Emanuel Shaw II may be the king of sleaze, but South Africa is not without its own homegrown sleazeballs, writes Mungo Soggot
While discussing Liberian politician Emanuel Shaw II’s spectacularly corrupt track record in the West African country, a Liberian journalist based in Washington told the Mail & Guardian last month: “You must watch out. You must be careful of this man.”
“Why? Will he sue, will he shoot?”
“No, no,” said the journalist. “You misunderstand me. I don’t mean you must be careful. I mean your country must be careful.”
Six weeks on, it is easy to see what he meant. As the M&G exposed last week, Shaw — in his capacity as Liberia’s finance minister under the dictator Samuel Doe — set up a new national oil company during 1989 in which he had a 60% stake.
He pumped up the price of fuel, split the profits with his cronies, and then sued the government for $20-million owed to his “national” oil company after fleeing the impoverished country ahead of Doe’s gruesome, public execution.
The same man has spent the past six months advising the head of South Africa’s Central Energy Fund, Don Mkhwanazi, on the state oil company’s restructuring. He has an office at the company’s Johannesburg headquarters which is steadily losing experienced staff. Despite an onslaught of evidence about his corrupt past and present — the M&G has exposed how Shaw extorted $10 000 from a top oil trader after promising to promote his interests with Minister of Minerals and Energy Penuell Maduna — Shaw is still being paid by the taxpayer.
Bearing in mind Mkhwanazi’s ignorance of the South African oil industry — and considering Maduna’s reluctance to take any decision on the industry — Shaw presumably has relatively free rein to concoct any scheme he fancies.
Shaw said last week he would sue the M&G for R7-million — an exercise he will presumably not pursue at the taxpayers’ expense.
The Liberian journalist’s warning implied that South Africa is not used to sleaze. Shaw, who is a South African resident, does of course represent a calibre of crook so far unrivalled in South Africa: he is smart, eloquent, cunning, charming and convincing. He was a model of courtesy when contacted by the M&G after the newspaper published an article entitled “Oil man’s CV of sleaze”.
But, if the past 12 months are anything to go by, there is plenty more sleaze and plenty of other people of whom South Africa should be wary.
To begin with, there is no need to search further than Shaw’s South African link man, Mkhwanazi, for an example of a South African who — although never implicated in or convicted of any misconduct — has been involved in unusual business practices.
Mkhwanazi gave Shaw and Shaw’s son, Emanuel Shaw III, the state job without tendering — a year after his own law firm set up the consultancy named in Shaw’s contract with the state oil company. The main listed director of that company, International Advisory Services, is Ethelbert Cooper, a Liberian associate of Shaw’s. Cooper, who is working in South Africa illegally, also advises Mkhwanazi on Mkhwanazi’s National Empowerment Trust Investment Fund.
It emerged this month that the two most eminent members of this investment fund’s executive — Oscar Dhlomo and Gibson Thula — resigned last year after Mkhwanazi spent a sizeable portion of the fund’s R5-million start-up cash on himself and on Cooper’s remuneration.
One of the defining features of the tales of corruption and cronyism which have dogged the government this year is that the culprits have frequently survived unscathed.
There have been some impressive exceptions, such as the decision on the part of North West Premier Popo Molefe to oust his education MEC after she faced allegations of cronyism and incompetence.
One of the most memorable prosecutions for corruption was that of Louis Botha, the Gauteng housing department official who was hit with a hefty prison sentence for stealing about R8-million from the subsidised housing kitty.
And there have been a few instances in which the government has employed a damage control tactic much favoured by the its predecessor: a commission of inquiry. Mathews Phosa, the premier of the Mpumalanga province, has on at least two occasions appointed an inquiry into shenanigans in his province.
Maduna also immediately ordered an inquiry into Shaw’s appointment — in the week after it was exposed in the M&G. He has, however, ignored a written memo from his special adviser dated October 19 in which he was advised to suspend Mkhwanazi’s board and ditch Shaw.
At the time of going to press, the Department of Minerals and Energy, which conducted the inquiry last week, had yet to release its findings. It is, however, unlikely that Mkhwanazi will be axed for his performance in the Shaw scandal. He has already been cleared by his own board.
However, a head count of the major players in this year’s prominent sleaze stories shows that few heads have rolled where they should have — in spite of the insistence on the part of President Nelson Mandela last week that the government is tackling corruption.
And, in some cases, such as in that of the Motheo scandal, it is the whistle blowers who have lost their jobs.
One of the best examples has been the Motheo housing scandal, which gave a disturbing glimpse of elements of cronyism in South Africa’s mass housing programme. To date there has been no proof of outright corruption, but the scandal has left a bad taste after providing startling insights into the Mpumalanga government’s irresponsible handling of housing funds and into the opportunism of some low-cost housing developers and their accomplices.
The Motheo housing deal involved the handing of a R198-million housing contract to an unknown housing company, Motheo, run by a doctor called Thandi Ndlovu — a friend of the Minister of Housing, Sankie Mthembi-Mahanyele. The contract, for the construction of 10 500 houses in the middle of nowhere, was given with the unwitting help of a bank, Nedcor, after provincial housing officials rode roughshod over a string of key procedures.
The scheme was masterminded by Kevin Gibb, a senior banker at Nedcor who was fired for, among other things, his involvement in the scheme. Gibb vowed to take on Nedcor in the courts, but recently lost the first round in the Labour Court.
The former director general of the Department of Housing, Billy Cobbett, blew the whistle on the scheme and was swiftly fired by his minister. He told a commission of inquiry into the affair that Gibb had had “an incredibly close relationship” with the minister.
Mthembi-Mahanyele said Cobbett was “incoherent” when he alerted her to the many problems in the scheme. However, official documents from the department show Mthembi-Mahanyele was fully informed by Cobbett when she fired him.
At the heart of the deal was Mpumalanga’s provincial housing board, headed by Saths Moodley who was fired by Phosa after the scandal broke. To this day, Moodley, who worked closely with Gibb, insists he resigned. And Mthembi-Mahanyele for several months insisted that Cobbett resigned — until Cobbett proved the contrary by disclosing the value of his payout from the government.
Moodley told the commission of inquiry — appointed by Phosa — that the saga actually boiled down to an elaborate plot on the part of senior government officials and Nedcor to embarrass Mthembi-Mahanyele.
The provincial government paid out =0BR9,2-million of national housing funds before the project was frozen. That money has still to be repaid.
Mpumalanga’s reputation as a province prone to sleaze was secured at the beginning of the year when the M&G exposed the way the province’s parks board had handed over its famous natural assets to a shadowy foreign company and promised not to talk about the deal for 50 years.
The Dolphin Group, headed by Ketan Somaia who was at the centre of a major financial scam in Kenya, was given enormous power over attractions such as the Blyde River Canyon, Bourkes Luck, the Blyde River potholes and Pilgrim’s Rest. In exchange, it agreed to bankroll the parks board to the tune of about R12-billion over eight years.
The head of the parks board, Alan Gray, insisted that this financial support would not compromise the parks board when it assessed the impact on the environment of any of the group’s schemes.
Somaia at one stage tried to secure Kenyan leader Daniel arap Moi for a reference. The Mpumalanga government eventually dispatched some officials to Kenya to investigate the Dolphin Group. While in Kenya, the Mpumalanga officials failed to meet with the country’s attorney general, opposition politicians or the police — but instead concentrated on enjoying the hospitality of several Dolphin lodges.
On their return, one of the officials warned: “It is a fallacy to think the Mpumalanga government will ever subject investors to tender processes or in-depth investigations. If we create the perception that investors will be investigated in this manner, it is doubtful that [we] will attract any investors at all.”
Terms of the contract were toned down in the end in favour of the province, but the Dolphin Group is nevertheless still entrenched in Mpumalanga. Gray said recently that the series of expos=E9s about Dolphin had been an attempt by the media to boost circulation and the work of “jealous” journalists.
Mpumalanga also hit the headlines this year for having helped the deputy speaker of the National Assembly, Baleka Mbete-Kgositsile, obtain a fake driving licence. The licence was issued by traffic director Henry Brazer on the instructions of Safety and Security MEC Steve Mabona, who was forced to resign.
A commission of inquiry appointed by Phosa found that Mabona last year sent his official vehicle and bodyguards to fetch Mbete-Kgositsile in Johannesburg.
Mbete-Kgositsile says she travelled to Delmas for her driver’s test to “save time and not stand in queues”. Although she was tested for both licences on that day in Delmas, all documentation for the licences indicated they were issued in Kabokweni, 350km away in the former homeland of KaNgwane.
The commission — which discovered that the province was conducting a roaring trade in fake driving licences — heard from Mpumalanga traffic inspector Roelf Smith that he had received complaints from a junior staff member about the alleged irregular issuing of Mbete-Kgositsile’s licence and had launched an investigation. Three days later he was ordered to stop his investigation.
Brazer was suspended by Phosa’s commission, but was recently cleared of any “intentional misconduct” by an internal disciplinary inquiry. He has been reinstated as traffic director — despite attempting to hide from the commission the fact that he had issued fake licences.
Mbete-Kgositsile has expressed little concern about the incident. She would probably be far more concerned, however, if she knew that — according to a string of sources — her daughter has been involved in a relationship with none other than Emanuel Shaw II.