‘State capture was evident as early as 2014’, says Gordhan


JOHANNESBURG, November 19 – The state capture phenomenon had been around as early as 2014 in South Africa during former president Jacob Zuma’s administration, Public Enterprises Minister Pravin Gordhan told the state capture commission of inquiry on Monday.

He said individual corrupt activities, through procuring goods and services from third parties at inflated prices, has been around since 2009.

“These acts [of corruption] were popular as early as 2009, such as the story of a bottle of water. The bottle costs you R6 at a shop, but government is charged R40 a bottle [by third parties]. Another phenomenon spiked in 2015 in many institutions, regarding procuring complex pieces of equipment and spares, for example, that of an aircraft,” Gordhan said.

“Policy decision was taken by boards that there will be no buying directly from manufacturer. Buying from a company in East rand which has no capacity to produce that part, would cost you $16 million than the $40 at the manufacturer, you will pay $16m. This is to illustrate the level at which [state capture]  starts,” he said.

“Then there was a Cabinet reshuffle in 2010 and when the [SOE] boards were changed after [former public enterprises minister Barbara] Hogan was dismissed from Cabinet. It looked like just an event where a certain number of people left and others came in…  the picture was still hazy but it became clearer in 2014 and 2015. Events that took place at Treasury in 2015 and the manner in which the nuclear deal issue was tackled…all suggested that there was more to it than the individual acts of corruption…there was wider set of schemes.”

He said the “final penny dropped” when the Gupta emails leaked to media emerged publicly. The minister said people began seeing the evidence and started “connecting the dots” about the impact of state capture.

Commission chairman Deputy Chief Justice Raymond Zondo asked why government opted to spend more by buying through third parties.

“It seems to be common at government departments that goods that can be easily bought at a shop are instead bought from someone who adds a certain percentage [to the price]…. costing taxpayers more. It seems to be quite common… why?”

Gordhan said that it was not government policy but the practice was implemented by officials anyway.

“But the constant question for us all should be who benefits? Where does the money go? Who designs these processes?” asked Gordhan. (ANA)