South Africa

Days of Zondo

State Capture legal bills: Zuma and the Usual Suspects in line for state funding

State Capture legal bills: Zuma and the Usual Suspects in line for state funding
Former South African president Jacob Zuma appears in the High Court of Pietermaritzburg, South Africa, 27 July 2018. EPA-EFE/PHIL MAGAKOE / POOL

The Presidency and several government departments have applied for authorisation from the State Attorney to pay the legal fees of former president Jacob Zuma and some current and former members of the executive, emanating from the State Capture inquiry.

Fresh from a R10-million High Court blow, former president Jacob Zuma leads the pack of former and current members of the executive whose legal bills for the State Capture inquiry would be picked up by the taxpayer.

The Department of Justice has confirmed that his State Capture legal fees would be covered after a successful application by the Presidency. It is unclear when this was done.

Zuma’s state-funded legal battles are currently the subject of litigation. He faces the R10-million personal cost order after the High Court in Pretoria last week dismissed his bid to appeal against an earlier personal cost order awarded following his aborted effort to block the release of former public protector Thuli Madonsela’s State of Capture report and a subsequent reckless bid to review it.

A High Court ruling in respect of continued state funding for his corruption case — the cost of which is in excess of R16-million thus far — is pending. Zuma’s charges of fraud, corruption, money laundering and racketeering stem from 783 alleged payments to him in relation to the country’s notorious arms deal.

In addition to the former president, the State Attorney also received applications for funding in respect of former Communications minister, Faith Muthambi, and Home Affairs minister, Malusi Gigaba.

In response to questions from Daily Maverick, the Department of Justice said payment of Zuma’s State Capture-related fees has been approved while the applications of Muthambi and Gigaba are pending.

Muthambi, exposed in the #GuptaLeaks for feeding confidential Cabinet documents to the Guptas, was dumped from the executive during President Cyril Ramaphosa’s Cabinet reshuffle earlier in 2018.

She was at the helm of the Department of Communications when the Guptas sought to direct government advertising spend towards their then-fledgling media empire.

Her former department submitted Muthambi’s application to the State Attorney following a request from her and three former officials, including former head of GCIS, Mzwanele Manyi.

If approved, those costs will be borne by the Department of Communications, the department said in response to questions.

Manyi, also due to testify at the Commission in the coming days, said he prepared and submitted his statement to the inquiry on 31 August at his own cost.

Public servants are entitled to state-funded legal cover in matters emanating from the execution of duties — they are required to apply to their respective departments and on consideration of their cases, applications are submitted to the State Attorney for approval.

The Department of Communications said it was duty-bound to submit applications for legal assistance to the State Attorney.

Noting that the minister (currently Nomvula Mokonyane) has no authority in law to approve such applications, she referred those to the Department of Communications’ legal services for advice and was advised that they be referred to the State Attorney for consideration and a final decision.”

Former Public Enterprises minister Lynne Brown has received approval for funding through the department. Brown, who vacated public office in March, has had a legal representative present at the Commission since proceedings began on August 20.

While not directly implicated thus far, Brown, through senior advocate Simmy Lebala SC, applied unsuccessfully to cross-examine witnesses at the Commission.

Brown headed public enterprises between May 2014 and early 2018, a period marked by the Gupta heist of state-owned companies with irregular board appointments and alleged unlawful payment of R1.6-billion to global consulting firm McKinsey & Co and the Gupta-linked Trillian Capital Partners.

The Justice Department said its database does not show funding applications by either Des van Rooyen (briefly appointed as finance minister when Zuma sacked Nhanhla Nene in December 2015) nor by Gupta acolyte Mosebenzi Zwane, the country’s former mining minister.

Thus far only one unspecified application has been rejected by the State Attorney.

Applications are considered on the basis that applying officials are embroiled in legal action as a result of the execution of their official duties while in the employ of the state. The affected officials or executive members are permitted to use their own lawyers in instances where the State Attorney is either conflicted or lacks expertise.

Fees payable to private lawyers are then negotiated at a capped rate although there is “no limit to costs”, the department told Daily Maverick.

It is unclear whether former officials who are mere witnesses to the State Capture inquiry also qualify for legal cover.

The State Attorney has no record of an application for funding involving former Public Enterprises minister Barbara Hogan, scheduled to testify on Monday. Daily Maverick understands that the former Cabinet minister has not applied for state-funded legal assistance and that her current legal adviser is acting pro bono.

The State Capture inquiry, set to run for just over two years, is investigating allegations of State Capture, fraud and corruption in the public sector.

In addition to the issues dealt with in the initial phase, the multi-billion rand deals involving state-owned enterprises such as Transnet and Eskom — much of which implicate former parastatal executives — would in all likelihood be covered some time in 2019.

They include a R54-billion locomotive contract by Transnet and a R600-million pre-payment for coal that Eskom paid the Gupta-owned Tegeta Resources, cash that helped them cover a shortfall on the purchase price for Optimum Coal.

Directors of Eskom are covered by a R6-million-a-year insurance policy which provides cover, subject to approval by the insurers, of up to R10-million a director. It is not known at this stage whether implicated individuals such as former Eskom CEO Brian Molefe or former CFO Anoj Singh are dipping into this kitty for legal fees.

Daily Maverick previously reported how Eskom had put the brakes on a R1-million legal bill involving former Board member Mark Pamensky, who had extremely close ties to the Guptas during his tenure. DM


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