Paul Mashatile: Fees kickback?

Paul Mashatile, Gauteng’s powerful but controversial finance minister, had a close relative’s tuition fees paid last year by a consultant who benefits from provincial government contracts.

Documents show that a Midrand college invoiced Mashatile personally for tuition fees amounting to more than R20 000, but that the consultant, Donovan Nadison, paid.

It is not the first time that questions arise over the propriety of Mashatile’s relationship with contractors. The Mail & Guardian revealed in July last year that he had declared, but then disowned, a multimillion-rand stake in technology company Business Connexion, which had won contracts from a provincial agency answering to him.

Mashatile was also in the spotlight when it was revealed last September that his department had footed a R96 000 post-budget dinner bill for more than 200 people at exclusive French restaurant Auberge Michel in Sandton.

Nadison is a former youth activist and self-professed ‘public-sector junkie” who has consulted widely with clients in national and provincial government.

Mashatile this week denied any conflict of interest, seeking to portray the relative — his nephew — as one among many students he had helped to find sponsors in business.

Nadison confirmed the payment and admitted it was ‘a bit close”. But he said he had resolved not to bid for contracts from Mashatile’s department of finance and economic affairs so as to avoid aggravating the appearance of a conflict of interest.

While Nadison may not have contracts with Mashatile’s department, he has, however, been involved in two large projects driven by Mashatile and the Gauteng Economic Development Agency (Geda), a statutory body answering to Mashatile.

They are the controversial Soweto monorail project and Soccerex, the world’s premier soccer exhibition which Gauteng won the rights to host.

The M&G has a copy of an invoice from the Midrand Graduate Institute, addressed to Mashatile last March. The amount charged, R22 780, was for one Tshepo Ncube’s ‘Bcom pre-degree” course fee last year. Ncube is Mashatile’s wife’s sister’s son. The invoice gives Ncube’s address as Dove Lane, Alexandra East Bank — believed to be Mashatile’s former address.

The invoice was faxed to Nadison’s office in April. Nadison then scribbled a note on it to one Joanne — probably his wife and business partner, Joanne Murraybrown — to pay from his personal account.

The invoice and a print out reflecting an internet deposit from Nadison’s account were then presented to the Midrand Graduate Institute as proof of payment.

Approached for comment this week, Nadison confirmed the payment, but claimed it had to be seen against the background of his support for youth causes in general.

He said he sponsored a number of young people both through his New Africa Youth Trust and in his personal capacity, and that he brought them into his organisation on a media and marketing consulting programme. He said Ncube had been on this programme and that he had ‘mentored” him.

Asked if the sponsorship could not come across as giving rise to a conflict of interest, Nadison said: ‘I was aware from the start that this thing can get me in trouble because it’s a bit close. But I don’t have any contracts from [Mashatile’s department of finance and economic affairs] and said I won’t tender for more.”

He added: ‘In a broader sense I benefit from work in the Gauteng government, I can’t argue.”

Nadison’s stated avoidance of doing business with Mashatile’s department may do little, in fact, to resolve the conflict of interest.

Nadison and his New Africa Consulting have an ongoing relationship with Dornier Consulting, a transport and resources management consultancy owned by the European aerospace and defence company EADS.

Dornier has consulted on a number of Gauteng mega-projects, including the Gautrain and Soweto monorail, both driven by Mashatile and his counterpart in the public transport, roads and works portfolio, Ignatius Jacobs.

The R12-billion monorail plan, touted as a private investment facilitated by Geda and Jacobs’s department, was publicly unveiled by Mashatile and Jacobs in mid-May.

The plan attracted immediate criticism, not least from national Transport Minister Jeff Radebe, who said he was ‘in the dark” and criticised it for a number of apparent failings.

Mashatile and Jacobs met Radebe on May 25 to find common ground, but agreed then to put it ‘on hold until such time as the necessary process, including consultation, had been undertaken”.

Four days later, Dornier Consulting presented an ‘expert statement report” to Jacobs’s department. It concluded that the project was ‘absolutely feasible” and ‘will perfectly complement existing transport systems”. Nadison and another member of his New Africa Consulting were listed in the report as senior consultants in the Dornier task team, which had compiled the report.

Nadison confirmed that ‘on monorail I have been supporting the province through working with Dornier”, but claimed not to have invoiced either.

Meanwhile, Geda earlier this year ran a quasi-tender process which resulted in eSkape, a travel agency of which Nadison is one of three partners, being appointed by United Kingdom-headquartered Soccerex as its local partner to provide travel services to delegates.

Mashatile was key to Gauteng’s successful bid to host Soccerex for three consecutive years in the run-up to the 2010 Fifa World Cup. More than 3 500 delegates are expected to attend this year.

Geda spokesperson Barba Gaoganediwe said Geda had proposed that Soccerex’s preferred accommodation agency, United Kingdom-based Match, team up with a local partner. Geda then issued requests for proposals to six service providers on the provincial database. They were scored as in an ordinary tender and the results were presented to Soccerex. ‘We got a thumbs-up for our selection from Soccerex.”

Nadison confirmed the basic process, but emphasised that, after Geda had recommended eSKape, Soccerex had done its own ‘check” and had issued eSkape’s letter of appointment. ‘I have no legal relation with the province.”

A powerful political persona

When Paul Mashatile and Public Works and Transport Provincial Affairs Minister Ignatius Jacobs prematurely announced the monorail project for Soweto, they were criticised by Minister of Transport Jeff Radebe, writes Rapule Tabane.

But their immediate boss, Gauteng Premier Mbhazima Shilowa, kept his silence, arguing that he was overseas when all of this happened.

Last year in July when the M&G asked Shilowa if he would act against Mashatile after our exposé of a case of possible conflict of interest involving his shareholding in a company that did business with his department, Shilowa promised to investigate. But he added that on the basis of a conversation he had with Mashatile he did not believe there was wrongdoing.

In his interactions with the media, Mashatile is one of the most soft-spoken and humble politicians, but ANC seniors in the province say he is a powerful political persona.

The former youth activist from Alexandra has survived the gruelling politics of Gauteng, which has claimed many casualties since 1994.

He was involved in the very first ANC structure established in the region after the unbanning of the party, serving as interim secretary of the South African Communist Party and part of the interim leadership structure of the ANC.

Mashatile has never lost that aura and is now the longest-serving provincial minister. His portfolios have been transport and public works, safety and security, housing and now finance and economic affairs.

Many believe he is the next premier when Shilowa steps down in 2009 after serving two terms. But before that Mashatile faces a tough battle for the position of ANC chairperson at the provincial congress in September.

Lobbying has already started, with provincial housing minister Nomvula Mokonyane and education provincial minister Angie Motshekga also contesting for the position. But the province could settle for a compromise candidate in David Makhura, the current provincial secretary.

However, people close to Mashatile say he may not contest the provincial position and instead aim for a seat on the ANC national executive committee during elections at the national conference in December.

Mashatile survived even the disbanding of the ANC provincial structure by Luthuli House after acrimonious infighting when Mathole Motshekga was premier and ANC chairperson.

After Shilowa was elected chairperson when the province was relaunched in 2003, he had to rely on Mashatile to teach him the ropes and introduce him to the regions and branches. ANC members in the province say that has created the strong bond between the two.

‘Shilowa relied on him to stabilise the province,” they say.

His relationship with Shilowa ensured that even after he lost the race for deputy ANC chairperson against Motshekga in 2004, it did not diminish his influence.

Besides Shilowa, Mashatile is said to have set up many people in business who now remain loyal to him. Although his personal wealth is not known, Mashatile is regarded as a key fundraiser for the ANC and is connected in the private sector.

In the provincial government, Mashatile plays a vital role in strategic projects such as the multibillion-rand Gautrain and the Blue IQ.

The departure of former provincial finance minister Jabu Moleketi to national government in 2004 has also cleared his way and increased his chances of becoming the premier.

Mashatile is best known for surrounding himself with homeboys from Alexandra. At least two heads of bodies that report to him as provincial minister of economic affairs are part of what is informally called the Alex mafia. They are Mike Maile, the head of the Gauteng Shared Services Centre and Keith Khoza, his former adviser and now head of the Gauteng Economic Development Agency.

Mashatile’s responds

From time to time the office of the MEC [provincial minister] receives requests from students requiring financial assistance to pursue their studies. The MEC would then refer these requests to business people who can assist these students.

Tshepo [Ncube] was one of the many students that the MEC referred to various business people for assistance. It is a matter of public record that MEC Mashatile has facilitated funding for a number of students from previously disadvantaged backgrounds.

Donovan Nadison has not done work for any of the departments that are under MEC Mashatile’s political stewardship.

With regard to the monorail project, we wish to reiterate that the project is a private sector initiative. Our involvement in it was through the Gauteng Economic Development Agency whose role is that of facilitating this massive investment into the Gauteng economy.

At no stage has MEC Mashatile appointed consultants for the monorail. Equally with Soccerex, which is driven largely by the private sector, MEC Mashatile was not involved in the awarding of any tender.

Furthermore we wish to point out that there are clear guidelines that govern the awarding of tenders. In terms of these guidelines, MECs are not required to be involved in the processes of awarding tenders.

It is against this background that we believe no conflict of interest exists on this matter.

Nadison is known to MEC Mashatile, just like many other business people that the MEC interacts with, given his responsibility as the MEC for finance and economic affairs. The two have no special relation outside their official duties.

Who is Donny Nadison?

Donny Nadison is a self confessed ‘public sector junkie”. Currently a government consultant extraordinaire, the 42-year-old Nadison’s most memorable position was his short stint as first CEO of the commercialised South African Weather Service (SAWS).

He promotes himself as a ‘turnaround strategist” and has consulted with the Gauteng provincial government on numerous projects. He also formed part of the turnaround team sent by government to the Eastern Cape.

Reared in the Eastern Cape, Nadison has a background of youth activism and is seen as close to a number of senior ANC members. Former environmental affairs minister Valli Moosa appointed him to the SAWS and Education Minister Naledi Pandor last year nominated him to serve on the board of the Eastern Cape’s Walter Sisulu University.

Nadison is currently deputy chairperson of the board.

His New Africa Youth Trust — one of a number of ‘New Africa” entities registered under his name — recently benefited from a generous R629-million BEE deal facilitated by millionaire businessman Saki Macozoma.

Profile of a politician

Paul Mashatile was born in Geraldsville, Tshwane. He became president of the Alexandra Youth Congress in 1983. During this time he was also assistant general secretary for the then Southern Transvaal branch of the United Democratic Front.

After the unbanning of the ANC and SACP in 1990 he was appointed interim secretary of the SACP in Gauteng. He also served on the interim leadership group of the ANC.

In 1991 and 1992 he was head of political education of the ANC in Gauteng and became provincial secretary of the ANC from 1992 to 1998, when he was elected deputy chairperson of the party in the province.

In 1994 he became a member of the Gauteng provincial legislature as leader of the house.

Mashatile is currently serving as a member of the ANC provincial executive committee and provincial working committee.