Mining giant Gold Fields "sought to reward a host of officials and politicians for their influence", suggests new evidence.
AmaBhungane can today reveal new evidence of influence peddling, fronting and a cover-up of wrongdoing in Gold Fields' 2010 empowerment deal.
This is in addition to United States investigators' claims that the company "bribed" ANC chairperson Baleka Mbete.
Last year, Gold Fields commissioned New York law firm Paul, Weiss, Rifkind, Wharton & Garrison (Paul Weiss) to investigate alleged corruption in the award of its South Deep mining licence and a related empowerment transaction.
The Gold Fields board decided in August not to commit the Paul Weiss findings to writing, in effect burying them.
However, the Mail & Guardian exposed the findings, expressed in a slide presentation, that shares awarded to Mbete may have constituted bribery.
AmaBhungane today reveals further details of the slide presentation, including the investigators' conclusion that Gold Fields violated anti-corruption laws when it cut various connected people into the BEE consortium Invictus Gold.
Paul Weiss found that this was either a corrupt payoff for their alleged help in influencing government to grant the crucial mining licence, or Gold Fields management was guilty of "willfully ignoring" evidence of corruption.
The investigators' slide presentation to the Gold Fields board also detailed how top managers knew that a front company was used to conceal shares awarded to Eric Lucas, then an IFP member of Parliament's mineral resources committee, and Musa Zondi, then a fellow MP and secretary general of the IFP.
This could breach anti-corruption laws, Paul Weiss said.
The investigators' presentation contains damning criticism of the "lack of credibility" and "inappropriate behaviour" of Gold Fields chief executive Nick Holland and company attorney Michael Fleischer, whom they accused of hiding critical information from their board and investigators.
Paul Weiss's damning findings, which suggested potential criminal liability, starkly contrast with the Gold Fields board's weak response in August that "Holland has offered to waive his  bonus".
The mining house would not answer further questions this week, but board chairperson Cheryl Carolus has said the board "acted in full compliance with the law".
Through a spokesperson, Holland and Fleischer declined to comment.
In 2010, Gold Fields appointed convicted bank robber Gayton McKenzie as a consultant to help it to secure the new-order mining right it needed to work its South Deep mine.
In June that year, Paul Weiss reported, McKenzie's personal assistant delivered a memorandum to Gold Fields listing proposed members of the new BEE consortium, Invictus Gold.
The proposals in the memo, copies of which were allegedly signed by McKenzie and his assistant, were explicit: shares were to be awarded to officials and politicians who had already used, or would use, their influence to help to secure Gold Fields' mining licence.
Paul Weiss said Gold Fields asked for the the memo to be prepared, and that Fleischer met McKenzie to review its contents. Fleischer made detailed handwritten notes on the document, which "showed no concern about lobbying".
A week later, McKenzie's firm delivered another, similar memo.
The memos proposed as beneficiaries:
- Ayanda Dlodlo, who as "strategic adviser to the president of South Africa, Jacob Zuma [would bring] extensive lobbying capacity [and] is willing to play the role of facilitator between [Gold Fields] and government".
- Gugu Mtshali, the "current fiancée of the deputy president Mr Kgalema Motlanthe [who is] well-positioned within the political spectrum, and her inclusion can show value for many years to come".
- Approached by amaBhungane, Dlodlo and Mtshali denied lobbying and said they had no stake in the consortium.
- Luthuli House deployee Thandi Shongwe, who "will serve as an important nexus between the ruling party, government and [Gold Fields]".
- Shongwe was ultimately given a stake in Invictus. She did not respond to requests for comment.
- Baleka Mbete, whose "inclusion speaks for itself". She took a R28.6-million stake in Invictus, but has not answered questions.
- Lucas, an MP in Parliament's minerals committee, "[also] played a pivotal role in lobbying for the South Deep licence". He could not be reached for comment this week, but appears to hold a stake through a "front" company.
- Former ANC treasurer Mendi Msimang, who "spent a great deal of time together with Dlodlo and Mtshali in assisting [to lobby] … He is undoubtedly a friend of Gold Fields and clearly understands what would be expected of him as a role player within the BEE consortium".
This week Msimang confirmed that he holds a stake in Invictus through a company called Zungezile Investment Holdings. However, it is held in his Ngendane Trust, obscuring his stake. Gold Fields has never disclosed his share.
This week Msimang denied this was "fronting" or that he had lobbied or would lobby for Gold Fields.
McKenzie and advocate Jerome Brauns – Gold Fields' chief architect of the deal – reportedly denied lobbying occurred. McKenzie previously claimed the memos were drafted by a junior in his firm.
The investigators said that, in later interviews, Holland and Fleischer "inappropriately downplayed" the memos' significance, claiming Fleischer had "confirmed with Brauns there was no lobbying".
But they argued that such denials were "not credible or persuasive", adding that the two executive's handling of the memos "raises serious concerns".
The law firm reported that no witnesses could recall Fleischer's alleged "confirmation" that there was no lobbying.
It said: "If Fleischer expressed concern about lobbying language to Brauns after receiving the first memo, why would consultants deliver the second memo with equally troubling language?"
They found no documents proving Fleischer's alleged concern.
Brauns could not be reached this week.
In any event, the ultimate make-up of Invictus strikingly resembles that proposed by McKenzie, including many of the alleged lobbyists suggesting Gold Fields relied on his proposals.
Paul Weiss criticised Holland and Fleischer, saying they never objected to McKenzie's memos and "continued to employ their author without sanction".
And, damningly, they also accused the two men of failing to disclose the memos to the board and for later withholding them from law firms Linklaters and Werksmans, which also investigated the deal.
Fleischer told Paul Weiss that he "forgot" about the memos, but the law firm said this was "not credible". It concluded that Holland and Fleischer "either embraced or acquiesced in the activities described in the memos, or were willfully blind to them".
This had potentially criminal implications under anti-corruption laws in the US, where Gold Fields has a secondary listing.
According to Paul Weiss: "Whether or not lobbying occurred, [the US Foreign Corrupt Practices Act (FCPA)] can be violated … under FCPA, what counts is [Holland and Fleischer's] belief and intent to make corrupt payments, not whether [an] official acted improperly."
Alternatively, they said: "Under [the] FCPA, willful blindness = knowledge; [Holland and Fleischer] cannot ignore evidence of corruption by consultants. [And] US regulators have pursued FCPA violations without proof of official corruption. These have resulted in criminal fines and other penalties."
Paul Weiss also found documents that "expressly showed fronting".
This was "a very serious concern" in the eyes of South Africa's mineral resources department and would violate provisions of the FCPA which would consider it a corruption "red flag".
The fronting findings centered on the alleged inclusion of MP Eric Lucas in the consortium.
According to Paul Weiss, former mineral resources director general Sandile Nogxina said the department told Gold Fields it would be inappropriate to include Eric Lucas, given his role in Parliament.
But in an October 2010 email from Brauns to Fleischer, weeks before the consortium was finalised, Brauns said that Lucas "was informed of the concerns and proceeded to nominate Nicole Lucas [his daughter] to represent his interests."
In a transcribed SMS of the same date, found in Fleischer's files, another MP, the IFP's Zondi, said: "I hereby confirm … that in the interim I've asked that my shares be placed under the custody of Nicky Lucas."
According to Paul Weiss, Fleischer told Brauns fronting was unacceptable. But there was "no written evidence that Fleischer took any genuine, meaningful corrective action. The only relevant contemporaneous documents confirm fronting."
Nicole Lucas said "we have been advised" to refer all questions to Gold Fields and would not comment further. Zondi could not be reached for comment.
Carolus previously said the company's handling of the BEE deal was "collectively informed [by] … a range of sources and advice from a number of legal and other advisers".
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.