/ 23 February 2017

Tainted Molefe fits Zuma’s needs

Set-up: There is widespread suspicion that President Jacob Zuma
Set-up: There is widespread suspicion that President Jacob Zuma

If you are a deeply compromised leader who needs an inside man at a critical government institution, Brian Molefe is arguably not a bad choice.

His nomination to Parliament has stoked speculation that President Jacob Zuma is gearing up for yet another Cabinet reshuffle and that Molefe is key to his plan.

Political conjecture suggests that Zuma has the treasury in his crosshairs and that Molefe is tipped to replace Deputy Finance Minister Mcebisi Jonas, if not Finance Minister Pravin Gordhan, outright.

As candidates for Parliament go, Molefe is a knowledgeable civil servant, having served at the treasury, the Public Investment Corporation and Transnet before his secondment to beleaguered power utility Eskom.

His capability makes him a more palatable sell to investors but he is seen as deeply compromised following the revelations contained in the public protector’s State of Capture report.

In the report, which recommended a judicial commission of inquiry into the findings, former public protector Thuli Madonsela noted the extensive communications that took place between Molefe (as Eskom chief executive) and members of the Gupta family or executives of Gupta-linked companies.

This was at a time when the Gupta-linked Tegeta was negotiating the purchase of Optimum Coal Holdings and its Optimum coal mine, which supplies Eskom.

Revelations included that Molefe had been taking and making calls to Gupta family members and Gupta company executives at this pivotal time – including 44 calls to Ajay Gupta – and cellphone records placed Molefe in the Saxonwold area, home to the Gupta family, 19 times.

Molefe resigned after the public protector released the report, although he denied any wrongdoing.

Opposition parties and civil society clamoured against his nomination to Parliament this week even as the ANC began reshuffling its MPs, which is believed to be another sign that Zuma is paving the way for Molefe to assume a senior role.

The ANC moved MP Makhosi Khoza from the standing committee on finance to chair the portfolio committee on public service and administration.

But Madonsela’s report also criticised the Eskom board at the time, many of whom had associations with the Gupta family, for not managing their conflicts of interest properly, particularly in relation to the circumstances surrounding Eskom’s prepayment for coal, which directly helped Tegeta to buy Optimum Coal.

Many of the board members have resigned, some before the release of the public protector’s report, although chairperson Ben Ngubane remains at the helm of Eskom.

More recently, an investigation by law firm Dentons into the precarious state of Eskom before and during the 2014 and 2015 bouts of load-shedding revealed many red flags regarding procurement and the financial management of the utility.

Molefe joined Eskom as interim chief executive on April 20 2015, the same day the Dentons investigation formally began. He was appointed permanently to the post in September 2015.

Instead of continuing with the investigation, Eskom’s board summarily terminated it in June that year and, according to an investigation by the Financial Mail, sanitised its findings. In recent weeks, Eskom released a redacted version of the report and justified the board’s decision by saying that it had opted to stabilise the institution rather than drag out the investigation.

It is not clear to what extent Molefe contributed to the board’s decision to end the investigation and to keep the report under wraps.

Eskom said this week that, as with any investigation “by any entity under the sun, various leaders interface with the proceedings of the investigation, one way or another, consistent with the requirements of the investigation”.

But Eskom did not “see the value of singling out certain leaders from the collective”.

The Dentons report “was a culmination of specific terms of reference which had been ring-fenced for an investigation period of three months to enable the board to proceed expeditiously to restore the business to normalcy in the interest of the nation”.

It had contributed to the revival and turnaround of the utility, including stabilising the grid and implementing critical efficiencies, the utility said.

Furthermore, the State of Capture report was “inconclusive” and treating it as the final arbiter was “unfair and premature”, as well as “grossly irresponsible”, Eskom said.

Despite all these questions hanging over Molefe, the ANC in Parliament was still expecting to have him sworn in, according to Nonceba Mhlauli, the media liaison officer of the ANC parliamentary caucus. Although this was reportedly meant to take place on Wednesday, the spokesperson for Parliament, Moloto Mothapo, said no date had been set for it.

Lawson Naidoo, the executive director of the Council for the Advancement of the South African Constitution (Casac), said in a statement that Molefe’s appointment would be “an affront to the Constitution and good governance”.

He was nominated to Parliament by the party’s North West arm. But on Twitter, Casac also called into question the procedure surrounding Molefe’s nomination, stating that the Independent Electoral Commission could not shed light on when the ANC’s party lists had been amended to include Molefe. The Electoral Act governs when and how a party may supplement its list of candidates for Parliament.

The Democratic Alliance’s chief whip, John Steenhuisen, said Molefe was ethically compromised and that the DA was investigating the procedural requirements to fill the vacancy in Parliament. The party also laid criminal charges against Molefe after the release of the State of Capture report.

Mhlauli referred all queries about Molefe’s suitability to Luthuli House, but ANC spokesperson Zizi Kodwa did not respond to requests for comment.

Efforts to reach Molefe were unsuccessful.