Politics

Mon,19Feb2018

Politics

When the business of impunity meets the impunity of business

The apologias from multi­nationals embroiled in South Africa’s ever-expanding Guptagate scandal have a haunting familiarity. They mimic an earlier non-apology: the submission by former president F. W. de Klerk on behalf of the National Party to the Truth and Reconciliation Commission set up after South Africa’s first free elections in 1994.

In practised lawyer-speak, De Klerk asserted that “mistakes were made” during 50 years of apartheid, but that its leaders were “good and honourable men”. Unfortunately, said De Klerk, while trying to counter the “menace of international communism” a “context” was created in which “abuses by security personnel were not sufficiently discouraged”. Surveying the human costs of National Party rule – more than 21,000 killed in political violence – the commission rejected De Klerk’s formulation and concluded that apartheid was indeed a crime against humanity.

In London in September, De Klerk was asked for his view on the involvement of Bell Pottinger public relations company, KPMG auditors and McKinsey consultants in schemes that looted the South African state treasury and undermined honest officials. Ever the lawyer, De Klerk replied: “It is too early to tell.”

KPMG and McKinsey played apology poker. Starting with a low bid, they opened with a general statement of regret to no one in particular, coupled with a few early retirements, a suspension here, a sacking there. When people such as ex-finance minister Pravin Gordhan started talking about legal action, the parent companies paid attention. Partners from New York and London flew to Johannesburg, conveying personal regrets to Gordhan and other top officials.

Threats to these companies are multiplying. There are direct financial ones. How much did McKinsey’s and KPMG’s actions cost the treasury? State utility Eskom is asking McKinsey to refund the R1bn ($73m) it earned from a contract in partnership with Trillian, owned by a Gupta associate, Salim Essa. The status of that contract, judged illegal by several independent lawyers, is being tested in court. KPMG, according to one of South Africa’s top economists, Iraj Abedian, could be held liable for the loss of “tens of billions” of dollars caused by its damage to institutions and investor confidence.

Despite their apologias, both companies refuse to admit wrongdoing or legal liability, and South Africans’ anger towards them grows. KPMG International has been slow to launch an internal investigation into why its local company produced a politically charged critique, now withdrawn, of an anti-tax evasion unit that was troubling the Gupta brothers and President Jacob Zuma’s son Duduzane.

Guptagate could presage stronger demands for corporate and political accountability. It exposes more clearly the mechanics of grand corruption. Successive media reports conjure an image of predator politicians dragging reluctant multinational companies into a web of illegal and mispriced contracts from which mega-profits are laundered through tax havens. But Guptagate points to a different dynamic. Here, the company is the predator seeking out compliant and greedy politicians with whom to do business. What has developed in South Africa is a high-tension battle between independent regulators and courts on one hand taking on a criminal business-political condominium on the other.

But before anyone gets too smug about McKinsey’s and KPMG’s discomfiture, the revival of 783 charges against President Zuma reminds us of the origins of the current wave of grand corruption. In the mid-1990s, Western governments such as Britain, France, Sweden and the US – resolutely backing their national arms manufacturers – sold South Africa’s new government some $6bn of weaponry. Much of it was irrelevant to the country’s strategic needs, and almost all of it was at inflated prices, pumped up by third-party commission agents.

Politicians such as Zuma are accused of cutting themselves into the deal; some diverted cash into the coffers of the ANC to fund election campaigns. In fact, it was similar to corruption under apartheid rule. Then, politicians took their cut from the mining conglomerates and laundered their profits overseas. The main difference today is that journalists can report it without having security restrictions slapped on them. Mistakes were made, indeed.

This article came from the November 2017 print edition of The Africa Report magazine

 

'It's going to be a tough election': South Africa's ANC votes for a new leader

Dr Zweli Mkhize, Treasurer-General of the African National Congress (ANC), leading party of the Republic of South Africa, in his office at Luthuli House, the ANC headquarters - Credits: Miora Rajaonary for TAR
Amid speculation that he may emerge as a compromise candidate in the ANC leadership election, Mkhize tells The Africa Report what the party needs to fix to win back voters

Read more...

'The clock is ticking': Ghana's new president tries to kickstart urgent economic reforms

Nana Akufo-Addo - Credit: All rights reserved
Having run for office for nearly the past two decades, President Akufo-Addo now has the power to bring the changes he has long called for. The electorate is watching to see if he can turn around the economy, decentralise power and fight corruption

Read more...

Mo Ibrahim: 'There’s no renewal process for capitalism'

Mo Ibrahim, Founder, Mo Ibrahim Foundation - Credit: Bruno Amsellem/Divergence

The billionaire philanthropist talks to The Africa Report about inequality across the globe and the challenges leaders face when tackling the impacts of globalisation

Read more...

Winnie Madikizela-Mandela: 'It's time for change of leadership'

Winnie Madikizela-Mandela listens as South Africa's president Jacob Zuma, addresses party delegates in Johannesburg, South Africa, July 5, 2017. Photo: Themba Hadebe/AP/SIPAPresident Jacob Zuma has led the governing ANC party to the lowest point in its history due to corruption, and South Africa is reverting to the racist state, says the activist, former first lady and ANC stalwart, Winnie Madikizela-Mandela

Read more...

Spotlight on Winnie Kiiza, firebrand leader of Ugandan opposition

Twitter State House UgandaIn Uganda, the firebrand leader of the opposition in parliament is standing up to the government, which is using strong-arm tactics to change the constitution and allow Museveni to stay in power.

Read more...

Revolutionary justice

To the barricades as the African sun beats down, comrade judges.
 
You have nothing to lose but your horsehair wigs and billowing black robes.
 
But surely the idea that the courts, deep in pomp, would constitute a revolutionary guard against the global tide of authoritarianism and political crookery is naive in the extreme?
 
Why would this elite cadre of judges flaunting their self-belief as they pass judgements have any interest in challenging the status quo?
 
Yet, for the past few years, the courts have shown a thrillingly robust spirit as better organised activists use them to show governments the limits of their power.
 
In the US, the courts struck down Donald Trump’s ban on Muslim immigrants; in ­Britain, they forced Prime Minister ­Theresa May to consult parliament before she signs its divorce with the European Union (EU).
 
This has extended to Africa where lawyers, in and out of court, find themselves on the frontline of political battles.
 
The ruling by Kenya’s Supreme Court on 1 ­September to annul presidential elections because they did not meet the standards set out in the electoral law was held up as a ­triumph for judicial in­dependence.
 
The court’s decision was also a side-swipe at international observers who had rushed to endorse the election and lecture the losers about the need to move on.
 
It may have been helpful for the court that Kenya’s chief justice, David Maraga, is a conservative and deeply religious figure with no record of radical affiliations.
 
Critics accuse the court of heating up Kenya’s political climate; in fact, it was already on the boil.
 
The judges were doing what they should do: testing the provisions of the constitution against realities on the ground to make the political system more accountable to the people.
 
Radical justice
 
Far better that arguments about fair elections and legitimacy should be hammered out in courtrooms or council chambers than settled on the streets.
 
Kenyan activists took a cue from their Ghanaian counterparts, who launched a monumental appeal against the 2012 election results.
 
Although those petitioners failed after eight months of detailed public hearings, the case helped change electoral law.
 
That laid the groundwork for last year’s far more credible and accountable elections.
 
In South Africa, the courts are being dragged into the centre of the political ­arena.
 
Asked to rule on the reliability of provincial and the African National Congress’s elections, they have been handing down verdicts inimical to President Jacob Zuma’s interests.
 
Most of all, the tacticians of the Economic Freedom Fighters and the Democratic Alliance have been scoring successes in their efforts to ensure that the 783 charges of corruption and racketeering against Zuma are tested in court.
 
There is no immutable plan for all this.
 
The activists and petitioners are losing as many cases as they win.
 
But by pushing back against arbitrary power, the courts are opening up ways for people to organise a more honest and accountable political system.
 
That’s radical, if not revolutionary, justice. 
 
From the November 2017 print edition 

Most popular

  • Latest

  • Most read

News & Analysis

Politicians

Elections

Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us