Published by Penguin Books
an imprint of Penguin Random House South Africa (Pty) Ltd Reg. No. 1953/000441/07
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www.penguinrandomhouse.co.za
First published 2019
1 3 5 7 9 10 8 6 4 2
Publication © Penguin Random House 2019
Text © Pieter-Louis Myburgh 2019
Cover photograph © Gallo Images/Foto24 /Charl Devenish All rights reserved. No part of this publication may be reproduced,stored in a retrieval system or transmitted, in any form or by any means,electronic, mechanical, photocopying, recording or otherwise,without the prior written permission of the copyright owners.
PUBLISHER: Marlene Fryer
MANAGING EDITOR: Robert Plummer
EDITOR: Bronwen Maynier
PROOFREADER: Lisa Compton
COVER DESIGNER: Ryan Africa
INDEXER: Sanet le Roux
ISBN 978 1 77609 374 8 (print) ISBN 978 1 77609 375 5 (ePub)
For the journalists, whistleblowers, sources and activists who have fought and continue to fight to turn the tide.
Contents
Contents
Introduction
Prologue: Death of a Bentley bagman
Part I: Credential struggles
1. The Tumahole ‘treasonist’
2. Hillbrow days
3. Exile
Part II: Premier in waiting
4. An early scandal
5. Free State capture and the ‘cattle thief’
6. Crushing the Scorpions
7. The assassination of Noby Ngombane
Part III: The R1-billion housing splurge
8. ‘Bring your people’
9. Fall guys and fat cats
10. Rewarding friends and punishing foes
PART IV: Iron fist
11. Regime unchanged
12. Fourth estate capture
Part V: All the president’s pals
13. Tea with Atul
14. A family of fixers
15. Reddy to rumble
16. Zuma’s Vrede ‘thank-you fee’
PART VI: Daddy’s girl
17. The R9-million freebie
18. Vogelfontein
19. Paved with gold
PART VII: The IgoFiles
20. Enter Igo
21. Plunder plot
22. A blueprint for bribes
23. Havana nights
24. Ace shows his hand
25. The ANC’s asbestos benefits
26. Zizi
27. The last cash run
28. ‘Ace’s girls’
PART VIII: Top Six fix
29. Nas(w)rec(k)
30. New dawn, old guard
Photos
Acknowledgements
Notes
Abbreviations
Index
Introduction
One Friday evening in mid-2013 my cellphone rang just as I was about to put a few takeaway pizzas in my car. I had been working at a Sunday newspaper in Johannesburg and it was not unusual to get work-related calls over the weekend. Not recognising the number flashing on my phone’s screen, I hesitated. It had been a long week and I was looking forward to enjoying hot pizza and a few beers with friends. But curious journalists rarely ignore phone calls, so I answered. The person on the other end of the line introduced himself as Ace Magashule, the premier of the Free State.
My first thought was that someone was playing a prank on me, but I soon realised it was indeed him. At the time, I was researching a tender awarded to a Bloemfontein-based company for organising the annual South African Sport Awards. The company’s owner was said to be closely connected to top government leaders and had apparently clinched the contract in an irregular manner. While Magashule and his provincial government did not feature in the story, 1 I may have sent out queries to officials regarding the company’s work in the Free State.
Magashule had somehow got word of my interest in the contractor and had decided to give me a call. I don’t recall verbatim what was said, but he tried to convince me that his administration and the company in question had nothing to hide.
The call was strange, to say the least. Top-level government leaders do not normally contact young, relatively unknown journalists, at least not directly. I got the sense that Magashule was worried about what I might uncover. I also think he wanted me to know that he was aware
that I was looking into the matter. I later learnt that, over the years, Magashule contacted other journalists in a similar fashion. To me, this conduct betrayed a degree of nervousness about the media’s interest in his province’s affairs. His apparent habit of contacting reporters also carried a hint of subtle intimidation. At least one Free State journalist I spoke to claimed to have abandoned an investigation into a provincial tender after receiving such a call.
Magashule had every reason to be worried about nosy journalists. I believe the government deals unpacked in this book, along with previous revelations, sufficiently implicate him as the head of a well-organised state-capture network in his home province.
Compared to the most prominent tender bandits in national government, however, Magashule’s anxiety must have been considerably more manageable during his stint as premier. For a start, Jacob Zuma’s time in charge of the country saw government’s law-enforcement arm become as ineffective as a gangrened limb. There was no need for the likes of Magashule to be concerned about being investigated or brought to book. Media outlets, civil society organisations and the general public, meanwhile, were largely focused on scandals involving Zuma, his state-capture enablers and rent-seeking at national departments and large state-owned companies such as Transnet and Eskom. Public-sector looters and their private-sector accomplices in provinces like the Free State were left to execute their schemes without drawing too much attention. While there have been great examples of investigative work on Magashule and his administration over the years, such reports have been too sporadic to produce the sustained outrage and pressure necessary to bring about meaningful change.
More than a few sources in the Free State’s political set-up referred to Magashule as ‘Mr Ten Percent’ for allegedly demanding a 10 per cent cut from each government contract in the province. During his nine-year run as premier, the Free State’s cumulative annual expenditure totalled over R200 billion. While it is unlikely that ‘Mr Ten Percent’
skimmed off R20 billion, considering what I uncovered while writing this book I do believe substantial amounts of money ended up in his broader capture network. This includes his family, friends, former business associates and political allies.
Magashule had been extremely careful in his alleged dealings with contractors and other businesspeople, some of his former associates told me. Kickbacks due to him from government contracts would be paid in cash, they all alleged, ensuring that any financial links to dodgy contractors were kept to a minimum. Furthermore, Magashule apparently often used trusted security guards, drivers and other aides to do his dirty work. He also avoided electronic communication and preferred to discuss ‘funny money’ and related matters in person. Some of my sources feared that if the Hawks and other law-enforcement bodies were to one day wake from their Zuma-induced slumber, they would have a difficult time finding any conclusive evidence of Magashule’s involvement in corrupt government deals.
But no one can erase their entire past. In April 2018, while I was still working at News24, I looked into a R255-million ‘asbestos audit’
contract awarded by the Free State’s Department of Human Settlements. I linked the contract to Igo Mpambani, a high-flying tender mogul who had b
een gunned down in Sandton in 2017. 2 I stayed on Mpambani’s trail and eventually got hold of a bulky stack of emails, bank records and related material that detailed some of the
murdered businessman’s dealings. For ease of reference, I refer to these documents as the IgoFiles. In order to protect my sources, I cannot divulge any information about how these documents came into my possession. It was my ‘mini-#GuptaLeaks’ moment. Although not nearly as large as the dataset that laid bare the Gupta family’s murky conduct, the IgoFiles were undoubtedly a valuable find when it came to linking Magashule to possible corruption. ‘Premier requested that you pay full amount of R470 000,’ reads a snippet of one email in the IgoFiles. Part VII fully unpacks the dubious asbestos audit contract and explains how Magashule may have received as much as R10
million from the deal.
In this book I examine the undemocratic means with which Magashule and his political allies clung to power in the Free State. I also unpack a fresh revelation about a trip to the former Gupta estate in Johannesburg, allegations of shady meetings with other connected businessmen, and indications that Jacob Zuma may have scored a
‘thank-you fee’ from one of the Free State’s failed housing projects. All of these stories should strengthen calls for a proper investigation into Magashule’s dealings as premier.
In researching and writing this book, I relied partly on the experiences of an extensive list of individuals who, at varying times during Magashule’s political career, moved very close to him. I interviewed about ten political figures who all once formed part of his inner circle.
They were able to provide me with invaluable insights into Magashule’s conduct and habits, especially those pertaining to his alleged state-capture ploys. Another ten or so businesspeople and other connected types added to the story. A few politicians from opposition parties were also of great help. Apart from the IgoFiles, I relied on
heaps of tender documents, company records and related material to construct this partial account of what I consider to be Magashule’s history as a state captor. I call it a partial account because there is certainly much more to uncover. Magashule’s ties to a certain business family from Vereeniging, for example, do not feature in this book and warrant further exploration. In fact, we might need a separate commission of inquiry to help get to the bottom of the rot that infected the Free State government during Magashule’s time in charge.
Magashule was given a fair opportunity to comment on the issues explored in Gangster State, but he chose not to make use of it. More than sixty questions sent to ANC spokesperson Dakota Legoete for the attention of his boss remained unanswered.
In April 2017, I ended my first book, The Republic of Gupta, with a word of caution to the ruling African National Congress (ANC) that many other observers have also issued: elect better leaders to your top structures, or risk losing further support in the face of continuing statecapture and corruption scandals.
Then Nasrec happened. In December 2017, political spectators watched – some with horror, others with bemusement – as, at its fifty-fourth national conference, the ANC enacted the political equivalent of shooting itself in the foot with an anti-aircraft gun. The election of Ace Magashule and fellow ‘premier leaguer’ David Mabuza as the party’s new secretary-general (SG) and deputy president respectively ensured that allies of the disgraced Zuma would continue to besmirch the party’s name and reputation. Their presence in the ANC’s Top Six would also jeopardise President Cyril Ramaphosa’s so-called ‘new dawn’, meant to revive the party’s founding values. Mabuza has since craftily repositioned himself within the ANC’s broader power
dynamics, and has been remarkably quiet.
It is Magashule who, in my view, now most prominently embodies the ruling party’s glaring departure from the vision for the ANC and South Africa upheld by earlier leaders such as Albert Luthuli, Oliver Tambo and Nelson Mandela.
There has been much talk in the past about ‘criminal elements’ within the ANC. Ironically, Magashule made one such remark in 2012 when service-delivery protests in a few Free State towns turned violent. 3 This sentiment became particularly popular when the Guptas’ state-capture project was exposed. The narrative was that a handful of alleged criminals, Zuma being one of them, had infiltrated an organisation that was otherwise still dominated by good, honest people. It was a hopeful notion. Less sympathetic observers called it naive. Whatever the case, it is now obvious that the ANC suffers from a chronic inability to correct past mistakes by dealing with these alleged ‘criminal elements’.
Zuma’s dramatic recall as state president may well have been a result of Ramaphosa’s ascent to power. But the latter was bound to encounter resistance from shady characters around every corner if he attempted to navigate the ANC and the country out of the maze of corruption. In a cruel twist, the power of some of these questionable characters was actually bolstered by the internal ANC voting machine that delivered Ramaphosa and the ‘renewalists’ their marginal victory.
The elevation of Magashule to one of the party’s most powerful positions reaffirms the organisation’s reckless nonchalance with regards to its image and reputation. There are still questions around whether he won the contest to become secretary-general in a fair manner, but the ANC has effectively buried the matter for the sake of
‘unity’. It is, however, Magashule’s nine years as Free State premier
that will have even graver implications for the ruling party. At the time, there were enough allegations of misconduct for the ANC to at least consider axing him, yet the party chose to look the other way. The fact that Magashule and other high-profile people have managed to escape censure for their alleged crimes for so long leads me to a disturbing conclusion: what we have witnessed since at least 2009 is not the work of mere ‘criminal elements’ within the ANC, but rather the effect of the outright criminalisation of the party as a whole.
In this regard, Gangster State is at once a book about Ace Magashule and the political organisation to which he belongs. The simple fact of the matter is that Zuma, Magashule and others were able to do so much damage to the ANC and the country because the party failed to stop them.
Can all of this still be turned around? I believe so, but by this I mean the country, not the ANC. The ruling party’s appointment of its very own ‘secretary-gangster’ to a position as visible and important as the one Magashule now occupies can be seen as a broad endorsement of criminality. If Magashule did indeed ‘steal’ the position, the ANC’s failure to deal with this only further supports my argument. The party’s chronic inability to stem the criminalisation of its internal leadership structures will one day be viewed as a key reason for the ANC’s final implosion.
‘The measure of a man is what he does with power’ – Plato
Prologue
Death of a Bentley bagman
On the day of the murder, Tshepo Thabane* had been at his usual spot on the corner of South Road and Bowling Avenue since dawn.
Like the other regular beggars and casual labourers who had made this intersection their base, the young man from the nearby Alexandra township usually arrived in time for the great procession of luxury sedans and SUVs that trickled past towards Sandton’s business district each weekday. His earnings from that morning’s peak-hour traffic had been pretty good. With noon fast approaching, Tshepo’s mind started to drift towards thoughts of food. As he counted the coins in one of his trouser pockets, he could almost hear his stomach berating him for having skipped breakfast.
Tshepo was just about to leave his spot to go and buy lunch somewhere nearby when his eye caught the grey Bentley Continental GT driving in a southerly direction on Bowling Avenue, towards the intersection. The car glided into the turn-off lane that feeds into South Road. The impressive machine stood out even among the other expensive cars Tshepo had become accustomed to seeing at this crossing. The robot was red, and there was just one car in front of the Bentley. At the next flash of the traffic light’s g
reen arrow, it was destined to turn right into South Road and cruise towards the CBD.
Meanwhile, Tshepo noticed that a silver Audi A4 had snuck into the slipway that carries Bowling Avenue’s traffic into South Road going in the opposite direction, away from the CBD and towards Alexandra. It had come to a halt on the side of the slipway, less than fifteen metres
from where the Bentley waited at the traffic light.
Then two men got out of the Audi. Both brandished handguns and wore hoodies drawn over their heads. The car had tinted windows, but Tshepo could make out the silhouette of a third man who remained waiting behind the steering wheel.
The two men were young, Tshepo noticed. He thought that they couldn’t have been older than twenty-five. Tshepo thought he could hear the men exchange a few words in Zulu.
Later, as he replayed the scene in his head for the umpteenth time, Tshepo would note that time didn’t freeze or slow down at all that day.
If the movies were anything to go by, action scenes were supposed to unfold in slow motion. What he saw next, however, happened at a frighteningly normal pace.
The two men walked towards the stationary Bentley. Wearing a grey hoodie, the shorter of the two gunmen positioned himself in front of the sleek sedan. His accomplice, a tall, slender man wearing a blue top, stood right next to the driver’s window.
‘Open the door!’ Tshepo heard the taller man shout in English.
The Bentley driver understandably disobeyed the order.
The tall gunman then tried to break the Bentley’s window by smashing it with his weapon, but he was unsuccessful.
The driver and sole occupant of the Bentley now clearly realised that he would have to take drastic action if he wanted to live. He let the car shoot forward, forcing the gunman in grey to hop out of the way. The Bentley smashed into the car in front of it. The latter’s driver panicked and sped off over the crossing, undeterred by the red robot.
The Bentley, however, failed to follow the other car over the crossing to get away from the gunmen. The engine had either stalled or the
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