Over the Easter weekend we reported on the involvement of Noluthando Vavi, the wife of Cosatu chief Zwelinzima Vavi, in marketing pension fund administration services to union members. We also exposed an effort by the company that pays for her influence to buy the silence of a Mail & Guardian reporter.
At the time Vavi and other union leaders protested that there was no conflict of interest, insisting that pension fund trustees act independently in the interests of workers and that Mrs Vavi would have no special influence over them.
That claim conveniently ignored the fact that the trustees representing workers are all shop stewards and that unions have been vocal of late in demanding more direct influence over pension fund decisions. Vavi also glossed over the deep association between the company concerned, SA Quantum, and the union federation.
This week we reveal that Jan Mahlangu, the Cosatu official responsible for co-ordinating pensions policy and for travelling the country to talk to trustees about their investment decisions, was given an Audi worth about R350000 by SA Quantum.
We need to be very clear about this: we are not dealing here with a minor incident of corruption in an obscure corner of the union movement and the financial services industry.
Union members invest billions of rands each year in pension funds and competition for their business is fierce. Enormous fees and commissions are earned and those costs are ultimately taken out of the retirement savings of workers. Trustees are legally bound to take investment decisions on the basis of securing maximum returns for those whose interests they represent. A percentage point here lost to excessive fees, or there to poor performance by a fund manager, compounded over the working life of a fund member, can mean the difference between a relatively comfortable retirement and penury.
SA Quantum has clearly sought to build its business on the basis of political influence and corrupt payments rather than by providing the best possible return to workers. But it is only the clumsiest and most obvious influence-peddler in an industry fraught with practices that amount to theft on a massive scale.
The involvement of unions and of union officials in business — particularly investment companies — has been fraught with conflict of interest from its genesis in the 1990s and the reasons are not hard to find. Union-business links create incentives for officials that have nothing to do with serving the basic interests of members.
That is even clearer in the cases of outright corruption that we report this week. How are we to trust union calls for reform in the financial sector in circumstances where such grotesque abuses are permitted? And how can we take seriously union pronouncements on BEE and economic policy when union influence is used in this fashion?
Cosatu and its affiliates wield enormous power in our society. Union leaders are quick to label “workerist” those who argue for a focus on members’ immediate concerns rather than on the broad political landscape. We would argue that Cosatu could do with a bit more workerism if that means putting members’ needs above greed and political ambition.
Fifa must come to the party
In its history South Africa has had numerous self-proclaimed “friends” exchanging baubles and the Bible for our land, our resources and our very souls.
Fifa and its president, Sepp Blatter, have brought the religion of football to these shores in the form of the World Cup. In doing so they have also defended this country against the Afro-pessimism surrounding our ability to host this global mega-event, from which the organisation is set to make more than $3-billion. For this we have been very grateful.
We have diverted money away from more pressing infrastructural needs, like schools, libraries and hospitals, to build multibillion-rand football temples and borne the heavy cost of almost every aspect of this tournament.
The government has also signed contracts with Fifa that allow it to act above our laws — from its intransigent attitude to the merest hint of image-rights infringements to the insistence of its tour operator, Match, that hotels and bed and breakfasts maintain prices in line with those it is offering. It is a price collusion that allows Match to ensure a profit and prevent itself from being undercut.
We have also allowed our anxieties and insecurities to be preyed on by Fifa. With every announcement about slow ticket sales for the World Cup, South Africans gnash their teeth and beat themselves bloody about how our high crime rate or demagogic politicians are deterring foreign tourists from coming here. We shoulder the blame for not using the internet or not having credit cards with which to buy tickets.
But, as we reveal this week, it is Fifa’s operators — Match Services AG and Match Hospitality AG, both linked to Blatter’s nephew, Philippe — who are largely responsible for poor overseas sales and the large number of tickets made available in the last sales phase, which started on April 15.
They have hogged tickets and hoped to attain maximum profits from their monopoly of those available to tour operators and for hospitality suites.
South Africa has done — and continues to do — what Fifa has asked of us to ensure a successful World Cup. But the time has arrived for us to ask what Fifa is doing.