The Mercury

Entry into the pearly gates is yours for just 50 grand


- Edited by Peter DeIonno. Contributi­ons from Ayanda Mdluli, Ethel Hazelhurst and Donwald Pressly.

THERE is a saying that “political parties are like escort agencies” who make sure that all your investment­s end in a climax that is guaranteed to last for a minimum of five years, depending on the term of office entrusted to the current political master.

The toilet wars, which characteri­sed the recent local government elections, are over and the fat cats have been called in once again to pledge their loyalty to the national democratic revolution by forking out sizeable cash donations to the ANC Youth League’s coffers.

In a clear-cut case of the political patronage that has characteri­sed African politics since Ghana gained its independen­ce in 1957 it seems that lessons have not been learnt from past mistakes.

For attendance at the Business Networking Lounge at the league’s elective conference at Gallagher Estate, starting on June 16, R50 000 gets you in, R80 000 gets you closer, R120 000 gets you ringside seats next to the big bosses, and R180 000 could buy a seat that could help mark the next really big ground-breaking black economic empowermen­t deal. All this, a stay of four days in Midrand and you could be on your way to ANC heaven, with rivers of Johnnie Walker Blue Label and expensive champagne flowing to your heart’s content.

That’s not all, while 50 grand allows you entry into the pearly gates, you get to see the youth league go about electing its next round of leaders, hopefully without the bared bottoms and chair-throwing that have graced previous performanc­es.

While the fat cats pay homage to their newly bought political connection­s, we ordinary South Africans can look forward to another demise of a fully functionin­g gold mine or wannabe farmers with no skills to work our precious land where millions of rands have been thrown down the drain.

Swiss miss

Switzerlan­d’s attempts to avoid being blackliste­d as a tax haven are not doing too well. Bloomberg reported yesterday that the country’s efforts to comply with Organisati­on for Economic Co-operation and Developmen­t (OECD) reporting standards had fallen short of what was needed.

Switzerlan­d was removed from the OECD’s “grey list of unco-operative tax havens” in September 2009.

This followed the undertakin­g made by the country to co-operate. That decision in turn was prompted by, among other things, a threat by the Group of 20 industrial and

You get to see the league electing its next round of leaders, hopefully without the chair-throwing and bared bottoms that have graced previous events.

developing countries to apply sanctions.

The row followed revelation­s about the role of Swiss Bank UBS, which helped US taxpayers conceal informatio­n from the US Internal Revenue Service (IRS).

UBS signed an agreement with the US in 2001 that allowed it to act as an intermedia­ry bank for US citizens. In return, it was obliged to report to the IRS the income of clients who were US citizens.

However, UBS didn’t keep its end of the deal and a former UBS employee eventually blew the whistle.

He confessed he had assisted a wealthy property developer to evade $7.2 million in US income taxes. He also revealed that many US citizens objected to the bank reporting to the IRS.

Rather than risk losing these clients, the bank had created a special category of US taxpayers and structures to hide the true ownership of their accounts. In the process, the bank escaped the reporting rules.

The IRS took action and so did internatio­nal tax administra­tors who pressed for sanctions.

Yesterday the Global Forum on Transparen­cy and Exchange of Informatio­n for Tax Purposes said Switzerlan­d still had at least a year to go to meet global standards for helping foreign government­s identify suspected tax evaders.

Its efforts will be assessed in a peer review in the second half of next year.

Illicit activities

Illicit economic activities – which include tobacco smuggling, illegal diamond dealing, endangered wildlife trade and drug peddling – was costing the economy about 10 percent of the gross domestic product, which was a total of R178 billion, State Security Minister Siyabonga Cwele told the National Assembly during his budget vote yesterday.

To the gold industry alone there was a loss of nearly R7bn last year, Cwele reported, noting that it was costing the country hundreds of thousands of jobs and was compromisi­ng the New Growth Path of his colleague, Economic Developmen­t Minister Ebrahim Patel.

Of much concern were the textile, tobacco and mining industries.

The ripple effect was that the illicit activities eroded the tax base, distorted trade, violated foreign exchange regulation­s and created unfair competitio­n to legitimate businesses.

Curiously Cwele himself has become publicly embroiled by associatio­n with the illicit economy, as he dubbed it.

His wife, albeit estranged from him, was recently convicted of drug smuggling and is out on bail – pending an appeal.

Cwele has ignored calls by the opposition to resign and has not commented on his wife’s trial.

He was not at court when she was convicted last month. Sheryl Cwele, who was arrested in January last year, recruited women to smuggle drugs from South America and Turkey.

One South African woman, Tessa Beetge, is serving an eight-year jail sentence in São Paulo after having been found with cocaine in her possession in 2009.

When President Jacob Zuma was asked during the municipal election campaign whether Cwele would be asked to step down, he said: “That has nothing to do with elections.”

Cwele himself said it was up to the president to handle the matter.

Perhaps it is a case of keeping the devil you know, rather than replacing him with the devil you don’t.

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