/Pieter du Toit: How Pravin Gordhan became the principal enemy of the state capture project

Pieter du Toit: How Pravin Gordhan became the principal enemy of the state capture project

2020-01-14 06:30

When he was finance minister, he had to time and again fend off attempts to capture the Treasury and reconfigure the fiscus. He used the office of the chief procurement officer at the Treasury to clamp down on illegal, fruitless and wasteful expenditure and tried to keep a rein on rampant expenditure, which created many enemies who wanted to keep on pillaging state resources, writes Pieter du Toit

The assault on Pravin Gordhan has continued unabated, in different shapes and forms, ever since he was returned to the position of minister of finance after former president Jacob Zuma’s corrupted decision to sack Nhlanhla Nene in December 2015.

After his return to National Treasury – from where Zuma removed him after the 2014 general election – he faced a constant barrage of attacks, including from inside the ANC and Cabinet, National Prosecuting Authority and Hawks, both of whose leaders at the time have since been removed by the courts.

And now, as minister of public enterprises tasked with turning around state-owned companies virtually dismantled and destroyed by rampant corruption and mismanagement, he is again facing a co-ordinated assault that threatens his political future.

Eskom’s consistent failure to ensure a stable supply of electricity to the country and the glacially slow attempts to stabilise the company has made him a target for capture project inside the ANC, EFF and various former lieutenants in the Gupta orbit who have lost their jobs.

These elements want Gordhan out of his position.

And they want him out because he has been a consistent opponent of the rent-seekers, corrupted and state capture faction. As minister of finance between December 2015 and March 2017, he has seen the depth and breadth of the capture project first-hand, and when he was dismissed by Zuma, he led the inquisition into Eskom as an MP on the portfolio committee on public enterprises.

His return to Cabinet, after the ANC’s election victory in May last year, was met with an enormous campaign to discredit and vilify him led by Julius Malema and the EFF, who have been ably assisted by Public Protector Busisiwe Mkhwebane’s range of investigations against him.

And Ramaphosa has made Gordhan his personal emissary, the minister who must clean up ground zero of state capture: Eskom, Transnet, SAA and Denel.

Which makes Ramaphosa a target, too.

The destruction of Eskom

When Gordhan and his team stepped into the ministerial suite at the Department of Public Enterprises at Pretoria’s 80 Hamilton Street, Arcadia, in the summer of 2018, what greeted them in the remnants of Lynne Brown’s office was dysfunction and a dearth of expertise.

Brown had been dismissed by Ramaphosa when he announced his first Cabinet after Zuma’s ousting, with parastatals becoming the main feeding trough for the captured under her watch.

The ministerial office that was supposed to manage and provide oversight of state enterprises was bereft of the necessary technical and other skills needed to ensure that SAA, Eskom and Transnet, to name a few, were managed according to the shareholder’s expectations – and specifically to ensure that they are run according to the Public Finance Management Act, the Companies’ Act and the King Codes of Governance.

And Eskom, far from being the only state-owned company gutted by state capture, was certainly at the centre of the project of patronage and extraction.

The parliamentary inquiry into Eskom’s affairs, along with various other investigations, including those by the Treasury as well as law firms Dentons South Africa and Bowmans, have exposed the almost cellular level of rot at Eskom. And they detail how Eskom was systematically taken apart.

In its report, the parliamentary committee on public enterprises committee finds that “in general, the various laws, regulations, codes, frameworks, and other agreements that together constitute the basis of Eskom’s governance infrastructure had been distorted, circumvented, misused, applied in a non-uniform and non-transparent manner…”

It also accuses various successive boards and executives, including disgraced former executives Matshela Koko, Anoj Singh and Brian Molefe, of being responsible for “the collapse of good governance and poor financial performance” and recommends that law enforcement authorities investigate their alleged criminal and unethical conduct.

Under Zuma’s government and during the period of capture, the board and management “failed to report acts of fraud, bribery, corruption and/or theft”, with various contracts falling into this category, including the agreements with consultant McKinsey and the Gupta-linked firms Trillian and Regiment and the multimillion-rand pre-payment to the Guptas’ Tegeta coal mining company.

It was under the leadership of Brown and Malusi Gigaba that governance was dismantled at Eskom, and it was with executives like Molefe, Koko and Singh in charge that illegal contracts were signed and billions of rand siphoned from the company’s balance sheet into the pockets of a range of unscrupulous characters like the Guptas.

Thanks to them, Eskom was captured, repurposed and served the interests of private firms and individuals over a period of almost 10 years. It led to a breakdown of governance, honesty and good financial management. And that is the cesspool into which Gordan, the capture project’s primary enemy, has waded into.

A history of resistance

Gordhan was detested by the capture faction in Zuma’s Cabinet and ANC. And he is reviled by individuals and groups – like Malema and the EFF – who have a lot to hide. And Gordhan, who built the SA Revenue Service into one of the most admired institutions of its type in the world (before it, too, fell prey to capture), has shown the stomach for a fight.

When he was finance minister, he had to time and again fend off attempts to capture the Treasury and reconfigure the fiscus. He used the office of the chief procurement officer at the Treasury to clamp down on illegal, fruitless and wasteful expenditure and tried to keep a rein on rampant expenditure, which created many enemies who wanted to keep on pillaging state resources.

In March 2017, Zuma had finally had enough, and in the most brazen and overt act of capture he dismissed Gordhan and replaced him with Gigaba, a prime enabler of grand corruption at state companies. With Gordhan out of the way, the Treasury, the big prize because it could control the purse strings, could be used in service of the project of capture.

Even though the Treasury has been wrested from the project’s control, the networks of patronage and pillaging remain at large. And with Gordhan in charge of state companies, these networks will continue to remain under threat.

Expect the assault on Gordhan, and Ramaphosa’s flailing project of recapture, to continue.

– Du Toit is assistant editor for in-depth news.

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