Deep Collusion by Athol Williams: Bain was ‘right at the centre of strategising and planning projects that would facilitate state capture’
State capture whistleblower Athol Williams fled South Africa recently, citing concerns for his safety. His new book, Deep Collusion: Bain and the Capture of South Africa, published days after he boarded his flight, “lifts the lid” on foreign profiteering and the weakening of public institutions.
Williams, a business strategy advisor, author, and former University of Cape Town ethics lecturer, blew the whistle with explosive testimony at the Zondo Commission back in March 2021. A former partner at the South African branch of US-based management consultancy firm Bain & Company, he presented evidence relating to the company’s alliance with Jacob Zuma and Tom Moyane in alleged state capture in South Africa.
Williams explained his decision to leave the country in a statement, saying the assassination of senior Gauteng health department official Babita Deokaran “showed that authorities were choosing not to proactively protect whistleblowers”. “If I remained at home there was a good chance I’d be silenced, so I left,” he writes.
Deep Collusion draws on Williams’ testimony from the Zondo Commission and reveals the full extent of what Bain did not want the public to know.
It also highlights the lonely burden of the whistleblower and the great personal cost of telling the truth in the face of overwhelming pressure.
In his year-end self-assessment for 2013, Massone boasted about Bain’s growing brand in South Africa and his high visibility in the elite social and business scene as a result of his links to “formal associations” and attendance at “many of the JHB social/business events”. These activities, he claimed, were “increasingly positioning Bain as a key player … beyond the pure role as consultants”. Use of the word “pure” and “consultant” in the same phrase might rile some people, knowing what we do today. The consulting profession in South Africa and in many other parts of the world has not covered itself in glory. Scandals involving McKinsey, Deloitte, KPMG, Gartner and PWC had already cast the consulting profession in a dubious light. McKinsey, Deloitte and KPMG had been compelled to repay fees earned from contracts alleged to be illegal or because their work was deemed to be harmful and unethical.
Bain certainly had begun to morph into something that no longer resembled a management consulting firm. As we’ve seen, its activities transcended normal consulting activities and now ventured into the shadows of ethically dubious business practices where some of its clients seemed to thrive. Massone had certainly led the business, with the apparent approval of the global firm, beyond the role of consultants. This is evident in the way Bain dealt with the arrangement with Ndlovu and KaNozulu that Massone had put forward. Even in the face of serious questions raised by senior people in the firm, this arrangement was approved.
Internal red flags over Ambrobrite – the company, the people involved and the services they were to provide – were raised as early as December 2013. Nicolle Venter, the finance manager based in Johannesburg, wrote to her finance supervisor in London, Geoff Smout, that SARS officials could not verify Ambrobrite’s tax clearance certificate and that SARS officials “suspect it’s fraudulent!” This happened after Venter had presented to SARS the tax clearance certificate that Ambrobrite had sent to her. Smout replied to Venter’s email: “This whole situation seems very dodgy” and “I don’t trust this situation”.
Smout would almost certainly have raised his concerns through channels in London, but he also expressed his concerns directly to Massone in an email of 7 January 2014, outlining the lack of public information available on Ambrobrite, such as the fact that they had no internet presence, no financials and no listings in business databases. He clearly expressed his discomfort with the proposed contractual arrangement. On the same day Massone replied in an email, “I am very comfortable … That’s why I’ve chosen them.” The apparent ease with which Massone was able to sweep aside genuine concerns is troubling. But it was not only the finance people who raised red flags.
Communications from Bain’s global head of legal, Stuart Min, and Bain’s global head of marketing, Wendy Miller, both based in global headquarters in Boston, make it apparent that Bain was well aware how the contract with Ambrobrite was meant to function. Miller expressed her concerns in emails to Massone in January 2014. She wrote that people outside Bain “may twist this contract into an accusation of impropriety in how Bain is getting our business – that we pay people close to the President to use their influence to get ‘our man’ the CEO job, so we get the work”. There is an indication here that Bain had weighed up Ndlovu’s closeness to Zuma, the chance of influencing CEO appointments at public institutions, and the possibility of those appointments securing the awarding of consulting contracts. It nevertheless decided to proceed. And that is exactly how things played out in the years that followed.
In an email to Miller on the same day, Min wrote of Ndlovu and KaNozulu: “how are two ‘artistic producers’ qualified to provide us with intelligence on companies’ strategic and operational issues” and “it just seems disingenuous for Vittorio to not acknowledge in any way that we hope these guys will use their connections with President Zuma to influence executive selection decisions”. Here are two senior executives at Bain pointing out the absurdity of Massone’s plan. But their emails also made it clear that there was an awareness of the plan, and how it might pan out, at the most senior level in the firm.
Even after the contract was signed, concerns were raised internally. Miller wrote to Massone on 15 January 2014: “There are other articles online which talk about Ndlovu introducing people to Pres. Zuma”, and continued: “Given that these two are writers and video producers, it is hard to argue we hired them for their business acumen and expertise.” Massone would present counterarguments to Miller’s challenges, claiming there was no link between Ndlovu and Zuma, that what Bain was doing was no different from the operations of McKinsey and the Boston Consulting Group – as if this justified Bain’s behaviour. Massone then forwarded the email exchange to Paul Meehan, who asked Massone for an assessment of the situation. Massone argued that a partnership with Ndlovu represented a unique opportunity to execute Bain’s strategy and earn significant fees. He identified the potential risk of being associated with Zuma, which he concluded was actually a benefit, and the risk of being accused of manipulating the appointments of public sector executives, a risk which he said was minimal.
At a meeting I attended at Bain’s offices in September 2018, which included the lawyers Chris Kennedy and Darryl Bernstein, Stuart Min (who was on the speakerphone from the US) stated that he had objected to the Ambrobrite contract. When asked by someone in the room who had approved the contract despite his objection, Min first wanted to know who all were in the room listening to him. When he was told, he declined to answer. It seems obvious to me that only a very senior person in Bain’s global leadership would have had the authority to override the objection to a contractual matter by its global head of legal.
If one takes all the internal correspondence around the Ambrobrite contract into account, it seems Bain’s global leadership considered the opportunity in South Africa to be lucrative enough to overlook concerns from senior finance leaders as well as two global functional heads who served on the Global Operating Committee. This appears to show the level of support Massone had at the highest levels of the organisation. Despite all these objections, Massone dug in his heels. In January 2014 he wrote to his boss, Meehan, to say that he had full support from the partners in South Africa – “the partner group is on board”. He added that the “Government sector is a pillar of the office strategy” and that entering the public sector was “an important, fundamental step in the establishment of the SA Office”. Massone went on to admit that “Duma [Ndlovu] is a fundamental tool to enter it”. In other words, without Ndlovu’s contractual role of opening doors and feeding Bain information, Bain’s South African business might falter. Meehan must have understood this and, in any case, Massone was by now way too entrenched in the Zuma camp to contemplate any other path.
Massone’s further admission of Bain’s intimate involvement in Zuma’s plans in the January 2014 email to Meehan warrants replication here:
The discussion with Duma on the target SOEs is consequent to a broader discussion on the country vision and strategy we had with the President, which sees some of the SOEs as key to achieve change and economic development in the country. Zuma’s idea is to create a concrete legacy during his second mandate which will start in June this year. The Phoenix project was the first piece of this plan and where we were “tested”. There are other fundamental pieces of that legacy, which will involve the Revenue Service (SARS), the power company (Eskom) and others. There are also other components of that legacy (policies, laws, …), but we are clearly much less involved on that. Bain is key in the “industrial” component.
It is an astonishing admission. Bain had heard Zuma’s ideas directly and was involved in discussing his “vision and strategy”. This put Bain right at the centre of strategising and planning projects that would facilitate state capture. According to Massone, Bain was “key” to the plan and its role was to “target” the SOEs. Bain’s willingness to be involved in a broad scheme is evident from his statement that Bain had been “tested” at Telkom, which was the starting point for Project Phoenix. Just as we’ll see later at SARS, where Bain recommended that Moyane “test” one of his executives, this test seemingly did not assess competence but whether Bain was willing to go along with secret plans and mask these plans with weaponised consultant speak and analyses. Massone made it clear that SARS and Eskom were central to whatever scheme Zuma was secretly concocting. It is no surprise that both SARS and Eskom were subsequently hollowed out by state capture – that appears to have been Zuma’s intention from the start.
But Massone wasn’t done. DM/ ML
Deep Collusion: Bain and the capture of South Africa by Athol Williams is published by Tafelberg (R320). Visit The Reading List for South African book news – including excerpts! – daily.