/ 8 August 2008

The spy who fingered Mbeki

Corruption-busting ex-spy Mhleli ”Paul” Madaka was the source of the sensational claim that President Thabo Mbeki accepted R30-million from a German arms bidder, the Mail & Guardian can reveal.

Madaka died in a car accident, after speaking out, in circumstances queried by some of his friends and associates. In a grotesque twist his vehicle crashed into premises of the same German group he had accused of bribery.

Madaka claimed his information came from a National Intelligence Agency (NIA) probe into the multibillion-rand arms deal, associates say. This claim is backed up by an ‘information note” obtained by the M&G and dating from the time Madaka spoke out.

A former Umkhonto weSizwe soldier, Madaka had impeccable credentials as a government graft-buster: he was a senior member of the NIA’s anti-corruption unit before heading the investigations unit of the Public Service Commission, the constitutionally mandated custodian of good governance in the civil service.

Madaka’s death and the absence of outside corroboration means his story remains untested. Both Mbeki and Germany’s MAN Ferrostaal have denied the bribery allegation and separately indicated they are considering legal action after the Sunday Times published the claim last weekend. The paper provided no clear evidence to back its claim.
MAN Ferrostaal led the German Submarine Consortium, which successfully tendered in the late 1990s to supply the navy with three submarines at a cost of more than R6?billion.

The M&G can reveal:

  • Madaka, by then in the private sector, spoke to risk analysts early last year.
  • His allegation was included in a report on MAN Ferrostaal prepared by international risk consultancy Kroll. The report was leaked to a South African businessman in late July last year.
  • Madaka died weeks later, on August 21 last year, when his powerful Golf RS32 left the road near his Centurion home and piled into a MAN Truck & Bus yard. Ferrostaal and Truck & Bus are both subsidiaries of German industrial conglomerate MAN AG.

Researcher’s note
A private risk analyst’s information note from early last year, obtained by the M&G, records Madaka telling him that the ‘first payment” made by Ferrostaal was to ‘Mbeki personally”.

Although the note does not name Madaka — it calls him a ‘retired South African intelligence officer who was involved in an investigation into the arms deal” — the M&G has established from former associates that Madaka was the source.

The information note says Madaka claimed that both the NIA and the Scorpions had ‘proof” Mbeki received R30-million from Ferro­staal. Madaka added that when confronted by investigators, Mbeki maintained that R28-million had been passed to the ANC and the rest to Jacob Zuma, now ANC president. Madaka added that there was no proof of such on-payments.

From the context it appears Madaka was saying the investigation into the Ferrostaal payment was conducted, or at least led, by the NIA. The file ‘from the intelligence side” — as opposed to any Scorpions investigation — was complete, the note records Madaka saying. It also quotes Madaka doubting the Scorpions would go anywhere with it.

Associate’s story
A close associate of Madaka, asking not to be named, told the M&G a similar story: Madaka told him that ‘every­one knew” Mbeki took money from the Germans. ‘Paul [Madaka] told me it was in cash, which was brought back on the presidential jet.”

The associate said Madaka told him he had submitted a report on the matter to Mbeki and that he had told Mbeki not to pursue Zuma for corruption as it would ‘backfire”. Mbeki shunned Madaka after that.

Madaka was depressed, embittered and ‘terribly disillusioned” before his death, the associate said. Madaka resented the way the Mbeki administration had sidelined people, and had said: ‘We had fought to gain the country; now we are fighting each other.”

Madaka also spoke about what he thought was an attempt on his life.

Former NIA director general Vusi Mavimbela, who was close to Madaka, referred in similar terms to Madaka’s state of mind in a homily delivered at his funeral.

Extolling Madaka’s virtues as a spy, Mavimbela said: ‘We had many victories that were never toasted in the light of day … We had many good words of advice and some of them were never heeded. Mhleli, perhaps it explains some of the corrugations that our country now has to face. In turn and ironically, Mhleli, [these are] the very corrugations our country would later expect us to undo.”

Fatal accident
The essence of the risk analyst’s note was included in a 14-page report on Ferrostaal’s vulnerabilities prepared by Kroll, the risk consultancy. A copy of the report in the M&G‘s possession does not reveal Kroll’s client, but it is likely to have been commissioned by a party in a take­over battle involving MAN, Volkswagen and truck manufacturer Scania.

The Kroll report — on which the Sunday Times based its story without naming the report’s author or source — was leaked to a South African businessman known to the M&G in late July last year. Before anyone wanting to follow up on the Mbeki claim could trace Madaka as the source, he was dead.

Between 10pm and 11pm on August 21 Madaka, travelling to his Centurion home in the Golf RS32 he had only recently acquired, took the Brakfontein offramp from the N1. Where the offramp curved around the MAN Truck and Bus yard, the Golf continued on straight, smashing through the perimeter fence and mounting an embankment before falling back, upside down, on the fence.

A security guard on duty at the MAN premises at the time told the M&G he saw the final stages of the accident. He found it strange that Madaka, after taking the offramp — admittedly at high speed — could not also negotiate the gentle bend 20m or 30m further along the road. Madaka died on the scene.

The security guard has not been named for his own protection.

An inquest was opened before Pretoria magistrate NCJ Mncube, who considered the matter in May but referred it back to police, seemingly over technicalities. The papers served before Mncube contain information which, on the face of it, reveal a simple case of a drunk-driver speeding and losing control.

There is evidence Madaka had driven at 160km/h or faster at some stage before the accident. The cause of death is indicated as ‘chest injuries”. Manaka’s blood alcohol level is indicated as 0,33 grams/litre — almost seven times the legal limit.

But a number of those close to Madaka have questioned the circumstances of the accident. It is known that in the police — and Madaka knew police National Commissioner Jackie Selebi well — there have been questions about the very high alcohol level recorded.

Two sources told the M&G that Madaka had given up alcohol well before the accident, although another said a relative told him Madaka had started drinking again shortly before his death.

The security guard told the M&G he and his colleagues found no alcohol containers in the car — they had inventoried items found at the crash site as part of their duties. He also said a relative, mentioning that Madaka had collected the car after it was serviced that same day, queried whether the brakes had worked properly. The guard saw no tyre marks on the off-ramp.

The M&G was unable to confirm the claims about alcohol and the servicing of the car with the relatives concerned. Only the inquest magistrate can formally pronounce on the circumstances of Madaka’s death.

In response to the R30-­million allegation printed in the Sunday Times, the presidency released a statement: ‘The presidency would like to place it on record that President Thabo Mbeki has never at any stage received any amount of money from MAN Ferrostaal … In this regard, we recall the findings of the joint investigation into the strategic defence procurement package which found no evidence of ‘any improper or unlawful conduct by the government’.”

Government later said Mbeki was considering his legal options. Ferrostaal made similar comments to the M&G this week.

NIA spokesperson Lorna Daniels declined to answer questions, including whether Madaka had participated in a NIA probe into the arms deal; whether a report had been made to Mbeki; and whether information suggesting payment to or via Mbeki had been obtained.

Who was Madaka?
Mhleli ”Paul” Madaka was a well-connected struggle stalwart who was 47 at the time of his death a year ago.

He left South Africa in his late teens to join Umkhonto weSizwe and trained in Angola and East Germany before infiltrating South Africa. He was arrested and charged with terrorism in the former Transkei during the 1980s, but was released after the state case collapsed.

His fellow-accused in that trial included Sandile Nogxina, now director general in the Department of Minerals and Energy Affairs, with whom he remained close. His friends also included Vusi Mavimbela, with whom he studied at the University of KwaZulu-Natal in the early 1990s and who later served as director general of the National Intelligence Agency (NIA); and Gibson Njenje, forced out as NIA deputy director general by Mbeki in the same 2005 ‘hoax email” purge that cost then director general Billy Masetlha his job. Madaka was brother-in-law of the Minister of Trade and Industry, Mandisi Mphahlwa.

Madaka joined the NIA in 1995 and about three years later became a manager of the agency’s anti-corruption unit, which he is said to have co?founded.

He left for the Public Service Commission in 2000, where he headed the investigations unit until about 2005. His unit’s investigations into state corruption included one into alleged procurement and appointment irregularities at the National Prosecuting Authority.

Madaka, who was often referred to by his struggle name ‘Paul” rather than his given name Mhleli, developed business interests in sectors including mining in the final years of his life.