Opinionista Patrick Craven 2 March 2016

Corruption and capitalism: Exposing the rot

In the extraordinary aftermath of Pravin Gordhan’s budget speech, an almost Goodies v Baddies narrative emerged. But such a dramatic political fallout must point to something much deeper than a spat between senior politicians.

It’s war, declared the Sunday Times of 28 February 2016, just two of the thousands of works flooding the media in the extraordinary aftermath of Pravin Gordhan’s budget speech four days earlier.

Yet the more words that appeared, the harder it became to make any sense of the story. The attempt to personalise the issue led to its reduction to almost a Goodies v Baddies narrative. On the one side was Minister of Finance Gordhan: the brave, honest, clean, efficient defender of constitutional democracy, financial integrity and the free market economy. On the other, President Zuma: the corrupt, deceitful, incompetent, devious defender of crony capitalism and underminer of the Constitution.

None of the commentators and analysts could make the obvious point: that such a dramatic political fallout must point to something much deeper than a spat between senior politicians, but a dispute rooted in the broader quadruple economic crisis of mass unemployment, poverty, inequality and, especially, corruption.

An article on Tuesday in News24 by Max du Preez The SARS dossier that could spell trouble for Zuma and friendscame closer to explaining that Zuma v Gordhan is really about corruption, based on “a dossier in the safe at SARS headquarters containing dynamite allegations of corruption, fraud, front companies and foreign bank accounts against prominent benefactors of President Jacob Zuma”.

The allegations implicate not only Zuma but private business people: “Among the Zuma friends investigated by the SARS controversial investigations unit were super-wealthy businessmen Thoshan Panday of KwaZulu-Natal and Jen Chih “Robert” Huang, a Taiwanese citizen operating in South Africa a close business associate of Khulubuse Zuma, the president’s nephew, and a key middleman between South African and Chinese business interests.”

A PriceWaterhouseCoopers forensics investigation alleged Panday had paid vast amounts of money to senior police officers and manipulated tenders the police then awarded to his companies. Charges of corruption and bribery against him and Colonel Navin Madhoe were controversially dropped in 2013.”

Du Preez’s allegations are echoed in an article by Marianne Thamm in Daily Maverick, also on 1 March 2016, which refers to an “intelligence dossier” [the same one Du Preez refers to?] compiled by a discredited former SARS employee, Michael Peega, who was a special investigator with the NRG until he was caught rhino poaching while on leave in 2008.

There is a cast of hundreds,” she writes, “who have been drawn into the tawdry mess in their haste to defend and protect various powerful politicians and ‘businessmen’ who have flown and still fly close to the seat of power.”

Another example of big business’s role in corruption are the alleged activities of British American Tobacco (BAT) exposed by Barry Bateman on EWN on 15 February 2016 and Marianne Thamm in Daily Maverick on 24 February.

Bateman reveals evidence from a whistle-blower that BAT has been “involved in large-scale industrial espionage and the corruption of government officials” and that “the company allegedly hired a network of spies across the country and paid off law enforcement officials to disrupt competitors’ business operations.” 

Thamm writes: “There have been countless in-depth investigations of the tobacco industry in South Africa and elsewhere in Africa. Many… have revealed how the Hawks, the State Security Agency and SARS had all been drawn into and compromised to some extent by this industry… This month several US politicians wrote to US Department of Justice demanding that BAT… be investigated following claims that it engaged in widespread bribery ‘of politicians and policymakers’’ n Africa.”

She then makes a significant link between BAT and the current story: “It was a war that spilled over onto the pages of the Sunday Times which published a series of stories about an apparent ‘rogue unit’ in SARS that led ultimately to the dismissal of several key SARS officials, including [Ivan] Pillay and Van Loggerenberg.”

The allegations about the dossier, the counter-allegations about a “rogue unit” in SARS and the charges against BAT, Panday and Huang bring us back to the heart of the current story, and powerfully strengthen the view that behind the exchanges of insults we have a deep-rooted structural problem, and not just personal spats.

But they also demolish the media’s attempt to portray Gordhan as the knight in shining armour, fighting to save us from corruption, because, if these allegations are true, he was in a better position than anyone, first as head of SARS and then as Minister of Finance, to expose what was going on.

He has claimed that the “rogue unit” was quite legitimate, but has not revealed whom it was investigating, what they discovered and what action is being taken against those involved in any tax evasion. Nor has he commented publically on the alleged “dossier”.

Even if he is personally clean and innocent, if he is turning a blind eye to corruption, tax evasion and fraud by others, he shares in their guilt. The central problem is that Gordhan has become the most ardent champion of the neoliberal capitalist system, as we see in successive budget speeches. Exposing the rot at the core of that very system would strike at its heart. Is that why he prefers to remain silent?

He is not alone. Most capitalists and their commentators hide behind the false argument that corruption is a problem confined to the ANC, government, state-owned enterprises and their leaders and officials, and overlook the fact that every time a contract is awarded on the basis of a bribe, the company that wins the contract is every bit as guilty as the public servant who accepts the bribe or colludes in the fraud.

An example was an article by former Business Day editor, Songezi Zibi, (Unembargoed, 22 February 2016). “The Minister of Finance,” he wrote, “must deal with the elephant in the room that even supposedly powerful politicians have only begun to talk about. This is the reality of trying to grow an economy in what is effectively a gangster state. I call it such because it is captured by criminal elements who do not care for Gordhan’s growth narrative.”

He tells two shocking stories:

1. “Last year a former CEO of a state-owned enterprise (SOE) told me he had quit after receiving death threats so serious that they were delivered to his office. These came after he had turned down the forceful advances of powerful business people who have been in the news lately.

They wanted him, among others, to award them contracts for raw material supplies worth billions. When he explained that he did not get involved with deciding contracts, they wouldn’t have it. They wanted him to break the rules. He still refused A senior manager, notably junior to the executive, waved the document in the technocrat’s face and said, ‘This time they must f***ing sign this, or else’!”

2. “About two years ago, people who had been promised patronage posts by a politician, but didn’t get them when she was appointed, brazenly confronted a highly regarded administrator at an Eastern Cape metro. A columnist in the Herald newspaper received telephonic threats when he wrote about the poisoned environment. Needless to say, the official also didn’t last. She was paid to leave after her life was made very difficult.”

These are issues,” he writes, “that speak to the African National Congress’s decay… Until the party deals with its own inability to run itself effectively, elect leaders with depth and rid itself of the gangsters who make up a significant part of its body politic, there is little hope for growth.”

But why, despite the fact that it is clear that the guilty parties in both stories were from the world of business, does Zibi then put the blame for all this criminality solely on the ANC? The culprits may have been ANC members, though Zibi never confirms or even alleges this, and if so they must be held to account. But Zibi is silent on the role of capital in the ‘gangster state’, still quieter on the endemic corruption and criminality of the whole capitalist system.

The allegations by Bateman, Thamm and Du Preez also reinforce the argument against the #ZumaMustFall and #GuptasMustFall campaigns for trying to place the blame for our crisis on individuals, families or companies, rather than the whole inherently corrupt system of capitalism.

It is obvious why the Guptas have evoked such anger – using their economic muscle to buy political influence, win contracts and make themselves even richer at the expense of their workers and local communities, with no democratic mandate from anyone.

But singling them out implies they are uniquely bad, and that crime, corruption and tax evasion are problems confined to this or that capitalist family of company, rather than ingrained, structural corruption, in which all capitalists strive by whatever means possible to influence elected governments, mould public opinion and manipulate contracts. Others may be more subtle and secretive, but no less effective.

So we must not only call for the Guptas to fall but the entire capitalist system. Only then shall we put an end to the growing misery that workers and the poor face every day from the criminal system that exploits and robs them. DM

Patrick Craven is a member of the Movement for Socialism. He is writing in his personal capacity.

Gallery

While we have your attention...

An increasingly rare commodity, quality independent journalism costs money - though not nearly as much as its absence.

Every article, every day, is our contribution to Defending Truth in South Africa. If you would like to join us on this mission, you could do much worse than support Daily Maverick's quest by becoming a Maverick Insider.

Click here to become a Maverick Insider and get a closer look at the Truth.


Stimulus Package

Ramaphosa steps up to economic realities with R50bn package

By Greg Nicolson

There are more skin cancer cases related to tanning beds than there are lung cancer cases to smoking.