Publication: Business Day Issued: Date: 2006-11-15 Reporter: Hennie van Vuuren Reporter:

Things We Should Not Get Used To

 

Publication 

Business Day
Date 2006-11-15

Reporter

 Hennie van Vuuren

Web Link

www.businessday.co.za

 

Are South Africans punch drunk? Have we become blasé about corruption in our midst? Could the political scandals that have made news headlines in the past few months be a justifiable excuse? Yengeni goes to jail. Shaik goes to jail. Kebble’s political links are revealed. Malatsi is sentenced. Zuma is charged. Travelgate MPs are sentenced while Oilgate is unresolved. This is besides the litany of allegations of corruption involving members of the civil service and the ever-present hand of corporate SA greasing palms where necessary. Although corruption is by no means systemic in a country that has developed sound laws and institutions to tackle the issue, the real danger is that we start to accept it as the way things work ­ business as usual ­ thereby numbing us to outrage and effectively allowing the rich to continue stealing from the poor.

It’s a vicious cycle that could end up consuming our society.

Perhaps this is why the media focuses on the farcical ­ witness the fierce debate in the past few days as to whether Tony Yengeni drank Czech beer while on weekend parole. It is possible corruption allegations have been turned into a series of soap operas by the media and opposition alike, so allowing us to lose touch with what is taking place in the wings: there is an intense battle raging to ensure that the power of money does not trump democratic politics in SA.

One of the most striking examples of this must be the revelation in the past few days of the existence of Chancellor House ­ an alleged African National Congress (ANC) front company ­ following the release of research commissioned by the Institute for Security Studies’ (ISS’s) Corruption & Governance Programme in collaboration with Idasa (the Institute for Democracy in SA).

Researchers Vicki Robinson and Stefaans Brummer were tasked with finding some of the sources of private funding and, helped by well-placed sources, they stumbled upon the existence of the Chancellor House Trust.

Chancellor House may well come to represent a defining scandal in contemporary politics that could overshadow Oilgate. Named after offices that housed the legal firm of liberation struggle icons Nelson Mandela and Walter Sisulu in the 1950s, the trust appears to have been established to benefit the ANC treasury, and the research suggests that it consists of a group of companies that report to ANC treasurer-general Mendi Msimang.

Chancellor House has over the past few years managed to notch up impressive investments in the energy, mining, engineering, information technology and logistics sectors. However, its crowning achievement must surely be the prospecting rights it was awarded to one of the world’s largest untapped manganese fields, in the Kalahari. Manganese is a strategic metal used to produce steel. The minerals and energy department awarded the rights to Chancellor House as part of a consortium with the Russian Renova Group, headed by Russian Viktor Vekselberg ­ an oligarch who is one of the 50 richest men in the world and has had a number of brushes with the law.

This all appears above board. However, the concern is that the ruling party may well have been both player and referee in this deal ­ undermining the constitutional requirements for a fair and transparent procurement process.

The question that therefore arises is whether Chancellor House would have benefited from this potentially hugely lucrative contract if it did not have party political credentials. This must have crossed the minds of other black economic empowerment companies that lost out in the bid, including Dirleton Minerals and Energy that has as one of its principals respected businessman and ANC member Zwelakhe Sisulu.

In many ways the awarding of this tender may therefore not only constitute the blurring of the lines between party and state but also undermine the important redistributive role empowerment must play if we are genuinely to transform and grow the economy.

Chancellor House seems to present proof that South Africans, collectively, need to draw a line in the sand that says, “Up to here and no further.” We cannot allow the interests of party, state and business to gently merge, as was the case under apartheid. We need only to glance back at the corrupt tenure of PW Botha and his racist crony capitalists to remind ourselves of the need to tackle this issue head on.

There are plenty of examples to show that this mixture can have all sorts of intended consequences. In the US it is exemplified in the support by big oil and arms companies for the Bush administration prior to the invasion of Iraq. In Zimbabwe, the emergence of companies owned by the ruling Zanu (PF) in the late 1980s was the beginning of what commentators have called the “Zanufication” of crucial sectors of the economy.

However, the Zimbabwean experience is instructive in other ways, too, because it suggests that many leaders in the party were in fact unaware that the party had stretched its tentacles into the economy. Questions soon began to arise as to whether this was intended to benefit the party or the individuals who controlled these corporate interests.

These practices can ultimately be the undoing of internal party democracy as new centres of power are created around strong people who hold the party’s purse strings.

They in turn dole out patronage to others and in the process the centre of democratic power in the party is discreetly hollowed out. It is therefore important not to regard party funding scandals as evidence of a political party acting in unison. On the contrary, party members and voters are likely to be kept in the dark when it comes to the names of foreign or local donors who have written cheques in favour of the party.

The Institute for Security Studies research suggests that Democratic Alliance MPs are, by way of example, not given access to the full list of donors ­ evidence that power and information are entrusted to others in the party.

Regulating the disclosure of private funding to political parties is crucial if we are to re-establish the link between citizens and those we elect into office ­ and equally between party membership and leadership. Ultimately, this will help to ensure that politics is representative of the needs of the majority, as opposed to the current trend towards disconnection between the rulers and the ruled.

This is perhaps the reason we witness the rise of political corruption in democracies across the world. The resulting voter cynicism further undermines the sustainability of the democratic project and entrenches ownership in the hands of the powerful and wealthy.

In the interim, we need to avoid fatigue and ensure we do not normalise scandal to the extent that the Chancellor House issue has gone unreported by many media.

Tough questions need to be asked by the media, civil society and branch members of political parties when we see the interests of politics, the state and business conflating. This is an imperative if we are to collectively prosper as citizens of a modern “secular” African state. This is a vision that Mandela and Sisulu shared while struggling for justice from the original Chancellor House over 50 years ago.

Van Vuuren is head of the Institute for Security Studies Corruption & Governance Programme. The ISS occasional paper can be downloaded at www.whofundswho.org.za

With acknowledgements to Hennie van Vuuren and Business Day.