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ANC caught in Bosasa crime web

DM168

STATE CAPTURE

ANC caught in Bosasa crime web

Former Bosasa Chief Operations Officer Angelo Agrizzi testifies at the Commission of Inquiry into State Capture on 29 January 2019 in Johannesburg. (Photo: Gallo Images / Netwerk24 / Felix Dlangamandla)

The Zondo Commission has found that the value of crooked contracts given to Bosasa by government departments was at least R2.37bn. And the ANC is deeply implicated in the skulduggery.

In the late 1990s, Bosasa, known at the time as Dyambu Holdings, was a fledgling logistics group that hardly got media headlines because its operations were small and limited to providing catering services to hostels in the mining industry.

But Bosasa did have an impressive client list, doing catering for mining and resources giants such as Sasol and Harmony Gold.

In the early 2000s, Bosasa decided to move on from mining to the public sector, targeting lucrative contracts that would make it the preferred supplier to prisons, schools, government departments and state-owned enterprises. The company’s plan worked — though it later fell foul of the law.

Bosasa has close links to the Watson family,  struggle icons of the apartheid era. The Watsons are from Eastern Cape, where Cheeky Watson’s decision to play rugby with black South Africans and forgo a Springbok cap in the 1980s made him a local hero. He and other family members were activists in the liberation movement and later became close to former president Jacob Zuma, the Sisulu family, long-serving Cabinet minister Ayanda Dlodlo, and the broader ANC.

Bosasa, led by the late Gavin Watson, parlayed its political connections and influence from 2000 into building a security and facilities management conglomerate that has since made billions of rands from state contracts. Bosasa is also the face of State Capture, with state contracts from Zuma’s government linked to corruption and bribes.

Part three of the Zondo Commission’s final report, released on 2 March, was blunt about Bosasa’s modus operandi. “Corruption was central to Bosasa’s business model,” the commission found after reviewing testimony by former Bosasa chief operations officer Angelo Agrizzi. “Everything came down to corruption.”

Exactly how much Bosasa received from unlawful state contracts between 2000 and 2016 is not known. But the Zondo Commission has proffered some numbers based on Agrizzi’s testimony, which implicates him in corruption as he was often the bribes paymaster.

Bosasa’s ill-gotten gains

The commission found that dodgy contracts awarded to Bosasa by government departments and other public entities between 2000 and 2016 were worth at least R2.37-billion. This is a conservative estimate as the value of contracts at SOEs, including the Passenger Rail Agency of South Africa and Eskom, was not determined by the commission.

Bosasa’s R2.37-billion loot is about a third of the additional R7.5-billion that the government plans to spend in 2022 to hire more personnel in security cluster departments, mainly to intensify the fight against crime and corruption.

To get that R2.37-billion from unlawful state contracts, the Zondo Commission estimates that R75.7-million in bribes was paid.

The profits Bosasa generated from these contracts is not clear. Calculating profits would involve the total value of contracts received and the total cost associated with the contracts (cost of bribes and other expenses incurred in delivering services to government departments and SOEs). According to Agrizzi, Bosasa generated a gross profit (total profits after all costs are deducted) of between 35% and 40% from unlawful contracts.

This is a conservative gross profit estimate because record-keeping wasn’t a Bosasa strong point, with bags stuffed with cash and destined for bribes routinely leaving the company’s vaults.

Still, gross profit of about 40% is a decent return on corrupt investments.

Ralph Mathekga, a political analyst, says the Zondo Commission reports provide more evidence that the ANC behaves like “a criminal enterprise”.

“The party has endorsed criminal activities and benefited from them. State Capture would not have happened if it didn’t start with the ANC, which was obliterated and captured earlier on. The ANC then became a platform for taking State Capture at a broader state level,” Mathekga told DM168.

Prominent businessperson Sipho Pityana agrees with Mathekga, saying corruption has become so organised that it is now aided by the ANC and its officials.

“I never quite imagined the depth of corruption until the Zondo Commission reports,” says Pityana, who has been vocal about the graft of the Zuma presidency years, even before State Capture became part of the national lexicon.

“Corruption has infested and built into the ANC as an institution. In every tender, people seem to have a hand in influencing where it will go.”

The sullied contracts roll in

The Department of Correctional Services was Bosasa’s playground and where it invested its energy in a sophisticated bribes-for-tenders scheme.

Notable contracts from the department between 2000 and 2016 included a catering deal worth R580-million for bribes worth R15-million; access control and CCTV with a value of R241-million (for R4.2-million in bribes); and a television systems contract of R300-million (R5-million in bribes).

Bosasa targeted the department’s senior officials, including Patrick Gillingham (chief financial officer) and Linda Mti (commissioner), offering them cash bribes, new vehicles and improvements to their homes, especially security upgrades.

Bosasa’s tentacles also reached into the Department of Justice and Constitutional Development, from which the company got a contract to install security cameras at 100 courts across the country. This had a value of R700-million and Bosasa paid R16.5-million in bribes.

Then there was the Department of Transport, from which a contract managing vehicles used by government officials with a value of R122-million was secured for a R3.6-million backhander.

SOEs targeted included the South African Post Office and Airports Company South Africa (Acsa), the owner of nine major airports including OR Tambo International in Gauteng.

In 2001, Bosasa got a five-year tender to provide car-parking protection and guarding services at OR Tambo. This tender was later extended to other Acsa airports, netting Bosasa R32-million.

Bosasa didn’t follow proper processes to win the Acsa tender. It offered monthly “bags filled with money”, which totalled R2.2-million over many years, to senior Acsa officials at the time, including Reuben Pillay (assistant manager of aviation security), Joe Serobe (the security chief) and Mohamed Bashir (procurement officer), to influence Acsa’s tender-awarding process.

At the Post Office, Bosasa unlawfully received security contracts worth at least R180-million to guard pay points where payments to the elderly were processed. To win these contracts, Bosasa paid for protection services for former Sapo executives, including Siviwe Mapisa (former head of security) and Maanda Manyatshe (former CEO), and offered the former luxury gifts such as watches.

Bosasa’s protection from the top

Despite negative media coverage of the Bosasa corruption scheme, the company still did business with the state.

Beyond 2016, Bosasa enjoyed state contracts with a value of R90-million. Around this time, Bosasa changed its name to African Global Operations to try to escape the cloud of corruption that was swirling around it.

The Zondo Commission explored why Bosasa and the government officials it bribed had escaped prosecution for so many years, despite the Special Investigating Unit (SIU) completing an investigation in 2009 into the company’s sullied contracts.

The SIU recommended the National Prosecuting Authority (NPA) consider prosecuting Gillingham and Mti for their part in tenders awarded to Bosasa by Correctional Services.

In his evidence to Zondo, Agrizzi claimed Bosasa and the government officials it bribed had protection from the NPA’s top echelons to stall prosecutions. Former NPA deputy director of public prosecutions Nomgcobo Jiba, her assistant Jackie Lephinka and special director Lawrence Mrwebi were allegedly on the Bosasa payroll. The trio has denied allegations of wrongdoing.

Bosasa also appears to have had political protection after bankrolling the ANC and the lifestyle of its head honchos. Around 2004, the ANC received a R12-million donation from Bosasa. Cyril Ramaphosa’s ANC presidential campaign received R500,000 in 2017 from Bosasa.

The Zondo Commission found that Zuma, Mineral Resources and Energy Minister Gwede Mantashe and former Gauteng premier Nomvula Mokonyane received largesse from the company in the form of sponsored birthday parties and home security upgrades. The three ANC officials have rejected the commission’s findings. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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