The recommendation for criminal charges is particularly applicable to Mr Anoj Singh and Mr Koko, who by false pretences led Eskom, through the officials who processed the R659 million payment, to believe that the R659 million payment was in the nature of pre-payment for coal, as was the R1.68 billion pre-payment, later converted into a guarantee, when in truth and fact they knew that the prepayment and the guarantee were needed to enable the Guptas to complete and save the sale of share transaction.
Earlier this week a warrant of arrest was issued for Ace Magashule, former Free State Premier and current Secretary General of the governing African National Congress (ANC), reportedly to face charges of corruption, money laundering and fraud in connection with the now infamous Free State government asbestos scam. As we await more details of the charges and the factual allegations on which they are based, it may be helpful to look at some of the legal principles that will help us evaluate how strong the state’s case against Magashule is.
Thanks to Pieter-Louis Myburgh’s book Gangster State: Unravelling Ace Magashule’s Web of Capture, as well as evidence presented before the Commission on State Capture, we have a pretty good idea how the asbestos audit scam went down. At the heart of the scandal is the awarding by the Free State government of a grossly inflated contract of R255 million (under highly suspicious circumstances) to companies owned respectively by Igo Mpambani and Edwin Sodi. The companies outsourced the work (for a fraction of the contract price) to others, and the asbestos, which poses a health risk to residence, was never removed from the houses.
Subsequently, the winners of the contract donated large amounts of money to the ANC. Furthermore, a “cost of business” spreadsheet that had been passed around between the owners of the two companies indicated that a certain “AM” was due to receive R10-million from the asbestos deal. On the apparent request of Magashule (channelled through his staff), one of the owners also paid large amounts of money from various accounts (money from the asbestos contract was apparently moved between various accounts) to fund various activities that would enhance Magashule’s political standing and cement his power, including the funding of a visit by 19 ANC members to Cuba for a “political course”.
It is hard to imagine that the awarding of the asbestos audit contract was above board, and that the payments to the ANC and various other parties were not made with a corrupt intent. But as is the case in most corruption prosecutions, proving the guilt of all involved beyond reasonable doubt can be difficult, as the perpetrators usually take every precaution to cover their tracks, and prosecutors seldom have smoking gun evidence at their disposal. As the Supreme Court of Appeal (SCA) noted in Scholtz and Others v S:
Corruption is all too often an issue which has to be determined by way of inference drawn from the proven facts. In this regard, like pieces in a jig-saw puzzle, a number of events need to be taken into account to determine the full factual matrix from which inferences may permissibly be drawn.
In assessing the strength of the NPA’s case against Magashule and his co-accused, it will be helpful to keep this in mind. But there are also other legal questions that may help to guide an assessment of the strength of the state’s case. I discuss a few of them below.
Availability of witnesses with direct knowledge of relevant events
While a court can convict an accused persons based on the inferences drawn from the surrounding facts, it will assist the prosecution if it can present evidence from witnesses with direct knowledge of some of the relevant events. For example, Schabir Shaik was convicted of corruption and fraud with the help of testimony from his former secretary and receptionist, Bianca Singh, who had first-hand knowledge of some of the shenanigans because she was required to take minutes at meetings between Shaik and representatives of the arms company from whom Shaik solicited a bribe for Jacob Zuma. In the absence of willing witnesses with direct knowledge of events, the prosecution can also attempt to strike a plea bargain with one or more of Magashule’s co-accused (or somebody else implicated but not yet charged) in accordance with section 105A of the Criminal Procedure Act.
As the prosecutions unfolds it will be interesting to see whether anyone within Magashule’s inner circle breaks ranks and agrees to testify against him and the other accused. The fact that Igo Mpambani, one of the main players in the asbestos scheme, was assassinated in 2017, may make some potential witnesses think twice before testifying against Magashule and his fellow accused. (To date, no evidence has emerged linking Magashule to Mpambani’s assassination.)
Linking an accused person to corrupt acts that he had allegedly orchestrated but not executed
In the coming weeks and months Magashule and his defenders may argue that there is no evidence linking him directly to corruption as he did not himself award the asbestos contract or benefit personally from the proceeds of the scam. (Whether the latter is true is not clear at this stage.) Magashule may thus deploy the well-known “throwing-underlings-under-the-bus” strategy, by arguing that he was not involved in awarding the contract, that underlings made all the requests for payments, that he was not aware of any of it, or that the corrupt funds benefitted the ANC and other benefactors and not himself. (Of course, throwing underlings under the bus can be risky as this might induce them to turn state witness.)
There are several reasons why this argument may be legally flawed. This is because section 3 of the Prevention and Combatting of Corrupt Activities Act (adopted in 2004) defines corruption very broadly and does not require the accused person to have been directly involved in executing the corrupt scheme or to have directly benefitting from it.
Thus, the accused person need not him or herself have financially benefited from the corrupt scheme. What is required is that the accused person must have accepted or agreed or offered to accept a gratification from another person, “whether for the benefit of himself or herself or for the benefit of another person.” So where it can be proven that an accused is involved in a corrupt scheme, and he or she arranges for the corrupting money to be used for the benefit of others – say for educational scholarships, trips to Cuba, or ANC expenses – this requirement would be met.
Second, the accused person need not him or herself have acted in an illegal manner or abused his or her position of authority to personally execute the corrupt scheme. It would be sufficient to prove that the accused “influenced another person to act” in an illegal manner or to abuse their power to execute the corrupt scheme. As an example, where a tender is awarded in a corrupt manner, politicians often argue that it was the bid adjudicating committee who made the final decision on who should be awarded the tender and that the politician could therefore not be guilty of corruption. But in terms of section 3, the politician would also be guilty of corruption if there is sufficient evidence that the politician influenced the decision of the bid adjudicating committee as part of a corrupt scheme.
Of course, in every case the state will have to prove that the accused had the requisite intention.
As the prosecution unfolds, it will be interesting to see what evidence the state can produce of any attempts by Magashule to influence the awarding of the asbestos audit contract, and of his general involvement in the alleged corrupt scheme. Any possible evidence of Magashule’s instructions to underlings who allegedly implemented the corrupt scheme may be pivotal.
When a corrupt scheme is exposed, the kingpin of that scheme may well argue that he or she had no knowledge of the scheme and could therefore not have been involved in it. One can call this “I-was-deceived-by-my-corrupt-officials” defence, familiar to all of us who follow the news. When that kingpin is charged with being an accessory to the corruption, this purported lack of knowledge will be an excellent defence.
In terms of section 20 of the Prevention and Combatting of Corrupt Activities Act, a person is guilty of being an accessory to the crime of corruption if he or she deals in either a direct or indirect way (or gets others to deal with) with corruptly offered gratification, knowing that the gratification was tainted by corruption. For example, if X knew that money he solicited for his political party or for the payment of scholarships originated from the paying of a bribe, he would be guilty of an offence.
It would often be difficult for the state to prove that the accused had knowledge of the corrupt origins of the money. That is why section 2(1) of the Prevention and Combatting of Corrupt Activities Ac states that for the purposes of the Act a person is also regarded as having knowledge of a fact if the court is satisfied that the person “believes that there is a reasonable possibility of the existence of that fact; and the person has failed to obtain information to confirm the existence of that fact”. This means that in circumstances where the evidence suggest that an accused would have suspected that the money was tainted, and turned a blind eye to it, they will not be saved by they own wilful ignorance.
When knowingly dealing with crooks, a conviction for money laundering looms large
The Prevention of Organised Crime Act prohibits various forms of money laundering. Money laundering occurs when you try to disguise the nature, source, location, disposition or movement of the money, while you knew or reasonably ought to have known that the money forms part of the proceeds of unlawful activities. Anyone who is part of the chain through which the money is passed, runs the risk of being convicted of money laundering.
Section 6 of the Act thus states that any person who acquires; uses; or has possession of, property (including money) and who knows or ought reasonably to have known that it is or forms part of the proceeds of unlawful activities of another person, shall be guilty of an offence. In the case of money generated by corruption, it would not matter that the money was not directly received from the person involved in the corrupt activity – as long as the accused knew or reasonably ought to have known that the money originated from a corrupt source.
Once again, if Magashule or any of the other accused are charged with money laundering, it would be important to see what evidence the state have to prove that the accused knew or reasonably ought to have known that the money originated from a corrupt source.
At the time of writing, we do not know enough about the nature of the charges and the evidence on which these are based, to make a meaningful assessment about the strength of the states case against Ace Magashule and other accused persons in the asbestos audit scandal. But as more evidence becomes available, and as the accused and their supporters develop their counter-arguments aimed at persuading the court of public opinion that the charges are “politically motivated”, it would be important not to make an assessment about these claims without some knowledge of the legal and factual questions at the heart of the case.BACK TO TOP