ANALYSIS

VBS bank heist arrests: Who’s next?

By Stephen Grootes 18 June 2020
Caption
EFF leaders Julius Malema and Floyd Shivambu. (Photo by Gallo Images / Beeld / Deaan Vivier)

The arrest of eight people accused of looting the VBS bank has great political implications for two of SA’s main political parties. It is entirely possible that Julius Malema and Floyd Shivambu – and the EFF – will be more affected than the ANC.

While much of the focus over the last few months has been on the intricate links between money that flowed through VBS Mutual Bank and into credit cards used by EFF leader Julius Malema and his deputy, Floyd Shivambu, this is in essence a story about corruption, money, and the ANC.

As with all financial crimes involving bank records (and, these days, WhatsApp conversations), there is a large amount of intricate detail about what happened and why. But the political chain of events explains what was happening in South Africa at the time Jacob Zuma’s reign as president was coming to an end.

In brief – at the risk of over-simplifying the complex chronological chain of events – the ANC-controlled councils in Limpopo, and one in Gauteng, suddenly started depositing their money in VBS around the same time the little-known bank approved then-president Zuma’s application in 2016 for a R7.3-million loan to #paybackthemoney he owed for renovations at his Nkandla homestead. This sudden inflow of cash swelled the bank’s coffers.

The bank’s executive started spending the money and handing it out to certain people (including the King of the Vha-Venda). National Treasury noticed that money was flooding out of councils and into the bank. Treasury then issued a circular, notifying councils that they were breaking the law by putting their funds in the bank, as they were not authorised to place their money with a mutual lender. As the flow of money stopped, the bank collapsed, and investigations began. The Reserve Bank then issued a report by advocate Terry Motau, leading to many investigative articles, the NPA and the Hawks investigation, and the arrests that have now been announced.

Four VBS Bank, two PIC executives, KPMG auditor and SAPS lieutenant-general arrested in R2,7-billion VBS robbery

It is Motau’s report that has been so revealing about what actually happened. It details how finance officials in councils were ignored or threatened when they asked why money was suddenly being placed with VBS. It shows how the money was spent, and where it flowed to.

When the report was published, the Limpopo ANC had to suspend its deputy leader, Florence Radzilani, and its treasurer, Danny Msiza. At one point Radzilani attempted a comeback, but Luthuli House refused to countenance it.

The question which has never been satisfactorily and publicly answered is, why did these officials place their councils’ money in VBS? The obvious answer is that there was a political instruction, and that it may well have flowed from the top of Zuma’s administration, which in turn helped a group of looters get their hands on a lot of cash.

All of this raises the question: who in the ANC, and who in the EFF will be implicated next?

For the ANC there is likely to be a very real test of the resolutions that it has passed, again and again, that are supposed to deal with its cadres accused of corruption. It has failed to implement these (for example, Bongani Bongo is still the chair of Parliament’s Home Affairs Committee despite facing charges of corruption). As more VBS details come out, the intricate information around why these councils made these decisions could lead to a flood of information about corruption in the ANC.

Politically, the ANC faces no real threat in Limpopo – there is no other party that comes even close to its support there (it won over 75% of the vote in the province last year). 

Electorally, the real issue is how this plays out on the national stage, and whether the details of corruption in Limpopo will have an impact on the ANC’s national showing, as well as the way the ruling party’s internecine battles will be fought in the future.

Considering the flood of information about corruption that has been swirling around the ANC, the impact on its national support is unlikely to be large.

The EFF, however, may find it much more difficult to weather the incoming storm.

Detailed reporting by Daily Maverick’s Pauli van Wyk has shown how money flowed from VBS and into credit cards used by Malema and Shivambu. And there are indications that they knew these arrests were in the offing.

VBS Theft, Money Laundering & Life’s Little Luxuries: Julius Malema’s time of spending dangerously

Last week, Malema tweeted that “Ramaphosa is the bastard and there’s nothing all of you, including him, can do”. The tweet appeared to come out of nowhere, and there was no explanation or build-up to it, other than Van Wyk’s story: 

The other side of the VBS puzzle – Matodzi’s WhatsApps reveal purpose and payments to Malema and Shivambu’s slush funds

Indeed, during the time of the Covid-19 pandemic “normal” politics has almost disappeared – certainly, it has not been business as usual.

A motivation for Malema’s behaviour may well be that he holds Ramaphosa responsible for any possible current or future criminal action against him. 

It appears that Shivambu has been in communication with the head of the Hawks, Godfrey Lebeya. As Scorpio’s Pauli van Wyk explained on Wednesday, Lebeya’s answers to her questions did not explain the nature of this communication.

Absent any other explanation, it appears that a suspect in a major criminal case, who is also a member of Parliament and the deputy leader of a political party, is involved in private communication with the head of the agency that is investigating him.

One does not have to have lived in the cynical country that we have become for the last 10 years to believe something fishy is going on.

Malema, Shivambu and others in the EFF have often denied that they benefited in any way from the VBS looting. They also say that the NPA should prosecute those responsible to stop what the EFF calls a “media campaign and slander”.

This is what makes them so vulnerable now. The detailed evidence in this matter is unlikely to benefit them in any way. Malema and Shivambu have both refused, time and time again, to explain their sources of income despite the evidence that they have plenty of money to splash out. And yet, as Van Wyk has reported, Shivambu’s brother’s engineering firm received R16-million from VBS and cannot show which services it provided in return. 

Tellingly, Malema and Shivambu have failed to take Daily Maverick and Van Wyk to court to stop what would be a massive slander if it were not true.

Last year, some in the EFF sincerely believed they were going to be a game-changer in the elections. The fact that they won less than 11% of the vote may suggest that many voters do not take their promises seriously, and see them as a corrupt entity. 

The charging and successful prosecution of Malema and Shivambu would end their political lives and could be the death knell for the EFF too.

Before Covid-19, Malema might have hoped that a criminal trial could be a useful focal point for political campaigning, in the same way that Zuma used his court appearances in the period leading up to 2009. However, that strategy may no longer be workable. Too much has changed. Not only are crowds not allowed, but the evidence against him has been too detailed, too widely circulated and simply impossible to counter.

Malema may well now embark on a campaign of bluster and insult. Referring to the president of South Africa as a “bastard” could be just the start, and it is likely that he will continue to insult journalists on the base of race and gender, and to call for the destruction of everything and everyone he sees as an enemy. It may be the only strategy he has left. 

The facts are stacked up too high for Malema and Shivambu to escape the inevitable. DM

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