Introducing the four crime cartels that have brought Eskom and South Africa to their knees

Note: City Press and Rapport first reported on some elements that we’re dealing with in this story on Sunday, 26 February.

Safe house

The organogram was the size of the boardroom table. Approaching it, there was a distinct feeling that what we were about to see could never be unseen. The country we thought we lived in, from that moment on, would be an entirely different place.

“CRIME CARTELS OPERATING WITHIN ESKOM,” the header explained, all in caps.

In the body of the organogram, below the so-called “territorial ruler” and his primary enforcer, who was identified by name as the “henchman” and “assassin”, were the leaders and foot soldiers of the four cartels: the Presidential Cartel, the Mesh-Kings Cartel, the Legendaries Cartel and the Chief Cartel.

There were photographs of the major players, in some cases alongside the companies with which they were affiliated, but a lot of the information was yet to be confirmed. Still, in a column running between the cartels was a box titled, “Illicit procurement process to defraud Eskom”. This, we knew, was the covert information on how it all worked.

“What we have here,” said our source, “is not evidence. It’s intelligence. You guys will have to do the work of joining the dots.”

There were other conditions that came with our access to this “safe house”, out in a quiet suburb of Gauteng’s metropolitan sprawl. We had been asked to leave our phones in the car, so it went without saying that revealing any clues that could lead to the identification of our sources was an absolute no-go zone.

Also, for the moment, we were told, very firmly, that we could not quote from the intelligence reports until we were given the green light.

The reason for this was simple: our sources, former state intelligence operatives who were now working for the private sector, are still active in the field.

“If you want to get killed,” said our primary source, “you come play here.”

We nodded, and turned our attention back to the organogram. Aside from the identity of the “territorial ruler”, it was the “illicit processes” that drew our attention.

At the top of the column was an item marked “Soldier”, where it was explained that the cartel leader or one of his subordinates would “approach a specific end-user” — for instance, an “engineer” in the generation or distribution division of Eskom — to begin the process.

“The end-user [Eskom insider] is in cahoots,” the text noted, “and receives a substantial amount in cash, including extra funds to bribe the other employees in the supply chain to ensure their cooperation.”

Next, the text went deeper into how the end-user operated and what he intended to accomplish, beginning with the “payment of an upfront bribe” to the store manager of a power station.

“The store manager then verifies how much of a specific type of equipment is available on inventory to be covered in a purchase order. Should the equipment to the value of the intended purchase order be available in stock, the existing equipment in stock will be hidden or displaced somewhere in the power station to justify the procurement/purchase request for additional equipment.

“Also, for the cartels to create a supplementary business to supply essential components or renew or continue maintenance contract works, the cartel will plot the destruction of infrastructure with insiders so that a breakdown can justify repairs or the supply of components via the cartel vendors.”

The text then went into information that is already in the public domain, such as “malicious damage” to conveyer belts and the “sabotage” of the railway line feeding the Majuba Power Station — the last example, it was noted, so as “to ensure the survival of their coal transport trucking companies supplying coal to Eskom”.

Finally, the text explained, the end-user would approach the procurement manager, “or an employee referred to as a Mphati in collusion with the cartel”.

This Mphati, it was noted, had become “a very influential contact at the power station”. As the man in charge of procurement, he “receives an upfront inducement that serves as an acceleration fee to issue a purchase request (RFQ)”. And here, according to the intelligence, was where the “illicit procurement process” got set in motion.

“The procurement manager/buyer instructs the financial department to approve the expenditure that must, according to the supply chain directives of Eskom, have the signatures of both the end-user and the store manager.”

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So there it was, the scam in all its torrid glory, a simple outline of a criminal network so vast and heinous that it was bringing the country to its knees. The cartel members, with the backing and protection of the “territorial ruler”, would, by this stage in the process, have the South African taxpayers’ funds all but in their leather bags.

In the column’s third section, the intelligence went on to explain:

“The purchase request (RFQ) is then taken to a senior buyer who will receive their share of the bribe/pay-off. After that, three compulsory quotes will be obtained. All three quotations will originate from the same cartel as all three approaching members are members/soldiers of the same cartel.

“The soldiers/vendors manipulate the quotations so that a specific pre-chosen company is inevitably appointed as the final vendor, and a purchase order (PO) is issued accordingly. In addition, the buyers often will create a false urgency by sending official emails to the vendor to expedite delivery, which will then be used to justify a higher price. It will also then record that the PO is bona fide.”

But that wasn’t all. The fourth section, titled “Bribed security officers sign off on non-existent product delivery”, was pretty self-explanatory, with Eskom’s security staff in the secret employ of the cartels putting their signatures to “ghost deliveries” and verifying that the equipment had been inspected at the main gate.

“The end-user and store manager will receive the ghost delivery and sign the receipt to deliver the non-existing equipment. The hidden equipment is retrieved from where it was hidden and placed back into storage as if the equipment had been delivered.”

It was at this juncture that we came across the sentence which, we knew, would make our work incredibly challenging.

Aside from the fact that all bribes up and down the line were paid in cash, there was the following problem:

“All the procurement documentation from the purchase request to the delivery note will procedurally correspond with the equipment on inventory, making it difficult for forensic audits to identify fraud and malpractice.”

The ‘territorial ruler’

The date was early December 2022, just days before the ANC’s elective conference at Nasrec.

We knew, from a series of previous conversations with our sources, that the intelligence gathered in the field suggested a direct link between the sabotage, the cartels, and an orchestrated programme of political destabilisation.

Not a day had passed in November without power cuts across the country, and now, in December, we were headed for an extended bout of Stage 6.

 

The name of the “territorial ruler” at the top of the organogram was therefore no surprise to us, although it still came as something of a shock.

A few days later, when we were directed to a second secret location to take possession of the monthly intelligence reports on which the organogram was based — a series of thick individual files stretching from March to November 2022 — we quickly came across multiple entries that suggested the “territorial ruler” was a contender.

In the July report, which totalled 128 pages, his name was mentioned 28 times. One of these entries, under the standard “Confidential” in red text, noted the following:

“THREAT: Destabilisation of Eskom power plants in Mpumalanga allegedly involving [‘territorial ruler’], Team Shikisha … the Presidential Cartel and Radical Economic Transformation (RET) cabal.”

Team Shikisha, it turned out, had been placed in the organogram above the four cartels — as a “feared murder squad” comprising roughly 60 to 70 members. The leader was identified by name, as was the name of the territorial ruler’s chief “principal”, to whom it was alleged that Team Shikisha covertly reported.

While Daily Maverick, for legal reasons, cannot yet identify these two individuals, the activities of Team Shikisha have long been in the public domain. In July 2021, it was reported in the Witbank News that Mpumalanga MEC for community safety, security and liaison, Vusi Shongwe, had organised a “crime imbizo” to encourage the residents of Emalahleni to speak out.

“It is alleged by the community members that [Team Shikisha] is using illegal guns, shooting in the streets, threatening people, and saying they will kill them,” the news report noted.

Also in July 2021, under the header “Team Shikisha”, a video was posted to Facebook of two gentlemen celebrating in a high-end car dealership.

Although the involvement of the two men was unconfirmed, this squared with the intelligence we received that leaders of the cartels would “pay cash for luxury cars” and “wash their hands in 15-year-old whisky” — a detail that would be repeated in former Eskom CEO André de Ruyter’s bombshell eNCA interview in late February 2023.

https://www.youtube.com/watch?v=6gF2dYQ-NdM

As for the “territorial ruler”, the August intelligence report noted the following, all in caps: “[THE TERRITORIAL RULER] INITIATES PUBLIC UNREST IN MPUMALANGA THROUGH HIS HENCHMEN TEAM SHIKISHA AND [name excised] IN SUPPORT OF BECOMING PRESIDENT.”

The SAPS generals and brigadiers

Similarly, as regards the involvement of senior South African Police Service (SAPS) officers with the Eskom cartels, the August report noted the following (again, although all names are known to Daily Maverick, the identity of the brigadier has been removed for legal reasons):

“[The ‘territorial ruler’s’] very close confidante is SAPS Brigadier X who undermines or frustrates any investigation into his interests. Whenever money is transported, Brigadier X is informed, and he ensures that the vehicle transporting the money is not stopped at a roadblock. If the vehicle is stopped, a phone call to X is made, who will take care of it.”

In all, in another arm of the organogram that stretched out from the topmost box of “territorial ruler”, 13 Mpumalanga SAPS officers were named under the following explanation: “CORRUPT: PREVENT PROSECUTION AND INVOLVED WITH CARTELS AND ILLEGAL MINING FOR FINANCIAL GAIN.”

The officers included two generals, three brigadiers, one ex-brigadier, one colonel, two captains, one lieutenant, one warrant officer and two sergeants.

But perhaps the most persuasive intelligence was reserved for the September 2022 report.

“The involvement of highly placed political actors remains extremely difficult to trace,” the report noted. “This is mainly because nothing is put in writing, and communication is done through third parties, which cuts out all direct connections. However, various independent sources suggest similar traces of involvement by [the ‘territorial ruler’], namely:

• “He controls people high up in the power stations to approve contracts for his friends and family.


• “He exercises firm control over contracts awarded for several types of departments in Mpumalanga province.


• “He also controls senior officials in the province, such as police and traffic police chiefs, city councils, and other local authority levels.


• “Information suggests that contract beneficiaries pay [him] kickbacks in cash for tenders awarded due to his influence. Rumours are that he hides some of his money in JoJo water tanks.


• “Should any investigation be initiated in Mpumalanga, an informant will report to [him] and give instructions to certain senior officials to ensure the investigation is stopped.


• “The indications are that he controls at least one hit squad operating in Mpumalanga.”

The bottom line (for now)

In the months since Daily Maverick received the intelligence reports, a team of journalists has been working all out to connect the information sourced on the ground to direct documentary evidence of the “territorial ruler’s” involvement in the Eskom crime cartels. This has demanded the gathering of many gigabytes of data from a range of sources, which, taken together, tell the story of corruption at South Africa’s power utility that includes hundreds of names and thousands of supplier companies, both local and international.

In the weeks and months and, perhaps, even the years to come, we intend to tell this larger story under the “Eskom Intelligence Files” banner.

But, as the intelligence reports warned, conclusively implicating the “territorial ruler” has proved an incredibly challenging task.

Although we would have preferred to wait for the bank statements and purchase orders that settled the matter once and for all, recent events in the public domain – most notably, De Ruyter’s aforementioned interview on eNCA – have made publishing what we legally can right now an important contribution to the understanding of just how big an ongoing crime scene Eskom was for years.

Finally, as De Ruyter also made clear in the eNCA interview, there was another Cabinet minister named in the intelligence reports — and we can now reveal that he also appeared in the organogram on the same (topmost) level as the “territorial ruler”.

As the political instability increases and President Ramaphosa continues to delay the announcement of his new Cabinet, which is expected to remove South Africa’s deputy president, the country hovers on the edge of the abyss. DM

Also read: Which minister told former Eskom boss André de Ruyter, ‘you have to enable some people to eat a little bit’?