How credible are the racketeering, corruption, money laundering and fraud charges against Jacob Zuma?

It is not surprising that former President Jacob Zuma has not provided any explanation for why he may be innocent of the recently reinstated charges of racketeering, corruption, money laundering and fraud. His lawyers have so far successfully managed to use technical legal arguments (as well as the illegally obtained spy tapes and their influence with the pliable National Director of Public Prosecutions) to protect him from having to do so. But what is the state’s case against Zuma? Is there any case to answer at all? To answer these questions, one must turn to the indictment prepared by the National Prosecuting Authority (NPA) in the case against Zuma and Thint Holdings.

To understand why former President Jacob Zuma has been indicted for racketeering, corruption, money laundering and fraud, it is necessary to know some of the details about the relationship between Zuma, convicted fraudster Schabir Shaik and his company Nkobi Holdings, and French arms company Thint Holdings (and their associates Thomson-CSF/Thales).

The state alleges that Shaik and Nkobi Holdings made 783 payments to Zuma totalling the amount of R4 072 499.85 in the ten-year period between 25 October 1995 and 1 July 2005. As the state claims:

The schedule payments to accused 1 [Zuma] make no legitimate business sense, in that neither Shaik, the Nkobi group, nor the other relevant entities could afford the payments, being at all times in a cash-starved position (at least until August 2004), relying on and at times exceeding bank overdrafts and thus effectively borrowing money from banks at the prevailing interest rates to make the said payments interest free. On the other hand, the group’s survival depended upon obtaining profitable new business, inter alia, with the assistance of accused 1 [Zuma].

(The state has already managed to prove in the Shaik case that these payments were made, so it should not be impossible to prove this again.)

The state also alleges that Thint (linked to the Thomson-CSF/Thales group) “conspired with Shaik and Zuma to pay Zuma the amount of R500 000 per annum as a bribe”. (The state has already managed to prove in the Shaik case that a bribe was solicited and partly paid to Zuma – although a complicated payment mechanism was used to try hide the bribe – so this should also not be impossible to prove again.)

In return for the more than R4 million paid to him by Shaik and his companies, so the state alleges, Zuma abused his formal position as MEC and as Deputy President of the ANC to do unlawful favours for Shaik and Nkobi Holdings. Most notably, Zuma provided “political support” to ensure that Nkobi Holdings became the preferred BEE partner of the company who was set to be awarded contracts in terms of the arms deal. (This Zuma could do, so the state argues, because as senior ANC leader and later as Deputy President of the ANC, he was politically connected.)

The state further alleges that Zuma also abused his position as MEC and as Deputy President of the ANC to “further the private business interests of Shaik and the Nkobi Group” in many other ways. The state lists 28 instances in which Zuma is alleged to have assisted Shaik and Nkobi to advance their private business interests. (In the Shaik judgment, the court confirmed that Zuma indeed used his position to do many of these favours to advance Shaik’s private business interests, so this suggests it would not be impossible to prove this again.)

The state further alleges that in return for the R500 000 per annum bribe, Zuma promised to use his position as Deputy President of the country and as the leader of government business in Parliament to protect the Thomson-CSF group (associated with Thint) in respect of the investigation into the arms deal corruption that the Thompson-CSF group was allegedly involved in.

By this time Zuma was Deputy President of the country and Leader of Government business, and it was in this capacity that a letter under his name was sent to SCOPA to argue that the there was no need for the Special Investigative Unit to investigate alleged arms deal corruption. The letter was also copied to the various prime contractors in the arms deal, one of which was the German Frigate Consortium, which included Thomson CSF and ADS. The fact that this letter was sent is not in dispute. If the trial happens and Zuma testifies, the state is bound to cross examine Zuma about his motivation for copying the letter to the arms company from whom a bribe was solicited for him.

With this background in mind, it becomes easier to understand the nature of the charges faced by former President Zuma.

First, Zuma is facing a charge of corruption for allegedly contravening section 1(1)(b) read with section 3 of the Corruption Act of 1992. This is the old Corruption Act replaced in 2004 by the Prevention and Combatting of Corrupt Activities Act. (There are also alternative charges in terms of the new Act, which I do not have space to discuss here.)

To prove this charge, the state will have to show that Zuma unlawfully and corruptly received benefits or services from Shaik and/or his companies which were not legally due to him with the intention to use his powers as MEC or as a political leader of the ANC to further the interests of Shaik and/or his companies in an unlawful manner.

The state will have to show that the payments of Shaik to Zuma created a common corrupt purpose between Zuma and Shaik. This means the state will have to prove that Zuma understood that the payments created an expectation on him to assist Shaik’s private businesses, and that he realised that Shaik’s ability to continue financially supporting him depended on Shaik’s business success.

When judge Hillary Squires convicted Shaik of corruption, he explained the relationship as follows:

[E]ven if nothing was ever said between them to establish the mutually beneficial symbiosis that the evidence shows existed, the circumstances of the commencement and the sustained continuation thereafter of these payments, can only have generated a sense of obligation in the recipient [Zuma]. If Zuma could not repay money, how else could he do so than by providing the help of his name and political office as and when it was asked, particularly in the field of government contracted work, which is what Shaik was hoping to benefit from.

Another charge for corruption relates to the contravention of section 1(1)(b) read with section 1(2) and 3 of the Corruption Act of 1992. It is alleged that Zuma unlawfully and corruptly agreed to receive a bribe from Thint and/or Thomson-CSF in exchange for protecting these companies from being investigated for corruption in the arms deal.

In this instance, the state’s case hinges on Zuma knowing that the bribe was paid and then knowingly acting in a manner to deliver on his side of the alleged corrupt agreement. It is this knowledge that would show that Zuma had the intention to act in a corrupt manner.

The crucial issue for the state may well be whether it can prove that Zuma met with Alain Thétard (a representative of the arms company) on the day the alleged bribe was agreed on. This would be the alleged meeting where Zuma is said to have confirmed the bribe by stating: “I see the Eiffel Tower lights are shining today”. Shaik testified that a meeting between himself, Zuma and the arms company representative did take place on 10 March 2000, but for a completely innocuous purpose.

Here Zuma might have a problem because when he was asked in Parliament in 2003 “Whether he had any meetings on March 11 2000 and/or on any other specified dates with Mr Alain Thétard, former head of Thompson CSF’s [now Thales] Southern Africa division and/or Mr Schabir Shaik in Durban or elsewhere …” Zuma replied: “I did not meet Alain Thétard on March 11 2000 in Durban or anywhere else in South Africa.”

If he testifies in his own defence (which would be difficult to avoid unless his lawyers can block the admission of much of the evidence admitted in the Shaik trial) he would have to explain why he provided this obviously misleading answer about the meeting (not volunteering that he did meet with Thétard a day earlier) if the meeting with Thétard was completely innocent. (Few individuals would deliberately mislead Parliament unless they have something to hide.)

Former President Zuma is also being charged with racketeering in contravention of section 2(1)(e) read with sections 1, 2(2) and 3 of the Prevention of Organised Crime Act (POCA) of 1998. To prove that Zuma is guilty on this count the state will have to prove that he was employed by or associated with an enterprise (Nkobi Holdings) and while employed or associated took part in a “pattern of racketeering activity”. A pattern of racketeering activity is defined as “the planned, ongoing, continuous or repeated participation or involvement in any offence” including fraud and corruption.

If Zuma does not manage to avoid standing trial, we would have to see what evidence the state presents to support this charge. Shaik was never charged with racketeering, so it is not possible to predict with any degree of accuracy what will happen with this charge.

However, it is important to note that the definition of racketeering is rather broad. In Savoi and Others v National Director of Public Prosecutions and Another the Constitutional Court had to decide whether various provisions of POCA are overbroad or vague because of the immense scope of its provisions.

For example, the relevant sections under which Zuma is being charged do not require the state to prove intention on the part of the accused. It merely requires that the accused must in fact have been employed by or associated with an organisation involved in various listed crimes. Racketeering is therefore a sweeping charge to face.

The Constitutional Court rejected the argument that various provisions of POCA was overbroad, arguing that “POCA seeks to ensure that the criminal justice system reaches as far and wide as possible in order to deal with the scourge of organised crime in as many of its manifestations as possible”.

The Shaik companies have already been convicted of various criminal offences, so all that the state would have to prove to secure a conviction on this charge is that Zuma was employed or associated with these companies and participated in some of the offences committed by them.

Former President Zuma is also being charged with the crime of money-laundering in contravention of section 4, read with sections 1 and 8, of the Prevention of Organised Crime Act (POCA) of 1998. Section 4 is a complex provision, but in essence it prohibits a person who knows or ought reasonably to have known that property is or forms part of the proceeds of unlawful activities, from entering some agreement about that property which has the likelihood of concealing or disguising the nature, source, location, disposition or movement of that property or the ownership or any interest in that property.

The court in the Shaik matter found that the source of the R500 000 bribe paid by the French arms company was disguised with a complicated transaction which indirectly led to the money being used to reduce a debt that Zuma had owed to another entity. This was done to assist with the first phase of the renovations conducted at Zuma’s Nkandla home (It was long before Zuma allegedly borrowed money through a bond facility.)

If the state can again prove this, the state would additionally have to show that Zuma knew or reasonably ought to have known that the money formed part of the proceeds of unlawful activity and agreed to the scheme (evidently concocted by Shaik) to launder the money.

Finally, Zuma is being charged with several counts of fraud. Fraud requires the state to prove that an accused unlawfully and with intention made false representations which causes real or potential prejudice to others. Several of the fraud charges relate to the alleged misrepresentations made by Zuma to Parliament in which he failed to declare all the benefits and or income received by Shaik or pretended these benefits were loans when they were in fact donations or gifts.

Another count of fraud relates to alleged misrepresentation Zuma made to parliament about the meeting between Shaik, Zuma and Alain Thétard where Zuma allegedly agreed to the receive the bribe offered by the French arms company in return for offering protecting to the company against any corruption investigation.

If one assumes that the state has ample evidence that Zuma did make false or misleading statements to Parliament, the remaining tricky part for the state in securing convictions on the various fraud charges would be to prove that Zuma’s misrepresentations caused real or potential harm to others.

Our courts have held that the harm need not be financial in nature. For example, to produce a false driver’s licence in traffic court would cause harm or potential harm to the state, and to write an exam in the name of another person would cause harm or potential harm to the examiner and the institution to which you have made the misrepresentation. It may therefore not be impossible to prove these charges either.

From the above it must be clear that if former President Zuma ever runs out of options and is forced to face the charges against him and has to testify, he may have a torrid time in court. However, this all assumes that the state can prove the same set of facts it has already proven in the Shaik case. If some of the witnesses perform less well during his trial, or if his lawyers manage to have some evidence (including some damning documents) excluded, it is even conceivable that it would not be necessary for him to testify.

The one thing Zuma and his lawyers know they must avoid at all cost, is a situation in which he is required to testify to answer the charges against him.

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