NEW DAWN OR FALSE DAWN? The reality behind ANC’s promises of renewal

by Jul 1, 2022Amandla Issue 82, Articles

This article was written before the publication of the final report of the Zondo Commission on 23rd June.

THE ZONDO COMMISSION HAS made serious findings of criminality against individuals, politicians, and private companies that enabled and benefited from state capture. The findings show that the ANC directly facilitated corruption and financially gained from it. Notably, the ANC’s deployment committee recommended that corrupt actors be awarded board positions at various public entities. In addition, the proceeds of corrupt tenders flowed directly to the ANC.

The governing party is now in a period of self-proclaimed “renewal”. But as pressure increases for the party to change, it appears steadfast on protecting both its deployment committee and the sources of its funding. When ANC President Cyril Ramaphosa appeared before the Zondo Commission in April 2021, he was asked to explain the role of the ANC’s deployment committee and to address the party’s political funding sources. Evidence from the Commission shows that the ANC directly benefited from tender corruption, receiving kickbacks and bribes as a form of party funding. As will be discussed later in this article, the governing party is now scrambling to resist transparency legislation which forces South African political parties to declare their donors.

So far, the Zondo Commission has made damning preliminary findings against the ANC over its deployment policy and how it facilitated state capture

Meanwhile, the ANC’s deployment committee has come under scrutiny at the Commission over its interference in various state-owned entities (SOEs). The deployment committee is a branch of the ANC that recommends candidates for various positions in the public sector, including SOEs. But the ANC’s insistence on deploying its own cadres has done more damage than good, and it has shown little willingness to change.

Establishing the deployment committee
The origins of the ANC’s official policy on cadre deployment can be traced back to the party’s Kabwe Conference in 1985. But it was only in 1998 that its national deployment committee was established and in 1999 that it adopted an official deployment policy. In an affidavit to the Zondo Commission in 2021, ANC chairperson, Gwede Mantashe, explained that the committee evolved to serve the ANC’s transformation project in the public sector after apartheid: “Strategic deployment of ANC cadres played an important role in the ANC taking control of the post-liberation state.”

Today, the committee is headed by the party’s deputy president. It consists of 15 members of the ANC, who are mostly from the party’s highest structure — the National Executive Committee (NEC). During the height of capture, in the years from 2012 to 2017, the head of the committee was ANC Deputy President Cyril Ramaphosa. It is now the Ramaphosa-led party that will have to consider what Justice Zondo will say in his final findings on the deployment committee. So far, the Zondo Commission has made damning preliminary findings against the ANC over its deployment policy and how it facilitated state capture.

The cadres and the SOEs

In its report on Eskom, the Zondo Commission questioned whether the ANC had done its due diligence to ensure “people of integrity” were recommended for positions at Eskom. It found that the deployment committee likely knew that Ben Ngubane would be appointed chairperson of Eskom, Brian Molefe would become the power utility’s chief executive officer, and Anoj Singh would be its chief financial officer.

Ngubane, Molefe and Singh were found by the Commission to be the key enablers of capture at Eskom. They allowed dodgy procurement deals to proceed at the expense of Eskom’s performance and for the benefit of Gupta-linked companies. The Commission also suggested that the ANC’s role in board appointments made it culpable for what transpired at the SOEs – like Eskom – where it had interfered. “The question that the people of South Africa are entitled to ask is: where was the ANC as the Guptas took control of important SOEs such as Transnet, Eskom and Denel? Where were they?”, the Zondo Commission said in its report on Eskom.

At Transnet, meanwhile, the Commission found it “reasonable to infer” that the deployment committee had played a role in the appointment of the public entity’s former Group Chief Executive Officer, Siyabonga Gama. Gama was linked to irregular contracts worth billions being unduly awarded to the Gupta patronage network. Gama was arrested and charged in connection with state capture at Transnet in May 2022.

Since the Commission released these findings, new allegations have emerged against the deployment committee. The Democratic Alliance obtained the minutes of ANC deployment committee meetings from 2018 until 2020, through legal action from the Zondo Commission. The minutes show that the governing party had, worryingly, discussed appointments to the judiciary and Chapter 9 institutions, including the South African Human Rights Commission.

Significantly, Ramaphosa told the Zondo Commission in April 2021 under oath that he was not aware that the deployment committee discussed candidates for judicial posts. However, the minutes of a committee meeting from 22 March 2019 show that the party did precisely that. This is concerning evidence that the ANC has intended to influence appointments that should be independent of political influence.

These examples from the Zondo Commission report, and the ANC meeting minutes, show that cadre deployment
is linked to corruption. It is a network through which politically appointed board members at SOEs enable corrupt procurement contracts, which in turn lead to the near-collapse of these SOEs. But cadre deployment is only one piece of how the party’s policies have enabled capture.

“The question that the people of South Africa are entitled to ask is: where was the ANC as the Guptas took control of important SOEs such as Transnet, Eskom and Denel? Where were they?”

The ANC’s corrupt funds

While Ramaphosa insists only individuals within the ANC have acted corruptly, findings from the Zondo Commission show how the party as a whole benefited from corrupt activity — most notably through its party funding coffers. The findings of the Commission demonstrate that the proceeds of corrupt tenders were used to fund the ANC itself.

The Zondo Commission found that in the Free State, a company called Blackhead Consulting was corruptly awarded a R255 million tender in 2014. The company also made donations amounting to millions of rand to the ANC between 2013 and 2018. The ANC also partly funded its 2016 Gauteng local government election campaign through the corrupt solicitation of R50 million from the company EOH. Bosasa, another company that used bribery to access tenders, was also one of the ANC’s big funders for more than a decade.

The ANC’s promise of renewal is now being tested, but it is failing. The Political Party Funding Act (PPFA) is a major new law introduced in 2021. It promotes transparency around how political parties are funded. The law requires political parties to report all donations over R100,000 made to them in a year, and limits donations by a single donor to R15 million per year. It requires transparency in the hopes of preventing funding by corrupt sources. The law came into effect after pressure was applied by civil society organisations, including My Vote Counts.

Yet after just one year, and despite the Zondo Commission calling for the strengthening of the PPFA, the ANC is intending to weaken it. The party proposes to increase the thresholds for reporting donations so that far fewer donations are made public. It also wants to raise or even remove any limit to donations made by one donor in a year. The ANC is desperate for donations because it faces a financial crisis. The governing party is over R200 million in debt, cannot pay its employees, and owes SARS over R100 million in taxes. It is now attempting to undermine the PPFA to increase its funding, even if it means inviting the proceeds of crime into the organisation.

The ANC’s latest reported donations in terms of the PPFA show that the party continues to accept dubious funds. The Independent Electoral Commission (IEC), the body responsible for reporting in terms of the PPFA, reported that the ANC received just one donation in the first quarter of 2022. It was R10 million from a company called United Manganese of Kalahari
(UMK). UMK is majority owned by a group of companies that includes Chancellor House. Last year, Chancellor House admitted that it was owned by a trust linked to several tender corruption scandals. The trust had the ANC as its sole beneficiary. Another investor in UMK is Viktor Vekselberg, a Russian businessman with close links to Russian President Vladimir Putin, who is subject to US sanctions. Clearly, the ANC has little concern about where its funding comes from, despite the findings of the Zondo Commission.

If the ANC continues to undermine party funding transparency, its promises of renewal and change will remain empty. Similarly, the party’s lack of willingness to stop its policy of cadre deployment is an indication that it values its own power more than the public interest. The governing party should be prioritising the removal of corrupt influences from its structures and finances, but at present it seems unwilling to change.

Ra’eesa Pather is an investigator and Michael Marchant is the Head of Investigations at Open Secrets.

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