Whichever way you look at it, the questions about Gold Fields's mega BEE transaction are justified, say Drew Forrest and Craig McKune.
'Crucify … and no facts," was former Reserve Bank governor and current ANC national executive committee member Tito Mboweni's tweeted response to amaBhungane's report in the Mail & Guardian on Gold Fields's contentious empowerment deal – and how ANC chairperson Baleka Mbete benefited from it.
The ANC – after a strangely protracted delay – sang the same refrain, branding in an official statement the report as "flimsy, unsubstantiated … an exercise in slander".
Really? The problem facing Mbete's apologists is precisely the factual nature of the story, which no halfway decent newspaper could have shied away from publishing.
What could be more substantial than the verdict of reputable New York law firm Paul Weiss, Rifkind, Wharton and Garrison, hired by Gold Fields itself to interrogate the 2010 transaction?
It found "credible evidence" that the company violated the anti-bribery provisions of the United States Foreign Corrupt Practices Act by hugely increasing Mbete's stake, from R2.2-million to R28.6-million, to stop the threatened scuttling of an empowerment transaction at Gold Fields's South Deep mine.
Crucially, the black economic empowerment (BEE) deal was a condition for the conversion of old-order mining rights at the company's most important South African asset.
Another hard fact is Gold Fields's announcement last week that the US Securities and Exchange Commission has launched an inquiry into the empowerment transaction. Gold Fields has a secondary listing on the New York Stock Exchange.
Whether the threat to torpedo the BEE deal was ever carried out, or legally could have been carried out, is immaterial. For bribery to exist in South African and US law, all that matters is that the company feared this could happen.
The finding against Mbete is inferential, to the extent that Paul Weiss was hired to probe the Gold Field's actions and Mbete was represented in the horse trading on the deal by an adviser, Brian Mosehla.
It is possible that in demanding a higher stake for her and– the Paul Weiss investigators allege – coupling it with a threat to sink the transaction, Mosehla was acting alone. But that is not what the investigators say they were told by advocate Jerome Brauns, the broker of the deal and a major shareholder in it. In a slide show prepared for the Gold Fields board, the investigators insist that in five hours of "confident, detailed and thorough testimony", Brauns repeatedly alluded to Mbete's decisive role.
He is quoted as saying that she "was using him [Mosehla] to negotiate a deal for her … he was her cat's-paw. He threatened to bring the deal down and create mayhem unless she was given more", and that "if you are as politically connected as [Mbete] is, she would command a great deal of respect and attention and would be in a position to put pressure on a lot of people if she chose to do so".
Even if this does not create a legal presumption against Mbete, it certainly suggests that she had a case to answer. After all, she did accept the colossal windfall.
Yet on September 12, eight days after amaBhungane first approached him for comment, Brauns released an extraordinary statement effectively claiming the investigators lied.
Mosehla's threats had played no part in the decision to increase Mbete's shareholding, he now said. He had proposed the raising of her stake, and that of two other politically connected women, Limpho Hani and Thandi Shongwe, based purely on the role of these "struggle icons" in liberating South Africa.
Beyond saying that Paul Weiss was "deliberately mischievous in order to create a sensation", Brauns does not explain what motive an internationally respected law firm could conceivably have for falsifying his testimony – and particularly in a way that damaged its client. Other aspects of his "recantation" suggest a caucused attempt at damage control.
The account is similar to that given by Gold Fields chief executive officer Nick Holland and its general counsel Michael Fleischer in their formal presentation to the Paul Weiss investigators. They testified that the Mbete share increase was "on the merits" and unrelated to any threats by her adviser.
Why, if Mosehla's threats were directed at securing a stake for himself, was it Mbete's stake that ballooned? And why, if there was nothing untoward about the massive restructuring of the deal, was it not reported to the Gold Fields board, its empowerment sub-committee or shareholders?
A less than frank attitude to the new arrangement is also suggested by a "cryptic" email from Brauns to Gold Fields management on October182010, immediately after the crucial meeting with Mosehla, that communicates the change in structure but offers no explanation.
The alleged use of threats is absolutely central to the accusation of bribery – and without it, it is hard to understand the chain of events.
The wholesale rearrangement of the consortium happened at the eleventh hour, when the deal was to all intents and purposes settled and after the prospectus had gone out to shareholders. What persuaded Gold Fields to entertain such a last-minute upheaval, if not a direct threat to its commercial interests?
How is one to understand the 13-fold increase in Mbete's stake, and why was she treated more generously than Hani and Shongwe who, according to the share register, each received a less than R5-million stake?
It may be a little unfair, but one doubts that someone's status as a "struggle icon" – a questionable description of Mbete in any event – would mean much to white mine managers (the suggestion is that if one attains high status in the ANC, one automatically and retrospectively becomes a struggle hero).
What would really have interested management – particularly as it was anxious to bolt down a threatened right to mine – would be her influence in the ruling party and government.
* Got a tip-off for us about this story? Email [email protected]
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.