Idiots are bad. Smart people are worse. By RICHARD POPLAK.
Enough is enough! I’ve had it with these motherf%*king snakes on this motherf%*king plane!
— Snakes on a Plane 
The last time I visited KPMG’s sprawling Johannesburg headquarters, I used up almost all of the soap. It was a particularly horrendous day during the 2016 student uprisings: stones rained down on skinny Congolese security guards in front of the University of Witwatersrand’s Great Hall, and then running battles through the eastern campus that spilled out onto the streets of Braamfontein. A Catholic priest was shot point blank in the face with a rubber bullet, and as blood dripped histrionically onto his pristine alb, my phone pinged out a reminder: I had an interview in Sandton, and it could not be rescheduled.
Time is money. Just ask an auditor.
And so off I trotted, through an eerily silent no-man’s-land strewn with bullet shells, chunks of pavement and other war flotsam, looking for somewhere to wash up. I crested the Jan Smuts hill, and despite a longstanding rule to stay away from any entity that helped fuck the global financial system, made my way towards KPMG’s offices. Inside the dimly lit atrium, I met the benevolent face of Kamikaze Capitalism: a receptionist nodded with studied acquiescence, showed me to the bathroom, and called me a cab.
No question, it’s fab being white.
Indeed, this was a classically South African moment. As I furiously soaped tear gas out of my eyes, I noticed that the bathroom smelled like an imaginary forest glade from the Triassic era, and I half expected to see little Mesozoic critters gambolling around my trainers. While one of the most violent days of the #FeesMustFall protests continued to rage up the street, KPMG’s staff glided through the hallways on invisible clouds of money. The building was frigid, as if the UK-based multinational was attempting to lower the mean sub-Saharan temperature by 30% – a “sustained corporate social responsibility initiative”, or some such.
South Africans are constantly forced to negotiate these insane binaries, to hop from one silo of experience to another. We sense, from somewhere ancient in our shared subconscious, that the oceanic currents running under the seen world are not benign. We dimly grasp the connections between icy office compounds monitored by private security professionals, and university campuses in which priests and teenagers are shot in the face by public servants. It’s not often that these threads are made explicit. A visit to KPMG helps clear things up.
After all, the consultancy and auditing firm has knowingly helped some very bad people steal tens of millions from the South African fiscus, which has had a material effect on the lives of those students demanding free education not a kilometre from the deep space chill of their lair. The link is not spurious, it’s not metaphorical, and it’s not poetic – it’s maths. Here’s an experiment that’s worth doing at home: type the number 10 into a calculator. From that, subtract three. The resulting number is measurably less than the initial number, meaning that there are fewer numbers than there were at the outset of this experiment. Now, imagine that those numbers represent money.
Thanks for the soap, assholes.
Snakes on a plane
Several things have happened in the last few days that have helped flush out any of the remaining confusion regarding how South Africa functions. For at least the past 10 years – but more accurately, forever – this country has been at the mercy of a plot between the government and Big Business, in which as much money as possible is siphoned away on behalf of an elite that amounts to no more than a few thousand people. I use the word “plot” deliberately, because there’s no other way to describe it – the whole thing has been plotted out, based on ancient and not-so-ancient models, and it has been done so deliberately, with no thought for what might happen when all the money is gone.
Which it very nearly is. Few people seem to grasp the complexity and severity of the crisis. With the economy cooking in the United States of Trumpistan, and with the Federal Reserve on the cusp of raising interest rates in order to slow the party, anyone relying on shitty emerging market currencies for yield will refocus their energies on buying greenbacks. Soon, the ZAR will begin its final, Zuma-inspired death march into 1990s Mexican peso territory, if it hasn’t set out on that journey already.
There is no resource beneficiation in this country – we dig it up and ship it out, and even this process is subject to a wrestling match between a larcenous mining industry and a thieving government. Manufacturing under the ANC has been reduced to an economic anachronism, which means we import virtually everything we use, and our purchases are subject to currency fluctuations. If you’re looking for a hint for how all of this plays out, 34,000 jobs were lost in the second quarter of 2017 alone, during a recession that magically and inexplicably materialised while the rest of the global economy was slamming it.
We should probably also note that our state-owned enterprises are, much like the economy, junk-rated shells. Exhibit A: South African Airways, under the fearless leadership of Dudu Myeni, is basically Snakes on a Plane running on an endless loop. In the real world, any company that has less than no money goes into receivership. And yet the argument that South Africa needs a state-run airline holds no water considering that SAA’s market share has been whittled down to a laughable 23 percent (excluding low-cost subsidiary Mango’s 13 percent), meaning that the domestic airline industry pretty much is privatised. As for the international market, with the likes of Emirates and Turkish Airlines gobbling up ticket sales, there is zero business case to be made for a South African carrier.
And yet, Finance Minister Malusi Gigaba just dumped another R3-billion into Myeni’s gilded toilet. This was followed by the minister’s spokesperson, Mayihlome Tshwete, insisting that when it comes to national carriers, this kind of stupidity (not his words) is consistent across the industry. Entirely true. But even as a money-sucking prestige project, even as pure advertising, SAA is a complete bust: Ethiopian Airlines has shown Dudu Myeni how an African-owned, African-run business can perform when it’s effectively managed.
Why is this happening? South Africa is, in the ANC’s parlance, a “developmental state”, meaning that the government is supposed to walk us through the post-colonial economic woods and deliver us to an egalitarian wonderland. Instead, they’ve herded us straight into the pages of Fanon’s The Wretched of the Earth. And so what awaits is an International Monetary Fund-style structural adjustment package – the gutting of the civil service; the fire-sale of everything the government owns; across-the-board “austerity” – all of which is less than a decade away.
Unless, of course, the Treasury gets its hands on the 1.9-trillion ZAR of sweet pension cash sitting in the Public Investment Corporation, in which case structural adjustment will be just be another part of the post-meltdown furnishings.
There is no one in the ANC capable of forestalling this disaster, largely because the ANC is a disaster, as evidenced by the violence that erupted over the weekend at the Eastern Cape electoral conference. Party presidential frontish-runner Nkosozana Dlamini-Zuma’s knowledge of a modern economy could be etched on a grain of rice by a funfair carnie, and her cabal is nothing more than an all-purpose fast-track thieving scheme. Her principal opponent, Cyril Ramaphosa, is one of those magical thinkers who believes that if we can just end corruption at our SOEs and run our ministries with something approaching competence, rainbows will shine out of unicorns’ buttholes. (The rest of the presidential hopefuls are varying degrees of sandwich filler, and the opposition parties might as well not exist.) But Ramaphosa, who should he win will inherit Zuma’s deep state, needs to be alert to the fact that there are no easy fixes: the entire machine, right down to the last ball bearing, is rusted into a giant lump of un-recyclable scrap.
Into this maelstrom strolls a woman named Bianca Goodson. Last week she published in the Platform for the Protection of Whistle-blowers in Africa (Pplaaf) details of her brief tenure as CEO of Trillian Management Consulting (TCM). Even after tens of billions of words of investigative reporting, even after the Public Protector’s “State of Capture” report, and even after the endless munificence of the #GuptaLeaks, Goodson’s testimony and its 65 annexures make for astonishing reading.
Goodson is no corporate innocent, having worked at Anglo American in a previous life. But when she joined TCM, the “consulting subsidiary” of Trillian Capital Partners, controlled at the time by Gupta arch-lieutenant Salim Essa, she was afforded a laparoscopic view of the economy’s digestive tract. Before long – by which I mean, within minutes – Goodson was sucked into the Gupta-verse, a daisy-chain of third-rate mouth breathers like former Blue Label executive Mark Pamensky, first rate scumbags like Essa, and blue-chip consultancy hacks like McKinsey and Oliver Wyman.
Goodson had been sitting on her revelations for a while. “I wanted to speak up sooner, but I was scared…. I was 100% out of my depth in terms of the company that I briefly kept,” she told amaBhungane.
Goodson’s testimony describes in gruesome detail a company that was nothing more than a vehicle with which to leach money from Eskom into Essa’s Trillian Capital Partners, while serving as a fake Black Economic Empowerment front for McKinsey (and Oliver Wyman) to reap tens of millions in consultancy fees from the SOEs.
Goodson’s bravery is admirable, and her experiences make for essential reading if one hopes to understand exactly how the formal and gangster economies intersect and interweave, how they prop each other up, and how they end up being indistinguishable from each other in their ultimate purpose: profit uber alles.
Um, what haven’t we learnt?
On Wednesday, just as Bianca Goodson was preparing to drop her bomb, the University of the Witwatersrand’s Faculty of Commerce, Law and Management convened a panel discussion that included former Finance Minister Pravin Gordhan, SA’s senior economist and KPMG critic Iraj Abedian, and Nonkululeko Gobodo, Chief Executive of Nkululeko Leadership Consulting, and the first black female chartered accountant to qualify in South Africa. The event was titled “KPMG – What have we learnt?”
Ja, what have we learnt? KPMG was the subject of a comprehensive and scalding editorial in these pages last week – there’s no need to fill in the details. But suffice it to say that the auditing giant performed two main functions that have subsequently qualified them for destruction. First, they laundered money for the Guptas (and, presumably, many, many others), and helped them offshore it in a fake emirate. Second, they prepared a report for the South African Revenue Service, implicating a number of civil servants, including then-SARS head Pravin Gordhan, in the creation of a “rogue unit” that was designated as a political hit squad. While KPMG last week disavowed the report, and while we now know that the rogue unit was a fantasy (laundered into fact by corporate media), Zuma henchman and SARS chief, Tom Moyane still insists it’s kosher. He thinks it makes riveting reading. It’s the erotic material he keeps by the bed at night.
No civilised community of humans has ever existed without a tax collection mechanism. Indeed, hate these institutions as much as you want, but taxation, security, and rule of law form the essence of a functioning state. KPMG aided in a targeted attempt to hobble SARS or, rather, tried to reconstitute it as another political weapon in the Zuma faction’s arsenal, which was soon to contain the entirety of the security services, and much of what enables rule of law. In other words, KPMG has contributed to the destruction of the South African state, a highly profitable enterprise that was not just unethical, but ipso facto treasonous.
Corporate South Africa tends to perv over the Chinese because “they get things done”. One of the things they’d “get done” is throwing in jail every last person associated with the KPMG/SARS file. And then forget where they hid the keys.
But capital punishment is not a thing here, and we’re discussing rule of law – or in this particular case, how professional values adhere within a rule-less vacuum. Indeed, Gordhan, who was far too polite during his panel statements, went on to ask a larger, more pertinent question:
“Where are the auditors when the state-owned enterprise went through the state capture process?”
The simple answer is that they were aiding and abetting. Abedian, however, took this question to its logical conclusion. His face melting in disgust, he said that “the KPMG SARS report is as low as an auditing firm can go. They’ve put an atomic bomb through their values. [But] you can’t steal a modern economy if you don’t have professional infrastructure around you. Lawyers, chartered accountants, auditors.”
That’s exactly it, isn’t it? It’s an echo of Bianca Goodson’s revelations – that business and government are connected, and together they drive the dark economy.
Indeed, clever whites and clever blacks are continually trumping excellence excellence excellence, as if South Africa is a meritocracy, and as if being an excellent chartered accountant or a lawyer or an actuary – you know, holding up the Standards – will be enough to forestall the apocalypse. And yet it’s “excellence” that’s undone us, because professional values are bankrupt, and the execution of excellence is indistinguishable from rank incompetence. South Africa has been undone by crooks like Zuma, sure. But his best soldiers were the country’s best and brightest, the guys and gals in the power suits, with their fancy degrees and their fancy cars – enablers like local Goldman Sachs chief Colin Coleman and other big brand execs, some of which now have the audacity to berate Zuma for his transgressions, simply because he fired several of their preferred finance ministers.
And so we must chuck the snakes off the plane, all of them. There’s concern that the big banks will be short an auditor if KPMG is wiped away from the bottom of Africa, but fuck that. They’ll make a plan. As for lost jobs, it’s not like Arthur Andersen’s 24,000 former employees are pushing shopping carts around America. Nope, it’s time to break the cartel. If we do so – if we scorch the earth and treat this as a proper economic battlefield – it may hasten the end of the system, or entrench us deeper in the interregnum. We cannot know.
That said, a message needs to be sent to the incoming leadership – your old co-conspirators are dead. South Africa’s wisest and best educated citizens were once thought of as our salvation, and that can again be true – they’ll model the pinstriped pajamas our leaders will soon be wearing. If we accept nothing but full disclosure and the severest of penalties – if we ignore the mealy mouthed pleas for financial sector stability while townships burn – then we begin to break the unbroken culture of impunity that has destroyed this country.
Original Photo: Japanese yen notes are piled atop US dollar bills during a photo opportunity at an office of Interbank Inc. money exchange in Tokyo November 27, 2009. REUTERS/Yuriko Nakao
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