Corruption Watch has released its latest statement sharing findings of the first report released by the Zondo Commission of Inquiry into State Capture, which identifies the key players who Judge Raymond Zondo believes were embroiled in what he termed a “mastery of undue influence” at State-owned enterprises (SOEs).
Corruption Watch this time turned its focus to former Public Enterprises Minister Malusi Gigaba, who is alleged to have interfered in Eskom’s business dealings with Gupta-owned TNA Media, despite many protestations to the contrary, when SOEs were under his watch between 2010 and 2014.
Corruption Watch says the Zondo Commission report, the first part of which was released last week, highlights the major procurement policy breaches surrounding three contracts entered into between the power utility and TNA, and how they did not yield benefits for Eskom, despite being characterised as opportunities for exposure by TNA briefings.
The organisation continues that during the terms of former Eskom CEOs Brian Dames and Colin Matjila (as acting CEO) – between 2012 and 2014 – Eskom spent millions in sponsorship on the breakfast briefings, despite the proper processes for such not being followed.
The proposal for one such contract – controversially approved for R43-million supposedly to seek exposure for Eskom’s 49M programme – was aimed at creating awareness among higher living standards measure consumers of their energy use. This despite substantial pushback both internally, as well as from Parliament.
Corruption Watch quotes Zondo as stating that Matjila was the key facilitator at Eskom and that he approved the largest sponsorship contract with TNA that the utility had ever entered into. This was despite not having the authority to enter into a contract of this size and at a time when there was no evidence of any value to be derived from the services offered by TNA, writes Zondo in the report.
MORE TNA DEALINGS
Zondo’s report also singles out the conduct of Chose Choeu, Eskom’s divisional executive for corporate affairs, as a key player in the dealings with TNA, noting that, in his testimony before the commission, he always attributed the motivation behind his decisions to pressure from either CEO as well as Gigaba.
Zondo concluded that Choeu did not act in Eskom’s best interests in facilitating the contracts with TNA. Eskom’s head of strategic marketing Pieter Pretorius is also quoted as a key witness for helping the commission to fill the gaps of what happened in this period.
The genesis for the first contract was an August 2011 meeting between Choeu, Dames, Atul Gupta and TNA representative Jacques Roux. It was TNA’s first pitch to Eskom and, in that conversation, it is claimed Dames agreed that he would support TNA and made a commitment to do so.
“Without following the usual process, Dames simply committed himself to contracting with TNA on behalf of Eskom.” Dames has never testified before the commission, adds Zondo in the report.
The first contract was concluded the following year, in April, for advertising in the New Age newspaper at a cost of R4-million, and sponsorship of six breakfast briefings at a total cost of just over R7-million.
The second contract, which followed months later in November, was for an additional four business breakfasts, and was for R4-million.
In-between these contracts, and for a while after the second one, resistance grew internally towards the dealings with TNA. The Gupta family’s public profile and repeated questioning from Parliament over Eskom’s relationship with TNA did not, however, deter Matjila from entering into a third contract with TNA, this time for three years and about 36 breakfast briefings, at a significantly higher cost to Eskom of R43-million, the report states.
Choeu admitted, according to the report, to having been placed under so much pressure by Matjila that he participated in the altering of the contract to exclude an early termination clause advised by Eskom’s head of legal and compliance.
The sponsorships committee rejected the proposal for the November deal on the basis that the earlier one had yielded no benefit for the parastatal. Despite this, Matjila was persistent in securing the contract, says Corruption Watch.
“Pretorius explained that under the sponsorship policy, there had to be monitoring and evaluation of the success and effectiveness of a sponsorship before it could be entered into again, but there was no such evaluation done before the second TNA contract was concluded.
“The commission’s investigations revealed how key role-players enabled the project of State capture to take hold in these entities and thrive for a number of years, despite the existence of certain institutions designed to protect our democracy, including Parliament.
“The evidence shows that there emerged at least two categories of people within the affected entities which allowed the Guptas to secure millions of rands of public funds for themselves over a number of years. Facilitators and followers,” the Zondo report states.
The facilitators, Zondo adds, were compliant officials who followed the orders of the Guptas, seemingly without question or hesitation.
Matjila had received notices of witnesses who had implicated him in the State capture allegations, but did not respond to them. According to Zondo, the commission’s investigators also made several attempts to reach him, but were unsuccessful.