Or maybe it simply came down to good-neighbourliness. As mentioned earlier, businessman Glen Netshivhodza was another Parys local and Magashule confidant who scored big during the housing department’s R1-billion spending spree. Incidentally, Magashule’s wife, Seipati, is in business with Netshivhodza’s wife. Seipati and Elsie Netshivhodza are listed as co-directors of a company called Kumba Civils.
In March 2013, Netshivhodza was appointed chairperson of the Free State Tourism Authority, a troubled provincial government entity that
later merged with the provincial gambling board and liquor authority. 25
Sources familiar with developments say that, as with nearly all major moves in his government, Magashule was behind Netshivhodza’s appointment to the tourism authority.
Netshivhodza’s two companies – Ithuteng Consultancy and Harakisha Building Construction – together pocketed more than R30 million from the FSHS, about R20 million of which was received during the first two financial years of Magashule’s reign as premier.
Like some of the other connected contractors, Netshivhodza apparently failed to complete his houses. For instance, Harakisha was appointed in 2010 to build 400 houses in QwaQwa. By 2013, the company had not finished a single one of these units, according to a progress report. The FSHS was left with no choice but to terminate the contract. The project was then taken over by TTC, the company owned by soccer boss Mike Mokoena. 26
This apparent inability to finish projects seems to be a common trait among the contractors from Magashule’s circle.
The final contractors worth singling out are owned by businessmen Madoda Khoba and Tlale Mokgadi, both alleged to be close to Magashule.
Khoba is based in the former homeland of QwaQwa and is said to be one of Magashule’s closest friends in this part of the province. His two companies, Group Two Trading Enterprise and Group YWO Trading Enterprise, earned an impressive R210 million in revenue from the FSHS between 2009 and early 2018, coinciding exactly with Magashule’s rule as premier.
There is documentary proof that Khoba may have dished out bribes to clear certain regulatory obstacles. Records from a court case in the
North Gauteng High Court detail how he allegedly paid an official of the Construction Industry Development Board R6 000 to get a higher CIDB grading in 2007. A higher grading would have allowed Khoba’s companies to bid for more lucrative government tenders, such as the ones he clinched in the Free State. 27
Mokgadi’s company, E’tsho Civils, is one of the private firms the FSHS appointed to draw up a report following the R1-billion debacle in 2010. But it has been doing well on the construction side of things too.
Between 2011 and 2017, E’tsho Civils netted a cool R150 million in revenue from the department, the HSS shows.
A few of my sources told me that Mokgadi and Magashule ‘travel the world together’. I found some evidence of this in the IgoFiles, the leaked documents I unpack in Part VII. A document from the premier’s office shows that in early 2014 Mokgadi flew to Cuba with Magashule.
There is overwhelming evidence that a large slice of the pie in the Free State housing department’s big splurge was gobbled up by contractors who either had tangible links to Magashule or were said to be close to him. In fact, R250 million was channelled to ten such companies in the two years between 2010 and 2012 alone. This included large payments to the likes of Blacky Seoe (a former business partner), Hantsi Matseke (a close friend from Parys) and Moreki Moroka (wife of a long-time lawyer pal).
But this was just the start of a process that would eventually see a mountain of money shift to people in Magashule’s inner circle. These contractors, along with a few others who got in on the action only after the R1-billion splurge, altogether received a staggering R2 billion in revenue from the FSHS during the nine years of Magashule’s reign as
premier.
His daughter, Thoko Malembe, started scoring FSHS contracts in November 2013. Unital Holdings, the company in which she is a 30
per cent shareholder, received contracts worth more than R150 million from the department for the failed Vogelfontein housing project outside Bethlehem. My work on this story for News24 revealed that Magashule’s office influenced the awarding of the contract, and that he visited the site in person after Unital was appointed. 28 Magashule denied influencing the awarding of the contract, but failed to or refused to comment on his daughter’s stake in the company.
Despite clear indications that contractors linked to Magashule are among the worst culprits when it comes to failed, delayed or substandard RDP projects, these companies were excluded from the FSHS’s attempts to recover wasted money.
In July 2015, the Democratic Alliance asked the department to provide figures on incomplete houses to the provincial legislature’s portfolio committee on public works, infrastructure, roads, transport and human settlements. Mokhesi came back with a truly shocking number – there were almost 11 000 incomplete houses all over the province, the HOD admitted. 29 Another submission to the portfolio committee in 2018 failed to put a figure on the total number of incomplete houses, but it confirmed that the problem had not been resolved and that projects awarded to politically connected contractors during 2010 had still not been completed. 30
The man who should be held accountable for this mess is Ace Magashule. As evidenced by the myriad examples unpacked in this chapter, Magashule clearly loomed large in the province’s allocation of housing contracts during his time as premier. This allowed him to dish
out RDP contracts worth billions of rands to friends, family members, former business partners and other associates. Many of these contractors were completely unprepared for large RDP projects and consequently contributed to the scourge of unfinished houses that still affects poor people in the Free State today.
The fact that the auditor-general identified R7 billion in irregular expenditure at the FSHS during Magashule’s time in office shows that there is much more to uncover. Furthermore, Open Water’s handling of the 2010 contracts and the apparent derailing of the SIU investigation points to a massive cover-up that would have required the involvement of senior politicians.
So far, not a single top-level government leader has been held to account for one of the largest low-cost housing debacles in South African history.
PART IV
IRON FIST
11
Regime unchanged
As premier of the Free State, Ace Magashule presided over the provincial government’s financial affairs with a despot’s flair for centralisation. Former and current MECs, erstwhile confidants, senior and mid-level officials, and businesspeople in the province all attest to a frightening executive environment in which ‘the fourth floor’, a reference to the premier’s office, controlled every stream, brook and tributary of the Free State’s cash flows. ‘There wasn’t a contract in the Free State that Ace didn’t know about. Whether it was for supplying toilet paper to municipalities or building roads for the province, he had a say in which contractors got the work,’ claimed one of Magashule’s closest former allies.
In some instances, the premier’s office sought to formalise its iron grip on pockets of the province’s budget, with disastrous effect. A plan initiated in 2010 to consolidate the Free State’s entire government advertising spend in Magashule’s office drew the ire of National Treasury and culminated in a forensic report that recommended criminal investigations (see Chapter 12). 1
Operation Hlasela is another case in point. Magashule seemingly used his so-called development programme to impose himself on procurement decisions at the Free State Department of Human Settlements. And Operation Hlasela ensnared the expenditure policies at the province’s other big spenders, including the departments of public works, 2 and police, roads and transport. 3 As we have seen, the former premier took a hands-on approach to the appointment of key
officials in every sphere of government. From mayors, municipal managers and directors at municipalities to MECs, heads of department an
d directors at provincial departments, Magashule apparently had the final say when positions with even the faintest financial function needed to be filled.
A growing number of former and current political insiders are now willing to talk about Magashule’s ruthless rule in his home province, but their claims are not new. As far back as 2013, Mpho Ramakatsa, one of the few ANC members who dared challenge the Magashule bloc’s political hegemony, warned about the then premier’s behaviour.
‘There is no single municipality in the Free State that is independent of Magashule’s influence,’ Ramakatsa told the Mail & Guardian in May that year. ‘He appoints everybody from heads of department to a cleaner. Those that do not toe the line are taken out [fired]. He has also centralised procurement in his office precisely to control the economy of the Free State. This makes him indispensable to a lot of people. ’4
By all accounts, Magashule enforced a pervasive and smothering degree of authority over government affairs. To maintain his alleged capture of the provincial government, he needed to remain equally powerful in his guise as leader of the ANC in the Free State. He clung to the position of provincial chairperson for a record number of years, and seemed proud to be known as the ANC’s ‘longest-serving provincial chairman’. 5 He ascribed his prolonged occupation of the ANC’s top spot in the province to the broad support the party’s branches supposedly lavished upon him. ‘I will always respect the branches of the ANC. I have never imposed myself as a leader. The branches have always nominated me. I will be elected unopposed at the provincial conference next month,’ a confident Magashule told the
Sowetan ahead of the 2012 provincial conference.6 His prediction turned out to be 100 per cent correct.
His victories at so many successive provincial conferences inevitably convinced commentators and journalists that he enjoyed near-universal support in the Free State. Over the years, the media consistently reported on his ‘popularity in the province’, 7 and described him as
‘popular at grassroots level’. 8 And so a myth was perpetuated that Magashule remained in power because he had authentic and widespread support from the 300-odd ANC branches in his home province.9 However, there is ample evidence to the effect that Magashule and his allies at least partly assured their political domination through dirty tricks. Developments that unfolded soon after the ANC’s 2012 provincial conference especially suggested that the provincial leadership had virtually no respect for the party’s most fundamental democratic processes.
Two scathing court judgments, a tiny trove of leaked documents and myriad source accounts enabled me to piece together the astonishing story of how Magashule and his cohorts obliterated the ANC’s branch-based system of participatory democracy to prolong their faction’s reign. As previously mentioned, opponents of the former premier and his allies were subjected to all manner of irregularities to keep them away from provincial conferences. A majority of South Africa’s highest court found that ANC members at many of the province’s branches were effectively disenfranchised. 10 As a result, the voices and votes of those who sought to bring about political change in the province were discounted at the very conferences where the Magashule bloc emerged as victors. In some instances, would-be challengers were neutered through intimidation and even violence. 11
All of this relates to the stick end of Magashule’s political scheming.
But he and his allies wielded plenty of carrots too. Branch members who stayed on their side were treated to luxury accommodation and other perks during provincial conferences. To fund this largesse, Magashule leaned on companies that got contracts from his provincial government. This practice seems to reaffirm the view that Magashule captured his province’s finances in order to benefit from revenues earned by various contractors, whether for personal gain or political survival.
Magashule’s conduct in his dual role as provincial premier and party chairperson is indicative of someone who harboured equal disregard for both spheres of power. As we have seen, as premier he oversaw a provincial administration that bent, broke or bulldozed over the clearly defined laws and prescripts that are meant to ensure proper procurement. In this regard, the auditor-general’s reports on the Free State alone provide ample evidence. As ANC chairperson, Magashule led a party apparatus that consistently decimated the century-old liberation movement’s proud tradition of participatory democracy.
There are strong indications that Magashule had no qualms about getting his hands dirty to help keep his bloc in power. In March 2011, the Free State ANC’s Winburg branch held a branch general meeting at the local town hall. 12 The municipal elections were just two months away and the branch had to nominate its candidates for councillors.
Magashule was present to chair the meeting, which soon turned violent amid fierce contestation between two nominees from opposing camps.
It was later alleged that Magashule had insisted on a candidate who did not enjoy the branch’s support. Branch member Joel Maleka, who supported the rival candidate, told this story to the media: I was one of
the people who were going to the stage to vote and supporters of
[Kgotso] Segamme [the candidate Magashule allegedly preferred] were blocking our way to the stage. When we asked to pass, we were told that we would not be allowed to vote for our chosen councillor. The next thing I felt someone pulling my shirt and trying to strangle me. I looked up and it was the premier himself. He ended up pushing me down to the ground. The premier grabbed my right arm and shook me.
Then he ordered his bodyguards to arrest us. 13
The Sowetan reported that Magashule had allegedly ‘slapped and kicked’ Maleka and fellow branch member Mzwanele Moletsane. 14
Magashule did not deny that he was involved in the disturbance, but claimed that he merely played the role of peacemaker. ‘I was chairing that meeting but I did not beat them up,’ he told reporters. ‘I was just separating them because they were about to start a fight. The truth will come out in court. Let the police investigate. The people who were there will be my witnesses. Politics is a dirty game.’15
Maleka and Moletsane laid charges of assault against the premier, but later withdrew them. Brigadier Sam Makhele, a spokesperson for the SAPS in the province, confirmed this. I got hold of Maleka, who told me that he and Moletsane withdrew their complaints after ‘sorting things out’ with Magashule. He did not want to provide further details on the matter.
Dennis Bloem, the former long-serving ANC member from the Free State who later joined COPE, sketched a disconcerting picture of Magashule’s alleged improprieties when it came to the ruling party’s meetings and conferences in the period before he became premier.
Bloem, who jumped ship in 2009, claimed that Magashule effectively
bought his way to the top of the ANC’s Free State hierarchy. ‘That man was not scared to produce money at ANC conferences,’ he told me when we spoke about Magashule’s rise in the party’s ranks. ‘We saw him with cash, and this made some delegates very uncomfortable. But others were brought to conferences in buses that stopped at KFC or Nando’s. Some of these delegates were also put up in nice hotels or guesthouses, away from other party members. This was all done to buy their support.’
Even some of Magashule’s closest former allies admitted that the party’s democratic processes had been a farce. One of them made a startling admission during an interview in mid-2018. ‘I helped Ace to swing conferences and branches for years,’ this former PEC member and MEC told me. ‘We bought members. The capture started at the branches and then spread to the regional conferences and finally the provincial conferences. Everything mentioned during those court cases was true.’
We will get to those legal proceedings in a bit, but first let us unpack some of the financial transactions that seem to prove that Magashule indeed squeezed cash out of contractors to book certain party members into comfortable hotels and guesthouses during provincial conferences.
I spoke to a businessman whose firm secured contracts worth
more than R50 million from the provincial government during Magashule’s time as premier. In early 2012, this person needed to meet with the premier about his company’s work in the Free State. He told me that Mamorena Mosala, the office manager at the ANC’s head office in Bloemfontein, facilitated the meeting. Email exchanges between him and Mosala seemingly confirm this. For the pleasure of meeting with Magashule, the businessman was allegedly required to make a
donation to the ANC. To this end, Mosala sent him the account and branch numbers for the party’s ‘salary acc[ount]’ at FNB. He duly paid his donation into the account and thanked Mosala for setting up the meeting, to which she responded: ‘Thank you. Always remember I am just a phone call away should you need anything from him
[Magashule].’
But it was the premier, or at least the party he headed, that needed something from the businessman first. A day before the ANC’s 2012
provincial conference in Parys, my source transferred R200 000 to the hotel and conference centre that was due to host the gathering. He showed me the proof of payment. According to him, Magashule himself had issued the instruction to pay the hotel. The businessman claimed Mosala had ‘coordinated’ the transaction.
As mentioned previously and elaborated on below, the 2012
conference ended up being declared unlawful. The Magashule-led PEC
was forced to convene a new conference in May the following year.
Once again, Magashule allegedly asked the businessman to provide financial support. The 2013 conference was held in Welkom, and my source transferred just under R100 000 to a few guesthouses in and around town to accommodate conference delegates. He provided me with proof of payment for these transactions.
*
In late 2011 there were murmurs of a possible attempt by fed-up ANC
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