Tuesday, February 24, 2009

On Carl Niehaus and “comrade capitalism”

The DA’s Jack Bloom says corruption is pervasive in Gauteng

"Almost every project is conceived because it offers certain people a chance to make money."

This amazing admission was made in January 2007 by then-ANC secretary general Kgalema Motlanthe [now SA President] in an interview in the Financial Mail on the ANC's business interests.

It lays bare the rot behind so much of the tender controversies and service delivery failures by non-performing companies.

I have concluded that corruption is pervasive in Gauteng, despite the public perception that it is a better run province than others.

The corruption is more hidden and highly sophisticated, with top level collusion, siphoning off vast amounts of money into private bank accounts.

Political appointments grease the wheels of this corruption machine.

This isn't free competitive capitalism that can uplift the people. It's "comrade capitalism", where buddies are looked after at the expense of the poor.

The Carl Niehaus saga illustrates how a dishonest and spendthrift man landed top jobs because of his political connections.

He was irregularly appointed by Paul Mashatile as the CEO of the Gauteng Economic Development Agency (GEDA) in April 2005 (April Fool's day, appropriately enough!)

If he had been properly interviewed, and reference checks done, his fake degrees and trail of debts would have been discovered.

Moss Ngoasheng, who chaired the GEDA board, only learnt about Niehaus' appointment when he read it in the newspaper, and resigned in disgust.

Mashatile then appointed Keith Khosa as acting board chairman, despite the fact that Khosa was the senior official in the Finance department with oversight over GEDA, an outrageous conflict of interest.

When Niehaus' fraud was discovered, he was not only allowed to resign without being charged, but thanked for his services at a staff meeting and given a farewell lunch at a swanky restaurant.

The businessman allegedly implicated was also let off the hook.

Mashatile says that there was no reason to report Niehaus because "there was no money lost", but this is a poor excuse as a crime was still committed with the intention to defraud.

This is certainly not the way to fight corruption, which is why the charge that I have laid against Niehaus, Mashatile and others will be an important test case for accountability.

According to a victim survey by the Institute for Security Studies, Gauteng is the corruption capital of South Africa .

45% of the Gauteng respondents said they had been asked for a bribe in 2007, up from 34% in 2003. This is more than double the reported rate in any other province.

Many bribes may be small, but over time the impact can be devastating in undermining trust in the state and planting the seeds for violent destabilisation, especially if bigwigs are seen to get away with it.

This has happened in Kenya where Transparency International reports that kitu kidogo (a "little something") features in 54% of the average Kenyan's dealings with institutions.

South Africa has slipped from its 36th world-wide place in 2002 in the Transparency International Corruption Perceptions Index, to 54th last year, scoring 4.9 out of ten.

This is a disturbing trend that hinders investment as honest businesses do not want to pay bribes and won't apply for tenders if they feel that it has already been decided beforehand.

Last year, the Gauteng provincial government launched the Gauteng Fund which is meant to provide private investors with "preferential access" to all projects by municipalities and government departments before these are put out to tender.

R28-million has already been spent on consultants, travel and salaries for the fund and a further R500-million contributed as seed capital.

According to Len Verwey of the Institute for Democracy in South Africa (Idasa), this fund "in effect promises to use public power to secure private gains ... It has potential conflicts of interest as well as kickbacks and the like written all over it."

By restricting competition, this fund could easily lead to higher prices and therefore less delivery for the poor.

It looks like a legalized form of corruption that is the slippery slope to a "vampire state" where the business and government elite join forces in looting the treasury for their own benefit.

2 Opinion(s):

Anonymous said...

Get hold of a copy of noseweek issue 112, the latest one, February. See lead article on page 6, "In the court of public opinion".

Since the Shaik trial the Scorpions found documentation that Shaik had not paid Jacob Zuma just R1.2m, but more than R4m. That is the real reason the Scorpions were disbanded: to prevent this coming out, because Zuma would then have been history.

Our 100% corrupt Zulu boy was totally, but totally, involved in the arms deal. As far back as 1992 Schabir Shaik and Thomson ("The French", now called Thales) drafted an agreement according to which all Thomson's interests in South Africa were to be held and controlled through a new company called Nkobi Holdings, in which the Shaiks, the French and the ANC (or a faction of it) would be shareholders. Even at that point, the plan was to have Zuma as a ghost stakeholder, entitling him to a percentage of the profits.

Soon after that the French got warnings from people close to Nelson Mandela that the Shaiks' Nkobi Holdings was not a "suitable' partner. Thomson CSF then bought a stake in South African arms company ADS to deal with instead, leaving Nkobi and the Shaiks out in the cold.

The French had been encouraged by parties close to Mandela and his then deputy Thabo Mbeki to rather do a deal with another ANC outfit, led by Reuel Khoza, called Consolidated Network Investments (CNI). This would then be associated with ADS.

But then Jacob Zuma actively intervened on behalf of the Nkobi crowd which of course included the Shaiks and himself as ghost shareholder.

Now Chippy Shaik was the official arms deal co-ordinator. In July 1998 Jacob Zuma met Jean-Paul Perrier of Thomson in London, and persuaded the French to consider restructuring the holding of ADS so that Nkobi would get its promised share. Chippy Shaik told Thomson that if they were not prepared to co-operate with him, he would make things difficult for them. The French got the message and three weeks later they were in Durban negotiating with Schabir Shaik. Zuma popped in at the meeting for a cup of tea. Now this was more than a year before the arms deal was signed.

The deal struck with the French on Zuma's behalf entailed his receiving R500,000 per year until the ADS's dividends began to flow. This was written in an encrypted fax. The fax also set out what Thomson expected from Zuma in return: protection of Thomson CSF during then current investigations, and permament support from Jacob Zuma for future projects.

So there you have it.

Thales and/or Tint are right now lined up for more arms deals with the SA Defence Force, obviously with Zuma's support. This time it's a R2.2bn order for short-range missiles. No tender was required.

We have already noticed that President Motlanthe is a sociopath. Psychopaths know how to turn on the charm, as we see with Jacob Zuma.

Jacob Zuma is a deadly corrupt man and should never, never, never be allowed to become president of South Africa because he will ruin the country totally with his never ending and pervasive corruption. The man should be in jail with Schabir Shaik. Chippy Shaik is hiding out in Australia, as Australia does not have an extradition agreement with South Africa.

I'm kind of paraphrasing Martin Welz's original article here. Doberman, you can find the original noseweek article which is a bit longer than my paraphrasing of it, and set it up as a lead post. The message is very clear: don't vote for the ANC or else the country is stuffed. Vote for anyone else, but keep the ANC and Jacob Zuma out.

Go for it, Dobes.

Anonymous said...

Our company got various calls from ANC election fund raisers. Imagine this! This are the pricks that handicap small, white owned companies like ours in tenders and than come and plead for donations for their crime syndicat!