POLITICS

Billions: The Dismantling Of The Prasa Investigation

Whenever investigations into corruption seems to get too close to President Jacob Zuma and his associates, it gets short shrift.

22/03/2017 13:59 SAST | Updated 10/04/2017 12:35 SAST
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Then chairperson of the Prasa board, Popo Molefe, addresses the media about the findings of the Public Protector on September 3, 2015 in Pretoria.

On Monday, the high court in Pretoria set aside the decision by former transport minister Dipuo Peters to fire the Prasa board, and instate a new one.

ANALYSIS

By the time a special board meeting of the embattled Passenger Rail Agency of South Africa (Prasa) ended on the afternoon of Friday February 24, Collins Letsoalo was livid.

Minister of Transport Dipuo Peters had ordered him to hold the fort as acting chief executive at Prasa until a suitable and permanent appointment could be made and to "ensure that the board adheres to good corporate governance".

But his efforts had been thwarted.

The board never wanted Letsoalo as acting chief executive, they wouldn't answer to him — that's not how corporate governance works despite what Letsoalo thought — and they weren't about to be hobbled by Peters or Letsoalo's insistence that a forensic investigation into grand corruption and large-scale looting be curtailed and ended.

Letsoalo, in an affidavit, says he "disagreed" with the Werksmans payments, but, more tellingly, differed with Molefe on his approach to the Hawks.

At the board meeting board chair Popo Molefe insisted on two things that Letsoalo vehemently opposed: firstly, that the investigation, conducted by the law firm Werksmans, continue as scheduled and, secondly, that legal action be taken against the Hawks policing unit, which had neglected to act on any of the 39 complaints made to it in terms of anti-corruption law.

Letsoalo, in an affidavit, says he "disagreed" with the Werksmans payments, but, more tellingly, differed with Molefe on his approach to the Hawks.

Therein lies the rub: Letsoalo (after he was parachuted in as Peters' personal emissary) tried to stop the investigations and apparently tried to shield the Hawks from legal action. If the Hawks are forced to explain themselves in court . . . well, then the whole ball-game changes and the Hawks' collective foot-dragging with other high-profile cases might also come under the spotlight.

(According to court papers, Molefe and the board were due to start proceedings against the Hawks within days before they were fired, with affidavits already having been prepared.)

By the end of the acrimonious meeting Letsoalo's contract had been terminated, the board had signed its own political death-warrant and a train of events had been set in motion which has the potential to link President Jacob Zuma and his family directly to nefarious dealings and questionable payments at Prasa.

But Peters intervened. She recalled Letsoalo to the safe embrace of the Department of Transport (from whence he came), fired Molefe and his colleagues and installed an interim board within 72 hours. The leak had ostensibly been plugged.

And it's now as clear as mud whether the Hawks will be held accountable and if the Werksmans investigation will continue.

'Good effort, but please stop digging'

Prasa has been relieved of around R24 billion in dodgy contracts over the last couple of years, the board told Parliament last year.

"This need to be recovered," Molefe says in an affidavit.

After the parastatal's chief executive Lucky Montana left in mid-2015, both the Auditor-General (July 2015) and Public Protector (August 2015) delivered reports which confirmed and exposed massive corruption. They recommended remedial steps to hold officials to account and to recoup lost monies — something which Molefe says he and the board took seriously.

The board contracted independent lawyers Werksmans to conduct a forensic audit, assisted National Treasury with a parallel investigation and even paid for forensic auditors to assist the Hawks because they did not have enough capacity.

The money was paid to George Sabelo (Edward Zuma's business partner) and Maria de Cruz Gomes (a friend of Zuma and an "ANC fundraiser") by Swifambo Rail Leasing . . .

According to Molefe, the search for a permanent chief executive was begun as soon as Montana left, and the board forwarded a shortlist to Peters in February 2016 — only to be ignored by her.

But in January 2016, a month before the board forwarded the names to Peters, Rapport newspaper reported that investigations into Prasa uncovered payments totalling R80 million to an individual who is a business partner of Zuma's son, Edward, as well as a "friend" of the president who is allegedly also a fundraiser for the African National Congress (ANC).

The money was paid to George Sabelo (Edward Zuma's business partner) and Maria de Cruz Gomes (a friend of Zuma and an "ANC fundraiser") by Swifambo Rail Leasing after it won a multi-billion rand contract to supply Prasa with locomotives. Swifambo is the focal point of the Werksmans investigation and the subject of a civil suit due to be heard in May or June.

Sticky.

Peters never replied to Molefe's letter about the shortlist, but in June 2016 told the board she wanted Letsoalo as acting chief executive "to stabilise the organisation", an institution that had by then been functioning without a permanent chief executive for a year.

By then the forensic investigations were in highest gear: Swifambo and Siyangena Technologies — which both received tenders worth billions of rand from Prasa — were targeted in civil suits, various other companies were identified as having irregularly benefited from tenders and proceedings had begun against Prasa employees suspected of collusion.

Peters sent Molefe a stern letter, saying the board's efforts to "clean up" Prasa are "commendable" but that investigations must be "closed off".

Then, in July 2016, Molefe told the Mail&Guardian investigations have exposed "riff-raff" government leaders who have their fingers "deep in the honey pot". Suddenly Molefe's critics started creeping out of the woodwork, saying the investigation by Werksmans is "too expensive" and "without focus".

A month after the Mail&Guardian interview, in August 2016, Peters sent Molefe a stern letter, saying the board's efforts to "clean up" Prasa are "commendable" but that investigations must be "closed off".

A furious Molefe replied in a nine-page missive, clearly explaining the scope of the investigation, its legal basis, the timetable attached and what is at stake. But Peters remained unconvinced, citing the cost of the investigation and its budgetary implications as the main reasons she wanted it stopped.

According to Molefe, Peters later tried to change her tune, saying she didn't want to "halt" the investigation, as she indicated in her letter, but merely wanted it "brought to finality".

After her own efforts to can the investigations failed and Letsoalo's greed was seemingly getting the better of him, Peters was left with one option: get rid of Molefe and his cohorts.

Letsoalo, meanwhile, seemingly didn't follow the minister's explicit instructions to rein in the board and allegedly went on a crusade to inflate his salary, which brought him into direct conflict with the board. And while all this was happening, Werksmans was preparing to unravel at least part of the grand scheme in court, with the legal action against Swifambo and Siyangena, as well as Berning Ntlemeza's Hawks, looming.

Molefe says he was adamant these legal actions should go ahead and that the Hawks must be forced to act. But, after her own efforts to can the investigations failed and with Letsoalo's greed seemingly getting the better of him, Peters was left with one option: get rid of Molefe and his cohorts.

With the subsequent dissolution of the board everything is now up in the air — Werksmans has yet to receive instructions from the new board, which will also have to decide whether to proceed with the legal action against the Hawks.

To make things worse, the parliamentary portfolio committee on transport, that was frothing at the mouth to launch a full-scale investigation into Prasa's affairs under Molefe, has also since backed down, saying "there's no need for an investigation anymore".

Even Zuma, when asked in Parliament, said it's not necessary. But that's not really surprising.

The pattern always repeats itself

Prasa isn't the first state institution that's been cut off at the knees just as investigations start unearthing paydirt.

Anwa Dramat, then head of the Hawks, was suspended when he publicly acknowledged his unit had started criminal investigations into Nkandla.

Robert McBride, head of the Independent Police Investigations Directorate (Ipid), was also suspended when he didn't play ball in sidelining Dramat.

Johan Booysen, from the Hawks in KwaZulu-Natal, was criminally charged when he closed in on Robert Huang, an associate of Zuma's nephew Khulubuse, and another associate, Thoshan Panday.

And when the South African Revenue Service (Sars) started investigating Nkandla's tax affairs, illegal tobacco smuggling and Aurora mines — all cases with links to Zuma and his family — it, too, was famously gutted.

Zuma's praetorian guard of Nathi Nhleko (Minister of Police), David Mahlobo (Minister of State Security) and Shaun Abrahams (National Director of Public Prosecutions) are holding firm, with Busisiwe Mkhwebane, the new Public Protector, auditioning to join the club.

Peters has also now shown her loyalty, the only currency that counts.

Like the Hawks' subjugation, Ipid's intimidation and Sars' neutering, Prasa has now also been brought to heel.

There's one crucial difference however: the courts have been given a foot in the door. And once these infernal judges get stuck in, there's no way of telling how things might turn out.

After all, they don't owe the president anything.