The trial of Durban businessman Schabir Shaik has delivered the first glimpse of an expected string of embarrassing political and personal disclosures. In a detailed explanation of his not-guilty plea, Shaik exposed what appears to be a covert African National Congress fund, the Development Africa Trust, set up just ahead of the December 2000 local government elections. He said it was for ”the care and welfare” of the Zulu royal family and tribal chiefs.
Several sources close to the trust, Deputy President Jacob Zuma and Shaik told The Mail & Guardian it represented an attempt to buy the political support of Zulu traditional leaders and the royal family ahead of the elections, in which the ANC was fiercely contesting KwaZulu-Natal rural municipalities against the Inkatha Freedom Party.
The witting or unwitting involvement of former President Nelson Mandela’s foundation in this alleged party political charm offensive is likely to add further embarrassment. Responding to the state’s version of a flow of R2-million from the Nelson Mandela Foundation through a bank account belonging to Deputy President Jacob Zuma, Shaik said the money was intended to be split between Zuma’s charitable education trust and an entity called the Development Africa Trust.
In his plea statement Shaik noted: ”I had no knowledge of the Development Africa Trust at the time, but understood that Dr Zweli Mkhize [ANC deputy chairperson in KwaZulu-Natal] was a trustee. He explained to me that the money was intended for confidential ANC activities … I have since learned that the object of the Development Africa Trust was to raise funds for the care and welfare of tribal leaders and the Zulu royal family.”
One source who has the ear of the Shaik camp told the M&G that the ”care and welfare” was understood by them to mean chiefs would be ”paid off” to wean them from the IFP. As early as last year, two separate sources close to Zuma and Shaik gave a similar version to the M&G.
Mkhize told the M&G this week that the Development Africa Trust was ”not a political thing”, but ”more a welfare kind of thing”. He declined to give details about what benefits had been paid to whom, saying the matter was before court and he did not want to ”entangle in the case”.
Questioned about the involvement of the Mandela Foundation, director John Samuel said he had joined the foundation at the end of 2000, after the donation to Development Africa.
Ismail Ayob, the foundation’s lawyer, who was handling its financial transactions at the time, said: ”I don’t recall this matter at all at this point in time.” Ayob will also testify for the prosecution in the Shaik trial.
The Nelson Mandela Foundation was set up in 1999 ”to develop strategic alliances and partnerships in order to foster community engagement, community project ownership and community benefit in carefully selected sites”, according to its website.
Senior IFP election organiser John Aulesbrook said the disclosures were ”no surprise”. ”We have been aware of this kind of strategy, though we didn’t have the detail behind it. It’s a matter of extreme concern to us.”
The claim that Development Africa was an ANC front designed to buy political support – with Mandela money – is only one of several potential embarrassments the Shaik trial may hold for the party. Others have also been raised in the opening days of the hearing.
In his plea statement denying all charges, Shaik claimed that about R273 000 of the R1,24-million paid over for the benefit of Zuma was, in fact, for the ANC’s benefit. This included the rental on Zuma’s Durban apartment from March 1997 to July 1999, which Shaik claimed he provided because of a need to give Zuma a secure residence.
It also included settling a R105 000 debt with Stanger businessman Dawood Mangerah. Mangerah, also the ANC branch treasurer in Stanger, had threatened to sequestrate Zuma if the debt was not paid. Shaik claims Zuma informed him the debt was incurred as a result of expenditure Zuma incurred on behalf of the ANC.
”I regarded these payments as contributions to the ANC,” Shaik said in his statement.
He also stated that after 1990 he was appointed as an assistant to ANC Treasurer General Thomas Nkobi and travelled extensively with Nkobi to solicit funds from Malaysia, Pakistan and the United Arab Emirates, among others, prior to the 1994 elections. Shaik’s Nkobi group is named after Thomas Nkobi.
Shaik also indicated that it was his intention to have the ANC as a business partner. ”After the general elections in 1994 I was planning to set up a corporate structure on the Malaysian model, which would have included the ANC as a shareholder. I was, however, advised that the ANC would not become involved in business in this manner,” he said.
The ANC has denied the party had any interest in Shaik’s Nkobi group. However, lead prosecutor, Advocate William Downer, indicated the state would produce evidence that Shaik purported to hold 10% of Nkobi on behalf of the ANC, and that any Nkobi group profits – including from government contracts such as the arms deal – ”potentially flowed to the ANC”.
The trial also threatens to lay bare, in embarrassing detail, Zuma’s personal financial situtation, which Downer described as ”parlous” in the period up to 2002.
Downer said that Zuma’s expenditure of R4,3-million during the period exceeded his earnings of R3,8-million, and that his financial affairs were marked by bounced cheques, lawyers’ and bankers’ letters, bond defaults and threatened sequestration.
You read it here first
On January 19 2001 Jacob Zuma wrote to Parliament’s public accounts committee urging the exclusion of the Heath unit from the probe into the arms deal. This, alleges the prosecution in the Shabir Shail trial, is key evidence that the deputy president ”protected” arms company Thales in return for a bribe.
That day, the Mail & Guardian published an article (”Evidence of ANC arms deal link”) that referred to an interview with Professor Themba Sono. Sono, who acted as director of Shaik’s Nkobi holdings in 1996 and 1997, was the first prosecution witness to take the stand on Thursday.
In his 2001 interview with M&G, Sono highlighted how Shaik and Nkobi had strong political connections, including to then unnamed ”political heavyweights in KwaZulu-Natal”. He also described how Shaik and Nkobi Holdings had set out to exploit those connections to position themselves to benefit from the upcoming multibillion-rand arms deal. He claimed that when the supply of corvettes to the navy was discussed, Shaik made it clear Nkobi would provide political connections, while other partners would provide the technical expertise and financing.
In his evidence on Thursday, Sono made similar claims. He said the Nkobi group at the time was interested especially in ”contracts in the government arena”. Judge Hillary Squires ruled that the names other than of Zuma were not relevant and prevented Sono from continuing his testimony about a payment relating to a trip by King Goodwill Zwelithini. Sono told the M&G in 2001 that Nkobi funded a trip by the Zulu king to the United States. Shaik had explained this was ”for the benefit of the movement [African National Congress]”. â€“ Stefaans Brummer and Sam Sole