Mungo Soggot
Penuell Maduna’s efforts to distance himself from Liberian consultant Emanuel Shaw II have been undermined by testimony from his own confidant at the state oil company.
The minister of minerals and energy’s main contact at the company, Brian Casey, has given Public Protector Selby Baqwa’s inquiry into the Strategic Fuel Fund (SFF) detailed evidence of Shaw’s close association with Maduna as an unofficial adviser.
Casey’s testimony helps to explain some of the mysteries surrounding Shaw’s key role in the state oil industry.
Casey has outlined the controversial Liberian’s duties as middleman between himself and Maduna while the three collaborated on information that was eventually used to justify the ousting of Casey’s boss, Kobus van Zyl.
Casey has hinted that Shaw could have exaggerated his relationship with the minister – “I was led to believe by Mr Shaw that he was doing various research projects on behalf of the minister” – but he also testified that Shaw clearly had a direct line to Maduna.
Casey opened the door this week to the sensational concession by Maduna’s counsel that there was never a R170-million theft of oil – supposedly the main focus of investigation by the public protector.
The concession prompted many participants at the probe to mutter there was no point in continuing, but Baqwa pointed out there were other matters that still require investigation.
Kluever said he felt that as far as his office was concerned, the concession “more or less wraps it up”.
He said there were nevertheless still matters at the SFF Baqwa had to explore. The taxpayers’ legal costs for six legal teams at the inquiry are expected to exceed R10- million.
Apart from discussion of his relationship with Shaw and Maduna, Casey’s testimony has concentrated on a questionable commission of six United States cents a barrel the SFF paid to Interstate, a “middleman” company that continued to help the SFF buy oil from Egypt after the oil boycott was lifted. Casey said there was no need for Interstate – South Africa could have bought directly from Egypt. But he admitted the commission was no secret at the SFF.
It was this commission that Maduna used to justify his suspension of Van Zyl last March. Four months later, Shaw was sitting in Van Zyl’s office on a R3-million consultancy contract, which was arranged by the state oil company’s chair, Don Mkhwanazi.
Mkhwanazi was forced to resign this year in the wake of the scandal surrounding Shaw’s appointment.
Casey was initially reluctant to disclose to the Baqwa panel his close association with the minister – an association that has exposed him to a blunderbuss cross- examination by Van Zyl’s counsel. “You worked in the coal industry for seven years. And then you became a spy for the minister,” was Eddie Bruwer’s opening growl to Casey this week.
Under cross-examination last week by Kluever’s counsel, Eberhard Bertelsmann, SC, Casey testified he had co-operated with Maduna in late 1996 while Maduna prepared his attack on Van Zyl and commissioned his own auditors, Ntasaluba Nkonki Sizwe, to probe the SFF’s books.
Casey said he fed information to Shaw, who reported to the minister. “I could clearly see that a chain reaction had been set in place.” Casey also said Shaw advised him to play a low-key role and that he had been provided with a special mobile phone to communicate with both Shaw and the minister.
Maduna repeatedly tried to distance himself from Shaw when the Mail & Guardian ran a series of articles about the Liberian – particularly when it reported how Shaw had allegedly extorted $10 000 from Fakhry Abdelnour, the Egyptian oil trader who was getting the 6c commission. He denied that Shaw was his adviser, but talked of how, for example, Shaw had helped him with computer problems while was writing his doctoral thesis.
After the M&G reported Maduna had asked another businessman to repay Abdelnour, the minister angrily promised to resign if it could be proved he knew of the bribe.
Casey said on Monday both Shaw and Abdelnour had informed him of the R10 000 transaction, which he understood was supposed to alleviate Shaw’s “cash-flow shortages”.
Casey also said Abdelnour appeared to believe Shaw was the key to furthering his business interests with the minister, who had by then said he wanted to end the 6c commission.
Casey claimed Abdelnour said there were more bribes on tap for Shaw and Maduna. He also said he reported Abdelnour’s alleged words to Maduna, but did not specify whether this included a mention of the $10 000. Casey said he was “horrified” by the idea of this bribery, but remained tight-lipped because of the minister’s and Shaw’s instructions to lie low.
The next day Casey opened the door to the R170-million concession. Although Maduna’s counsel, Kessie Naidu, SC, sought to downplay the concession by claiming it was “common knowledge”, one of Baqwa’s assessors indicated it was not trite.
“Am I correct in understanding that at present, whatever the reasoning behind it, it is common cause between all the parties that there was no theft or loss of stock to the tune of R170-million …? Is that what you say?” asked J Record, an auditor.
Shaw worked on a management audit at the state oil company in 1995, after which he developed his unofficial position as Maduna’s access man. Casey said in 1995 Shaw had a mandate from the deputy president, and Casey was instructed to let Shaw see anything he wanted. Casey said one of his meetings with Maduna took place at the house of Essop Pahad, deputy minister in Thabo Mbeki’s office.
Shaw is suing the M&G for R7-million.
A track record worse than Troussier’s, PAGE 22
It’s a pity that so much taxpayers’ money has been spent on this investigation when there were no facts against the office [of the auditor general]. We can commiserate about it now, but there is nothing that can be done about it.
He gave Shaw the job despite the fact he had been a close associate of Shaw’s for several years and even shared a bank account with the financier.
He said he convinced Maduna there was no substance to the R170-million claim days after Maduna accused Auditor General Henri Kluever of being party to the theft.