What lies ahead for a state so thoroughly, grubbily captured?

We need to trace the roots of the malaise, recognise the institutions that led to it being exposed, and plot a way forward for holding perpetrators to account

27 January 2019 - 00:06 By IVOR SARAKINSKY and EBRAHIM FAKIR

Apart from the fact that citizens are complicit with and captive to a compromised and craven political class, what else do the "state capture" scandals tell us about our political and governance trajectory?
For starters, much of the price inflation, bribery and corruption is traceable to and a product of the neo-liberal policy trajectory adopted at the time of SA's transition to democracy, in which an ever-increasing number of core state functions and responsibilities were outsourced and subcontracted to private providers.
The slew of privatisation and public-private partnerships was governed by less-than-effective regulatory regimes, lax enforcement and an absence of sanction for nondelivery. Apart from rampant price inflation in core government functions and service delivery, this exponentially increased the price of basic services and burdened the taxpayer with bolstering government revenues and subsiding private providers' profit maximisation.
In the post-industrial, technological age, it is to be expected that a number of government functions will be instrumentalised by private providers. But do they necessarily need to be mired in bribery and corrupt capture?
Evidence led before the state capture commission has provided a glimpse into two related, but different forms of corrupt capture. The most salacious detail has come from the mouth of former Bosasa COO Angelo Agrizzi, who - if even a half of what he claims is verified - has detailed the most brazen and breathtaking acts of open bribery.
This is embedded in a set of activities and contracts that the government would of necessity have had to carry out. What the Bosasa bribery did was to inflate prices so that resources could be top-sliced from existing government project commitments. Bosasa was not involved in getting the government to initiate new and superfluous projects. Instead, it manipulated the technical bid specification and adjudication processes, and fed politicians and public servants to incentivise them to engage in tender manipulation.
It was involved in buying gatekeepers to manage the process for their mutual benefit at the cost of administrative integrity and of citizens.
The Guptas, on the other hand, compelled the government to commit to a series of unnecessary, high-cost projects that denuded the national fiscus, distorted Treasury and public service regulations and destroyed the integrity of institutions while corroding the government's political mandate.
While Bosasa was involved in undermining ethics and integrity, the Guptas and their cohort were involved in out-and-out plunder - while undermining SA's sovereignty.
Make no mistake: though distinct as forms of corrupt capture, both are equally egregious. Sadly, a fair number of politicians and public servants have been involved in both. This erosion of political morality, personal ethics and public trust renders the society and its democracy exposed, especially in its maturing years. This will inevitably lead to politicised uncertainty, the consequences of which will be greater informalisation in the economy and society and a citizenry that will increasingly resort to informal modes of self-governance, resulting in delegitimised public power and authority, and the influence of criminality.
SA owes a debt of gratitude to investigative journalists. Their investigations revealed the detail of corrupt capture a decade ago. The multiple commissions of inquiry are still in the process of catching up.
What the two cases reveal about money and politics is that the relationships are nefarious, but creative.
Many have suggested that the Political Party Funding Act just signed by President Cyril Ramaphosa will shine the bright light of transparency on this. In fact, what these two cases prove is that the act might in fact be powerless unless it is accompanied by high-capacity and state-of-the art IT systems to detect and monitor the flow of money.
SA's banking system, in spite of its regulatory infrastructure and sophistication, was less than efficient in uncovering the financial flows from Johannesburg to Dubai. What chance of this infrastructure being able to detect and monitor continued financial abuse(s) in party funding? What of payments-in-kind, for example the provision of catering and facilities, clothing and food parcels, transport, advertising, marketing and publicity, policy and political advisory services?
Without an omniscient bureaucracy it is impossible to collect credible information on political payments- in-kind at any level of government. If such chicken, lamb, beef, dop, tjops and cash can be given to individuals as gifts and bribes, there is little detection ability. The act would not have detected a single thing done by Bosasa.
Investigative journalism has repeatedly proved its effectiveness and social value. Both in SA and globally, investigative journalism and research on corporations have been 1,000 times more effective in sanitising political processes where regulatory instruments failed. Thus, investigative journalism must be strengthened. Simultaneously, if we want coherent and capable government, then investigation, prosecution, sanction and punishment as consequence-management processes are the only way to clean up malfeasance.
For a start, a "Capone strategy" of prosecuting the corrupt on income tax evasion would be a more efficient tactic, since it is likely to be quicker, cheaper and easier to pursue than prolonged trials on capture, which will require proving intent. Tax prosecutions could also lead to the seizure of assets, while other prosecutions would involve lengthy processes of investigation, leading evidence, cross-examinations, followed by appeals and the tying up of processes in spurious technicalities.
Whichever route is sought, consequences are vital if we are to restore integrity to institutions and trust in servants of the public.
• Sarakinsky is Associate Professor at the Wits School of Governance. Fakir is Director of Programmes at the Auwal Socio-Economic Research Institute...

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