Public Protector Lawrence Mushwana has vindicated a Mail & Guardian exposé of the conflict of interest in the award of a multibillion rand Eskom tender to a company in which the ANC has an interest.
In February last year the M&G disclosed that, while chair of the Eskom board, former ANC Cabinet minister Valli Moosa presided over the parastatal, giving contracts worth billions to ANC funding company Chancellor House — while also serving on the ANC’s fundraising committee.
In his investigation of the issue Mushwana found:
- There was a conflict between the personal interest of Moosa in the ANC and his duty towards Eskom at the time when the board awarded a R38-billion boiler contract to the Hitachi Consortium, in which the ANC had an interest;
- Moosa failed to manage his conflict in compliance with Eskom’s conflict of interest policy and therefore acted improperly.
Mushwana found that the contract was not affected by Moosa’s improper conduct, but he recommended that business relations between public entities and political parties should be regulated by legislation.
Mushwana’s report exposes the lack of candour of both Eskom and Moosa when the M&G reported on the matter. At the time Eskom refused to say whether Moosa had declared his conflict or recused himself when the board took decision on the contracts.
According to information made available to Mushwana, Moosa chaired the meeting where the board resolved that the Medupi power station boiler contract should be awarded to the Hitachi Consortium.
It is clear that he was also aware at that stage that Chancellor House had an interest in Hitachi.
Auditing firm Deloitte & Touche had been appointed to conduct a review of the tender process. In its report, which went directly to Moosa, Deloitte stated:
”In the course of the assignment, we learnt that Chancellor House, a company allegedly owned by the African National Congress (ANC), is a shareholder of Hitachi Power Africa.”
Despite this Moosa continued to deny in correspondence with Mushwana that he had any conflict of interest.
Moosa wrote: ”At the outset I would like to point out that what is referred to as ‘public perception’ is by and large based on the perceptions of a relatively small number of journalists.
”The Mail & Guardian suggests that Chancellor House is linked to the ANC and because I serve on the National Executive Committee the awarding of the contract by Eskom to the Hitatchi consortium was improper. This does not provide a sufficient basis to support the assertion of a ‘reasonable perception’ of a conflict.”
It was only after further questioning that Moosa also confirmed the M&G report that he served on the finance committee of the ANC and was involved in fundraising.
Mushwana found: ”There can be no doubt that Mr Moosa, as a member of the NEC and its Finance Committee, owed a duty to the ANC to act in its best financial interests. Likewise, as the Chairperson of the Eskom Board of Directors, it was expected of him to act in the best financial interests of Eskom. These two interests were therefore in direct conflict at the time when the awarding of the contract to the Hitachi Consortium was considered by the Board …
”The only sensible conclusion is that Mr Moosa’s interest in the ANC could, at least, have been perceived as having affected his objectivity and discretion in making the best decision in the interests of Eskom.”
Releasing his report on Moosa, Mushwana also referred to another M&G revelation of ANC funding being linked with parastatal tenders: the Oilgate scandal involving PetroSA. His 2005 report on Oilgate exonerated PetroSA and deflected questions about the onpayment of PetroSA money to the ANC.
The M&G went to court to challenge his findings but, to date, no judgement has been delivered.
Mushwana said he had instructed his attorneys to lodge a formal complaint about the delay: ”The judgement is in many ways of particular importance and interest to both of us [the M&G and the Public Protector] and the general public at large,” said Mushwana.