The ‘spider-web’ of dodgy deals behind S. Africa ‘State capture’

South Africa’s commission of inquiry into ''State capture' corruption has provided this week the most detailed forensic accounting to date of the illicit mechanisms and money flows behind the theft of public funds amounting to many billions of dollars.

In grinding detail, an international forensic audit expert has spelt out to the State Capture Commission how the infamous ''Gupta Brothers'' – an immigrant Indian family, now at large and wanted for questioning in South Africa – used front companies and associates to cycle money back and forth between accounts in different entities’ and persons’ names in various banks, both domestic and foreign.

The idea was to make money which had been, in effect, stolen from government projects – sometimes with no work being done to earn it – impossible to trace.

Unfortunately for the Guptas and those linked to them, seized company accounts and information drawn from a mass of emails leaked in early 2017 have been joined, link by tedious link, into what seems an unbreakable chain of proof of misconduct.

In detailing the ''how'' of state capture, in just one instance, an inescapable linkage has been forged by forensic specialist Paul Holden, of Shadow World Investigations, implicating either directly, or through their oversight, high-profile figures including Ace Magashule.

Now the most powerful organisational figure in the ruling African National Congress (ANC) party, Magashule was premier of the Free State during some incidents under review by Deputy Chief Justice Raymond Zondo’s commission.

Compelling evidence

Although the process is taking days, and is slow going, what is being built up is a seemingly impenetrable body of proof which is likely to send to prison any and all shown to be connected with it.

During his 27-month long inquiry, Zondo has heard evidence ranging over many areas of concern, especially what happened in indebted and poorly managed state-owned enterprises, and who was paying bribes to whom.

This week his commission has been laser-focused on one apparently ''minor'' instance where relatively small amounts were involved.

This is because, as Zondo is closing in on the end of his commission’s allotted lifespan, broad allegations of misconduct have now to be pinned down to fine and irrefutable details for prosecutors to act on.

These details involve many acts of money-laundering and fake accounting moves which are, when revealed, merely the same money being moved back and forth between accounts to create deception, as well as ''dead ends'', forensically speaking, created by usually untraceable cash movements or involving third party associates.

Between company records of the Gupta businesses, their associates and related entities, and from information gleaned from the so-called ‘Gutpaleaks’, an anonymous public dump of thousands of emails in early 2017, the forensic trail has been almost completely filled in.

The specific project focused on by Zondo this week involved the uplifting of hundreds of impoverished indigenous (black) farmers in the Free State province, the idea being floated nearly a decade ago, and green-lighted under Magashule.

The Estina Dairy Farm was meant to be both a showcase for emergent dairy farmers, as well as a training context for such farmers to learn the necessary skills to be successful.

Some US$19 million was allocated for the project, the monies coming from the public coffers controlled by the Free State provincial government of which Magashule was political head.

In the end, only about US$1.4 million was actually spent on the project.

The rest was siphoned off, as detailed by Holden.

Damning trail

Under a strap headline, one TV news channel dubbed its coverage of the Estina Dairy Farm debacle as ''Estina: Land of Milk and Money''.

For example, some Estina funding, about $2m, was used to pay for a lavish Gupta family wedding which saw a plane-load of guests flown into SA from India, their charter flight irregularly landing at Waterkloof Airforce Base – ostensibly on the nod of ‘Number One’, meaning former president Jacob Zuma – and entertained at Sun City, famed for golf tournaments, casinos and high-end vacationing.

Most of the rest ended up in Gupta pockets, sometimes via multiple obfuscating transfers, including to and from bank accounts in Dubai.

The slow going of the evidence has been heavily offset by its significance.

A damning trail has been laid out of ''where the money went'', putting some senior ANC figures in the legal firing line, but most of all, painting the Free State under Magashule as being something of a ''Wild West'' where anything went, there being other corrupt tenders and projects unveiled and under investigation.

One such involved the auditing of the poorest in Free State who were – and still are – living under asbestos-cement roofs or between asbestos-cement walls, and the planned replacement of these toxic materials.

Millions were allocated from the province’s coffers but no discernable work was done.

Adding to the mounting pressure on Zuma, Magashule and other implicated high-profile politically-connected persons in the Zuma-supporting faction within the ruling party, is the determination of Zondo to force Zuma into the witness box.

Zuma recalled

Last month Zuma walked out of the commission, where he had been due to testify for five days, eventually not testifying at all and putting himself in line for fines and jail time through contempt of the commission, which carries the powers of a high court.

Zondo’s Commission has now recalled Zuma – whose walkout has been forwarded for investigation and prosecution – for two spells, from January 18-22 and February 15-19, amounting to two full weeks on the stand.

It is considered highly likely that, like some before him implicated in state capture shenanigans, Zuma will repeatedly exercise his constitutional right to decline to incriminate himself, once in the box.

But it is clear, say sources close to the commission, that Zondo wants to make a point with the extended duration of Zuma “squirming” under close cross-examination – no-one, not even a former president, is above the law, and certainly not the person who for years oversaw extensive damage to SA’s economy through run-amok thievery of public funds.