South Africa

AMABHUNGANE

How Geoff Makhubo lied to amaBhungane

Johannesburg Executive Mayor Geoff Makhubo testifies before the Zondo Commission in Johannesburg on 27 November 2020. (Photo: Gallo Images / Papi Morake)

Johannesburg’s embattled mayor was grilled by the State Capture commission last week after it was confirmed that his company received millions from a city contract – despite his earlier denials to amaBhungane.

“I… resigned as a member of Molelwane Consulting and director of all other companies in November 2011.”

That is what Johannesburg mayor Geoff Makhubo told amaBhungane in 2018.

We had just uncovered a secret agreement to pass 10% of a City of Johannesburg contract to Makhubo’s company Molelwane Consulting. 

Read the original amaBhungane investigation.

Geoff Makhubo, Jo’burg ANC leader, scored millions from City contract

The contract had been awarded to State Capture kingpins Regiments Capital in 2006, before Makhubo held a position in the city. But when he was appointed member of the mayoral committee for finance in 2011, it became a conflict of interest for him to oversee the city’s finances and benefit from one of its largest contracts.

Makhubo denied a conflict, saying in one of four written responses at the time: “I… resigned as a member of Molelwane Consulting and director of all other companies in November 2011.”

In another, he said: “I… made a commitment to the Mayor of the day and the ANC when I was appointed to the position member of mayoral committee that I will unwind my interests and resign all my directorships. All this was done in November 2011.” 

Except company records show that Makhubo remained a member, holding two-thirds of Molelwane until October last year (2019).

And evidence presented at the Zondo Commission into State Capture on Friday suggests he did not surrender his financial interests in the opaque consulting firm either.

Evidence leader Matthew Chaskalson told the commission they had identified R35.7-million from Regiments that flowed into Molelwane between 2008, when Makhubo became treasurer of the ANC’s Greater Johannesburg region, and 2016, when the ANC lost political control of the city. 

Of that, at least R7.1-million was allegedly transferred to Makhubo’s personal bank account.

Confronted with this evidence, Makhubo was forced to concede that he did not resign from Molelwane in 2011 as he had told amaBhungane in 2018. Instead, he told Deputy Chief Justice Raymond Zondo that he signed a resolution to resign in 2011, but that this was never filed. 

In part, this was because Molelwane is a closed corporation and resigning as a member would mean giving up his ownership stake too. And with millions still flowing into Molelwane, Makhubo was reluctant to let go.

“I wanted to divest myself… but it was never to be,” Makhubo conceded.

“My understanding… was I would resign, but would then start valuing and seeing what stood to Molelwane, a company that I had worked for for 11 years and built from scratch – how do I get back my sweat capital, how do I get whatever is due to me… the issue was I could not leave… because I was building wealth.”

But Makhubo’s vague answers did not sit well with Zondo.

“By 2018, you would have known that the resignation had not happened although there was a resolution, is it not?” he asked. 

When Makhubo confirmed that this was correct, Zondo pushed again: “I can understand a situation where you had taken the steps that you believed were necessary in order to effect a resignation, like signing the resolution or signing the letter of resignation… So you think you had resigned. 

“But by 2018, I take it that you knew that the resignation had not happened… So the question would arise, how you would say [to amaBhungane] in 2018 you did resign in circumstances where one expects that you know that the resignation resolution was not acted upon. You understand where my concern is?”

In fact, Makhubo had gone even further. In one of his 2018 responses, he wrote that his office “made follow ups and confirmation was received that my resignations have been noted and processed”.

It is also worth pointing out that Makhubo had the opportunity to correct any inaccurate statements he may have made in 2018. AmaBhungane exchanged nine letters with Makhubo over an almost two-month period – five sets of questions from us and four written responses from him – before our investigation was published.

But when the commission asked Makhubo whether he misled amaBhungane – and thus the public – in 2018, he refused to concede.

Instead, he told the commission that he “did not believe in the innocence of these questions from amaBhungane… I thought they were loaded with lots of politics.”

The problem for Makhubo is that instead of ignoring our questions, he provided false assertions that could now hurt him.

For instance, by claiming that he resigned “to deal with real or potential conflict of interest”, he showed an appreciation for the fact that remaining a member of Molelwane – as he did – was a conflict of interest.

The city has previously confirmed that Makhubo declared his interest in Molelwane. But as far as we are aware, he did not disclose Molelwane’s 10% cut of Regiments’ contract and failed to recuse himself when decisions were taken that would benefit Regiments. As the political head of the finance department, Makhubo was directly responsible for overseeing Regiments’ contract with the city. 

Molelwane will once again be important when Makhubo returns to the commission to testify about payments that he allegedly solicited from IT company EOH – payments that either went directly to him, to Molelwane or to fund the ANC.

Taken together, the evidence presented so far strongly suggests that Makhubo engaged in a quid pro quo with both Regiments and EOH, and that both companies paid him to wield his political influence in their favour, whether that was to secure contracts with the city or to keep them sweet.

As former Business Day editor Songezo Zibi tweeted over the weekend: “Geoff Makhubo may be in serious trouble. Of the 15yrs type.” DM

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  • It has to be said here that without AmaB and DM I am not sure that any of these crooks would be facing the music. The NPA has work for more than two lifetimes ahead of them and every single one of them should face charges otherwise where is the confidence in this government – nowhere! But what must be said as well that CR is facing this no confidence vote as Ace goes into overdrive to try and keep himself and JZ out of the chink.

  • A Luta Continua !! Oh Geoff, at sometime in the past your parents and ANCestors must have brimmed with pride at the activist in you which energised your joining the ANC.

    Engaged with them lately……..!!!!

  • I think the saddest part is that Makhubo is essentially an intelligent, thoughtful person in his make-up and could have easily contributed to a better South Africa. Yet he slipped to the lowest common denominator and in the current warped sense of reality probably views himself as a successful entrepreneur. It is clear that Makhubo and his company, Molelwane Consulting only ever inserted itself to milk the system and never added any value whatsoever to anything at all. Nobody gets empowered in this way and this lends no credibility to BBB-EE or whatever you want to call it. The system as it stands, is designed to fail its real purpose. Makhubo and all the others that Zondo has exposed provide simple stories on how not to govern. The DA has the opportunity to use these simple stories to convince voters, not long winded verbiage with racist inclinations. Once in power, instead of harping on about the ANCs’s failures, a DA administration should operate as social democrats and tangibly benefit the poorer electorate. 15, 20, 25 years of democracy could have produced a viable class of black entrepreneurs, but instead have corrupted good individuals to a class of opportunists like Makhubo that add no value..

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