As the Marx Brothers might have put it, ‘this man may look like a corrupt idiot and act like a corrupt idiot, but don’t let that deceive you – he is a corrupt idiot.’ – Slavoj Žižek
On 30 May 2003 then President Thabo Mbeki published one of his politically and analytically most brilliant internet letters. The missive, which became one of his most famous, attempted to challenge the widespread perception that had taken hold (and remains to this day) that the government arms deal had been riddled with corruption.
The letter laid bare some of the deeply problematic ideological assumptions underlying the discourse on corruption in post apartheid South Africa. It then used this insight – which was not only spot on, but also tapped into a widespread resentment amongst members of the newly emerging post-apartheid elite – to defend what seemed to be indefensible.
(This was a tactic often used by Mbeki in his letters: correctly expose and analyze widespread racist or Afro-pessimistic assumptions, then use the insight to deny the existence of obvious problems or to discredit the valid criticism of progressive voices in our society. He used the same tactic against the so-called “ultra left” in Cosatu and the SACP and against those who pointed out the folly of his HIV stance.)
In the letter Mbeki wrote (and I am quoting at length):
In the Biblical Gospel according to St Matthew, it is said that Jesus Christ saw Simon Peter and his brother Andrew fishing in the Sea of Galilee. And He said to them: “Follow Me, and I will make you fishers of men.” Perhaps taking a cue from this, some in our country have appointed themselves as “fishers of corrupt men”. Our governance system is the sea in which they have chosen to exercise their craft. From everything they say, it is clear that they know it as a matter of fact that they are bound to return from their fishing expeditions with huge catches of corrupt men (and women)….
[W]e should not, and will not abandon the offensive to defeat the insulting campaigns further to entrench a stereotype that has, for centuries, sought to portray Africans as a people that is corrupt, given to telling lies, prone to theft and self-enrichment by immoral means, a people that is otherwise contemptible in the eyes of the “civilised”. We must expect that, as usual, our opponents will accuse us of “playing the race card”, to stop us confronting the challenge of racism.
The fishers of corrupt men are determined to prove everything in the anti-African stereotype. They rely on their capacity to produce long shadows and innumerable allegations around the effort of our government to supply the South African National Defence Force with the means to discharge its constitutional and continental obligations. They are confident that these long shadows and allegations without number will engulf and suffocate the forces that fought for and lead our process of democratisation, reconstruction and development. However, what our country needs is substance and not shadows, facts instead of allegations, and the eradication of racism. The struggle continues.
Re-reading this letter, it seems almost inevitable that Mbeki would have attempted at first to protect former Police Commissioner Jackie Selebi. It also explains (better than anything anyone else may have written) why he refused to believe the evidence of Selebi’s corruption provided to him by the Prosecuting Authority and even continued to claim that nobody had provided him with any information that Selebi did anything wrong – even after Vusi Pikolu had briefed him on ten different occasions on the evidence against Selebi.
For Mbeki, his (often perceptive and accurate) ideological insights often trumped the proven facts. His tragedy (if you are sympathetic to the former President) or his evil genius (if you are not) was that these general ideological insights were often brilliant and perceptive, but blinded him to the specific facts and the valid criticism of individuals and about particular problems facing the government and the country and its people.
Which brings me to the set of questions I want to try and address in this post: why did an obviously brilliant, courageous and seemingly deeply principled struggle hero like Jackie Selebi became corrupt? Why are we confronted almost every day by news of crooked cops, Home Affairs officials and tenderpreneurs? Why does it sometime feel as if we are being engulfed in a tidal wave (or is it a Tsunami) of sleaze and corruption in South Africa?
The easy answer would be to blame everything on the racist stereotypes that Mbeki rightly warned against and to deny the very facts before our eyes. But this approach would not help us to understand the root causes of the problem and neither would it help to eradicate them. Although the Afro-pessimistic master narrative which Mbeki warned us against may well have helped to exaggerate the perception of corruption in our society, it cannot explain away the problem, which is very real and very dangerous for the long term well-being of our country.
For the same reason we should reject with contempt the racist and offensive claim that there is something in the DNA of the ANC and the government it leads that predisposes it and its members to corruption.
I would like to suggest that the problem can at least partly be attributed to the nature of our transition to democracy. South Africa did not experience a true revolution, but a managed transition. The state remained in tact and the private sector was largely left untouched. During the transition period the crony capitalists and the opportunists, who had exploited the conditions created by apartheid to make vast amounts of money, went to work to capture the new elite in order to protect their own financial interests.
Thus some of the big mining houses and other big business institutions who had resolutely supported apartheid, jumped ship and went to work to woo the members of the incoming government in order to protect their profits and their vested interests. They donated money to the ANC, forged close personal ties with some ANC leaders by wining and dining them and by providing them with all kinds of material “assistance”. They claimed they were doing this out of altruism or out of a deep sense of shock about the horrors of apartheid which – so they laughably claimed – they had only belatedly become aware of.
In essence, what large sections of the big business community did, was to offer legal bribes to the ANC as a movement as well as to individual ANC members to ensure that their own financial interests would be secured. They would offer fantastic riches to a few lucky well-connected individuals through BEE deals and directorships with the understanding that there would not be any fundamental transformation of the economic system in South Africa. Workers would still work and die for a pittance, while bosses would be allowed to continue to draw huge salaries and bonuses and subvent profits to London and New York.
Was it then not all too human and understandable that some (but not all) members of the new elite – who had not benefited from these legalized bribes – began to feel hard done by and tried to do something about it? Thus the mutually beneficial relationship between crony capitalism and some members of the new elite became firmly enrenched. In the feeding frenzy that followed, the lines between the legalized bribes paid by the apartheid capitalists and the criminal bribes paid by people like Schabir Shaik and Glen Agliotti became somewhat blurred.
And as more and more people seem to get fabulously rich (perhaps not as rich as those who exploited the apartheid system) and the culture of accumulation and consumption firmly took hold, it was perhaps inevitable that somebody like poor Jackie Selebi would begin to think that there was not really anything wrong with a gangster buying your very own child a nice pair of shoes. Ironically, it is exactly against this new kind of colonization that Mbeki himself warned in his Nelson Mandela Lecture when he said:
Thus, everyday, and during every hour of our time beyond sleep, the demons embedded in our society, that stalk us at every minute, seem always to beckon each one of us towards a realizable dream and nightmare. With every passing second, they advise, with rhythmic and hypnotic regularity – get rich! get rich! get rich! And thus has it come about that many of us accept that our common natural instinct to escape from poverty is but the other side of the same coin on whose reverse side are written the words – at all costs, get rich!
Is it too late to turn around this ship? Well, extraordinary political and moral leadership is required to address the capturing of our hearts and minds by the crony capitalists. We have the perfect Constitution and the perfect laws to fight the good fight and to stop the rot, but without the political leadership there will be no success. That is why the fight raging currently inside the ANC between the tenderpreneurs and those who believe in the creation of a more fair and just society is pivotal for the long-term well-being of our society.
Sadly, because he is himself compromised and implicated in the culture of greed through his association with the fraudster Schabir Shaik, President Jacob Zuma is probably not the best leader to lead the fight. Time for a change in ANC leadership perhaps?
Prof: it has become difficult for me to post, I feel so much subconscious seething anger, so I worry about my comments, even lose sleep.
Mibeki’s bastardization of St. Mathew is classic Mibeki, showing well his immaturity in spiritual awareness. And what capture of corrupt women and men? Selebi, well I predicted he would fall, and watch how this is used to spin the ANC commitment to dealing with corruption. And look how fast the league responded.
You can not fool some of us, ANY
Correction (I hit save and it sent):
You can not fool some of use, ANY OF THE TIME.
My apologies (for the control S = Send) My post was interrupted.
To understand the consequences of the level of corruption is SA today, let me say what I have said before. I was active with an NGO for five years which for R250,000 (that’s one quarter of a million rand, as I’m sure you know) said NGO produced a trauma room at SAPS, a garden program now traversing one of our provincial provinces, a mini sports park for young children, and a pre school now in its fourth year.
100 million plus on tickets alone to favorites and friends for free elite seats to the SWC games; now that, combined with everything else we hate within this criminal elite coup we live with, could have done the same thing in 400 communities.
Apart from corruption destroying the ability of all levels of government, it is also destroying the ability of volunteers, global funds, civil and corporate donors (who do most of the work, apart from government dependent grants for the poor) from continuing to serve the people. Those who care, we are actually in crisis.
@ Pierre,
“They say nothing of the fact that the AG is required by the law to show his draft reports to any institution he may be auditing, for any comments it may wish to make.”.
What are the requirements in law that were referred to by former pres Mbeki?
sirjay jonson says:
July 5, 2010 at 19:53 pm
What were you smoking since 18h00?
Maggs:
Section 3 of the Public Audit Act states: that the AG “is independent and is subject only to the Constitution and the law, including this Act; (c) must be impartial and must exercise the powers and perform the functions of office without fear, favour or prejudice; and 10 (d) is accountable to the National Assembly. (NOT to the President or the authority he is reporting on).
The Act provides that the AG must submit a final report to the relevant authority. There is no provision in the Act that reuires or allows the AG to show the report to the institution being audited before it is finalized.
Zulani: get a life! Have you any idea how serious the situation is in SA?
By the way Zulani: what I smoke is the tobacco I grow myself, with numerous staff who I treat as family producing food for the communities. What appears to me to be totally lacking in SA, with umbuntu nothing more than a PR scam, is compassion. Would you know what that is?
Some years ago I seem to recall reading that Thabo Mbeki liked to be considered the “cleverest man in the room” whenever he found himself as part of a group. To achieve this distinction one must constantly come up with new ideas and this tends to steer the intellectually ambituous in the direction of the worlds great philosophers, ancient and modern, like St Matthew.
Here lies great danger because old ideas frequently have little place in a modern context and the self proclaimed intellectual loses his way in the rubble of antiquity.
Be that as it may the ANC lost one its very few powerful thinkers when Mbeki left the building
changing (only) zuma will change little else
the real problem lies with the morally diseased state of the top echelons of the party; that the state is similarly infected is a logical and unavoidable consequence
Difficult to disagree with anything in the Prof’s post today, I reckon the incoming ANC government was filled with many brave individuals who had lost a career’s worth of earnings while devoting their lives to the struggle. Easy targets for the real con-men and thieves. After all, who doesn’t deserve a little bit of comfort after a life of sacrifice?
Yes, that’s how is started.
But let’s not forget where the yoke of corruption is learned today. Right there on the roadside, where the police – on the pittance they are paid – will find it very difficult to enforce the law rather than score a few bucks…
That’s where WE all can make a difference. And honour our country.
Yes, I agree that business were the instigators in the corruption we see in SA today and that many ANC leaders were extremely succeptable to it. Indeed, I think it was Feldstein that identified that it was international arms dealers (and their middlemen) that started “lobbying” ANC leaders in the early 1990s (even before 1994) for sale of future arms to SA.
But for most businesses it were and continue to be a matter of survival in changing and challenging times in a very competitive global world. It is not unique to SA, but is a feature of the capitalistic world we live. Maybe our leaders are simply not so good at hiding the evidence as leaders elsewhere (but getting better at it over time with experience?).
But I rather believe it shows how good our investigative skills are (in the media, NPA & SAPS) as well as our society’s continued drive to eradicate corruption. Yes, we need many leaders (in business, civil society and government) to continue to take a strong position against corruption. Not leaders blinded by their pro-African (or anti-African pessimism) zeal, neither leaders easily succeptable to corruption (even by friends).
The UK rid itself from the corruption by the British East India Company, the US did get rid of the corruption by the Robber Barons. With continued vigilance, we (as a society) will win the fight.
Excellent post, Pierre. Of course, our vulnerability to corruption at the time of the managed transition was made worse by the fact that individuals coming to government from decades in the struggle were often in an appalling state financially.
“We have the perfect Constitution and the perfect laws to fight the good fight and to stop the rot”
You’ve found some absolute instrument, engraved tablets, certitude? Surely not, Prof?
Pierre De Vos says:
July 5, 2010 at 20:36 pm
If, there is no provision in the Act that requires or allows the AG to show the report to the institution being audited before it is finalized, then fmr Pres Mbeki’s statement that “the fact that the AG is required by the law to show his draft reports to any institution he may be auditing, for any comments it may wish to make” cannot be true.
And as Kessie Naidu wisely said at the Hefer Commission “if it’s not true, it is a lie”.
“Controversial orthopaedic surgeon Wynne Lieberthal has resigned from Witbank Hospital as the Health Professions Council of South Africa (HPCSA) prepares to deliberate on two new complaints about his competence.
Lieberthal’s resignation comes just four months after the council reinstated him as an independent practitioner – following his four- year struggle to have his name cleared.”
http://www.iol.co.za/index.php?set_id=1&click_id=15&art_id=vn20100705045810544C107364
Maggs, there might be another Act that I am not aware of that Mbeki is refering to. Or there might be regulations issued by the AG on this. But the main Act dealing with the work of the AG definetly does not contain such a provision. It contains provisions that allows those affected to receive the FINAL report. But in this case theuy received a draft which was then changed after input from the Cabinet. There are good reasons why this is scandalous. The AG is independent. Showing the report to those reported on before it is finalised and asking for comments, impugn the report. Imagine Judge Joffe had given his judgment to Selebi and then allow3ed Selebi to make changes to the wording of the judgment where he did not agree with the findings. We would have laughed at Joffe and the judgment as he would not have been independent.
Maggs Naidu – maggsnaidu@hotmail.com says:
July 6, 2010 at 8:18 am
Pierre De Vos says:
July 5, 2010 at 20:36 pm
July 6, 2010 at 8:57 am
Pierre and Maggs, it is standard best practice in an external audit that a draft audit report is presented to party whose organisation is being audited in order to seek clarifications and to point out any factual errors. Auditors are typically in an organisation for a few weeks and they audit transactions that have occured over protracted periods, they therfore rely on the officials of that organisation to provide information and source documents. It is however up to them to determine whether an explanation is correct or not, and the contents of the final audit report is their own responsibility. This is a known fact in commerce and the public sector, thus I was amused when the DP/DA pointed the changes in the draft audit report a few years back and concluded it was corruption! Typical of South African pundits and the media they ran with the story without even varifying what audit procedure and practice is!
And no, you will not find it in any act. I think the only act that exists regulates the profession and prescribes that standards and good practise be created. An industry board thus develops, considers, monitors, etc, these practises and standards. The AG is bound, to my knowledge, by these practises.
@ Vuyo,
I accept that audit processes necessitates engagement before final reporting.
My question was, and still is, in relation to “the fact that the AG is required by the law to show his draft reports to any institution he may be auditing”.
What law?
Prof your post is correct but I also have to agree with Grease the Psalms. Many in South African society have felt that they have been short changed by the political compromise that the ANC took. It decided to grease its own palms with business money and settled for no changes in the business practices in the country. There was a Truth and Reconciliation Commission which somehow forgot that business benefited from the apartheid state. Therefore there were no reparations for the past injustices. Society seeing this has seen it proper that each member should make as much money as possible in as short space of time as possible. Police are bribed, tender committees are bribed, local councillors are bribed etc. These crooks are envied by society for their riches. The citizens not in power positions see this and they too decide a, 8 to 4, job won’t help them make money quickly. Therefore they too start robbing banks, hijacking etc. they too are envied by our youth who follow in their foot steps. It becomes so desperate that human life is worth the money in your wallet or the car you drive. It’s a circle. But no one wants to look back and look at the problem. We all look at the symptoms and shout at the top of our voices when we hear about a corrupt politician or a crime. We forget that after the negotiated settlement South Africa should have seen some meaningful reparations paid by companies, instead of reparation of politicians. We should have seen willingness of companies not only to admit that they benefited from apartheid but that their employment practices and remuneration was highly favourable to one section of the population. After the so called miracle this was not rectified. Black workers still earn a pittance while their employers make profits from money earned during apartheid days. Businesses removed many privileges that they offered to whites only once the so called miracle was achieved. Transport allowances were removed and only offered to senior staff that happened to be all white. Housing and house allowances were discontinued but for those that had houses the benefits would continue until the houses are paid up, these also happened to be white. To this day business pays a white employee more in remuneration than a black person. Whites are more likely to be employed than blacks even if they when to the same school, studied in the same university, with the same qualification. What does the government do in response to this? It comes up with a BBEEE plan that greases more politician psalms. Politics become a lucrative profession and we get idiots as our representatives (ANCYL).
@Pierre
Corruption is a cancer that affects and weakens all societies in the world, to a greater or lesser extent.
It results in a mis-allocation of resources and distorts the price mechanism .
Corruption unfairly impoverishes the vast majority at the expense of a tiny minority that are unjustifiably enriched in the process.
Poor and relatively poor countries are particularly susceptible to corruption in the civil service – especially Police, border officials, customs officials, traffic Police etc , due to simple economics – these officials are often very poorly paid, and the incentives to collude with the corruptors are huge.
Imagine a narcotices cop that is paid R5,000 per month and struggles to feed his family catching a perpetrator with R1,000,000 worth of heroin on him.
The perp offers him R60,000 there and then to close his eyes and ears for 2 minutes whilst the perp gets away – one year’s salary for 2 minutes work.
What percentage of cops would not accept the bribe, given the facts that I have laid out – surely quite a bit less than 100%?
My point is that corruption of the civil service is linked to relative poverty (that does not condone or excuse it – it merely seeks to explain why some poor countires may appear to be more corrupt than their more affluent peers).
The evidence I have read suggests that corruption in the wealthier countries where the civil servants are relatively well paid, tends to take place at a higher level (think arms dealers, senior members of government etc).
Look at Britain and the BAE scandals involving Saudi Arabia, SA etc (all neatly swept under the carpet by the British leaders)not to mention the “defence” contracts given to the likes of Halliburton by the US in their new colonies of Afghanistan and Iraq!
Your assertion that all or most business supported apartheid is wrong – for economic if not moral reasons.
The fact is that Apartheid impoverished us all – the manufacturers of consumer goods would like to sell their expensive products to all 50 million South Africans, not just 5 million whites.
Some of the major beneficiaries of Apartheid were poor uneducated, unskilled whites that were employed in the civil service and were effectively given sheltered emplyment.
The ANC’s need for support from big business and multinational corporations arises from its (tax) income needs to support its extensive wwelfare programmes. This compels it to pursue conservative economic policies, notwithstanding its association with the trade union federation Cosatu and the SA Communist Party.
The ANC government’s receives support in the form of votes from the poor as a reward or in exchange for the extensive social welfare programmes for the poor.
Big business, for its’ part, is heavily reliant on government to pass legislation and make decisions that allow and enable it to generate income into the future. The often massive incentive will always be there to “incentivise” government decision-makers to make “favourable” decisions that benefit business.
Corruption thrives where there is no accountability.
The ANC does not face any electoral threat. Therefore the ANC will not lose power and therefore it is de facto unaccountable to anybody except itself and its internal politiking.
Until there is a genuine prospect of the loss of power, this will continue unabated and only get worse. Just see JZ getting in as such a popular guy despite the enormous body of evidence collated by the NPA and the conviction of Shaik. This must have told the ANC that there really is no limit on the corruption they can get up to – so its open season at the trough.
At the moment all we have are theoretical limits.
Excellent post, but I have to disagree with you on one point, Professor.
There is something wrong with the DNA of Africans that predisposes them to corruption–namely, they are human beings. They are no better and no worse than people in every other society where government corruption will take hold if not constantly rooted out. In the USA we’ve experienced similar things under a zealously anti-government Republican government (if that makes sense). See, for example, the jaw-dropping scandals at the Louisiana Mineral Management Services.
Similarly, there is something wrong with the DNA of the ANC that predisposes it to corruption–namely, it is a political party. Any party in power for too long inevitably becomes corrupt. The Republicans in the USA managed it faster than most for a number of reasons, but the Democrats had their fair share back when they were in the majority years ago.
I hesitate to blame big business in South Africa particularly for corruption. Businesses everywhere will always try to buy whatever politicians are available–rent-seeking is easier than real capitalism. It’s a chronic problem in nearly every country. The USA always has the juiciest examples in the developed world, but even in western Europe (with their much lower levels of corruption in general) has some serious crony capitalism, especially in the financial sector.
What South Africa needs most is resilient, transparent institutions that are resistant to corruption, and most importantly, serious consequences for parties that engage in such things, which means of course a credible opposition party. Probably the worst thing to ever happen to the party of Mandela is their continuing landslide victories in every election.
One might hope that they can reform from within, but historical examples of that are scarce. More likely they will continue to get worse and worse over time, until they govern so poorly that they lose. It’s the only hope I can see.
Zoo Keeper says:
July 6, 2010 at 10:48 am
The ANC is, in my view, going to get roughed up at the next local government elections.
At national level there is little chance of it losing support in any material way – if anything it may get even stronger.
There is no convincing data that supports the argument that there is no limit on corruption even though there may be some instances where powerful people seem to get away with their criminality.
The powerful who get away with criminality must surely be having sleepless nights – there are numerous instances where the house of cards comes tumbling down when these thugs fall out of favour which can happen nearly in a twinkle.
It would have been inconceivable a few years back that the then most powerful policeman, the head of Interpol, fully supported by our very strong President would be facing the very real prospect of 15 years as a ordinary criminal?
Nothing is so permanent as never to change, as Dworky once said. Or maybe it was Lao-tzu.
Maggs Naidu – maggsnaidu@hotmail.com says:
July 6, 2010 at 9:53 am
Hi maggs, I thought I had sufficiently explained the matter to you. I am no accountant but know that legislation exists to regulate the accounting and auditors professions such as the Auditing Profession Act. These legislations create statutory bodies (e.g the independent regulatory board of auditors). These statutory bodies ordinarily develop and maintain auditing standards, ethical standards, which are internationally comparable; create appropriate framework for the education and training, deal with non-compliance, Inspect and review the work of registered auditors and their practices to monitor their compliance with the professional standards, etc. The AG is bound to these standards as they are applied to the public sector and these standards take into cognizance best practice such as the circulation of draft reports to the entities being audited to solicit input.
I will not be so patronizing as to lecture you on the sources of law and that it is not in all instances where you can readily say: “in terms of section so and so of legislation so and so”. Indeed the law regulating lawyers is similarly composed of legislation, rules of practice, common law, case law interpreting same, etc. The same applies to the audit profession. Thus for example if an auditor issued a report containing a material error (say the particulars of the company/entity being audited) owing to a failure to circulate drafts to solicit comment including regarding such errors) and that error causes harm, that auditor may well be liable in law (perhaps in terms of delict, etc). Hence a practice may well develop (as indeed this practice has developed to circulate drafts) that falls to be defined as a legal norm thus rendering as uncontroversial a contention such as “[t]hey say nothing of the fact that the AG is required by the law to show his draft reports to any institution he may be auditing, for any comments it may wish to make”!
In our poisoned space that we call public discourse such obvious contextual realities are willfully ignored to pursue one or other agenda.
Maggs,
For further evidence of the poisoned public discourse of South Africa I refer to your comment: “It would have been inconceivable a few years back that the then most powerful policeman, the head of Interpol, fully supported by our very strong President would be facing the very real prospect of 15 years as a ordinary criminal?”.
A comment that ignores, despite all the available facts, that:
- the person who initiated and pursued this powerful policeman never once stated that he was ever prevented from investigating this powerful policeman, but was in fact assisted by the very same strong President to obtain evidence from the police when they blatantly refused to assist the prosecutor (indeed he claimed interference came only at the stage when he sought to arrest this policeman! Why not prevent the investigation altogether rather than wait until there’s a case and then prevent the investigation? Why not support your political enemies to rid themselves of this investigator in order to protect your bosom buddy? Why wait for the most importune time to show your support of this fellow and risk being charged for defeating the ends of justice? No one will consider these obvious anomalies because they are inconvenient to the agenda of those who poison our public space).
-that the organization that was able to investigate the head of police is no more, through the actions of the leading lights of our present administration (that claims credit for the conviction, assuming that we will forget that they orchestrated the demise of the very organization that initiated the investigation) and therefore that IT IS indeed conceivable that we will never again be able to prosecute a very powerful policeman.
-That this much praised conviction of this policeman occurred only because of the active protection of the organization that initiated that investigation (despite the negative personal political ramifications of this support) by this strong President and during the term of that president.
- that those who claim that this strong President supported this corrupt policeman can not provide the basis upon which this president could have acted at the time of that person’s investigation (thus suggesting by the supporters of a democratic right based south Africa that persons must be dismissed every time there’s a suspicion and not evidence of wrongdoing!).
It WAS IN FACT conceivable that the head of the police, the deputy president of the country, the chief whip of the Ruling Party, the Head of Intelligence, etc, could be arrested and convicted for offenses against the law. Not anymore! Cele and Zuma sleeps a great deal better at night than either Selebi or Mbeki ever did.
Vuyo says:
July 6, 2010 at 11:20 am
You may have missed my comment that I accept that audit processes necessitates engagement before final reporting.
In the private sector, it’s a given that auditors will embrace some “massaging” of reports by their clients – clients have a choice of who to chose as their auditors, so some “flexibility” is expected.
It is even accepted that “Scopa chair Dr Gavin Woods confirmed the AG was legally obliged to direct the report to the executive to ensure national secrecy provisions were not contravened” – http://www.iol.co.za/index.php?sf=24&set_id=1&click_id=13&art_id=qw1003341241212A652.
One the other hand we have http://book.co.za/blog/2008/10/29/book-excerpt-the-arms-deal-in-your-pocket-by-paul-holden/
But the bottom line is this – if the AG is by law required to present a draft report, on matters pertaining to the Executive, to the Executive who can then rewrite the report, why do we even need an AG?
Maybe we can substitute the AG with a book keeper.
Vuyo says:
July 6, 2010 at 11:55 am
Indeed Cele and Zuma sleep a great deal better at night than either Selebi or Mbeki ever did.
But that is based on the goodwill that they enjoy. For now!
As Dworky wisely said, nothing is so permanent as never to change – just ask Julius.
@ Maggs
“At national level there is little chance of [the ANC] losing support in any material way – if anything it may get even stronger.”
Maggs is right.
Although it is far from perfect, our people still trust the ANC to deliver a bright future. I am not interested in the programs of any of the opposition parties. Zille is more corrupt. President Zuma has committed himself to rooting out corruption. All ministers have to account for their portfolios.
Thanks.
If Mbeki was “one of the ANC’s few true powerful thinkers” then heaven help us…
@ Spoiler,
The ANC has a wealth of powerful thinkers, who, now that JZ is at the helm, will begin again to contribute to the NDR.
As Dworky rightly points out, “our people still trust the ANC to deliver a bright future”.
@ Dwork – I dunno much about the programmes of parties other than the ANC (nor am I interested in what they have to offer) but I think you are entirely off the mark that “Zille is more corrupt” – maybe she misses the boat, prone to fits of anger, throws the toys out the cot and and and. But certainly not corrupt, let alone more corrupt – which is more than can be said of many in the top echelons of the ANC.
maggs,
It is your suggestion and that of some of our pundits that “the bottom line is this – if the AG is by law required to present a draft report, on matters pertaining to the Executive, to the Executive who can then rewrite the report, why do we even need an AG”. It ignores reality, because the reality is inconvenient to the agenda, prevalent in RSA, of suggesting that if it relates to government it must invariably deviate from proper procedure. Hence you conceding “that in the private sector its a given”, whilst questioning whilst the same “given” norm when it applies in the public sector (perhaps because the public sector is dominated by a black led, or ANC led, or Zuma led, or Mbeki led government, and must therefore be corrupt and require more stringent protocols, as opposed to the private sector, which is white led, or Ackerman led, or DA sympathetic, or, etc, and must therefore be fit for purpose and be clean! Interestingly, no one would dream of suggesting that the DA or Helen Zille is interfering when they receive and give inputs to the AG’s draft reports in the Cape and Cape Province!). This nonsense does not permeate the atmosphere of countries with a competitive (sometimes partisan) media that substantively contests information and the meaning thereof, in favour of one or other principal. In those countries, the contending media would have long sifted the obvious nonsensical proposition that circulating a report for comment invariably implies intervention by the public executive but certainly not the private executive!
Vuyo says:
July 6, 2010 at 12:59 pm
Where did the “perhaps because the public sector is dominated by a black led, or ANC led, or Zuma led, or Mbeki led government, and must therefore be corrupt” come from?
Sometimes it’s better to sit on our chips than to carry those on our shoulders.
Indeed I expect the ANC led government to do a whole lot better than what we had previously as I expect it to do better than the private sector – it’s at least why I support and vote ANC.
And I expect a Black led/managed public sector to outperform previous administrations and the private sector.
I don’t see how asking the hard questions deviates from that.
I don’t care much what happens in the DA led areas – their supporters, voters and opposition parties there must do what they must do.
Anyway, back to the arms deal – are you of the view that the Arms deal was entirely clean?
If it was, that would be a world first – maybe someone should get the Nobel Prize for that!
There is a massive difference between making inputs and making changes.
If Shauket Fakie was so entirely wrong about his drafts seemingly incompetently so, as was reported, then perhaps we need to ask why was he appointed AG in the first instance.
@ MDF…….you say…… “Zille is more corrupt”.
Would you be able to provide us with just one example where Zille has been corrupt.
Maggs
@ Where did the “perhaps because the public sector is dominated by a black led, or ANC led, or Zuma led, or Mbeki led government, and must therefore be corrupt” come from?”
It’s not based on a comment attributable to you (nor is it a direct comment on your motives) but on a tendency one encounters regularly when interacting with individuals about standards expected of both the private and public sector, whereupon, with no objective basis whatsoever, stringent controls are expected of government as opposed to the private sector. I contend that this tendency is driven by the views stated, but perhaps you have an alternative view?
@ “Anyway, back to the arms deal – are you of the view that the Arms deal was entirely clean?”
No arms deal is entirely clean, or for that matter any transaction where public funds are spent (universally). However, the South African arms deal was one of the only major arms deals that were investigated with any serious vigor in at least the past two decades internationally and it has resulted in a number of convictions. Compare the South African response to the arms deal as opposed to say the British response? No doubt to any observer that we did way better than most first world and or developing countries (and credit is due to those who were involved, including the NPA, AG, etc, and the government that ensured that the investigation of powerful people could continue without let) yet, by following our public discourse, you could never tell. Interestingly, individuals such as Pikoli (who was incidentally in the justice department when the NPA investigated the arms deal, and would presumably, being apparently such an august figure, have not brooked any unlawful conduct) are universally saluted as being beyond reproach, being brave, independent, etc, for some investigation (Selebi and Zuma) are clearly corrupt, are lackeys of the state, cadre deployees, etc, when they make judgment (that there’s no corruption in the primary contracts). Why? Because in the former instance their professional conduct serves to reveal the corruption of those who are the ideological or other opponents of the paymasters of the media and our pundits, whilst in the latter instance they reveal appealing qualities of the ideological and other opponents of the paymasters of the media and our pundits! Thus it becomes possible, for example, (if you’ve followed our political discourse of the recent five years) for punditry and the media to suggest that the NPA/Scorpions to be the instruments of a Mbeki’s abuse of power whilst at the same time being the chief nemesis to his evil designs, or for the police to be allies of Mbeki, through their leader, whilst at the same time the enemies of the organization that is allied to them in purpose, or for the conviction of a crooked police head to be trumpeted as proof of the strength of our institutions when in fact the institution that enabled his conviction has be abolished by the very people who are trumpeting the strength of our institutions! It’s absurd, dishonest, and stranger than fiction.
http://www.thedailymaverick.co.za/article/2010-07-06-paul-osullivan-and-im-also-going-after-thabo-mbeki
It looks like there is plenty of fish in the sea despite all the denials and the courts are having a “Catch of the Day” every now and then.
I doubt if there will be another politician on this earth who speaks left walk right on such a scale.
At least in UK they know who stopped the investigation (Blair) and reasons (against national interest) which are real taking into consiideration that Saudi is ruled/owned by a family. I doubt if there is a British citizen who gained personally but UK and others are benefitting immensley from Airbus orders that were at stake.
Isn’t a large part of the problem that the ANC can, by law, accept corporate funding, making itself dependent upon corporations for its continued existence? And the ANC supported this law, right?
What the corporations did (purchasing the ANC) was perfectly legal, and the ANC even wrote those laws, so the ANC envisaged itself selling its soul.
The problems of corruption in SA are really the result of the primacy of parties in the political structures of the state. The SA constitution/legal structure is far from perfect, in that it tends to enshrine the role of institutions (especially political parties) over individuals. It should be no surprise that institutions such as political parties and corporations collude to enrich themselves at the expense of the state. I think that SA is evolving towards a corporatist state.
Vuyo, your fidelity to Mbeki (if not the facts) is commendable. Loyalty is an admirable characteristic. Just to provide some balance, I post a summary of the former ANC MP, Andrew Feinstein’s book, which I found a very ineresting read indeed (Feinstein was forced out of Parliament because he insisted rather too robustly on Parliamentary oversight):
Shady links exposed in former MP’s book
Cape Town – Shady connections between arms deal companies and the late defence minister, Joe Modise, are described in a new book by Andrew Feinstein, a former ANC MP. So is then deputy president Thabo Mbeki’s questionable role in selecting BAE and Saab to provide the SA Air Force with fighter and trainer jets.
Feinstein, who now lives in London after resigning from parliament in 2001, has launched After the Party, which he describes as a personal and political journey inside the ruling party. It explains how his feelings of euphoria at being part of the new South Africa slowly soured.
Feinstein, a former economics adviser to Tokyo Sexwale, now a billionaire businessman and possible ruling party presidential candidate in December, headed the ANC component on parliament’s standing committee on public accounts (Scopa) during its probe into the arms deal.
He says it is clear that the ministers’ committee, chaired by Mbeki, took the final decision to go with BAE/Saab rather than the Italian equivalent, Aeromacchi, which was the preferred technical choice of the air force “and half the price of the BAE/Saab equivalent”.
Defence force arms procurer Chippy Shaik was asked about a perceived conflict of interest because his brother, Schabir, was a director of African Defence Systems (ADS), a company bidding for sub-contracts to build the combat suites for four South African Navy ships. Chippy Shaik said repeatedly that he had recused himself from the meetings at which the relevant decisions were made.
Then Scopa chairman Gavin Woods asked him what role ADS had played in the arms deal. He was told that 50 percent of ADS was owned by Thomsons, the company chosen by the builder, German Frigate Consortium, to provide the combat suites.
Chippy Shaik’s shady dealings with representatives of arms companies included a suggestion to one that he contact Tsepo Molai, who was linked to Modise. The representative reported that Molai proposed that the bidding company hire him (Molai) as a consultant, suggesting a start-up fee of $250 000 (R1.6 million) and a retainer of $25 000 a month. Fincantierer, an Italian company bidding for the frigate and submarine contracts, had a similar experience with Chippy, according to Feinstein. The firm was asked to meet him at an informal venue and Chippy suggested Schabir as an appropriate empowerment partner, implying that failure to follow his advice would hinder Fincantierer’s efforts to secure a contract.
Feinstein notes that the joint investigation team into the arms deal found Chippy Shaik had a massive conflict of interest and did not recuse himself from relevant meetings.
“So he had lied to parliament. At the Scopa public hearing he had been asked specifically whether he had physically left the meeting rooms whenever issues relating to his brother’s company were discussed. He replied emphatically that he had … I wrote an open letter to speaker [Frene] Ginwala suggesting that to protect parliament’s integrity Shaik’s misleading of the committee should be investigated. I never received a reply. No action was ever taken.”
Chippy Shaik recently emigrated to Australia.
Feinstein notes that British Aerospace, now known as BAE Systems, donated R5 million to the Umkhonto we Sizwe Military Veterans’ Association, whose life president was Modise.
“One of the bidders [in the arms deal] allegedly bought Modise millions of shares in defence company Conlog,” says Feinstein. A few weeks after leaving office as defence minister in 1999, Modise became chairman of Conlog, which benefited from the arms deal.
Feinstein does not even leave finance minister Trevor Manuel untouched. He met him at Speaker’s Corner, a restaurant near parliament, during the Scopa investigations. Manuel is reported to have said: “We all know JM [as Modise was known]. It’s possible that there was some shit in the deal. But if there was, no one will ever uncover it. They’re not stupid. Just let it lie. Focus on the technical stuff, which was sound.”
Of Mbeki, Feinstein relates the story of the exclusion of a unit headed by Judge Willem Heath from the arms deal investigation. “Given that the president had acted as chair of the cabinet subcommittee that made the key decisions in relation to the arms deal, it was improper for him to be setting the terms of the investigation into his own conduct.”
Feinstein quotes a source in the auditor-general’s office as saying staff who had been directing the inquiries into the deal for more than a year were removed from the investigation. Another source said the auditor-general had been summoned to a couple of meetings with the president. Mbeki “made it clear in no uncertain terms which aspects of the deal the auditor-general could and could not investigate”.
And another interesting article (for context and balance) from the Mail & Guardian:
S.A. MINISTERS AND ANC GOT MILLIONS’: GERMAN PROSECUTORS
Evelyn Groenink, Sam Sole and Stefaans Brummer
Mail&Guardian ( 14/2/2007 )
‘SA officials and Cabinet members’ as well as ANC alleged bribe recipients
German prosecutors believe Tony Georgiadis, the shipping tycoon regarded as close to President Thabo Mbeki, helped channel millions of dollars in arms deal bribes to ‘South African officials and Cabinet members’. The explosive allegation is contained in a request for legal assistance, seen by the Mail & Guardian, that the German embassy in Pretoria forwarded to the Department of Foreign Affairs on 28 September 2007. The document, a formal request for South African help to follow leads, presents the firmest outline yet of a criminal probe, led by state prosecutors in Dusseldorf, into the sale of four naval corvettes to South Africa. The German request follows a similar one from Britain last year, swelling a body of evidence that flatly contradicts the South African Government’s insistence that the main contracts in the controversial arms deal were not tainted by corruption.
‘Accused’ shipping tycoon Georgiadis and his alleged SA friends
The request lists 10 ‘accused persons’, Georgiadis prominently among them, and states that contraventions of German anti-bribery legislation, fraud and attempted tax evasion are being investigated. The other nine suspects are mostly executives from German companies making up the consortium chosen as preferred supplier for the corvettes in November 1998 and awarded the multibillion-rand contract in December 1999. Georgiadis this week flatly denied wrongdoing. Of Greek extraction but London based, Georgiadis shipped oil to apartheid South Africa in contravention of sanctions and developed close relations with members of the previous government [of the apartheid period – ed]. He extended his sphere of influence to the ANC after 1990, developing relations, according to several accounts, with Mbeki, Deputy President Phumzile Mlambo-Ngcuka, her husband and former National Prosecutions head Bulelani Ngcuka and Penuell Maduna, a former minister.
Alleged payments of bribe money to ‘SA officials and Cabinet members’
The presidency has deflected questions about Mbeki’s relationship with Georgiadis. While acting as a lobbyist for German arms interests during the acquisition process, Georgiadis reportedly had the ear of Mbeki, then Deputy President, who chaired the Cabinet subcommittee that oversaw the acquisition. The M&G first highlighted Georgiadis’s role in February 2007 after the German magazine Der Spiegel revealed that Dusseldorf investigators were probing “commission” payments of $ 22-million (about R150-million) to a company in Liberia. The M&G identified this company as Mallar Incorporated, a secretive letterbox company, and said that Georgiadis was believed to be behind Mallar. The German request lists three amounts of ‘bribe money’ allegedly paid by the corvette consortium, led by Thyssen Rheinstahl Technik – $ 22-million, $ 3-million and DM1-million. It also confirms Georgiadis’s allegedly central role in the largest of the three. The request states: “For the payment of these bribe monies, so-called ‘commission agreements’ were arranged by Thyssen Rheinstahl Technik with Liberia-based Mallar, which is represented by Tony Georgiadis, who distributed the money, for an amount of $ 22-million. At least the major part of these amounts had been paid to South African officials and Cabinet members directly or indirectly after the [German] international anti-corruption law had become effective.” Before February 1999, when this law came into effect, foreign bribery was not an offence in Germany .
Cheques to the ANC, Mandela Children’s Fund and Mozambican charity
However, the German document reveals that in a raid on the home of Christoph Hoenings, the top Thyssen executive involved in the South African bid, investigators discovered photocopies of three cheques for R500,000 each to the ANC, the Nelson Mandela Children’s Fund and the Foundation for Community Development. The latter is a Mozambican charity founded by Graca Machel, Nelson Mandela’s wife. Independent Democrats leader Patricia de Lille revealed the existence of these payments, saying Thyssen had made them in January 1999. This was during contract negotiations after the German consortium was named preferred bidder. None of these entities has admitted receiving the money. It now appears these amounts might have been paid by Georgiadis, although with Thyssen’s knowledge. The German document states: ‘The accused Hoenings received these photocopies from the accused Georgiadis and was asked to keep them confidential.’ Hoenings was the Thyssen official who, in 1995, revealed that Mbeki had intervened to restore the German bid after Armscor had excluded the company from a shortlist drawn up during an earlier round of bidding for the corvette-supply contract. That process was aborted in favour of the later Strategic Defence Procurement Programme, which issued new tenders for jets, helicopters and submarines, as well as corvettes.
Thyssen official’s report of request for payment by Chippy Shaik
It was also Hoenings who allegedly met Shamin ‘Chippy’ Shaik, then head of Procurement at the Department of Defence, in July 1998. According to Der Spiegel, Hoenings – although he was not named by the publication – recorded in a memo that Shaik had asked for a payment of $ 3-million. The German request now confirms that a lobby agreement for $ 3-million – the second amount of which it calls ‘bribe money’ – was signed with a London company, Merian Limited, represented by accountant Ian Pierce, the go-between allegedly nominated by Shaik in his meeting with Hoenings. The request states that the money was paid to ‘a South African official acting on behalf of Armscor’ (erroneously identified in the document as Schabir and not Shamin Shaik) ‘in order to motivate him in violation of his duties to support the delivery contract for the corvettes’. Chippy Shaik has previously denied any wrongdoing. [Armscor is the South African state arms manufacturing company. Schabir Shaik, the brother of Chippy Shaik, and former financial adviser of ANC president Jacob Zuma, is serving a 15 year sentence in prison for corruption and fraud relating to the arms deal. – ed].
Raids sought to investigate a ‘flow of bribe payments’ to SA officials
The German request seeks South African assistance in carrying out ‘search and confiscation warrants’ issued by a Dusseldorf judge in June last year, with raids also being sought in Switzerland, the United Kingdom, Jersey and Monaco. Raids are sought on several entities in South Africa (which are known to the M&G) to obtain information about the ‘flow of bribe payments’ and ‘agreements between the participants’. The German document reveals how Thyssen’s alleged desire to deduct commission payments from tax as ‘business expenses’ first alerted the authorities. The German Income Tax Act outlawed such deductions after the end of 1998, if the payments constitute an illegal act. Thyssen, the request alleges, ‘falsely declared that these payments had been made for the bid as early as 1998 and that in the end they did not know who was the recipient of these monies’.
Denials of wrongdoing by ThyssenKrupp and Georgiadis
Thyssen has strenuously denied wrongdoing. The company said: ‘ThyssenKrupp is confident that the suspicion of illegal commission payments will not be confirmed in the further course of the public prosecution office’s investigations.’ The German document states that Georgiadis expressly denies he passed on any money to South African politicians or officials. It concedes that the names of the recipients ‘are known only to a certain extent’. Georgiadis told the M&G: ‘I flatly deny that I have been involved in any wrongdoing and I have not been in any way involved in bribing anybody. Beyond saying the above I have no comment.’
Vuyo says:
July 6, 2010 at 14:21 pm
More stringent controls are expected of government as opposed to the private sector – that’s the very least we should expect and insist on. It may be that often comments are nit picky because they simply do not like the ANC – but their motives cannot be a source of comfort for us if the state coffers are being fiddled. I expect better of the ANC government and better of the Black led administration. Anyone who suggests that “now is out time to eat”, if by eat is meant stealing state money, is simply mad.
Re Mr Squeaky Clean – It was reported that Cilliers pointed out that on the day Pikoli’s wife received her 2% shares in Vulisango, he became the Director of Public Prosecutions, on February, 1, 2005. which “were paying material value – I mean millions and millions of rands,” Cilliers said. Pikoli told the court that his wife told him about the shares, which she received from Gibson Njenje (a close friend of hers and newly appointed National Intelligence Agency director-general), in 2005. http://www.timeslive.co.za/news/article197881.ece
Conclusions can be drawn about being squeaky clean, or not – but that does not absolve those implicated in corruption, nor does it diminish the role former President Mbeki played as the then Head of State, Commander in Chief, State President.
Mbeki was powerful – you may recall that Zuma took out a whole page advert in the Sunday Times proclaiming that he has no Presidential ambitions. It would be naïve to conclude that Zuma got up one day and decided arbitrarily to do that.
It would take a lot to make a convincing case that Mbeki :-
- was not covering up over the arms deal
- was not protecting Selebi or would not have had the Selebi investigation dropped if Polokwane did not happen
- suspended Pikoli over concerns of national security.
Pierre, I commend you for your willingness to engage the contributors to your blog even if your responses about your ideological opponents lack any factual basis or proper judgment. For example, I wish to firstly make clear an uncontestable fact: Feinstein was never forced out of parliament by anyone, least of all the ANC but rather chose to leave parliament voluntarily. His statement of resignation can be found in Wikipedia. Indeed your reliance on his concerning considering that Andrew Feinstein (a self promoter of the likes of Paul O’Sullivan, who is now supposedly single handedly responsible for Selebi’s conviction!), without even being embarrassed, claims he would routinely breach collegial trust by “leaking” information to the media. Were he a member of the bar or side-bar he would have long been struck of the roll for improper conduct; but he is not, and is, rather, a politician (a fact which is all too often forgotten) and therefore routinely acts as unethically as his profession would seem to require.
Lastly, to use newspaper reports to argue a case is misleading. For example, if I were to write a biography on say Mandela using South African press clippings from the 1960s to the early 1990s, the reader would be certain that old Madiba is the devil incarnate. Or, similarly, write a book about the DA using contemporary press clippings, the reader would be convinced that civil war and the slide to hell has been single handedly stopped by that organization. It’s a fact, the media despised Mbeki and the ANC led by Mbeki (even more than they despise Zuma and the ANC led by Zuma), so nothing turns on these media reports and books written by authors/biographers preselected by the paymasters of our media as the appropriate propagandists of the regressive cause.
@ Maggs
“I don’t care much what happens in the DA led areas”
Maggs, this strikes me as somewhat irresponsible.
You SHOULD care deeply what happens in the DA led areas – to the tens of thousands who are consigned to squatting in the veld.
It is only if caring people like you raise your voices that we will be liberated from DA tyranny!
Thanks so much.
Our History, no wonder we are here now.
http://www.fxi.org.za/old%20webpages/archives/Weekrep/1999/13-8-99.0.htm
Mikhail Dworkin Fassbinder says:
July 6, 2010 at 16:19 pm
Ok Dworky, you win.
Stop Zuma!
Fight back!
@ Vuyo says:
July 6, 2010 at 16:14 pm
Vuyo are you the newly appointed editor of the new daily?
See
http://www.sowetan.co.za/News/Article.aspx?id=1158738
The paper will be called “The New Age”. Former Business Day journalist Vuyo Mvoko will be its editor.
@Prof, I agree with some of your analysis. Such as the connection between the capitalists, the ANC and the exploitation of workers and everyone else.
I think the biggest tragedy started with the secret deals that were struck with many ANC ‘leaders’ who later become Presidents of South Africa and so on. Then it went on with the so-called TRC. Which in essence, legalised illegallity.
The big problem today is that some people, still put a rubber stamp on these secret deals by voting for the ANC, every five years. perhaps this is largely to do with a lack of a formidable opposition party. Here I am not talking of the two faced DA, and dying COPE. The others do not count really.
This has also had the effect of giving credibility to white denialism, false black amnesia, misplaced racial solidarity between races, instead of solidarity for an equal society at all levels for all, with time. In addition, the constant application of the divide and rule principle. For instance, on BBBEE and AA. No one cared to explain it to the large section of whites, ie through workshops and forums, as to why it is needed. The effects have been hatred from whites and defensivess from blacks and all forms of stereotypes doing the rounds.
What is needed is a real revolution, where capitalism would be weakened, this may also weaken corruption. However, in order to do that, we need to start with the bodyguards(ie ANC and otherss such as the black middle class and white middle class). It may be too late though, as Antonio Gramsci has put it, That in order to get rid of capitalism, we must first stop people( the workers, the proletariet and others) from thinking that the common sense of the bourgesie, is their common sense. That the culture of the bourgeisie is their culture.
It might prove dangerous and deadly though, as Rousseau put it, that “Nations like men are only teachable in their youth, with age they become incorrigible” How do you tell a young white person who grew up celebrating racial division and white supremacy, to suddenly forget it? How do you tell a black kid who is mis-informed through education, and other advice that his problems are as a result of poverty? How do you tell the majority of black people who discriminate against those blacks who are not ‘rich’ that they have been co-opted into the capitalist machinations and will forever be slaves? How do you tell the majority of black people who are sadly called balck diamonds that they have not succeded,as they are living from salary to salary? The list is endless…
Prof De Vos
Do you have a e-mail address at which I could contact you. I require some advice on an issue.
Much appreciated.
my address: yaaseen2002@yahoo.com
@ Sibusiso
“What is needed is a real revolution, where capitalism would be weakened, this may also weaken corruption”
Yes, this makes sense to me. Corruption arises because capitalists pay over “private” wealth to government officials. I am convinced that if all resources and institutions were transferred to the state, officials would not be subject to constant temptation.
@ Anton
“Would you be able to provide us with just one example where Zille has been corrupt.”
Anton, I have not fully researched this question. Certainly, eyebrows have been raised regarding the dubious funding of Madam Zille’s exorbitant plastic surgery. Maggs has cited the tens of billions spent on so-called “consultants.” Perhaps Maggs will furnish other examples.
Hie hie hie…
Mikhail Dworkin Fassbinder says:
July 6, 2010 at 20:32 pm
hahahaha.
Dworky,
When you run out of wisecracks, you sound like a cow belching methane.
@ MDF……Would I be correct in thinking that without “fully researching” this question you have made a statement about somebody being corrupt. I may be mistaken but that is how I read your words………….”Zille is more corrupt”.
If my memory serves me correctly Ms Zille had botox treatment which is not quite plastic surgery. Would you care to explain “dubious funding”. This is a cosmetic procedure so I do not think that a medical aid would pay. Do you have reason to believe that this was paid for by the state?
The problem with a minority of very vocal ANC members is that they go to bed each night after they have repeated loudly to themselves;
“Zille is corrupt”
“Media ‘resents’ SA’s successes”
(http://www.businessday.co.za/articles/Content.aspx?id=113940)
“Fleeing whites did not cause the destruction of Zimbabwe. The illegal sanctions imposed by England and America did.”
(http://www.timeslive.co.za/local/article536828.ece/Zille-and-Merkel-let-their-hair-down)
“…….. in the DA led areas – to the tens of thousands who are consigned to squatting in the veld.”
etc
when the next day comes they follow the great African tradition emulating the ostrich; burying their head in the sand.
We are nearing a moment where it will be fair to say, “we have a government that we deserve”.
Sibusiso
Margret Thatcher has still not been proven wrong: “The problem with socialism is that eventually you run out of other people’s money.”
Socialism does not create wealth like capitalism does, it just distributes it. Welfare states eventually fail because of the burden of the dependents on the producers.
Capitalism is most certainly not perfect and is unfair, but there isn’t a better system out there. Sorry.
Gwebecimele says:
July 7, 2010 at 9:18 am
Hey Gwebe – did you see Special Assignment last night, regarding the rip off of Makarapa creator?
And of course 3rd Degree over “How can a virus cause a syndrome. It can’t!”; forget ARVs, rather take industrial solvent, garlic and beetroot, a quack’s vitamins, a truck drivers concoction.
Eish!
@ Maggs
Yes I watched a bit but had to switch to soccer.
Watch out for 2014 in Brazil, Makarapas & Vuvuzelas will flow from China to Brazil under some White man’s name without the knowledge or benefit to the SA rightful owners. History has a way of repeating itself.
Less said about HIV/AIDS in last 15 yrs the better
@ Zoo Keeper
Thatcher forgot, the State money always collected via tax, fines, licenses, trade etc.
This money never ends and is aways collected for the benefit of all. Even in extreme cases such as Greece and Zim this can be revived and improved as long as you eliminate greed.
Gwebecimele says:
July 7, 2010 at 9:42 am
I recorded it for later watching – it sounds really awful.
“Some among us” can rip off the destitute and sleep well.
It seems as if there is a new name for the Mbeki Institute.
http://www.news24.com/Columnists/MaxduPreez/Distorting-history-20100707
Gwebecimele says:
July 7, 2010 at 9:50 am
The same Thatcher who’s administration famously said that anyone who thinks that the ANC will rule South Africa is living in Dworky and Brett’s house?
And with Ronald Reagan coined the phrase “Black on Black violence” in support of the apartheid regime.
And who’s son tried to organise a coup in EG from South Africa and was let of the hook by our government.
That Thatcher?
Gwebecimele, I would not put too much faith in claims by RW Johnson, which are as credible as any claim made by Anthea Jeffreys – in other words one should take it with a pinch of salt and udnerstand that it comes from a particular ideological place. Talk about having an axe to grind!
Pierre writes (of RW Johnson) that “one should take it with a pinch of salt and understand that it comes from a particular ideological place.”
Yes.
In this regard, RWJ is, of course, quite different from Steve Friedman, Zackie, Eusebius, and Pierre himself, who come from no ideological place in particular.
Gwebecimele
“the money never ends” – that’s the fatal assumption of socialism. Capitalism creates the wealth that is taxed. Wihtout it, there will be no wealth – see North Korea or Cuba.
Capitalism harnesses normal human greed and taxes grow through that. If you destroy or critically undermine capitalism, you kill the goose that’s laying the golden eggs.
Say what you like about Thatcher’s politics – its called Real Politik so don’t expect anything warm or fuzzy from her because they were using us as a proxy in the Cold War, in this case, she is still right (on the money).
@ Prof
I agree with you, the tone of the book and the gossip in it is overwhelming but there are details that assist to connect certain dots. What puzzles me , is that he also freely identify his sources and none of the accused seem to have an appetite to challenge/sue him.
@ Zoo Keeper
Innovation, Entepreneurship, Trade and other activities create money/wealth under any system( Capitalism, Socialism etc) and not the system itself.
Regulatory frameworks, Laws and State Interventions must be in place to eliminate (greed and abuse) & promote(returns and rewards) irrespective of the system in question.
Vuyo, your position on Mbeki and Selebi (which ias based on giving Mbeki the benefit of the doubt) is tenable, it seems to me, if one assumes (i) that Mokothedi Mpshe lied when he said in an affidavit under oath that the President was provided not only with notice of wrongdoing by Selebi but with evidence; (ii) if one further assumes that there was a very good reason for Mbeki not to give the real reason for the suspension of Pikoli at the time and that he therefore had lied about the suspension being all about the breakdown of the relationship between the Minister and Pikoli and nothing to do with Selebi; (iii) and one ignores the fact that Mbeki reappointed Selebi for another year several months after Selebi had actually been charged.
On the arms deal: Mbeki, like Feistein, is a politician, so do you ascribe the same attributes to both?! What we do know is: (i) that there was an investigation about corruption in the arms deal by Parliament that was stopped; (ii) that the investigation by JIp produced a draft report given to Mbeki and others; (iii) that this investigation was innitiated by Mbeki who was also one of the main actors in the drama and who therefore had the power to steer the investigation – through drafting of terms of reference 0- to avoid any wrongdoing; (iv) that substantial changes were made to the report after having been given to Mbeki and other Ministers; (v) that these changes fundamentally changed the tenor of the report and was much less critical about the corruption in the arms deal than the roginal; (vii) that even so the report found that there were serious and credible evidence that there was corruption in the arms deal.
After dishing them out at ABSA.
http://www.fin24.com/Economy/Marcus-slams-executives-over-pay-20100707
MDF, no we ALL come from ideological positions. My point is, RW Johnson’s ideological position is a sort of colonialist yearning for the good old days when Sir De Villiers Graaf acted like such a gentelman to the natives and that I personally fundamentally disagree with his ideological commitments and (obviously) think my commitments are ethically far more tenable.
Zoo Keeper says:
July 7, 2010 at 11:24 am
“the money never ends” – that’s the fatal assumption of socialism.
Ok.
I read somewhere that the US is borrowing and borrowing and borrowing from China, Japan and the Mid East countries – and in all probability will never pay that back – a kinda never ending reserve.
Yes, Pierre, just thought I had to correct your initial comment on RWJ, which seemed to reflect the classic liberal error of labelling your enemy as “ideological,” whereas you yourself were objective/neutral.
BTW, have you actually read Brave New World, or whatever RWJ’s new book is called? I suspect not. Unfortunately, unless we force ourselves to read stuff we “know” in advance will be offensive rubbish, we all become more and more comfortable with a series of assumptions that are never comprehensively challenged.
(By the same token, many liberals will never, ever, read Johnson’s nemesis, Ronald Suresh Roberts.)
@ Maggs
Nice one, Communist China bankrolling Capitalist US.
They call it cross wires when detonating bombs.
@Anton
You have fallen into the trap of rising to MDF’s bait, mate.
Do what the rest of us do – ignore his coments and take them from whence they come.
He appears to have a strange sense of humour and enjoys ‘winding people up”.
Quote “Certainly, eyebrows have been raised regarding the dubious funding of Madam Zille’s exorbitant plastic surgery. Maggs has cited the tens of billions spent on so-called “consultants.” Unquote
“Raised eyebrows” – (caused by) Botox / plastic surgery) – geddit?
He knows full well that the so-called “consultants” used by W Cape govt are the second tier suppliers and outsourced service providers used by all tiers of government, national, regional and local, especially by ANC (many of the “white papers” and draft bills are compiled with the aid of consultants).
It kind of speaks volumes when the only criticism that can be levelled at a leader is a snide comment on her appearance and medical history – which information was volunteered by the leader herself (no leaked hospital medical records required).
Or unsubstatiatd speculation (“billions” spent on consultants, when the total provincial budget does not even run into billions!).
By all means let’s have an audit and expose of the amount of money spent on consultants at ALL tiers of government, including W Cape.
PS:To my knowledge, Zille did not steal anyone’s watch or jewellery whilst she underwent the medical procedure.
Innovation, trade and entreprenurial enterprises are a product of greed.
You will never, ever elminate greed. You have to harness it for good. That’s why you need some regulation (fine line) so that business is not stifled in any way. Tax revenue is then generated.
Its not perfect by any means but it is the only systme that works. Socialism is a State-run economic outlook which stifles normal citizen businesses.
Socialism depends on capitalist activities to survive. There isn no other way.
That the US is borrowing from everywhere more about bad management and bad decision-making than a fault in the system.
Hey Dworky, are you a class monitor here.
LOL!!!
Peter L says:
July 7, 2010 at 12:20 pm
Hey Peter,
Dworky nest, from Thatcherism, is in the famous cloud cuckoo land.
Some will fly over it, some will fall into it.
Gwebecimele says:
July 7, 2010 at 12:20 pm
China reportedly has more US$ than the US has – but they cannot spend it. So the US has a neat plan – let other countries earn the $$$ and they (the US) will spend it. It’s called the American dream.
Gwebe, I think Marx and Lenin (and even Mao), would be shocked to learn that a country where a handful of people connected with the ruling party had become stagggeringly wealthy, largely at the expense of hundreds of millions of people working round the clock in sweatshops to make goods for Western multinationals, and where trade unions were banned, was “communist.”
@Maggs & Gwebecimele
Forgive the Ecos 3 lecture, but the US presently acts more like a “socialist “than “capitalist” state in many ways – it has effectively nationalised many industries, especially financial services.
Economically, China in many respects acts like an arch capitalist.
The US has lived and continues to live far beyond it’s means – ie it spends more than it earns (runs up huge trade, balance of payments and budget deficits).
It finances the shorfall through the issue of treasury bills – which results in an immediate cash injection that has to be paid back over a number of years.
This is “Sovereign debt” -the debt is owed by the US government, and is considered relatively “low risk”.
As you imply, some of the biggest purchasers of these TB’s are China and South East Asia. One country’s debt is another country’s savings (reported in the media as “gold and foreign exchange reserves”)
The East is also buying a lot of hard assets (land, buildings, factories) in the US and elsewhere in the west – this is known as direct foreign investment.
The pawpaw would hit the fan if and when the US currency devalued badly (it has started happening already) and US inflation rises way above that of its trading partners.
Once US sovereign debt starts to become risky, the Dollar no longer becomes the world’s reserve currency (replaced by what? – the Euro is in even more dire straits) and Oil and other strategic commodities are no longer denominated in Dollars, the USA’s dominant (Economic and political) position in world affairs will be at an end.
Can’t happen too soon for me!
Michael
Marx maybe, but not Lenin.
Lenin was one seriously evil dude. He makes Mugabe, Mao, Castro etc look like rank amateurs.
@ Michael
Precisely my point, these labels belong to stone age and have lost meaning. ZooKeeper must move on and look beyond labels.
@ Zoo Keeper
Innovation is about creativity,survival, efficiency, change etc and less or nothing about greed. Even in arms it is done with good intentions(safety) unless it falls in the hands of the greedy.
@ Peter L
I guess Zoo Keeper needs your lesson most. He is still caught up in the past and unaware that the world has move on. Just like others, he will eventually learn.
BTW, I like this one from you.
“One country’s debt is another country’s savings”
Peter L says:
July 7, 2010 at 12:47 pm
The US$ won’t devalue much.
Countries with large US$ reserves will not allow that to happen.
It’s unlikely that US domination in world affairs will happen in the foreseeable future, maybe even past that.
Gwebecimele says:
July 7, 2010 at 13:10 pm
It’s only savings if it can be spent, which cannot be by countries with large dollar reserves.
What’s the point of having money that cannot be spent?
Sort of like our General Cele who reportedly kept R1 million under his pillow which the thieves to took and now he cannot do anything about it – but that’s all speculative reporting by the media. Maybe it was R39.73.
@ Maggs
Please explain “It’s only savings if it can be spent, which cannot be by countries with large dollar reserves”.
Unless it is in a swiss bank under a dictators name.
Gwebecimele says:
July 7, 2010 at 13:41 pm
I understand that China for example has several trillion US$.
I read some time ago Russia put several tons of gold into the market, that then caused the gold price to crash so they realised far less for their gold than they anticipated, so they had to sell more than they wanted.
If China indicates that they want to use their “savings” the US$ will slump. Not only will the value of their reserves fall but the value of their currency will strengthen – something that China is reluctant to have happen.
For now all they can do is admire the big numbers on their savings accounts – but as I understand it, and as Peter pointed out, the Chinese state enterprises officials, travel the world with large cheque books, buying all manner of assets including our resources and mines.
chinese reserves (which, for the most part, actually consist of dollar denominated treasury bills) can hardly be described as “savings” in the traditional sense
it is rather just the consequence of the massive imbalance in bilateral trade
(china providing credit to the US to finance the american people’s credit-based brand of consumerism)
this reserve should not be confused with actual attributable operational profits from private and state-owned industries, which (together with taxes and state-owned banking deposits) is what is used for capital expansion in-country and internationally
as a contemporary consequence, chinese monetary authorities are able to manage (some would say manipulate) their currency exchange rate – and they do so adroitly, to the extent that washington has been howling “foul” for years now, and have recently been making “trade tariff” noises
the irony is that a stronger yuan will not make america more productive nor more competitive; only a diminished reliance on credit will…which is just not a palatable option, neither politically nor economically
the amazonian liquidity that has been injected into financial markets over the last two years are largely unproductive “false” capital and will in the long term simply lead to inflationary related dollar weakening; chinese authorities are not concerned about this, since they cannot and do not intend to “spend” their reserves; it is a strategic asset utilised for the sole purpose of retaining a very flexible competitive advantage
for centuries the chinese economy had been the biggest globally; things are simply returning to their normal course…slowly, but certainly
(p.s. there is precious little that the chinese can be taught by western economic academia…the lessons that we are only learning now have been part of the “chinese way” for many centuries, albeit in more rudimentary form: when it comes to strategy, they wrote the universal book)
dunce of the week:
“By saving for the proverbial rainy day and thus “under-consuming”, individuals are effectively denying jobs to many of their peers.”
– chris gilmour (in the daily maverick)
http://www.thedailymaverick.co.za/opinionista/2010-07-06-the-paradox-of-thrift-is-alive-and-kicking-like-crazy
MDF, i suspect chris gilmour might have plagiarised this line from one of your lessons ? (teeheehee)
Gwebe
Take a look at the “spends more than it earns” scenario. Socialism is dependent on capitalism and always, always will be.
You state that it is driven by innovation, but every innovation must have a pay-day or else it is not worth innovating. Basic motivator – self interest and greed. We all want more.
The US has over-stretched itself and has a massive deficit. It is only being “saved” by China holding off because of self-interest.
China is an immensely capitalist nation.
@ Zoo Keeper
Stimulus, NHI and bailouts are ……………………………….
Municipalities debt is Eskom’s “Savings/Bonuses”
http://www.fin24.com/Companies/State-owes-Eskom-R189m-in-arrears-20100707
…. realiant on tax revenue from capitalist business.
Propping up failing businesses though is wrong. NIH is socialism but paid for by capitalist taxe-money. So long as services are provided for tax revenue, the cycle continues.
You can’t divorce socialism from its depedency on capitalism.
Pure business coincidence
http://www.moneyweb.co.za/mw/view/mw/en/page292520?oid=494926&sn=2009+Detail&pid=287226
etienne marais says:
July 7, 2010 at 14:53 pm
“dunce of the week”
I thought that some wise economist said that during a recession government spending should increase. Something about literally burying money underground and letting private sector to dig it up if necessary to create jobs.
Nah, that sounds crazy – maybe it was Dworky or cud be Brett.
No sane person would come up with that kind of crap.
Maggs, Yes, it was I who said that, in my oft-cited book ‘Economic Consequences of the Peace.’ (Now available on Amazon.)
hahahaha
Hello Maynard.
@ Etienne
I more or less agree with you, but surely you must agree that a sustained short and medium term rise in US inflation is inevitable (above that of its’ trading partners) which has to result in Dollar devaluation in the long-term (Purchasing power parity makes it a mathematical certaintly in the long-term).
I do not believe that the USA “model” of consuming more than they produce and living on credit is sustainable.
Have you analysed Obama’s budget numbers?
We would all be screwed if we ran our household budgets like that!
The sooner they take the required neccessary economic medicine and stop wasting massive resources by unlawfully invading other countries, the better.
@Maggs
Our old mate John Maynard keynes was the man you have in mind, I believe.
He used to play the stock market regularly and died a very rich man, BTW.
i do not disagree with you at all peter
in fact, i made the point, just slightly differently:
“liquidity…injected into financial markets…..will in the long term simply lead to inflationary related dollar weakening”
it is important to note that, in concept, keynesian economics was essentially developed in order to address perceived inequities of a post war (WWI) economy
it is at base a response to a unipolar crisis which, within a very specific and limited set of circumstances, is a sound and appropriate antidote
it has done its job well before; think for example of the marshall plan post WWII
problem with the US is that they have adopted this essentially “wartime” type economic tactic (modified into new keynesianism) as an enduring and ubiquitous strategy and that is where the theory’s major weakness lies; once in the cycle and once the thinking is fully institutionalised, it is almost impossible to extract oneself from it…so the transient successes leads to a kind of perpetual positive reinforcement, eventually resulting in the mainstream academia (think krugman, stiglitz, etc) and the policy wonks (greenspan post 1999, the fed and treasury post 2001) perceiving it as a kind of magic
what they are currently betting on is that appreciation in asset classes (property e.g. is a good trigger) will outperform the inflation/interest rate differential resulting in vastly improving solvency ratios; in theory, considering the current low base of interest rates, this certainly is possible, but it will still be contingent upon real remuneration levels increasing at a rate close to asset class appreciation (this, in order to create the demand so as to sustain the appreciation in the former)…a classic catch 22 scenario, all the while whilst accelerating the rate at which they are constructing massive further deficits
oh, and it will take at least half a cycle (currently 7/2= 3.5 years from date of the first amazonian liquidity injection) to reach that point where inflationary creep starts improving solvency ratios…until then, well, look for another bank that is just too big to fail or, alternatively, a 20-35% destruction of the dow jones on the back of the much vaunted double-dip
so, where to put one’s money ?
i believe african penguins are becoming a rarity, that is sure to stoke up demand, but they bite
rhino horn is apparently very lucrative, but risky business (the game rangers apparently still carry guns…brett, please confirm)
abalone exportation seemingly also pays handsomely, but is a similarly dicey industry…uhh, and rather smelly
too late to take advantage of SWC ticket scalping
ummm…i think i’ll just stick to investing the bulk of my discretionary earnings/savings with SARS
Sandile Memela – Spineless middle class parasites
——————————————————————————–
2010/07/08
His Master’s Voice
TEN years ago, during a fellowship at Duke University in the United States, a leading African-American thinker and philosopher used a phrase that has stayed with me for years.
Those who know Professor Cornel West regard him as one of the 10 greatest minds of the 20th Century. The one time I heard him speak I was left with no doubt that he was one of the most brilliant, incisive, insightful, enlightening, healing and intellectual voices of contemporary times.
As he grappled with the complex issues of race, gender, class and capitalism in his talk, he used the phrase “gangsterisation of the economy”. This description captured the gluttony, greed and selfishness that has become a culture in corporate America which, inevitably, has an incestuous relationship with politics.
What this means is that business and politics in the United States have, largely, come together not only to exploit the world’s resources but to do that so only a few white men can be filthy rich.
In a little over 10 years, long before our freedom and political gains had consolidated, the leadership who the people looked up to in the new South Africa had adopted this American way of thinking and life.
It is now an open secret that some leaders within the African National Congress not only “did not struggle to be poor” but have no qualms aspiring to be “filthy rich”.
Over the last few days, I have found myself haunted by West’s phrase, “gangsterisation of the economy,” as I consider what has become of one Jackie Selebi.
More and more former – and it is necessary to emphasise the word former – liberation struggle heroes have become fallen, paralysed, corrupt and spineless middle class parasites.
When we look around, what we now see are one-time rebels who have now become part of what they themselves fought against, a way of life against which they themselves once reacted.
It was not self-aggrandisement, greed, corruption and individualism that inspired these men, mostly, to be willing to make sacrifices for the struggle. It was a deep sense of moral principle and an unrelenting commitment to justice, equality, brotherhood and democracy in a society that was to be Africa’s gift to humanity and the world.
Instead, Selebi and his comrades have fallen into the trap of posh cars, fancy clothes, designer shoes and luxury homes – things that are nothing but an invitation to descend into the devilish dungeons of amnesiac, self-deluding middle glass emptiness.
Oh, how the mighty have fallen!
And who shall our people turn to, now, that the World Cup is almost over and … empty?
I will neither shed a tear for Selebi et al nor cry for this beloved country. What I know is that when a man lives in an economic system steeped in evil, he will get caught in its web.
The guilty party is not just this fallible man who turned against what he once represented but the evil system that makes it impossible for him to do the right and good thing.
When you do not control the economy of the country you fought for, there will always be some cabal that you will be expected to click with.
Sure, it helps to be a man of principle who can stand for his ideals and be willing to live by bread alone. But we have to realise it has been impossible for the former liberation movement to beat the system and them. The result is many former liberation struggle heroes have, ironically, joined the party.
The poor, dispossessed and marginalised people look up to these one-time heroes for leadership, inspiration and, above all, the delivery of a better life for all. But it will take time for any man, including a Nelson Mandela, who lacks economic power to take control of his own life.
The only way to avoid the gangsterisation of our way of life is to make sure that all of us have enough of what we need. The people must share in the wealth of the country.
Sandile Memela is an author and chief director for marketing & public relations at the Department of Arts & Culture. He writes in his personal capacity
Could BEE billions have been put to better use for blacks?
——————————————————————————–
2010/07/08
INSIGHT – Hilary Joffe
WHAT would South Africa look like now if we had taken R600 billion over the past decade and spent it on creating jobs?
It’s hard to know how we would have spent that much: even now that the government has made job creation its priority, innovative ideas on how to do it are hard to come by.
But huge feats of innovation and creative thinking have gone into the structuring of black empowerment ownership deals over the past decade or two. Jenny Cargill, author of a new book on black empowerment – Trick or Treat: rethinking black economic empowerment – estimates the total value of those deals at R550bn-R600bn, far more than the R140bn of capital that has been invested in land redistribution and low-income housing in recent years.
How much of South Africa’s scarce capital should have been invested in share ownership for black people, as opposed to jobs, land or houses for them? It’s a crucial question, but not one that has ever really been asked.
And that’s one of the most remarkable things about black economic empowerment . It is, Cargill argues, the biggest exercise in social engineering that the post-apartheid government has undertaken. Yet there has been very little attempt to align it with other elements of economic transformation policy. Nor, she says, has there been much clear thinking on just what it is the ownership requirements are meant to achieve. Originally, those doing deals aimed to transfer control, or significant influence, to new black shareholders. But the control idea has long gone out the window and the BEE codes of good practice effectively put paid to it altogether. By requiring 25 percent black ownership they set a ceiling, Cargill argues, so that all companies had the incentive to do was tick that box, not exceed it.
And though 25-26 percent was originally a magic figure because it gives the power of veto over key decisions by shareholders, the broad-based requirements of the codes have diluted that.
So Cargill comes to the conclusion that BEE ownership now is essentially about redistribution – not control, influence or productive investment. But nobody has asked whether this is the best way to do redistribution, nor whether it is equitable or effective.
Some black people can access deals, some can’t; some get good assets, others don’t.
Most take on huge debt to buy their shares, so deals often unravel, or shareholders end up having to sell some of the shareholding to repay the debt.
“A puzzled ‘Why are we doing this?’ is in order – particularly when we consider the costs involved,” writes Cargill.
One would have hoped that the kinds of questions she is asking would have been taken up as the government, labour and the mining industry worked to develop an updated mining charter. Last week’s declaration on a “strategy for the sustainable growth and meaningful transformation of SA’s mining industry” does at least make the link between macro policy and empowerment policy, and there are hints of new thinking on BEE.
Yet, in the end, the declaration does not confront the “articles of faith” (as Cargill calls them) of empowerment ownership. For one thing, that 26 percent target is still there.
Why are we still doing this? Why not, for example, just donate some shares instead? Cargill points out that it cost the big four banks 2.5 to three percent of their market capitalisation to transfer 10 percent of their equity to black shareholders. Which implies that giving the shareholders three percent free would have transferred the same economic value as trying to sell them 10 percent. Then there’s the thorny “once empowered, always empowered” issue.
If the black empowerment partners sell their stakes, does the company get the full credit for a deal done, or must it start again? This is crucial, for companies and black shareholders.
If firms have to keep doing empowerment deals forever to comply with the rules, the cost to the economy will be incalculable. One way around this is for companies to lock the black shareholding in for good. If they bar the black shareholders from selling at all, then they are not transferring wealth: the shares are worthless because they can’t be traded. If they insist the shares can be sold only to other black people, the effect is to slash the value of those shares, because the pool of investors who can afford to buy them is so small they will have to be sold at a deep discount.
Apparently there were behind-the- scenes talks on this among the mining stakeholders, but Mineral Resources Minister Susan Shabangu wasn’t persuaded, telling reporters that any company that sold its empowerment stake to non-empowered shareholders would just have to do another deal.
The charter is still on the drawing board, but Shabangu’s comments were a depressing reflection of how little appetite there is in the government for a rethink. Policies often do prove to have unintended, even damaging, consequences. But it takes bold leaders to admit that, and even bolder ones to throw out the articles of faith and start again.
Hilary Joffe is senior associate editor on Business Day
@ Gwebe: “Could BEE billions have been put to better use for blacks?”
No.
Jenny Cargill has a white tendency to undermine BEE and affirmative action.
Our people need ROLE MODELS of successful black businessmen driving nice German cars. (This inpires the masses to work harder.) Cargill also ignores the TRICKLE DOWN effect! Do not forget that the beneficiaries of BEE and affirmative action employ numerous black cleaners, security guards and gardeners. The latter thus obtain opportunities in the formal economy, while learning to aspire to greater things.
Thanks.
@ Dworky
When these empowered companies start to underperform then we nationalise them.
I guess dust from a german SUV transporting a public official is enough to encourage kids of the poor whilst we subject them to OBE.
prof I understood and comprehended the post, it’s beautifully written so that the reader can see that Mr. Mbeki actually declines to see what is perfectly obvious, his own thoughts are limited by exactly that boundary that he had created for himself and now he is blinded as a result thereof by the corruption of the elite, it’s like when you go into a public toilet you breath through your mounth so you won’t smell the poo.
Gwebecimele says:
July 7, 2010 at 13:41 pm
———————————————————————————
China in Africa – West goes East
Carol Paton and Claire Bisseker
Thursday, 8 Jul 2010
China’s presence as a driving economic force on the African continent has, until now, all but passed SA by. That is set to change — a new wave of Chinese investment is about to hit SA
The new 17-storey African headquarters of state-owned Chinese miner Sinosteel, which has gone up on Rivonia Road alongside Investec Bank in the heart of Sandton’s business district in Johannesburg, tells the story: the Chinese invasion of SA has begun and is here to stay.
There is a new Chinese impetus for deal-making in SA (see graphic on deals). Most of the deals so far have been in the private equity space. But Chinese business leaders are zeroing in on every sector, searching for partners or big investments. SA is seen as an attractive, small, open economy that is easy to penetrate for private Chinese investors. And SA experts on China say the Asian economic powerhouse will start buying into SA and Africa through the JSE. But the rules of negotiation and their offerings in SA will have to be different from those in the rest of Africa.
http://www.fm.co.za/Article.aspx?id=114196
Maggs and Pierre: Will you march with me to the new Chinese mining house on Rivonia Rd, to demand the cutting of trade ties with China, to protest against the crushing of Tibet?
I of course stand in full solidarity with your demands that all ties with the illegal Zionist entity likewise be severed. But we must be careful not to create the (of course, mistaken), impression that we do not condemn human right violations that happen to perpetrated by our important trading partners just as firmly.
Thank you in advance for your principled support!
@ Maggs
Wait until they finance the 10 000 SA Chinese who qualify as BEE/PDI to buy the whole of SA under the transformation banner.
Hey Maynard,
“Thank you in advance for your principled support!”
Speak for yourself.
I just make gurgling noises – nothing principled about that.
I will help with your struggle against the mighty Chinese army though – I am right behind you. Er, maybe not – I am sure you are able enough by yourself.
@Gwebecimele
Watch it, mate – just now MDF will acccuse you of being a coconut (that presumably automatically has “white tendencies”?, and is probably a bastard, if not a bloody agent!)
Peter L, I don’t know about Gwebe, but it sounds like you may yourself be some kind of bastard-agent – with strong white tendencies to boot.
But thanks, anyway.
@ Peter L
I have a serious lack of credentials to be a coconut and Dworky is not so generous.
@MDF
According to the ID book issued to me by the previous regime, and according to my Alma Mater, I qualify as a PDI.
Given my appearance I guess that would make me a sand-blasted Coconut!
Perhaps my mixed genes account for any white tendencies?
Given recent voting patterns, perhaps it would be more accurate to talk of “Non-black tendencies”?
BTW – on official docuements that ask for “race”, I do not tick any of the boxes (B,W,C or I) – I create my own new box marked “Human” and tick it!
@ Peter L
Are u employed? In the EE report of your company are u “Human”?
Well MDF will knight u as such.
ROTFLMAO!
Human2!
@Gweb
Happy to say that I am gainfully employed.
I’m not too sure how my company classified me in terms of the EE report, scorecard etc – I suspect that, like my Alma Mater, they were only to keen to place another tick in the shaded column!
A SENIOR Eastern Cape police officer with a Grade 10 qualification and a certificate in plumbing was promoted to colonel last year in what other officers have slammed as a classic “jobs for pals” scandal.
Among the stipulated criteria for the position was that the successful applicant needed an “appropriate three-year tertiary qualification” and three years’ managerial experience – neither of which then-Captain Zolile Hakula, of the Protection and Security Services (PSS) static division in Bhisho, had.
Despite this, he was promoted to colonel in October last year after senior police officers allegedly intervened to ensure he was placed in the position. Although the police have declined to comment, the allegations are supported by documents that show the under-qualified officer was promoted over other candidates more suitably qualified for the post.
An investigation by The Herald newspaper revealed that despite senior police officers acknowledging that Hakula was unqualified and not the top candidate for the job, he was still promoted and made commander of the unit.
Reliable police sources, who asked to remain anonymous , alleged that Hakula was friendly with Layton Tshabalala, a top-ranking commissioner from police head office in Pretoria, who wrote a letter to his counterpart recommending Hakula for the promotion.
On Hakula’s curriculum vitae, a Tshabalala – also from the PSS unit – and another assistant commissioner are stated as references.
The Herald is in possession of documents that show Hakula has a Std 8 (Grade 10) certificate which he acquired in 1985 and a certificate in plumbing he obtained in 1992.
Other discrepancies are that Hakula was admitted into the police force in April 1995 at the rank of warrant officer, formerly known as inspector, and not as a constable, as is normally the case. Hakula also has two previous criminal convictions. In 1998 Hakula was charged with two offences, one for a road traffic violation and another for fraud. In 2000, he was sentenced and given the option of a R2000 fine or 12 months’ imprisonment.
According to a senior source in the police, a selection panel of high-ranking officers was established to perform score-based assessments of five short-listed candidates.
The chairperson of the panel was a Commissioner Kulu, who is also allegedly a friend of Tshabalala.
The position as commander of the Bhisho-based PSS unit was advertised in May 2009 and carried the rank of colonel and a salary of more than R18000 a month.
The advertisement stated a list of qualifying criteria, including an “appropriate three-year tertiary qualification” and three years’ managerial experience. Four months after the job was advertised, a motivational letter was sent to the commissioner of personnel services, Julius Phahlane, by fellow commissioner and Hakula’s alleged friend, Tshabalala.
The letter states that Hakula was previously appointed acting commander of the unit and that Phahlane had two options, either to recruit new people externally or recruit internally within the police.
The motivation letter goes on to say that despite another captain scoring better marks in the assessment, Hakula should still get the job.
It also states that Phahlane should award the promotion to Hakula and “condone” the fact that he did not meet the qualification requirements.
Shortly after the letter was received, Phahlane issued a memorandum stating that Hakula had been awarded the job.
But three days later another letter, also signed by Phahlane, was issued stating Hakula had not been successful as he was unqualified for the position. Despite police members raising queries about Hakula’s appointment, the letter was ignored and he took up the position as colonel.
http://www.dispatch.co.za/article.aspx?id=419097
Please tell me why has the South African public taken all the corruption from the ANC goverment over such a long period of time … Are people not sick of hearing how much money certain people in goverment or youth league have ??? Tenders that just seem to be given to those in the loop . . This is a sad state of affairs
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Pierre, your article makes excellent and balanced reading. White South Africans, of which I am one, cannot deny or pretend that corruption didnt exist in apartheid SA. I have no doubt it existed and to an extent perhaps far greater than today. So I refuse to defend Apartheid Corruption and would be quite happy to see those involved be brought to book. Notwithstanding, corruption at any time in our history is unacceptable. Furthermore corruption in the past can never justify corruption in the current regardless of the circumstances. One would hope that as people we wisen up from our experiences of the past however it seems we still cling to racially divided loyalties, which serves no purpose in improving the quality of life for all. The evil of corruption should no longer be a debate based on ones political or racial affiliation. It doesnt matter which camp one sits in and all that matters is that we ALL call it for what it is. Corruption is an evil of the worst kind. It is immoral, illegal, improper, unacceptable and dispicable. Those, regardless of race, who practise it are as guilty as a muderer and rapist for corruption is, similarly to murder and rape, taking something from another that which one is not entitled to and does not have permission to take. As the current generation(s) we owe it to future generations of South Africans that we discard debate based on political or racial points of view and aggresively tackle the cancer that corruption is. We have an opportunity to advance our beloved South Africa OR destroy it whilst we haggle and argue about side issues. Lets live out our responsibilities and do the right thing.
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