NEWS

Corruption Watch Takes Eskom-McKinsey Battle To The U.S.

The NGO said they were going this route because local authorities were not likely to do anything.

11/09/2017 17:20 SAST | Updated 11/09/2017 17:20 SAST
Siphiwe Sibeko / Reuters
Electricity pylons are seen in front of the cooling towers at the Lethabo Thermal Power Station, an Eskom coal-burning power station near Sasolburg.

Corruption Watch has opted to report global consultancy firm, McKinsey, to authorities in the United States because they believe it is unlikely that South Africa's local criminal justice system will do anything about it.

The NGO is in the process of finalising submissions which will be made to the U.S. Justice Department to investigate McKinsey's dealings with Eskom.

Corruption Watch director David Lewis said his organisation opted for this route after alleged irregularities in the deal emerged from the leaked Gupta emails, the Budlender report and the Public Protector's State of Capture report.

"The deal between Eskom and McKinsey not only contravenes South African legislation but also US legislation, where the firm is based," he said.

"Our own criminal justice system is not likely to do anything about it."

Lewis said Corruption Watch's lawyers are "all but complete" in preparing their submissions but because they have to work with lawyers in the U.S., the process may take "longer than [he] would like".

Earlier this year, Advocate Geoff Budlender released a report implicating McKinsey in corruption. It found that Eskom had acquired their services at R1 billion per year, and McKinsey subsequently subcontracted 30 percent of those services to the Gupta-owned Trillian.

Eskom initially said Trillian was paid because they were subcontracted by McKinsey -- which were enlisted in September 2015.

But McKinsey came back fighting, saying they had never entered into a contract with Trillian because of concerns over the Gupta-linked company's ownership.