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SAFTU statement on latest Gupta revelations

Every day we read more shocking evidence of the ways in which the Gupta family, President Zuma, his family and his cronies in state-owned enterprises, have enriched themselves through manipulating tenders and contracts.

The South African Federation of Trade Unions has repeatedly and unequivocally called for Zuma, his cabinet and all those implicated in this looting of the country’s resources to resign and face prosecution. Indeed our affiliate NUMSA first called for the President’s resignation nearly four years ago, long before the #zumamustfall campaign, at its 2013 Special Congress, which declared:

“The congress calls on President Jacob Zuma to resign with immediate effect because of his administration’s pursuit of neo-liberal policies, such as the National Development Plan, e-tolls, labour brokers… and the track record of his administration which is steeped in corruption, patronage and nepotism”.

SAFTU has however rejected the view that corruption in South Africa is confined to one man, one family and their cronies. Evil though they are, they do not act in a vacuum. For every politician or SOE official who receives a bribe there is a company that pays that bribe, and they are not all called Gupta.

SAFTU rejects the view advanced by representatives of the ‘mainstream’ capitalist class that the Guptas are just an aberration in what remains a fundamentally honest and law-abiding society. They are not exceptional, but just a particularly obnoxious example of an inherently corrupt and exploitative capitalist system, and just the tip of an ice-berg of far more widespread corruption within that system.

The most recent revelations provide powerful new evidence for this view. It is becoming clearer that the ‘Gupta’ scandal embroiled big international companies that were part of the ‘mainstream’ monopoly capitalist class and supposedly more ethical and law-abiding, but, according to these reports, just as guilty.

Bell Potting

Bell Pottinger, the Guptas’ public relations firm, is a large British multinational public relations and marketing company headquartered in London.

It is a well-established part of the British ruling elite, illustrated by the fact that Its co-founder is ‘Lord’ Bell, whose main claim to fame is that he was the main spin-doctor for the anti-worker Prime Minister Margaret Thatcher. Other clients have included the brutal Chilean dictator Augusto Pinochet, and the repressive regimes of Belarus, Egypt and Saudi Arabia.

Their work for the Guptas involved drafting statements and speeches which deliberately sought to misuse ideas that are popular among South Africans to make their clients, particularly the bought politicians, sound more credible, disguising their greedy motives behind propaganda that sounded ‘radical’ and in line with these popular views, but which was a cover to hide their policies which were the exact opposite of ‘radical’.

Zuma and his allies, who for more than 20 years have presided over an economy based on neoliberal free-market monopoly capitalist principles, which has led to mass unemployment, poverty and the world’s widest inequality, suddenly started spouting about ‘radial economic transformation’ and overthrowing ‘white monopoly capital’.

They are quite unable to explain what any of this means, which is hardly surprising given that we now know that these statements were written in London by Bell Pottinger’s spin-doctors. This explains why in a poll on SABC’s Newsroom show which asked viewers if they understood what ‘radical economic transformation’ meant, 70% replied ‘NO’.

This confusion is doing incalculable damage to those like SAFTU who are making legitimate calls for genuine, socialist, economic transformation.

The very fact that Bell Pottinger have ‘apologised’ for their work on behalf of the Guptas is itself significant. Big PR firms hardly ever apologize, but an apology in itself is meaningless if it is not followed by a complete, uncensored report of all their dealings with the Guptas and South African politicians, officials and business leaders.

McKinsey & Company

The next big name to emerge is McKinsey & Company, a big US-based worldwide management consulting firm which ‘conducts qualitative and quantitative analysis in order to evaluate management decisions across the public and private sectors’. According to The New York Times, it is considered the most prestigious management consultancy in the world.

Just like Bell Pottinger, McKinsey is clearly not a minor player in the capitalist world, yet it is also implicated in many of the Guptas’ most corrupt deals.

Advocate Geoff Budlender was appointed to investigate allegations that McKinsey brokered deals between Eskom and a Gupta-related company called Trillian Capital Partners. It was hired by Eskom in 2015, at an estimated cost of R1-billion a year, and was meant to improve efficiency and cut wasteful expenditure at South Africa’s largest state-owned entity.

McKinsey’s deal with Trillian was supposedly for “supplier development”, a sham programme intended to upskill small, black-owned business. But documents from Budlender’s report, and the #GuptaLeaks, show that Trillian planned to siphon off huge chunks of the money it received from Eskom to a company part-owned by the Guptas and another company in Dubai.

At least R266-million of Eskom’s money was thus handed to Trillian, a company that, in the words of McKinsey’s own executives, was merely there to receive a 30% slice of the contract “in return for not much work”.

When asked about these payments, Eskom has consistently repeated the line that “Eskom has no contracts in place with Trillian Capital Partners and/or associated companies.”

In a parliamentary reply last year, public enterprises minister Lynne Brown repeated the same assertion, claiming that Trillian had no contracts with Eskom and therefore had received no payments.

Yet when Budlender asked for copies of all the invoices Trillian had delivered to state-owned entities, Trillian handed over invoices addressed to Eskom and marked “paid”, confirming that between April and August alone, Trillian received R266-million.

Just like Bell Pottinger’s apology McKinsey tried to dodge taking any responsibility by finding a scapegoat; its SA director Vikas Sagar has been asked to take leave, and they are asking US lawyers Norton Rose to do an urgent investigation.

As an American-based company they may well face prosecution in the US courts.

SAP

The third international company to come on to the scene is SAP, a German company said to be the third largest business software company in the world. With an income of R330 billion a year it too is clearly a big player in the capitalist world.

AmaBhungane and Scorpio have revealed that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company called CAD House, that specialises in selling 3D printers. The terms suggest a thinly disguised kickback arrangement that If CAD House were the ‘effective cause’, i.e. the ‘fixer’, of an SAP-Transnet contract worth R100-million or more, the Gupta company would get 10%.

In the next year, SAP paid CAD House a whopping R99.9-million, suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies.

Conclusion

These are just a few of the corrupt deals involving these three companies that have already been exposed by the media. There must be many more that have not been revealed and they must be forced to come clean with a full report of all other such activities, who was responsible and what action they intend to take.

There will surely be many more companies whose involvement with the Guptas have not yet come to light, and even more cases of corruption in general, as the emails continue to emerge.

The importance of these latest revelations for SAFTU is that they reinforce our argument that corruption and the plundering of resources is not just a problem caused by a relatively small coterie of wicked individuals.

Its root cause is the capitalist system which is inherently corrupt, a system based on the exploitation of workers and the theft of the surplus value that their labour produces, to enrich a wealthy elite who are driven by a ruthless pursuit of profit at all cost, regardless of the damage this inflicts on society.

The biggest crime committed by the ANC leaders is that they have propped up capitalism through policies like GEAR and the National Development Plan. They have failed to end the domination of the economy by the white, male elite who captured the state under colonialism and apartheid, and made them even richer relative to the workers, with the ratio of CEOs’ income to those of workers from 50:1 to 500:1

They have adopted a neoliberal capitalist strategy which has turned villains into millionaires, impoverished the people, disrupted service delivery and left education and healthcare as a privilege for the rich.

The ANC government has thus created the environment for double-dealing, for institutionalised theft, for undermining oversight, for disempowering our people, and for allowing unfettered looting and made sure they themselves are at the front to the queue for the proceeds.

Zuma has not only failed to end white monopoly capitalism but on the contrary his government embodies all the worst features of the system they pretend to be fighting.

The fact that others are involved in such crimes in no way exonerates the ANC leaders, particularly as they do so as elected representatives of the ANC. That is why SAFTU insists that Zuma and his entire cabinet must resign, but warns that this will not in itself put an end to corruption and certainly not an end to capitalism.

What we see is a faction fight between two gangs of rich capitalist exploiters, neither of whom have any interest in improving the lives of their workers, poor communities or the country as a whole. The same factions have their proxies within the ANC leadership, with Cyril Ramaphosa as the representative of the mainstream, white capitalist class against the corrupt pro-Zuma capitalists.

As we said at the SAFTU launching congress, we oppose both factions of the ruling class and will not take sides to defend either the corrupt looters or the mainstream white monopoly capitalists. They are both fighting each other for control of the state and government for their own selfish class interests and not  those of the working class and poor majority whom they both exploit.

The federation will oppose any attempt to resolve this crisis within the parameters of a capitalist system which has proved that it has no solutions. The only way out of the crisis has to be through a mass movement of the working-class based on a program guided by the principles of Marxism-Leninism for the democratic nationalisation of the mineral and manufacturing monopolies, the banks and the land, in line with the aspirations expressed in the Freedom Charter.

Viva SAFTU Viva!