Tearful Niehaus admits fraud
He has been entrusted by the ANC with the strategic job of spokesperson. But Carl Niehaus has left a broad trail of bad debt and broken promises behind him.
Confronted this week with allegations that he owed hundreds of thousands of rands to politicians and influential businessmen and committed fraud while working for the Gauteng provincial government, a tearful Niehaus admitted that he:
- Forged signatures while he was chief executive of the Gauteng Economic Development Agency (Geda) before resigning in December 2005;
- Borrowed money over a six-year period from some of the brightest stars of the ANC and business galaxy, much of which he has not paid back;
- Asked to be connected to Brett Kebble because he was ‘desperate for financial help”;
- Had to leave a top job at Deloitte and Touche in 2003 after his financial woes became embarrassing;
- Owed the Rhema Church more than R700 000 when he was asked to resign from his post as chief executive and spokesperson by a full board meeting in 2004; and
- Had to repay R24 000 to director general in the presidency Frank Chikane when he left his job there under a cloud in 2004.
But he denied allegations by his co-workers at the time that he intended to pass off the trips as work expenses. He disputed accounts that he left the presidency amid claims of financial impropriety and ran up implausible expense accounts at Deloitte.
Among those he asked for financial assistance from are Arts and Culture Minister Pallo Jordan, ANC empowerment magnates Saki Macozoma, Tokyo Sexwale and Cyril Ramaphosa, Absa chair and former deputy governor of the Reserve Bank Gill Marcus and mining tycoon Rick Menell.
When powerful friends could not rescue him from what he described as ‘the devastation of debt” he drifted into seemingly outright criminal conduct.
In 2005, after just seven months as Geda chief executive, responsible for handling millions of rands of transactions, he wrote a fraudulent letter and forged the signatures of then finance minister and now Gauteng Premier Paul Mashatile, transport minister Ignatius Jacobs, education minister and now ANC Women’s League president Angie Motshekga and agriculture minister Khabisi Mosunkutu.
The letter was intended to secure a loan for Niehaus from a businessman who hoped to use it to ensure favourable treatment from the Gauteng government on property deals.
Niehaus confessed this fraud to Mashatile, who told him to quit or face a disciplinary inquiry.
Niehaus resigned on December 9 2005.
Told this week of a long list of former employers and creditors who told the Mail & Guardian about their dealings with him, Niehaus broke down.
‘Most of what you’ve confronted me with is true. I wish it wasn’t. I’ve made massive mistakes and I’ve disappointed a lot of people terribly. I’ve no illusions that if you publish this article it will mean the end of my career,” he said, weeping.
‘I asked people like Saki Macozoma, Cyril Ramaphosa, Tokyo Sexwale, Gill Marcus, Pallo Jordan and Rick Mennell to help me financially.
‘I was down and out. Some of them gave me money and some didn’t. I am terribly indebted. I also received money from Brett Kebble,” Niehaus said.
Niehaus said he asked Macozoma to introduce him to Kebble. ‘I asked for the meeting. Saki was my friend and I asked him to help me out. I asked to be introduced to Kebble and I met him three times.
‘Kebble gave me R70 000 for communications work. He still owed me money. I’m paying R100 000 back because I can’t fight the liquidators—there was no contract, only a verbal agreement. I can’t prove anything and I don’t have the money to go to court,” he said.
Niehaus is locked in a battle with the ANC’s other spin doctor, Jesse Duarte, who is said to be extremely unhappy with the circumstances of his appointment.
Party insiders say he was headhunted for the role by ANC secretary general Gwede Mantashe, angering Duarte, the incumbent. She is understood to be reluctant to stay on after elections.
Those who have worked with Niehaus over the past 14 years and lent him cash to fund his and his former wife, Linda Thango’s, extravagant lifestyle say they are not surprised things turned sour.
Niehaus has always ‘over-promised and under-delivered”, they say.
Over the past decade he has resigned from most jobs under pressure or earlier than his contract stipulated because of debt or unhappiness with the management of his financial affairs.
Niehaus became a household name when, as an anti-apartheid activist, he was found guilty of high treason and sentenced to 15 years in jail in 1983.
He became Nelson Mandela’s spokesperson in 1994 and was then ambassador to The Netherlands.
On his return to South Africa he briefly worked at the NGO Nicro before his relationship with Mandela helped him secure a job at audit firm Deloitte and Touche in Gauteng and in The Netherlands.
While at Deloitte he was embroiled in legal action after failing to honour an offer to purchase an expensive house on Prinzen Gracht, one of Amsterdam’s most prestigious addresses. The penalty for cancellation was more than R1-million. This debt sent him into a financial tailspin.
‘I felt I had to resign because Deloitte have strong ethics around their partners—they must have their financial dealings order,” Niehaus said.
A former partner at Deloitte, who asked not to be named, said Niehaus was ‘always” in financial crisis and that the Prinzen Gracht debacle had not led to his ousting.
‘He borrowed money from partners at Deloitte. He also asked me for money but I told him I’m not a bank.
‘He once booked a helicopter to fly from Sun City to Johannesburg at huge expense. He claimed to have lost his credit cards on at least two occasions [when improper expenses appeared on the statement] and asked people to help him out [with hotel bills]. He also knew somebody in Nedbank who helped him out.
‘He insisted on a huge salary—more than others on the same level. We paid him because he promised to bring political work to the company. That didn’t materialise.”
Another source, also a partner when Niehaus worked at Deloitte, said that when Niehaus resigned the firm wrote off large sums he still owed.
Chief executive Grant Gelink said: ‘To the best of my knowledge Niehaus didn’t owe Deloitte any money when he left, but I don’t know if money was written off. I wasn’t CEO at the time.”
Niehaus denied owing the company money, adding: ‘I don’t recall ever claiming money from Nedbank because of a stolen card.”
On the Sun City helicpter flight he said he had addressed a conference at KwaMaritane and had to be in Johannesburg an hour later ‘for the launch of the strategic communications division. The CEO questioned me months later about this expense and accepted my explanation.”
He said he had borrowed money only from one Deloitte partner and had ‘paid it back in full”.
Niehaus’s financial troubles deepened when he divorced his wife and co-accused in his terrorism trail, Jansie, and married Linda Thango.
Four sources who worked closely with him after 2002 said Thango, a former non-executive director of African Media Entertainment and management consultant, was central to his extravagant lifestyle.
‘His wife wanted all the best toys: holidays, jewels, clothes, shoes and shopping, shopping, shopping. Carl got sucked into that lifestyle, loved it and lived way beyond his means,” said one of his former ANC bosses.
Others said he had always been attracted to the trappings of wealth, but that Jansie had kept a tight rein on the family finances. Niehaus himself insists that he must take responsibility.
He said: ‘I never said no [to Linda]. I thought this is the way you keep love—you buy it. I should have been firm and said: ‘No more. We can’t live like this.’ I didn’t and I fell into the devastation of debt.”
After his departure from Deloitte Niehaus was ‘rescued”, as one government official put it, in 2004 by a job in the presidency working on celebrations planned for a ‘decade of democracy”.
A top presidency official who oversaw his work said: ‘We terminated his contract early because he didn’t complete the work he was meant to do. He turned out to be inefficient. He himself felt he had to leave—there was no fight.”
The official added: ‘He took his wife to Durban and used the presidency’s money to pay for the hotel. We told him that’s unauthorised expenditure and you need to pay it back now.” Niehaus denies his contract was terminated prematurely, adding that he does not remember the Durban trip.
‘I worked there and finished my contract. I was paid a R24 000 advance, which I paid back to Frank Chikane.
‘I suppose it’s not impossible that I went to Durban during that time, because my wife’s mother lived there,” he said. After leaving the presidency in mid-2004 Niehaus was appointed Rhema Church chief executive and spokesperson.
He admitted to being asked to leave Rhema after working there for four years ‘because of a disagreement about the size of my loan with the church, among other things”.
Rhema continues to insist that he left amicably and there were no financial irregularities.
‘[Church leader] Ray McCauley organised a staff loan for me. They bought me a car and agreed to pay a large amount to [the seller of the Prinzen Gracht house].
‘The financial officer and I increased this loan a number of times and Ray was very unhappy because it was not done with his knowledge. I resigned,” Niehaus said.
Niehaus also confirmed using Rhema’s travel agent to book a holiday in Zanzibar. While employed by the church he bought himself a Porsche and a C-Class Mercedes Benz.
Rhema gave Niehaus six months to repay R700 000. Mashatile’s offer to him to head Geda was, therefore, a lifesaver—which he admits abusing.
On the fraudulent letter in which he forged the signatures of senior Gauteng government officials, he said: ‘Pierre Swart managed a company called Blue Label, which offered to lend me the money to repay the Rhema debt. I was absolutely desperate, because if I didn’t repay it I would’ve had to sell the townhouse in my wife’s name that I had given as surety.
‘But there was a hook. In exchange for the loan they wanted a letter committing various provincial ministries to favouring them when they wanted to rent, sell or lease government buildings in the Johannesburg CBD.”
Buildings sold with lease agreements in place are worth much more than empty structures, a developer told the M&G.
‘I was very desperate but what I did was terrible. After I wrote the letter and handed it over I immediately knew that I had done the worst thing in my life.
‘I went to see Mashatile. I confessed that I’m deeply compromised and he was deeply disappointed. I resigned immediately.”
Former Gauteng premier and now Congress of the People leader Mbhazima Shilowa confirmed Mashatile told him that Niehaus was asked to leave over ‘financial impropriety”.
Blue Label has major contracts with Vodacom and Telkom. The company made no comment.
Said Niehaus: ‘The ANC job is a lifesaver for me and things have gone wrong now in a terrible way. I have to be trustworthy to do my job. I live under no illusions about what this article can do to my life. I wish I could turn back the clock.”