Insight: Book extract

Jacob Zuma may have been 'a president for sale'

A 2008 trip with Jacob Zuma to an African despot infuriated Zwelinzima Vavi and Blade Nzimande but revealed the start of a pattern of state capture

09 September 2018 - 00:00 By STEPHAN HOFSTATTER


Shortly before 8am on Friday 10 October 2008, a jet took off from Lanseria Airport. On board were Zwelinzima Vavi, Blade Nzimande and the newly elected president of the ANC, Jacob Zuma. Their destination was Equatorial Guinea. The oil-rich West African country is ruled by Teodoro Obiang Nguema Mbasogo, one of the continent's most corrupt dictators. Obiang had invited Zuma to attend his country's Independence Day celebrations, which took place two days later.
The three men were a coalition of the disgruntled, rather than ideological bedfellows, united in one thing only: their opposition to president Thabo Mbeki. Vavi, the charismatic trade unionist, and Nzimande, the acerbic head of the South African Communist Party, had both decided to throw their weight behind Zuma to oust Mbeki at the ANC's elective conference in December 2007.
Vavi and Nzimande felt Mbeki had sold out the working class by adopting neoliberal economic policies that had failed the poor.
They also regarded Zuma as a victim of Mbeki's abuse of state institutions - the police, prosecuting authority and intelligence services - to settle political scores and neutralise rivals. Ironically, Zuma would use the same tactics to even more devastating effect when he took over the country.
JUST MONTHS BEFORE THE ELECTION
With just months to go before the April 2009 general elections that would propel Zuma to the highest office in the land, Vavi and Nzimande wanted some time alone with the man whom they'd helped put in power. The trip to Equatorial Guinea was an ideal opportunity to whisper a few suggestions in the ANC president's ear before he chose his cabinet. What they hadn't bargained on was a chance encounter with one of the Gupta brothers and bearing witness to a seminal moment in the future "state capture" saga.
By the time Vavi and Nzimande flew to Equatorial Guinea with Zuma, a large body of evidence already existed suggesting the newly elected ANC president was corrupt. For a start, there was the conviction in June 2005 of Zuma's former financial adviser, Schabir Shaik. During his trial, Shaik had admitted to making hundreds of small payments to Zuma totalling almost R1-million. He claimed that they were loans or gifts to his former comrade in the anti-apartheid struggle.
Prosecutors argued that Shaik was bribing Zuma to further his business interests, including with French arms and electronics maker Thomson-CSF (later renamed Thales), which had won a R2.6-billion contract from the South African Navy in 1997 to fit four new German frigates with combat suites.
Next came the dramatic raids by the Scorpions. In August 2005, the elite crime-fighting unit swooped on Zuma's home in the leafy Johannesburg suburb of Forest Town (situated a stone's throw from the now notorious Gupta compound in Saxonwold), as well as on his Nkandla homestead in rural KwaZulu-Natal, the offices of his lawyer Michael Hulley, and Shaik's home in Durban. The raids yielded 93,000 documents, apparently providing investigators with valuable evidence in their corruption investigation.
Following the raids, former KPMG investigator Johan van der Walt compiled a detailed forensic report into Zuma's financial affairs that underpinned his indictment for corruption in 2007. The report identifies 783 payments totalling R4-million that Shaik made to Zuma. He spent over R500,000 on school fees for fourteen of Zuma's children and dependants, including Duduzane and Duduzile Zuma; he took care of Zuma's car repayments and repairs, household expenses and travel and medical costs; and he regularly handed Zuma wads of cash.
Shaik's business model was simple and not uncommon. He was close to politicians with the power to decide who got awarded lucrative state contracts. A company that wanted a contract had to cut him in on the deal. Shaik would then broker bribes for the politicians or use the proceeds of his partnership to bankroll their lavish lifestyles. In Zuma's case, Shaik did both.
The Guptas would later deploy a variant of the same scheme. The family cut Zuma's son Duduzane in on government deals and, the evidence suggests, used their influence with the president to ensure multinationals were awarded large contracts in return for lucrative partnerships and kickbacks.
Zuma, Nzimande and Vavi landed at Malabo Airport, Equatorial Guinea, on the afternoon of Friday 10 October 2008 and were immediately whisked off to the presidential palace eight kilometres away on the eastern side of the Bay of Malabo. The only person granted an audience with Obiang was Zuma.
The Independence Day proceedings kicked off on Sunday, but for most of the population there was little to celebrate. Thanks to its abundant oil reserves and small population of just one million people, the country boasts the highest per capita income in Africa, yet it ranks 138 out of 188 countries on the Human Development Index and is cursed with some of the worst indicators in the world for health, nutrition and education.
THE COUNTRY'S WEALTH LOOTED
The reason for these disparities is that most of the country's wealth is looted year on year by a parasitic elite, especially by the family of the man with whom Vavi, Nzimande and Zuma had come to celebrate Independence Day. According to Human Rights Watch, the country earns about $4-billion a year from oil revenues but spends only $140-million on education and $92-million on health care. Eighty percent of its budget is spent on massive infrastructure projects, with most contracts awarded at inflated prices to senior officials, including Obiang and his family.
Obiang's son, Teodorin Obiang, who is vice-president, has become notorious for his playboy lifestyle, flaunting the wealth he's been accused of looting from his impoverished countrymen. Over a decade ago, French and US prosecutors charged Teodorin with money laundering, corruption and embezzlement. Since then, the authorities have confiscated his $30-million villa in Malibu, a six-storey $200-million mansion in Paris with gold-leaf bath taps and original paintings by Degas and Renoir hanging on the walls, a $120-million 76-metre yacht and nine supercars, including a Ferrari, a Porsche, a Bugatti and a Maserati, which were auctioned for $3.6-million. Teodorin also owns a R50-million mansion overlooking Fourth Beach in Clifton. In 2017, a French court found him guilty of corruption and money laundering and handed down a three-year suspended jail sentence.
In Vavi's account of the trip, he and Nzimande were at first impressed by the royal treatment they received, but the novelty soon wore off. They'd come to talk to Zuma about whom he planned to appoint to cabinet and various government posts. Instead, they found themselves sitting idly on the veranda of the presidential palace while Zuma was locked in discussions with Obiang behind closed doors. On Sunday, the monotony of their stay was broken by attending the Independence Day ceremony. They'd been told that their meeting with Zuma to discuss the future of South Africa would take place the next morning. But after breakfast they found themselves back on the veranda, twiddling their thumbs, bored and frustrated.
At 10am, to their astonishment, Duduzane Zuma and Tony Gupta, the youngest of the three Gupta brothers, waltzed in. Duduzane was twenty-six years old at the time, Tony thirty-six. They said that they'd been "doing business" in the Central African Republic and Angola. Before Vavi and Nzimande could enquire further, the youngsters were shepherded into the room where Zuma and Obiang were holding their umpteenth private discussion. They locked the door behind them and only emerged three hours later. By then it was time to fly home.
A decade later, Zwelinzima Vavi told me that both he and Blade Nzimande were incensed that "these young people were prioritised over the alliance". They'd flown halfway across the continent with Jacob Zuma but hadn't had a single discussion about the future of the country. Zuma clearly had other priorities. Even before becoming president of South Africa, he was facilitating business deals for the Guptas that his family would benefit from - a pattern of patronage that his host Obiang was well acquainted with.
"I don't know who they met in Angola or in the Central African Republic," Vavi said, "but I know that in Equatorial Guinea, the third leg of their African safari trip, they met the head of state in the presence of the ANC president. Why else would the president introduce his son and his business associate to the leader of another country?"
Even then, Zuma was "opening doors in foreign lands" to further the business interests of the Guptas, and by extension his own.
THE 'ANGOLAN MODEL'
Vavi was also perturbed that Duduzane Zuma and Tony Gupta had just been to Angola, another oil-rich country with a fabulously wealthy ruling elite and a population languishing in poverty. The ruling party, the People's Movement for the Liberation of Angola (MPLA), had fought a successful liberation war and ruled the country since 1975 but had "lost credibility", as Vavi put it, because of former president José Eduardo dos Santos's family's corrupt accumulation of wealth.
"The daughter of Dos Santos is one of the richest women in the continent and everybody knows that this is not because of her business astuteness but because of the proximity to the father," Vavi said.
It was a model that would soon be replicated back home, with Duduzane Zuma and his Gupta business associates inveigling their way into every corner of the government machinery, ultimately being awarded the cream of state contracts and mining deals.

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