Democratic Alliance leader Tony Leon stepped into the DA’s Western Cape “dirty money” scandal on Thursday in a frantic move to contain the escalating damage to the party’s credibility.
Reeling from the resignation of the DA’s respected Western Cape deputy leader, Hennie Bester — seen by many as the heir apparent — Leon announced a package of tough forensic measures aimed at laying bare the relationship between the party and German tax fugitive Jurgen Harksen.
At the same time, the Scorpions confirmed their preliminary probe had been upgraded to a full investigation into money-laundering, fraud and corruption involving Western Cape politicians and others.
Scorpions spokesperson Sipho Ngwema declined to give names.
Many in the DA feel the party’s Western Cape leader, Gerald Morkel, should fall on his sword after of a stream of damning allegations about his dealings with Harksen at the Desai commission in Cape Town. But the signs are that he is hanging on to office for dear life. On Thursday he continued to insist he received money on the DA’s behalf from “a reputable German businessman” who wanted to remain anonymous.
Describing Bester’s resignation as “a vote of no confidence in his party colleagues”, Western Cape ANC leader Ebrahim Rasool reiterated the party’s call for Morkel to step down as Cape Town mayor. But Morkel –nicknamed the Kennedy of the Cape — is keeping mum.
Looking grim but controlled at a press conference on Wednesday, Bester did not elaborate on Morkel’s future.
“Mr Morkel is the guardian of his own conscience and the master of his own fate,” he said.
Leon said: “I must acccept his [Morkel’s] word until the contrary is proven … I don’t think there is a basis for a resignation. It’s a personal judgement call for the person involved [whether to step down pending investigations].”
Although Bester made the decision to quit politics earlier in the week, his announcement came hours after a suspended senior Absa manager, Erik Marais, told the commission he laundered DM99 000 in instalments into the DA bank account.
Clearly rattled by Harksen’s testimony, and maintaining the German was “a serial fraudster”, the DA sprang into action on Thursday.
Leon’s leadership was not in question, said one insider. However, the DA was “serious about dealing with the problem” and motivated by “our need as a party to retain integrity and credibility”.
At a media conference in Parliament, Leon and national management committee chairperson James Selfe announced there would be independent forensic audits of the Western Cape and national DA and Democratic Party books.
Bester acknowledged to the Desai commission the Western Cape DA had received R269 000 in anonymous donations.
The DA leadership said that if any contributions from Harksen were traced, they would be repaid to trustees of his sequestrated estate.
Morkel and former finance MEC Leon Markovitz, who appears to have been the link-man in approaches to Harksen for party contributions and personal loans, have agreed to audits of their personal bank accounts.
In addition, the party’s internal inquiry into the Harksen saga has been told to get to the bottom of the matter by next Wednesday. Both Morkel and Markovitz offered written pledges of cooperation to the Scorpions investigators.
Senior DA sources said the party had received legal advice that it could not get rid of Morkel on the basis of what it continues to describe as allegations.
The sources said the party did not want another destructive public crisis over the sacking of a leader. They are convinced he would go to court, as he did last year to challenge his expulsion from the New National Party.
Action would be taken immediately if concrete proof of wrongdoing emerged either through the DA internal probe, the forensic audits or arrests by the Scorpions.
The loss of Bester, who will remain a DA member but who is withdrawing from active politics, is widely regarded as a major blow to the DA in the most fiercely contested province ahead of the first floor-crossing window period, expected in the second half of June.
The defection provision was part of the NNP-African National Congress cooperation agreement signed after the DA split last year. It will release NNP councillors, who won their seats under the DA banner in the December 2000 municipal poll, to rejoin the NNP without losing their seats.
During the alliance break-up, Bester emerged as a driving force in efforts to maintain the DA’s political standing in the Western Cape, and was key to speeding up the party’s founding Western Cape congress.
It was widely accepted Morkel became provincial DA leader in recognition of his role in remaining in the DA and encouraging other NNP members to do the same. However, Bester was tipped to take over in time.
Western Cape DA sources say they are “punch-drunk” and “reeling” from testimony before the Desai commission of inquiry into bugging allegations at the provincial legislature and malpractices in the offices of the premier and director general.
Bester confirmed the evidence had contributed to his decision to resign. “It fits into a bigger pattern … of an opposition being hunted.” The continual political mud-slinging in the Western Cape had convinced him it was impossible to continue.
“I hope for a time when this season of madness is over,” he said.
On Wednesday suspended senior Absa manager Marais described to the commission how he used his passport to exchange DM99 000 for the DA at Absa branches, Rennies’ Travel offices and during a private holiday in Amsterdam.
The money was initially paid into his personal bank account and then transferred to the account of the DA. The first instalment of R104 800 was made in October last year, and the last some time in January or February this year. During this time, the remaining foreign currency was kept at his home.
Marais said Morkel had contacted him in July or August last year while he was still premier to tell him to liaise with former DA party secretary Werner Schwella. Marais went to the DA offices to pick up the cash.
Harksen last week testified he handed over an envelope with DM105 000 to Markovitz. Speculation has been that the former finance MEC kept the cash in his safe before it was transferred for exchange into rands.
“Political parties are very sensitive about their donations. I was in a position of trust,” said Marais, a DA member whose wife is a party councillor in the Cape Town unicity. He also explained that before his promotion he had been the contact man between Absa and various levels of government for four years.
The quietly spoken bank manager testified that in April he had handed over R90 000 which had not yet been paid into the DA’s account to the Scorpions, together with deposit slips and other documentation.
Marais has stepped down as vice-chairperson of the Afrikaanse Handelsinstituut and chairperson of the Kaapstad Sakekamer until investigations against him are finalised.
Apart from the apparent direct funding of the DA by Harksen, the party also appears to have benefited indirectly.
The fugitive from German law, who also faces fraud charges in South Africa, this week claimed he handed over R35 000 at Morkel’s request for catering and buses to “a venue outside Cape Town” late last year.
In November, during the party split, Morkel rallied rebel DA members to meetings at Goudini Spa to maintain the alliance in the Western Cape.
Other dealings alleged before the Desai commission include:
- Morkel’s use of Harksen’s lawyers to fight his expulsion from the NNP last year;
- Harksen’s donation of money for Morkel’s legal challenge, through a third party and the German’s friends;
- Harksen’s payment of legal fees for the establishment of a family trust account; and
- Harksen’s payment of five months’ rent on Morkel’s plush Higgovale home.
In addition, the Cape Town media have published records of the two men’s cordial meetings, together with Markovitz, over good food and alcohol. Harksen and Morkel signed the visitors’ book at Maximilians restaurant in Cape Town as recently as February 22 this year. Harksen has repeatedly testified to meetings over braais and in cigar lounges, hotel eateries and expensive restaurants.
The commission also heard of personal financial dealings between Harksen and Markovitz. The German signed a contract to purchase the Sports CafÃ