THE USUAL SU
The Gupta files, a trove of leaked e-mails, seem to confirm the controversial family’s audacious scheme to take over key state companies and ministries. But how far can political and legal action go toward dislodging alleged corruption kingpin Jacob Zuma, dismantling their shadow state and bringing the miscreants to book?
For more than two weeks now, SA has been gripped by revelations contained in thousands of e-mails involving businesses of the Gupta family and their associates in government. While the broad allegations contained in the leaked files are not new, the revelations have been both shocking and amusing. Shocking, because of the sheer audacity of a relatively ordinary family that made this country their home from India at the dawn of democracy in 1994. Amusing, because of the laughable nature of some of the schemes hatched in the correspondence, and the gullibility of those the family apparently sought to buy off in its grand project of capturing the state.
The e-mails show how members of the family, who’d initially planned to establish a shoe factory in SA, dreamt up the most ridiculous of schemes to harvest billions from the taxpayer through their relationship with influential political and government leaders in general and President Jacob Zuma in particular. The latter proved a most amenable host of corruption.
But what does it all mean? Why are the e-mails important, and should we care?
The data in the approximately 200,000 e-mails dates back to 2012, and measures about 400 gigabytes. Our team of nine journalists, and others in other newspaper stables, have been working flat out for the past 14 days mining the data. That was preceded by IT teams working to make it all easily accessible to the journalists.
On the surface, the e-mail correspondence contains what experts believe is prima facie evidence of many commercial crimes committed by those who wrote and sent the e-mails, and those who received them.
Also implicated in the suspected crimes are some of those who are the subject of the e-mails.
The correspondence details Gupta plans to take over key sectors of the state, including companies owned by government and some key state portfolios.
The way the Guptas set about “capturing” state entities is described by a group of university academics in a research paper titled “Betrayal of the promise: how SA is being stolen”, published in May: it starts with the subtle corruption of key players in government. Where subtlety fails to achieve the desired outcome for the Guptas, outright corruption of targeted key individuals, and sometimes of whole institutions, would be pursued with vigour.
But what is to be done?
“Firstly, the Gupta-zuma network comprising 12 companies and 15 individuals that holds the symbiotic relationship between the constitutional and shadow state together needs to be broken and dismantled,” say the academics in their paper. “This will require political action within and outside the tripartite alliance to dislodge Zuma as the kingpin of the symbiosis, coupled with legal action to criminalise and bring the perpetrators of state capture to justice.”
It may yet be a long time before any of that succeeds, particularly as Zuma acolytes are still firmly in charge of the law enforcement agencies. Political power has, however, shifted away from him. The president has recently been forced to concede ground in a few key instances.
Most prominent is the reversal of the reappointment of Brian Molefe as the chief executive of Eskom. The president had initially earmarked him as a replacement for finance minister Pravin Gordhan, whose stand against state capture and corruption deeply frustrated Zuma and the “shadow state” over which the Guptas appear to preside. Some senior ANC leaders speak openly of having opposed Molefe’s appointment as finance minister after he was rushed to parliament early this year.
The second defeat for Zuma has been his loss of Hlaudi Motsoeneng and the entire SABC board last year. Motsoeneng is undergoing a disciplinary process that has all but ended his long and controversial career at the public broadcaster, where he openly boasted about the political protection he said he enjoyed from Zuma.
The e-mails show small- and large-scale attempts to capture and corrupt key institutions by offering seemingly generous and grand inducements. Large and small, these machinations are all aimed at, and have largely succeeded in, securing untold wealth and influence for the Guptas. So successful have they been that they are listed among the 10 richest families in SA, all within the relatively short time since their arrival.
In many instances the inducements border on the ridiculous. One example is the plea by Daniel Lugisani Mantsha, chairman of state arms manufacturer Denel. An e-mail sent from Mantsha’s law firm, in his name, attaches a municipal bill for R14,238
What it means: The trillion-rand nuclear power deal that Zuma has been pushing for would be a great parting shot for the Guptas
to Ashu Chawla, of the Gupta computer business Sahara, for his “urgent attention”. Mantsha ignored telephone calls and text messages seeking clarity on this. In another such example, the emails reveal how, for their efforts in enhancing the Gupta project, 362 members of an ANC region in the Free State had to be rewarded with airtime of R120 each in May 2014 while campaigning for the party in the local government elections. It’s hard to believe that for that little reward, their effort was part of a grand plan to ship the country off into the Gupta empire.
Two of the larger inducements revealed in the leaked e-mails concern the acquisition of an R18m apartment for Zuma’s son Duduzane in the Burj Khalifa building in Dubai, and the Guptas’ negotiation of the acquisition of a R330m mansion for the president in the emirate.
Other attempts are outright ridiculous in the scale of their imagination. Take the case of Mcebisi Jonas, the former deputy finance minister, who told former public protector Thuli Madonsela he’d been offered R600m by Ajay Gupta as bait to take the job of finance minister. He told Madonsela under oath that on October 23, 2015 he was told the money would be deposited into a bank account of his choice, together with R600,000 in cash he could take with him as he left the Gupta family compound in Saxonwold.
The Guptas had made “a lot of money from the state,” and wanted to increase this to R8bn, from R6bn, according to Jonas’s statement to Madonsela. His help as finance minister would be needed to remove a “stumbling block” — the then director-general of treasury, Lungisa Fuzile, and other key members of the institution’s executive management.
The Guptas’ meeting with Jonas had been arranged by Zuma’s son Duduzane and Fana Hlongwane, a shadowy businessman whose name would feature many times in the trove of leaked emails two years later. A few weeks after Jonas turned down the alleged job offer, Jacob Zuma appointed a little-known ANC backbencher, David Des van Rooyen, to the job until then held by the highly regarded Nhlanhla Nene.
While Jonas’s allegations about the Guptas were nothing new, he blew wide open the lid on their modus operandi. Now that the matter was in the public domain, others came forward with similar allegations, the most prominent being former ANC MP Vytjie Mentor and former government spin doctor Themba Maseko. Their claims were denied by Zuma and the Guptas.
In the Gupta project to capture the state for profit, key individuals like Duduzane Zuma have been invaluable instruments.
From the shadows of their Saxonwold, Johannesburg redoubt, the Guptas managed to usurp aspects of state power through the capture of family members of key players and decision makers at the highest echelons of power. This made them useful pawns in the game of chess being played by the Guptas.
The leaked e-mails seem to confirm many of the allegations contained in Madonsela’s report, including the modus operandi of systematically removing “stumbling blocks” from state institutions and enterprises.
Such stumbling blocks between the Guptas and their ability to make money from the state — be they in the National Prosecuting Authority, the Hawks special investigative unit, or the intelligence services — get mercilessly swept out the way. Neither the intelligence and security agents nor police watchdogs are immune from the purges.
Take the case of Mo Shaik, a staunch former Zuma ally who fell out of favour after questioning the Guptas’ influence over key individuals and institutions of state. This was only two years into his tenure as head of the SA Secret Service in 2011. Along with Gibson Njenje, who was director-general of the State Security Agency, and another security chief, Jeff Maqetuka, Shaik lost his job after warning Zuma that the Guptas had become a security threat to the state.
Such is the Guptas’ power over
Zuma, himself a paranoid former spy, that he would think nothing of the dangers of turning against senior spies like these, who could potentially pose a threat to him.
In the sphere of corporate capture, Duduzane Zuma and relatives of key politicians like Free State premier Ace Magashule and ANC deputy secretarygeneral Jessie Duarte, have emerged as useful instruments and fixers for the Guptas. After all, what’s to be suspicious about when a son meets and talks to his father, who just happens to be president, while the son incidentally happens to do business with the Gupta family?
Zuma is always careful not to be directly involved in offering or soliciting help for the Gupta project until he is assured of the co-operation of the intended accomplice. Take the case of
Zola Tsotsi, a former Eskom chairman.
Early in March 2015, Tsotsi was summoned to the president’s official residence in Durban at short notice. On arrival he was met by SAA chair Dudu Myeni and her son Thalente. Also in the room was lawyer and consultant Nick Linnell. Myeni wasted no time, telling the Eskom chairman that “ubaba” (Zuma) would like him to institute an inquiry into the power utility, which was afflicted by financial and operational shortcomings that resulted in daily load-shedding.
The board of Eskom was to suspend its four top executives and investigate the causes of the operational and financial meltdown. Linnell would help Eskom conduct the investigation as he had already helped SAA in similar situations. Five minutes into the conversation, with Tsotsi having heard what Myeni had to say, Zuma walked into the room. According to two sources with knowledge of the matter, Zuma only checked if Tsotsi had understood “what needed to be done”.
On responding affirmatively, Tsotsi was excused to fly back to Johannesburg to commence the probe. Myeni denies any knowledge of or involvement in the matter. The other part of this conspiracy allegedly involved another Gupta associate, Salim Essa of consulting firm Trillian, who is said to have interviewed the replacements of the suspended Eskom executives, a claim to which he declined to respond.
As with the Jonas case, Zuma did not involve himself in the alleged offer to Mentor of the post of public enterprises minister in October 2010. Mentor told Madonsela that Zuma was at the Gupta compound when Gupta family members offered her the job if she’d cancel SAA’S route to India. She declined the offer, and Malusi Gigaba was duly appointed to the post.
An offer that the leaked e-mails show did succeed, was that of the post of public enterprises director-general, made to Mogokare Richard Seleke. He was appointed six months after an anonymous e-mailer, whose author calls himself “Business Man”, sent his CV to Duduzane Zuma, signed off “Regards, Richard.” Seleke denies being the sender of the e-mail.
He was head of the department of economic development & tourism in the Free State at the time. Mosebenzi Zwane had been MEC of this department prior to his appointment as mineral resources minister, shortly before Seleke moved to public enterprises.
Capturing the public enterprises department was the greatest prize the Guptas could have wished for, as it is the single most important arm of government. It has political oversight over the largest and most strategically placed state-owned companies. Eskom and logistics and railways group Transnet offer by far the biggest procurement opportunities.
Once Gigaba was deployed there, the Guptas muscled in, winning contracts in Eskom and Transnet. His replacement by Lynne Brown in May 2014 only served to strengthen the position of the Guptas in these institutions.
These, including the controversial breakfast sponsorships of The New Age newspaper by both companies, were preceded by the appointment of Gupta associates to the boards of both companies.
A month after Gigaba’s appointment as minister of public enterprises, with then-fledgling The New Age having secured its Eskom, Transnet and SABC sponsorships, it printed its first edition. For all intents and purposes, the taxpayer had funded another Gupta enterprise.
It is not clear how far the Guptas are from being satisfied with their loot, but events since their alleged October 2015 meeting and R6bn boast to Jonas, suggest they may have already surpassed their R8bn target.
They may still want one last major deal, though, before decamping to their bolthole in Dubai. The trillion-rand nuclear power investment that Zuma has been pushing for would be a great parting shot, ensuring untold wealth for the Guptas and their other shadowy hangers-on.
They may yet clinch it, particularly if legal action based on the leaked e-mails gets nowhere and Zuma stays put as president to the end of his term in May 2019.
Generations of SA taxpayers will pay heavily should that come to pass.