LONG READ | How to capture a state: Zondo report lays bare how Guptas pulled off brazen state capture

To illustrate how state capture worked, commission chair Raymond Zondo used TNA Media and the removal of Themba Maseko from the GCIS as a prime example — and former president Jacob Zuma's hand loomed large amid it all.

07 January 2022 - 06:00
By Matthew Savides
Atul Gupta at his family's former compound in Saxonwold. File photo.
Image: Kevin Sutherland Atul Gupta at his family's former compound in Saxonwold. File photo.

If you’re going to successfully pull off widespread state capture, it is key having the right people in the right places.

You will need a head of state willing to do your bidding and ensure the removal of those who resist your schemes, pulling strings and calling in favours to have them replaced by others who will.

The outcome? Brazen looting of state funds.

And this is exactly what the Gupta family did, according to part one of the state capture commission report which inquiry chair acting chief justice Raymond Zondo released to President Cyril Ramaphosa on Tuesday afternoon.

The report, using the example of Gupta-owned media company TNA Media, paints a picture of the methods used to give rise to what former public protector Thuli Madonsela coined state capture.

“TNA serves as an example of the way in which state capture took hold in SA. It shows the extent of the Guptas’ influence in the public sector in SA as well as the Guptas’ strategy to replace officials that were not compliant with their looting scheme,” the report reads.

“Government departments and state-owned enterprises used scarce public resources to secure advertising in or sponsorships with TNA that defied logic and legal requirements. It is undeniable that numerous public entities were used to siphon public funds to the Gupta media company and its owners.”

To pull this off, according to the report, there were three characters at play: “facilitators”, “followers” and “resistors”. The tactic, Zondo says, was to remove the resistors and replace them with either facilitators or followers.

Zondo’s definitions of characters involved in state capture:

Facilitators: “Compliant officials who followed the orders from the Guptas seemingly without question or hesitation”, unconcerned about what this would mean for the welfare of their institutions, and who “ordered their subordinates to be complicit in the facilitation” even if it meant using threats and intimidation.

Followers: “The subordinates to the facilitators who did not stand up to their superiors or speak out when there was evidence of corruption in their organisations”. Their involvement varied in the degree to which they resisted or complained about the orders they were given, but “it is evident that the project of state capture would not have thrived as it did if these key employees had not participated in the scheme by taking irrational decisions that were not in the best interests of their organisations”.

Resistors: “Key public figures were unwilling to comply” with the Gupta demands, and who were “removed from their positions and replaced, or were sought to be replaced, with ‘facilitators’”.

“Importantly, one of the defining features that has emerged in the evidence is that to divert public funds for private benefit, it was necessary to populate key institutions with people who were going to comply with orders. This might be because they were happy to receive some benefit — like being promoted to a high-status position — or because they received some overt pecuniary benefit,” the report reads.

To illustrate how this process worked, Zondo used the example of TNA Media and the removal of director-general and CEO of the Government Communication and Information System (GCIS), Themba Maseko.

Former president Jacob Zuma, Gupta brothers Atul, Ajay and Tony, late minister in the presidency Collins Chabane, Maseko’s replacement and now Zuma Foundation spokesperson Mzwanele Manyi, and a host of others feature in dozens of pages of testimony revision and findings contained in the more than 880-page report.

And, according to Zondo, Zuma’s hand loomed large on everything that went down at TNA between 2011 and 2017, including the former president’s own admission that he had spoken to the family about his desire for a new platform to be created that would be less critical of the ANC government than many others.

But Zuma’s involvement went beyond that, said Zondo.

In fact, the commission chair writes, if Zuma hadn’t conspired to remove Maseko as head of the GCIS in 2011, the Gupta family would not likely have been able to gain the state capture foothold they eventually did.

It was “highly probable”, the report states, that Zuma had phoned Chabane at the end of January 2011 regarding the removal of Maseko and his replacement with Manyi.

While Maseko was resistant to the Gupta’s approaches, said Zondo, Manyi was compliant with their requests — which ultimately lead to millions of advertising rand being funnelled to TNA.

“The removal of Mr Maseko from GCIS came at great cost to the country. Mr Maseko was one of the few government officials who was willing to stand up to the pressure exerted by the Gupta family.

“As the evidence presented before the commission over three years showed time and again, there were far too few public servants with the integrity and courage of Mr Maseko.

“Had it not been for the fact that Mr Manyi was moved in to replace Mr Maseko, the GCIS would likely have resisted the Guptas’ incessant pressure on government departments to divert their media spend to their business,” the report reads.

Maseko told TimesLIVE on Wednesday that he hadn’t yet been able to read the report.

He did, however, on Twitter, thank two people who had praised him after reading Zondo’s praise.

Manyi took to Twitter to describe the Zondo report as being “very malicious on me”.

“I get called names like enabler but zero evidence to justify such a slur. Zondo report says GCIS under my leadership enabled state capture but does not corroborate the wild and irresponsible assertions with even an ounce of evidence,” he tweeted.

In Zondo’s report, praise is heaped on Maseko — amid the stinging criticism of Zuma and Manyi.

“Mr Maseko proved himself to be one of the foremost resistors of state capture. He stood up to the efforts of the Guptas, backed by the then president Zuma, to extract unjustified amounts from the public purse. He was summarily removed from his important position for his act of opposition.

“Had he remained in his position, it is unthinkable that he would have approved the payment of millions of rand of public money on a media business with no verified readership and no credible circulation figures simply because a family with close ties to the then president demanded that he do so,” the report reads.

The report states that Maseko twice rebuffed the Gupta’s efforts to get him to spend the GCIS’s about R600m budget exclusively with TNA.

As a result, Ajay Gupta said that he would report Maseko to his bosses and ensure he was removed and replaced with someone who would do their bidding — something that Zondo says ultimately happened in the appointment of Manyi.

“On the evidence heard by the commission there is absolutely no doubt that president Zuma did, indeed, instruct minister Chabane to fire Mr Themba Maseko or move him from his position as DG and CEO of GCIS. There is also no doubt that in giving this instruction, president Zuma was giving effect to the wishes of the Guptas or was complying with their request or instruction to him to remove Mr Maseko because he had refused to co-operate with them,” the report reads.

The rest, as the cliché goes, is history — with this decision opening up the channels for the Gupta family to secure millions in government spending through their media company.

But what, exactly, was Zuma’s role?

According to Zondo, Zuma admitted that he and the Guptas were friends and that the former president “had an interest in the success” of the family’s media business.

He added that the commission heard evidence that Zuma “could do terrible things to give effect to the wishes of the Guptas”.

“A few examples will suffice to make the point. He fired [finance] minister Nhlanhla Nene because minister Nene was not co-operating with the Guptas and they wanted Mr Nene fired. President Zuma got himself involved in the suspension of executives in Eskom which led to the removal of three of them and they were replaced by Gupta associates. Furthermore, he refused to fill the position of group CEO of Transnet for over two years because he wanted Mr Siyabonga Gama for that position and there is evidence heard by the commission of a connection between Mr Gama and the Guptas.

“The fact that president Zuma was prepared to replace Mr Maseko with Mr Mzwanele Manyi as the DG or CEO of GCIS also shows how Mr Zuma operated,” Zondo writes.

And that, the acting chief justice says, is how state capture works.