Craig McKune and Sam Sole
Picture: Naledi Pandor – David Harrison
Another state-owned entity is going down the rabbit hole. This time it’s the Council for Scientific and Industrial Research (CSIR), where long-serving chief executive Sibusiso Sibisi can’t decide if he is Lewis Carroll’s Alice or Franz Kafka’s Josef K, but either way he wants out. And Sibisi has delivered a devastating parting shot, effectively accusing science and technology minister Naledi Pandor and director general Phil Mjwara of trying to “capture” the CSIR and meddling in a R116-million tender, allegedly at the behest of ANC treasurer general Zweli Mkhize.
“Dear Colleagues,” wrote a distressed chief executive Sibusiso Sibisi in a five-page letter to his staff at the CSIR last week. “Regrettably, all is not well.”
“The past few months have been so surreal that I initially felt like I had been thrust into Lewis Carroll’s Alice’s Adventures in Wonderland, but it rapidly became clear that the reality is considerably more unsettling than the eccentric but charming world of Wonderland,” Sibisi wrote.
“A more fitting metaphor is to be found in Franz Kafka’s masterpiece, The Trial, in which the protagonist Josef K, a staid chief financial officer of a bank, finds himself arrested and tried for a crime that is never revealed to him.”
Announcing that he would step down this September after 15 years in the job, Sibisi’s remarkable letter mainly deals with his unhappiness over an investigation by minister Pandor into “alleged maladministration and corruption” at his CSIR – allegations that curiously have never been revealed to him.
But curiouser still, as Alice might have said, is an account by Sibisi of how director general Mjwara allegedly leaned on him by “conveying concerns” of “named sources” that the CSIR was not awarding a R116-million supercomputer tender to “a named provider”.
Sibisi refused to say, but amaBhungane has established he was referring to Pandor and ANC chief fundraiser Mkhize. He did later confirm the “named provider” to be Chinese multinational Huawei Technologies.
“I also want to reject the notion that I tried to put pressure on anyone to sway a tender in one way or the other.”
In response to questions, Pandor said: “I categorically refute any suggestion of undue influence and have never sought to direct contracting in my department nor in any of the entities I oversee.”
Mjwara flip-flopped before conceding that he phoned Sibisi about the tender. But he added: “I also want to reject the notion that I tried to put pressure on anyone to sway a tender in one way or the other.”
AmaBhungane tried repeatedly over seven days but could not get a response from Mkhize or his lawyer.
Huawei denied any knowledge of the alleged interventions.
Sibisi’s story begins in September 2014, when the CSIR issued a tender for the provision of a high performance computing hardware platform: a very fast computer.
At the time, the CSIR already had a supercomputer at its Centre for High Performance Computing in Cape Town. This was a 64.44 teraflop machine that could process 64.44-trillion floating point operations per second, or “flops”. The fastest computer in Africa, it was used by private, state and academic researchers to run complex models and crunch huge amounts of data. But demand had increased and the centre sought to upgrade to a 15-times faster petaflop machine, one that could process 1 000 teraflops.
“merely conveying a concern from named sources”
The CSIR’s bid committee evaluated eight bids, two of which relied on a Huawei-based system, and proposed a winner in November 2014.
But according to CSIR documents seen by amaBhungane, CSIR executives then sought the advice of international experts and lawyers who found that none of the bidders had met elimination criteria and none of the offers was therefore acceptable. The CSIR was advised that it is entitled or “even bound” to cancel the tender, which it did, and bidders were promptly advised of this in a letter on May 5 2015. The CSIR refused to name the would-be winner.
That Saturday Sibisi received a phone call from science and technology director general (DG) Mjwara who wished to discuss the tender, Sibisi told amaBhungane.
As reported in the letter to staff: “[Mjwara] was at pains to point out that he was merely conveying a concern from named sources that it appeared that the CSIR was not going to award the tender to a named provider.”
Sibisi told amaBhungane: “The DG mentioned the name Huawei.”
He refused to name the “sources”, but amaBhungane was separately told by a person with knowledge: “Mjwara told Sibisi that the minister had been asked by ANC treasurer-general Zweli Mkhize to find out from the CEO why the tender was not awarded in a particular way.”
In an interview with amaBhungane, Mjwara said: “I got a call from someone wanting to know information about a tender process, which the CSIR was running. I referred the person to the CEO of the CSIR. End of the story; that’s all we did.”
Asked if he was concerned that Pandor and Mkhize were asking for information about the tender, he said: “Why should I be concerned if they are asking about this process?” But he then refused to specifically confirm or deny that the query had come from Pandor and Mkhize: “I think you should ask Dr Sibisi.”
Mjwara backtracked a few days later when amaBhungane confronted him with new information that he had not simply told his enquirer to call the CSIR but had directly phoned Sibisi himself.
He said: “When I said I referred the said person to the CEO, I mean any requests for tender issues in our public entities are not part of my accountability as a DG. I phoned him to alert the CEO that there is a request for information whose detail I can’t respond to but am happy to refer the person to him for issues raised as I am in no position to respond to requests on tenders from our entities.”
“The DG was reluctant to accept the box…”
Either way, Sibisi was affronted. In his letter to staff, he said: “I pointed out to the DG that his department is where the first line of defence against undue influence ought to reside. It is thus a profound irony that he should find himself acting as a dutiful messenger to convey thinly veiled attempts to subvert our internal procurement processes.”
He wrote: “There appears to be lack of recognition that the checks and balances of good governance at the CSIR are so robust that even if I wanted to sway a procurement process, I really would not be able to. That is the true nature of power. For you to have it, paradoxically you must first give it away. … Those who would capture the CSIR would be doing so at the peril of presiding over institutional demise.”
Holding his line, Sibisi told amaBhungane that in the week following Mjwara’s call, on May 15 2015, he visited Mjwara in his office and delivered a box full of procurement documents so that the DG could see for himself how and why the tender had been cancelled.
Sibisi said: “The DG was reluctant to accept the box, suggesting that, as messenger, he was not the appropriate person to receive it and that we should rather take the box to the minister.” But Sibisi said he left the box there and departed.
Later in 2015, the supercomputer contract was awarded to Eclipse Holdings, which used Dell Technology. Emphasising his faith in CSIR processes, Sibisi told his staff: “The provider was not the one that came up in the conversation with the DG.”
Why Mkhize and Pandor might have been interested in the success of a Huawei bid is not clear.
“Huawei abides by ethical business practices…”
In South Africa, Huawei Technology Africa’s 31% BEE partner is Nulane Investments 88. Nulane’s board is populated by influential figures. One is Yusuf Surtee, once well known as an ANC fund raiser and a confidante of Nelson Mandela.
Another is Sello Paulos Mahlangu who, in 1994, was appointed to head a committee to manage the “rationalisation, change and amalgamation” of the police and defence agencies in South Africa, according to an online profile.
Huawei itself might be of specific interest to Mkhize, given the ANC’s apparent strategic alliance with China.
But Huawei spokesperson Portia Mvubu told amaBhungane the company was not aware of Sibisi’s allegations: “Huawei abides by ethical business practices, conforms to applicable international conventions as well as laws and regulations of local countries where it operates and operates with integrity.”
And Nulane director Lester Peteni said: “To my knowledge there was no attempt by any of the directors or employees of Nulane to approach the minister or any person regarding this bid or any other bid.”
If in May 2015, Sibisi felt like Alice drowning in a pool of tears, the waters rose for him in February 2016 when minister Pandor wrote to CSIR chairperson Thokozani Majozi. She said she had received allegations from a CSIR employee of “alleged maladministration and corruption at various levels within the CSIR” that she would investigate.
AmaBhungane has seen much of the correspondence that followed in which minister Pandor reveals the source of the allegations to have been a CSIR employee who was on suspension at the time and was ultimately fired. According to Sibisi’s letter, she was fired for misrepresenting her CV in order to secure an executive position.
“A complete lack of objectivity”
A fortnight after the minister’s first letter, Sibisi told amaBhungane, he met with Pandor and described how he had been “prevailed upon” by Mjwara in respect of the tender. A few weeks later, Pandor wrote back to the chair to say she had appointed a firm called Open Water Risk Solutions to investigate the allegations.
Headed by former ANC and later South African government spy Ricky Nkondo, Open Water styles itself as a corporate risk management firm. Its engagement with the CSIR is being led by its forensic accountant Peet Pieterse, whose earlier work was reportedly torn apart by an East London judge.
That was in 2005. According to media reports at the time, Pieterse’s forensic report was the basis of a fraud case against three former Eastern Cape Development Corporation executives, including now deputy finance minister Mcebisi Jonas. Judge Dayalin Chetty found that Pieterse’s report demonstrated “a complete lack of objectivity” and was based on an “erroneous interpretation of the applicable legislation” and other inaccuracies. The executives, widely believed to have been the victims of a witch hunt, were acquitted.
In his letter to staff, Sibisi stops short of accusing Pandor of targeting him for his recalcitrance, but within days of her appointing Open Water, he politely handed in his notice to chairperson Majozi, saying: “I would like to indicate that, after 14 years and 9 months on the trot, I intend to take a much overdue sabbatical to rest and consider new opportunities.”
Chief among Sibisi’s concerns is that Open Water refused to detail exactly what accusations had been made. After first agreeing to provide the CSIR with written questions, Pieterse backtracked saying he had consulted with “my principal” and “that the department takes a dim view on the arrangement to obtain the required information by means of correspondence”.
“‘Curiouser and curiouser’, young Alice might cheerily have declared, but Josef K would have had good reason to be considerably more sombre,” Sibisi told his staff.
Faced with serious allegations and a “refusal by any of the parties to reveal the details of the alleged misconduct”, Sibisi told staff that he appointed lawyer Tebogo Malatji to assist the CSIR. This, he said, caused “untold consternation. How can we appoint an external lawyer when we have been instructed to accede to individual interrogation by the minister’s external consultant?”
He said: “The Malatji appointment drew the director general, Dr Phil Mjwara, into the fray. The DG, who pleaded lack of familiarity with the issues having reportedly been sketchily briefed by the departmental legal adviser, nonetheless prevailed upon me to withdraw Mr Malatji’s services. I demurred – politely, I like to believe, but emphatically.”
He added: “I am deeply saddened that matters have come to such a dramatically sorry pass between the minister and the CSIR and I am dumbfounded by it all – in particular, the apparent belief that a right to legal representation in the institutional interest can be curtailed by ministerial decree. It raises a fundamental divergence of views regarding the relationship between authority and power.”
Asked to respond, Pandor told amaBhungane: “My office received a protected disclosure from an employee of the CSIR and proceeded to initiate an investigation as is required by legislation. Thus far, the investigation has not been able to proceed due to areas of disagreement as to approach despite assurance of support and assistance by the chair of the CSIR board.
“The comments said to refer to me as a ‘named source’ occur in this context only… I have also never acted for any third party as suggested by the scurrilous letter of the CEO of the CSIR.”
Concluding his letter, Sibisi told his staffers: “I will personally be moving on in three months when my third contract comes to an end. I do not doubt that I will leave behind a resilient organisation that will survive the necessarily transient turbulent times and recapture the quiescence that is essential to ensure that the CSIR does indeed deliver ‘Our Future Through Science’. All the best to you all, Sibusiso Sibisi.”