The revenue collector says it is unable to offer its 12 479 staff any salary increase, leading Nehawu and others to announce strike action. (Delwyn Verasamy/M&G)
Bain & Company’s destructive consultancy project with the South African Revenue Service (Sars) was a gateway for a wider entanglement with the Zuma administration that went all the way to energy procurement. This is the hypothesis of Athol Williams, a former employee and consultant of the US-based consultancy firm, who took the stand at the Zondo commission on Tuesday as it delves into the undoing of Sars during Tom Moyane’s tenure as commissioner.
According to Williams, who spoke to the Mail & Guardian, Bain’s managing partner for South Africa, Vittorio Massone, held about 20 meetings with then president Jacob Zuma between 2012 and 2016.
The meetings were “very much concentrated” between 2013 and 2014.
This was the period when Moyane was being groomed by Bain for his new position as Sars commissioner and began negotiating a restructuring plan for the revenue service.
This plan included, according to Williams, “testing” key employees, such as Sars’s chief operating officer at the time, Barry Hall. It was an undertaking for which, if interpreted as a test of their competence, there was little need, and which Williams reads as being informed by a more sinister agenda.
Most troubling to Williams, he told the M&G, was the wide scope of Massone’s interactions with Zuma and that they allegedly intended establishing a presidential council or agency to implement future projects.
Williams said Massone explained in one email to colleagues that having their work with the government classified as “a presidential project” would mean that the relevant minister in a particular field could be bypassed.
Another email speaks of a special presidential delivery agency; this formed part of a file of documents labelled “ANC manifesto”. The plans ranged from restructuring the energy sector to “reshaping the South African economy”.
Williams said the reference to the manifesto pointed to the company availing itself to furthering party political objectives.
The discussions included an eventual, seemingly nonsensical merger between Telkom, the SABC, the South African Post Office and Sentech.
“On the face of it, that grouping would not make much sense, but it would entail an extraordinary concentration of infrastructure and procurement,” Williams said.
“The plans went beyond that still, towards energy procurement, including more nuclear-generation capacity, under the ambit of a presidential council that would effectively bypass other levels of the executive.”
Williams believes that this pointed to a comprehensive “capture” project, that would earn Bain consultancy fees several times over the R164-million its contract with Sars was worth.
Among those who attended the meetings, he said, were Telkom chief executive Sipho Maseko and Eskom chairperson Jabu Mabuza. He also believes that cabinet ministers were present and wants Bain to be compelled to name these.
Wiliams has worked for Bain for various periods since 1995, but was lecturing in values-based leadership at the University of Cape Town Graduate School of Business when the company approached him in 2018 to oversee an independent investigation, carried out by Baker McKenzie, into its role at Sars.
His role included reporting to the Nugent commission, between August and November 2018, on the outcome of the investigation conducted by the law firm.
“I think Bain wanted to give it a veneer of independence and truthful reporting,” he said this week ahead of his appearance at the Zondo commission.
Williams said he was not allowed full insight into the findings, and reported as much to Nugent. To this day, he has not seen the full report.
“All along the way I kept saying, ‘This is what I am finding; this is what I am seeing — you are not being truthful.’ I raised these red flags with Bain all along the way. ”
The Nugent commission found that Bain’s relationship with Sars resulted in 200 staff members being moved from their positions, the Large Business Centre closing and revenue collection capability being severely compromised. The company denied withholding information from the commission and has repaid its consultancy fee with interest.
It put down the damage wrought by its work with Sars to the result of serious errors of judgment, but Wiliams’s testimony suggests the Boston-based company lied about the extent of its actions, including to US authorities.
It approached Williams again in 2019 to serve as a consultant and drive a process of reparation for the harm the company had done to the revenue service.
He agreed, perhaps naively, in the hope of creating a model for corporate remedy.
The aim was not simply financial compensation, but a victim-based process of engaging with Sars employees whose careers were ruined to agree to a form of reparation.
“I was probably blinded a bit, because Bain was prepared to do this world-first,” Williams said.
He agreed and helped to set up an Africa board that would guide corporate governance in the company’s dealings in Africa.
But this came unstuck, and Williams believes the cause was fear in the top echelons and legal department that admitting to some of what it had done would create trouble for the company with the US department of justice.
“Bain had self-reported to the justice department in the US about the trouble they got themselves into here, and they could not deviate from that version,” he said.
Judge Robert Nugent, in his report to President Cyril Ramaphosa, recommended that criminal charges against the company be considered.
Bain had applied to the Zondo commission to have parts of Williams’s affidavit redacted, in particular those relating to its reporting to US authorities, but on Tuesday morning said although it still believed this and particular commercial information was confidential, it would no longer seek a ruling from Deputy Chief Justice Raymond Zondo on this score.
The company’s legal counsel, Alfred Cockrell, however, sought written permission from Zondo, in terms of section 11 of the Commissions Act, for the company to make public its own affidavit prepared in response to that of Williams.
The chairman interrogated why the general rule that affidavits become public once those who submit it had testified on the contents before the commission, should not apply in this instance.
He also noted that once an affidavit was submitted to the commission, it became part of the documentation that informed its inquiry into state capture.
After considering the matter during an adjournment, Zondo concluded that he saw no reason why Bain “should be treated differently to everybody else” and allowed to publish its own affidavit.
Cockrell said this would pose a difficulty for the company because Wiliams’s affidavit would become public during the course of the day, and it did not know if and when it would be able to cross-examine him.
“It does not even know when its application for leave to cross examine will be heard…. It will leave Bain & Co in an untenable position, where it is unable to respond,” he said.
The request, and hiring counsel of Cockrell’s stature, signal just how intent Bain is intent on damage control as Williams takes the stand.
Wiliams claims that the company offered him millions of rands in return for his silence when he again resigned as a consultant in August 2019.
“I think within Bain, there were two sides. I think there were those who wanted to do the right thing and those who did not and they kept tussling with each other.
“I have worked with Bain for a very long time. The people I am now accusing of state capture were my mentors,” he said.