Notes on Meaning and Implications of State Capture “Why we must act…”
Elements of a Definition • Shadow state and a shadow governing party • Wholesale corruption • Public institutions as private instruments • Corrosion (destruction) of public institutions • Erosion of the constitution and the rule of law • Reactionary populist politics
Connect the dots… • State of Capture Report • PG’s Application for a Declarator to the High Court • Regiments Capital v Trillian papers re “delinquent directorship” • SACC Unburdening Panel’s Report • Betrayal of a Promise Report • OUTA’s Case Book • Denel’s application to ratify Denel Asia JV with VR Laser • Fireblade application against Gigaba • HOB application for license • PRASA Mandamus application against the Hawks • Media reports re Trillian payments from Eskom • Media reports re Transnet 1064 contract • Media reports on Gupta emails
Template for Capturing an Institution • Smear campaign through “intelligence dossier” • Announcement of an investigation • Suspension of the incumbents • Replacement focus on investigating the previous incumbents • Results of investigation are leaked to the press • Subjects of investigation are prohibited from defending themselves publicly • An internal restructuring takes place in which the “ancien regime” is displaced • After a review old processes that were functional are suddenly outsourced
Examples of Shadow State and Party • Cabinet appointments at Saxonwold • SOE appointments at Saxonwold • Division of labour/power in cabinet from Saxonwold • “Fake” cabinet statements • Cabinet reshuffle in March 2017 - “ a list from somewhere… ” • ESKOM and Transnet • Sale of strategic oil stocks • Sale of SABC archives • International relations • Citizenship
Examples of Grand Corruption • Proposed nuclear tender • FIC Certificate of 72 suspicious transaction reports • Transnet Tender 1064 • ESKOM coal supply agreements • ESKOM prepayments for coal • ESKOM diesel contracts • PRASA locomotives and signalling tender • SASSA grants distribution tender • Sale of strategic oil stock
Public Institutions v Private Instruments • Absolve your friends, prosecute your enemy • Refund thine-self, audit the rest • Contract to yourself, shake-down others • Make the rules as you go along, others must keep up • Your subjects shall pay for your wedding
Redirecting or Destroying Public Institutions • Reducing the autonomy of SARB, SARS, NT, Hawks, IPID, NPA • Questioning the independence of the judiciary and media • Outsourcing state’s core functions, capability • SASSA grants = enrichment of foreign capital • CIEX v SARB = Change of Mandate & Constitutional Amendment • Purpose of mining charter = empowerment of “naturalised” blacks
Rule of Law or Ruler’s Whim • Party discipline above the country’s constitution • Selective disciplinary actions against “dissidents” • “Privatised” intelligence service • Omar al Bashir and weekend diplomatic immunity • Promotion of wrongdoers, demotion of the principled • Selective investigations and prosecutions 9
Dog-whistle Politics • 100% Zulu Boy • “Ungqingili” • Demonisation of Khwezi during the rape trial • Secrets of foreign-born traders (Operation Fiela) • Traditional courts bill • Defence of violence against women • White Monopoly Capital & RET
Why did they succeed (until now?) • Vestiges of apartheid enable populist politics • Historical partiality and oppression of the rule of law and state institutions • Politicisation of the criminal justice system • “Schizophrenia” of the new public service - professional or political? • Instability of the public service • PR Electoral System - one-party dominance • Fetish over history and ideology • Control over president and levers of state • Demobilisation of civil society
Effects of State Capture • Resources for development are redirected to private consumption • Government activities are directed to only those projects that can be outsourced • Defence of corruption always needs populist politics • Erosion of constitutional democracy • Increased govt debt, borrowing costs, threats to fiscal sovereignty • Raid on workers pensions • Potential limits on social expenditure
Countervailing Forces • Independent and vigilant media • Independent judiciary • Thriving civil society • Low economic growth • Incompetence and brazenness • High levels of political consciousness in SA
Quo Vadis?
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