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Smith flounders as Zondo asks why he did not sound the alarm on Bosasa

Former senior ANC MP Vincent Smith fumbled awkwardly for a response at the state capture inquiry on Monday when Deputy Chief Justice Raymond Zondo asked why, under his leadership, parliament’s portfolio committee on correctional services did not warn the department against further dealings with Bosasa despite knowing that prima facie evidence was found of corruption in contracts.

“Chair, I want to be careful,” Smith said. “I am not sure that we might have said it outrightly, but I do believe that the entire committee, including all the members, would have relayed that sentiment both to the department and to the minister. But I don’t recall us saying upfront to the department, ‘what are you doing with that particular service provider?’” 

In hindsight, the committee should perhaps have fired off a blunt warning, he said.

Zondo said it was beyond his comprehension that Smith remained silent after the Special Investigating Unit (SIU) had presented the committee with “horrific stories of corruption” relating to the department’s existing deals with the company in November 2009.

The report flagged bid-rigging and improper relationships between departmental officials and the company and had been handed to the National Prosecuting Authority to decide on instituting criminal charges.

Despite being privy to this information, Smith did not intervene as the department extended contracts with the company for prison nutrition and in the end “before, during and after your time”, Bosasa benefited from contracts worth R7-billion.

Even in its legacy report in 2014, Smith’s committee did not sound the alarm or react to the real the evidence it had heard years earlier.

“It is one of those things that are difficult for me to understand,” Zondo said. “I think from what I have heard Bosasa would have begun to do business with the correctional services not later than 2007 … and if I recall, correctly they only stopped after this commission had started and Mr Agrizzi had spilt the beans. Only then did the government start doing something to stop this business. How is it possible?” 

Smith demurred that parliament and its members had, at best, the power to persuade the executive and was not in a position to prescribe to ministers or directors general to terminate contracts or the tenure of officials suspected of wrongdoing.

Zondo suggested that the legislature had a duty if a minister were “unwilling or unable” to respond to persistent reports of corruption, including in the press at the time, to ask the president to reconsider their position in cabinet.

With hindsight, Smith said, the legislature might have taken a more assertive stance given the report it received from Willie Hofmeyr on behalf of the SIU. But he added that he believed it was also not the committee’s place to interfere in an ongoing probe.

Evidence leader Alec Freund put it to Smith that his inaction was “culpable” and recalled that according to Agrizzi it was no accident, but the result of bribes paid to him by Bosasa. Smith, who faces fraud and corruption charges alongside Agrizzi for allegedly taking payments of R870 000 from the company, vehemently denied this contention.

Zondo patiently asked if Smith could explain what exactly his committee had done to act on the information at its disposal, in case the commission had missed anything. 

Smith conceded that he could not recall the committee taking any particular action.

“I am not sure that there was anything physically or consciously we did other than raise it in the debates or interaction with the minister.”

Smith served as an ANC MP for 20 years and is the second MP to face criminal charges relating to state capture. The commission has more than a week been hearing evidence of how a weak parliament became an accomplice to the rent-seeking that robbed the state of billions of rands, primarily during the Zuma administration.

Zondo said last week he would have to consider whether the ANC had stopped its MPs from honouring their constitutional obligation to hold the executive to account.

The party is set to make representations to the commission in this regard. Earlier on Monday, the former chairwoman of the portfolio committee on transport flatly told the commission that all ANC MPs considered their primary obligation was to uphold the party’s manifesto.

Dikeledi Magadzi explained why she did not support a motion to establish an ad hoc inquiry into state capture. 

“I am not in parliament as myself; I am representing the African National Congress, and that will ensure that every time I toe the party line and that is what I did. The ANC said we are not going to support that motion … when the party said this is the route we are going to take you cannot deviate from the route the party has said you must follow.”

She added that she would, with hindsight, take the same decision today, out of loyalty to the ANC.

Zondo questioned Magadzi at length about why the transport committee failed to act on reports in 2016 that the Gupta family had sought to manipulate a R51-billion tender for new locomotives for the Passenger Rail Agency of South Africa (Prasa) and demanded representation on the board of the troubled entity. 

She replied that the committee deemed it “not opportune” to heed an opposition proposal to call the Gupta brothers to appear before it.

“Chairperson, I don’t necessarily have an answer as to why we did not call the Gupta brothers but let me indicate that our discussion in the committee led us to a situation where we did not call the Gupta brothers.”

Magadzi repeatedly said that during her tenure the committee had found itself helpless to halt runaway irregular expenditure at Prasa. It increased from about R100-million in 2013 to R24.2-billion four years later.

It noted its concern in budget review reports and appealed to successive Prasa boards and transport ministers, but to no avail, she added.

“Chairperson, we were very much aware of the irregular, wasteful expenditure, which was uncontrollable. We would engage with the chairperson and the minister … You can only do your bit,” she said.

Zondo said he was shocked to read from then auditor general Kimi Makwetu’s reports that Prasa’s losses mounted from about half a billion in 2014-15 to R15.3-billion in 2015-16, and then to R20.3-billion and R24.2-billion respectively in the two following years.

“So it is like all the people who were supposed to exercise oversight, they don’t care about this trend, and yet it is a trend that should shock them, that should make them want to do something they have never done before, on the basis that this cannot happen under our watch,” he said.

Magadzi conceded: “Probably in hindsight, I would say the committee should have done something, but we decided to say for us, this is something we cannot do.”

She defended her opposition to calls for a parliamentary inquiry into Prasa by saying the transport did not have the time because it had three bills to process and could not neglect its duty in that regard.

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