The State Capture report part 3 confirms what is already clear: a huge chunk of the public sector procurement budget is lost to corruption and outsourcing. In 2016, a former chief procurement officer at Treasury, Kenneth Brown, estimated that 30% to 40% of the public procurement budget is lost through fraud and inflated prices. Inflating prices and fraud is facilitated as a result of the greed to profit out of government contracts, by public sector officials in collusion with the private sector companies.
In this report, relations of collusion were facilitated through bribery and kickbacks amongst others. Bosasa is said to have scored about R2.37 billion in government contracts between 2000 and 2016. In winning these contracts, it has in turn paid about R75.7 million in bribes in the same period. In Angello Agrizzi’s own evidence, Bosasa paid monthly kickbacks to about 80 people.
Confirming what Kenneth Brown said 6 years ago, Bosasa reportedly inflated its pricing by 2.5%. In our view, this evidence grossly understates the percentage with which prices were inflated, especially give that the evidence further shows that about 35-40% of such contracts were pocketed as gross profits, and that, the 2.5% only covered the dividend for the kickbacks. It therefore means, prices may have been inflated by over 30% to 40%, quite in the range estimated by Mr. Brown.
The report shows that the company, Bosasa, not only paid kickbacks to individuals such as Minister Gwede Mantashe who is also the National Chairperson of the ANC and other ANC heavy weights such as Nomvula Mokonyane, Thabang Makwetla, etc., but also sponsored some of the African National Congress (ANC) activities. Like with the contracted awarded to Hitachi at Eskom, the ANC has proven beyond reasonable doubt
that it is a den for corruption, hence the culture of corruption has gripped the party’s factions across its alliance partners.
The public syndicate, build mainly around ANC cronies, is benefitting itself from the state resources at the expense of the public. This does not surprise us, however. The state has become a site of accumulation for the compradorial class – a class of aspirant bourgeoisie who have not found favour with traditional bourgeois class. Being shunned by traditional bourgeois class – what is otherwise referred to as White Monopoly Capital, this class parasitic class has the state as the only instrument and site of accumulation.
Unfortunately, their method of accumulation is characterised by sheer looting and squandering of public finances, the cost of which is bungling of service delivery leading to poor services meant for the working class and the marginalised poor majority.
Inefficient service delivery directly affects the beneficiaries of public service. SAFTU has consistently brought to the attention of the country that 70% of the population rely on public services. For this reason, SAFTU makes no apologies for these thieves and reiterate its longstanding attitude towards corruption in calling for:
• further investigation on others that the Commission recommends, as well as many
that the Commission’s work did not yet cover, dating to apartheid days when state corruption and corporate collusion were a commonplace.
• the immediate prosecutions of all those that the Commission is recommending should face music in the courts.
• Harsh sentences for both private and public players in the thievery that costs the poor so much.
In the wake of the first part of the State Capture report, Business Unity South Africa (BUSA) had offered to bolster prosecuting bodies in ensuring they prosecute those implicated in State Capture by providing private prosecutors, financial resources, and other unnamed forms of assistance.
By calling for the immediate prosecution of those implicated of wrong doing in the State Capture report, SAFTU reiterates its position that we reject the involvement of private business sector, because their enterprises are implicated in this corruption.
Besides that the case of Bosasa, accounting firms, banking firms and others graphically illustrates the implication of the private business sector, the underlying factor is that the public sector does not do business with itself. It does business with the private sector, and so the private sector is a partner in corruption of the public sector officials.
Thus, all three parts of the report have placed only two accused entities in the dock – the private sector and the ANC. That which remains is for the National Prosecuting Authority (NPA) to deliver these thieves to prison..