the latest State Capture report, “by doubling the price of a special meal (the exact same as a normal meal, but prepared differently) and running the normal and special meals at a 70/30 ratio, instead of the [previous] 90/10 ratio”.
By 2013, when the contract was illegally extended for a third time, the value had risen to more than R420-million per year.
By the end of the 2016/2017 financial year, when the Bosasa catering contracts had been running for more than 12 years, the spending was beginning to affect the entire prison system. The DCS annual report for that year notes: “The challenges experienced during the 2016/17 financial year was due to limited budgetary allocation ... mainly in relation to outsourced nutritional services under Programme Care.”
The report states: “Sub-programme Nutritional Services under Programme Care exceeded its goods and services budget by R97.359-million (7.2%)”.
Yet – astoundingly for a service for which no previous need existed, and which was invented by Watson to milk the DCS – the outsourcing may have continued beyond the liquidation of Bosasa in 2019. In that year, the DCS was reported to be scrambling for new catering contractors to replace Bosasa.
By October 2009, Parliamentary minutes record that the portfolio committee was “extremely concerned over the extent of the functions outsourced by the DCS”.
But Bloem testified that portfolio committee members also felt there were “more urgent issues” demanding attention, such as low salaries paid to prison staff and the problem of overcrowding in prisons. In reality, the rampant outsourcing to Bosasa was exacerbating these other issues.
“In prisons, there is really no strong argument for outsourcing unless it concerns some security functions — which is also a minefield,” Muntingh told DM168.
The impact of Bosasa corruption
Beyond the DCS, the Zondo Commission heard how Bosasa skimmed money off a halfway house that the company was building for abused children, registering “ghost employees” on the payroll.
Its activities around the Lindela Repatriation Facility, which it ran for Home Affairs as a facility where undocumented migrants were housed before being deported, were perhaps the most shocking.
It used the facility partly as a way to raise cash for bribes. Bosasa ran the only telephone facility and the only canteen there, with cash takings estimated at between R300,000 and R400,000 per month.
Because Bosasa was paid per person staying in the facility, the Zondo Commission heard how the company would drive around