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Nhlanhla Nene: The minister who refused to sign

Jacob Zuma was furious that he had nothing to show Putin on the nuclear deal and even angrier when Nene refused to sign a hastily written agreement

07 October 2018 - 00:03 By NADINE DREYER

The venue for the Zondo inquiry into the capture of the South African state gives few clues to the unfolding drama within.
The grey walls and rows of conference chairs in the cavernous space could equally have been the stage for a seminar on corporate sales tactics.
Instead, the dramatic story of pillage on a grand scale is being meticulously pieced together through the testimony of various players.
Venues for a calling to account rarely give an inkling of the magnitude of the revelations unfolding within.
Courtroom 600 in Nuremberg, where the surviving monsters of the Nazi high command were brought to trial after World War 2, is still a working court seven decades later. Wooden benches and heavy curtains give no hint of its role in prosecuting war criminals.
This week finance minister Nhlanhla Nene became the first sitting minister to testify to the commission, chaired by deputy chief justice Raymond Zondo.
The search for the truth is precise, detailed, catalogued. Two lever-arch files handed in by Nene are labelled K1a (the thick one) and K1b.
Before getting to the essence of his testimony the minister indicates for the record where words need to be inserted or corrected on his submission. A parliamentary question is corrected. (It wasn't a question, it was a letter.) Throughout Nene's appearance the deputy chief justice's low growl interjects when seeking clarity on a point.
Nene is of course the man who was dramatically fired by Zuma on December 9 2015 after barely more than 18 months into the job. He returned to the portfolio this year as part of Cyril Ramaphosa's administration.
Zuma replaced Nene with court jester Des van Rooyen, the "Weekend Special" who had spent seven consecutive days at the Gupta's Saxonwold compound before warming the finance minister's seat for little more than a long weekend.
It's become almost a tradition for commentators to mention the mad emperor Caligula's ambition to appoint his beloved horse Incitatus as consul when assessing wildly inappropriate political appointments. Van Rooyen's tenure was barely longer than it would have taken Incitatus to gobble down a bucket of oats.
The anger at the Van Rooyen appointment was so seismic that for once the emperor resident at Mahlamba Ndlopfu was compelled to put the interests of South Africans before the playing of his own fiddle. Zuma was forced to replace Van Rooyen only four days later with the unimpeachable Pravin Gordhan.
Having said that, Van Rooyen wasted no time in doing the Gupta bidding during those four days. He arrived at the Treasury with two Gupta attack dogs and, according to media reports, had managed to feed intelligence to the brothers within a few hours. This is a terrifying glimpse into how relentless and focused the mission to hijack the state coffers could be.
Nene under oath was a model of understatement. He could have been forgiven if he had exuded a smug sense of righteousness at his return to the Treasury, but this is not his style.
Nene had first been appointed minister on May 25 2014 after serving as deputy under both Trevor Manuel and Pravin Gordhan.
Although there are multiple reasons for his fall from grace, including his inevitable battles with SAA CEO Dudu Myeni, it's clear he believes his opposition to Zuma's nuclear ambitions and its infinite potential for self-enrichment was the main reason for his unceremonious axing.
Let's just emphasise that the 9,600MW nuclear build programme would have cost the country gazillions and gazillions. Does anybody even know how many noughts there are in a trillion rands? The opportunity for state looting would have been infinite.
As the Treasury kept the key to the state coffers, the finance minister would be consulted on all major government projects. Unsurprisingly, he earned the nickname Mr No among fellow cabinet ministers for reining in spending. Unsurprisingly, he also faced intense pressure to endorse projects.
As the final bulwark against corruption, the finance minister needs the full support of the president to maintain Treasury credibility. (That's unless the president is corrupt, of course.)
In June 2015 the president made serious allegations about the Treasury to his finance minister.
Nene was with his director-general when his PA interrupted their meeting. The president wanted to see him immediately. (He joked to his colleague that he was about to be fired.)
The president was hosting a Malaysian official and their discussions surrounded a potential deal involving PetroSA. The details are not relevant to this narrative except that the question of government guarantees was raised. At some point during their discussions Zuma commented that the Treasury was run by apartheid spies.
"It was clear Treasury did not enjoy Zuma's support," Nene told the commission with that characteristic understatement.
About a month later, in July 2015, a colleague forwarded a sinister document titled Project Spider Web to Nene. The bizarre report claimed the Treasury had been captured by apartheid state agents and white monopoly capital. Maria Ramos was named as one of the handlers, operating under the pseudonym "Queen of Leaves". (An allegation even those severely lacking in grey matter could not possibly fall for.)
Concerned at the damage this smear campaign could inflict on the Treasury, Nene passed on the report to the department of state security, then headed by David Mahlobo, a water scientist by profession. (Don't ask.)
To this day the origins of the document are unknown. Nene never got any feedback after forwarding Project Spider Web to Mahlobo and his spooks.
Nene was asked to explain his relationship with the Gupta family. He first encountered the brothers from Saharanpur at a dinner after the state of the nation address in 2010. They were "sitting at the high table".
By invitation he visited the Sahara computer headquarters in Midrand and was struck by repeated assurances that the Guptas were "good corporate citizens". Also that they did not do business with the government. Nene remarked that it was strange that they kept responding to a question that was not being asked.
Nene would get a call from Ajay Gupta to come around and "discuss the economy" and he would pass by the Saxonwold compound if he was free.
Although questions were being asked about the Gupta influence in the media, there were no signs of anything untoward as far as the minister could see.
That started to change in 2013. Duduzane Zuma's presence on one visit to Saxonwold confirmed the family's relationship with the president.
Warning lights started flashing when the Treasury started investigating charges of fraud and corruption amounting to millions at the Estina dairy farm and involving Gupta associates. Nene declined an invitation to the infamous Gupta wedding at Sun City as he felt it would be inappropriate.
Zuma's nuclear ambitions go back to 2011 when the preliminaries were put in place for SA to acquire nuclear energy. The first plant was projected to go online in 2023. Zuma himself took an active role in cabinet subcommittees investigating the nitty-gritty.
Fast-forward to June 2015 when the cabinet ordered a joint report from the departments of finance and energy.
The Treasury had calculated that the costs were staggering. The scale of the Zuma government's nuclear ambitions would entail one of the largest public-sector investments in any country worldwide. Ever.
Future South Africans could be burdened with debt for generations. It would also eat away money allocated for the poor.
The Treasury proposed a phased approach with ongoing checks to reassess and potentially halt runaway costs.
They requested input from their counterparts at the department of energy but none was forthcoming.
Just a month later Nene joined his boss and other ministers for the Brics summit in Ufa, Russia, which was to take place on July 8 and 9.
At a preparatory meeting with the president and some of his other ministers in Ufa, Zuma wanted to know what progress finance and energy had made on the nuclear model. (Presumably Zuma, who apparently speaks fluent Russian, wanted something tangible to show his good pal Vladimir Putin over blinis and reminiscences of jollity behind the Iron Curtain.)
The atmosphere turned tense and hostile when Zuma learnt there was nothing to show yet. Nene explained that the energy department had at that stage not provided the necessary documentation to complete the work.
Energy minister Tina Joemat-Pettersson (under whose watch the country's strategic oil stocks were sold off) produced a letter addressed to the Russians which she and Zuma wanted Nene to sign.
Nene refused. He told the commission the signature of the finance minister would see South Africans enter into a binding agreement with vast financial implications.
Asked about the mood during the meeting, Nene said Zuma was angry at the lack of progress and Joemat-Pettersson was eager to please her boss.
It was clear Zuma wanted the letter signed - no matter the consequences for the nation. The two ministers were told to go away and sort things out.
Joemat-Pettersson produced a revised document. "She really wanted to give a positive response to the president."
Nene felt this new draft was equally unacceptable and again refused to sign.
He was then treated with hostility and "as one guilty of insubordination". This rancour was particularly evident from Joemat-Pettersson, international relations minister Maite Nkoana-Mashabane and that old Zuma trooper David Mahlobo. They failed to grasp the implications of signing the letter - if indeed they even cared.
Will historians chronicling the story of state capture in years to come regard this single act of refusal as the one that saved us from decades of penury? That the bespectacled and dapper finance minister was a hero deserving of our eternal gratitude for facing down the wrath of Zuma and his lieutenants?
What was clear was that Nene was an obstacle to Zuma's state capture project. He had to go. Two weeks after their return from Russia, Zuma summoned deputy finance minister Mcebisi Jonas and expressed his dissatisfaction with his boss.
Then, on October 26, Nene met Jonas on a balcony at the Treasury building.
"I could see that Mr Jonas was flustered. He informed me of an uncomfortable meeting he had had with Mr Ajay Gupta, Mr Fana Hlongwane and Mr Duduzane Zuma in Saxonwold. He told me that during that meeting, he was offered the position I was holding at the time, that of minister of finance."
According to both Nene and earlier testimony by Jonas, Ajay Gupta had offered the deputy finance minister R600,000 in cash immediately and a further R600m to be deposited in an offshore bank account.
It's tempting to imagine how one arrives at a figure of R600m as the price tag for a finance minister. How many condominiums could one buy with R600m in Dubai?
"Mr Jonas told me that he rejected the offer of the deposit and the cash that he was invited to take immediately."
Nene recalled telling his deputy. "Who are they to offer you the job of minister?"
On his return from Russia, Nene had acted to drive the nuclear feasibility report between finance and energy forward, as his boss had so forcefully demanded.
On December 8 2015 Zuma scheduled a nuclear meeting at 3pm with relevant cabinet members. The meeting was then moved to 4pm and when Nene arrived at 4pm he realised consultation had already taken place between Zuma and the other ministers.
Energy officials then presented their nuclear report. It omitted any input from the Treasury. This sugar-coated presentation showcased only the very best scenario.
Nene gave the exchange rate as one example of this. Figures in the energy report were calculated at a rate of R10 to the dollar. Yet on that day the rate was R14.57 to the dollar. In effect this meant the stratospheric cost of nuclear was understated by 40%. Grossly comical if it had not been so reckless.
Treasury officials raised serious concerns but Nene had reached the end of the road. "I had expended all my fighting power."
After the meeting the Treasury team went to the Sheraton for coffee, gobsmacked by the magnitude of what had just happened. Media reports started surfacing that Nene would be fired and replaced by Van Rooyen.
The next day the last cabinet meeting of the year started at 8.30am.
Cabinet meetings are top secret and we know some detail of the meeting only because the commission applied to get the minutes declassified.
Nene told the commission that despite its gross flaws the nuclear report presented the day before by the department of energy was approved by the cabinet subject to some alterations. (Yet when media reports surfaced a few days later that the cabinet had secretly approved the start of the nuclear procurement programme during that meeting, this was denied.)
After the cabinet meeting ended at 5.30pm Nene was on his way home when he received a call that the president wanted to see him.
Nene had earlier told the Zondo commission that he had always been aware that his was not a five-year job, but a 24-hour job in which the incumbent served at the pleasure of the president.
Shortly after 6pm Zuma told his finance minister that the ANC's top six had decided he should be deployed to the Brics bank and that Zuma would be making an announcement about Nene's successor shortly.
Nene thanked the president for allowing him to serve in his cabinet and they shook hands.
The biggest obstacle to state capture had been eliminated in a meeting lasting no longer than two to three minutes...

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