Russia may have exported scourge of State Capture to SA – it could happen again

12 Dec 2022

President Cyril Ramaphosa’s possible resignation has sparked concern about the revival of Russian president Vladimir Putin’s autocratic influence on South African institutions under Jacob Zuma.

After South Africa’s abstention in United Nations’ votes on the Russian invasion of Ukraine, European political leaders warned International Relations and Cooperation Minister Naledi Pandor that Vladimir Putin is “exporting autocracy” to Africa, Pandor said.

The Times (London) pointed to Deputy President David Mabuza’s at least four private trips to Moscow, three while deputy president, when it reported that Mabuza is next in line to be president if something should happen to Cyril Ramaphosa.

“Politician with ties to the Kremlin is a frontrunner to replace embattled leader,” The Times wrote. Mabuza has explained that his trips were medical, including treatment for an alleged poisoning.

Anxiety about Putin-style corrupting influence on South African institutions goes far beyond the Russian nuclear deal, the poster child of State Capture that eventually derailed Jacob Zuma as president.

Under Zuma, the intelligence service was radically restructured to become disturbingly similar to Russia’s — the State Security Agency intervened in internal ANC politics to aid Zuma, it was authorised to start “revenue generating” businesses, and agents’ oath was changed to swear allegiance to the president. And the SSA became a cash cow for agents to accumulate private wealth.

The full relationship between Zuma, Putin and Putin’s powerful, intelligence-connected Russian oligarchs is still shrouded in mystery. But Zuma clearly admired Putin’s free hand as president compared to South Africa’s constitutional restraints.

“Why must I go and answer questions in Parliament?” Zuma asked former Sars executive Ivan Pillay. “Putin doesn’t go to Parliament to answer questions.”

Pillay was meeting Zuma to express concern that almost every large-scale tax evader accessed a political leader to pressure Sars to be lenient with them. No previous South African president would have compared Putin’s constitutional position favourably with his.

The term State Capture was first used by the World Bank in the early 1990s to describe Russia’s government.

Under Putin, Russian intelligence services gained enormous power and a significant number of intelligence officials from his home town St Petersburg have become super-rich oligarchs. They are often accused of interfering in domestic politics on Putin’s behalf.

Putin forced owners of independent media to give up their shares, and replaced them with Putin cronies. Political opponents have been blocked from competing with Putin in elections. Investigative journalists and opposition politicians have been assassinated or jailed.

During Zuma’s presidency, he attempted to introduce a media tribunal and a Secrecy Bill. But the most far-reaching and sinister changes occurred in the intelligence service, the State Security Agency, and only emerged after Zuma left office in the report of the High-Level Panel chaired by Sydney Mufamadi, now President Ramphosa’s national security adviser.

Zuma, a former ANC intelligence chief, had at least 13 meetings with Putin, a KGB operative who rose to be head of the KGB’s successor, the FSB. He restructured South Africa’s intelligence service and granted it sweeping new powers. Mufamadi’s panel concluded this led to a “large number of manifestly illegal orders”.

Among the new rules, the oath spies swore to uphold added that they swore loyalty to the president, not just the country, and to “recognise the authority of the minister of state security”. This was new.

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The restructured SSA was also authorised to conduct covert, domestic “influence” operations, which came to include establishing a trade union and interfering in factional politics in the ANC to support the Zuma faction against political rivals.

The SSA was granted the right to engage in “revenue-generating” activities, quite inappropriate in a democracy but perfectly at home in Putin’s KGB and its successor, the FSB.

Putin’s experience in the Soviet and Russian federation intelligence services was replete with business dealings involving trade. Before he became president, much of his work in government involved buying and transporting food and other goods, and doing deals with private companies after the collapse of the Soviet economy.

In that atmosphere corruption was rife and many former agents became rich. Once Putin became president, he systematically brought former KGB and FSB colleagues from his home town St Petersburg into national government and gave them control of private corporations. They constitute the second wave of Russia’s super-rich who owe their success to Putin.

Mufamadi’s panel concluded that “the SSA became in effect a cash cow for many of its members and external stakeholders.” Once it was encouraged to generate revenue this seemed inevitable, creating a new sphere of corruption and abuse.

Russian institutional influence in South Africa has many prongs, but the most obvious is that a single Russian oligarch, Viktor Vekselberg, is the ANC’s most important financial backer by far, bailing out the ANC from its recurring financial crises.

Vekselberg, one of the most influential oligarchs in Moscow, holds citizenship in Russia, Israel and Cyprus but his primary family home is in Geneva. Vekselberg maintains extensive property holdings and fine art, including nine imperial Russian Faberge eggs.

His involvement in South Africa is mainly through the Renova group, which has extensive interests in mining, energy and telecoms. Here Renova partnered with the ANC company Chancellor House to buy the United Manganese Company of the Kalahari (UMK). UMK has provided by far the largest declared donations to the ANC for the past two years.

Without the Vekselberg manganese interests, the ANC probably could not pay for its election campaigns. It is not realistic to assume this brings no leverage.

The Putin-Zuma nuclear deal was a logical step in the long-term strategy Putin developed in a thesis he wrote before he entered national government.

Putin’s 1990s thesis proposed using Russia’s advantages in the energy sector to rebuild its shattered economy. Putin saw the opportunity to use Russia's supplies of oil, gas and nuclear technology as a geostrategic lever to restore Russia’s power around the world.

This supports the view that the nuclear deal was initiated by Russia, not South Africa.

The Russian nuclear deal signed in 2014 aligned the financial interests of key oligarchs in Russia and the Guptas in South Africa — the Guptas had become South African oligarchs in the sense that is used in Russia — intervening to influence policy and high-level appointments. Ironically, Putin has his oligarchs on a tighter rein than Zuma did.

The Guptas, and Zuma’s son Duduzane, bought the South African uranium mine they renamed Shiva in 2009, but demand for uranium fell. Without the nuclear deal, it was a millstone, and the Guptas persuaded the Industrial Development Corporation to restructure part of its loan into shares and cut the interest rate on its remaining balance. The IDC took a serious hit.

The Russian side of the deal involved Rosatom, Russia’s largest electricity company which lists Putin as its “founder”. All nine board members are top government officials with careers in Russian intelligence, including Sergei Korolev, the FSB’s head of economic security. They include two assistants to the president, a cabinet minister, a deputy cabinet minister, the president’s representative in the Far-Eastern District, and the head of the Military Industrial Commission. They report directly to Putin.

Russian environmentalists first tipped off South African environmentalists who successfully fought the deal in court. In Cabinet, the deal was blocked when successive Finance Ministers Pravin Gordhan and Nhlanhla Nene refused to sign a state guarantee for the loans required. It was unaffordable.

“If either had signed, South Africa would have become another Russian-controlled failed state held together with violence and fear,” Development Bank of South Africa chairperson Professor Mark Swilling, a sustainable development expert, said later.

Another Putin-aligned Russian oligarch with a St Petersburg KGB background who visited Zuma at Nkandla in 2011 bearing gifts is Vladimir Strzhalkovsky. Strzhalkovsky, former CEO of the world’s leading producer of nickel and palladium, Norilsk Nickel, handed Zuma a Russian mobile telemedicine laboratory. Then-State Security Minister Siyabonga Cwele was present.

“Jakob (sic) Zuma expressed high opinion of the Company’s current projects in the country,” a company statement said. “He said that South Africa was ready to proceed with supporting the participation of Norilsk Nickel in new ore extraction and processing projects in South Africa.”

In his best-selling blockbuster The President’s Keepers, journalist Jacques Pauw relates that the equipment was impounded by Sars because it lacked clearance certificates. Cwele intervened citing “state security” and the cargo was released.

A source told Pauw there was a lot of cash on the plane. “When Cwele moved in he took over the whole shipment, including the money,” Pauw’s source told him. “The money was also not cleared and therefore illegally imported. Its origin and destination were never determined.”

Perhaps the biggest threat to constitutional democracy in Africa comes from the Wagner Group of Russian mercenaries, private soldiers that have operated in Mozambique, Mali, Libya, Central African Republic, Syria, Ukraine and many other countries.

Accused of widespread human rights abuses, the group last month uploaded a video in which one of its operatives in Ukraine executed one of its own with a sledgehammer as punishment for changing sides.

South Africa’s strict anti-mercenary policy, which led to the trial and deportation of Mark Thatcher, son of former British Prime Minister Margaret Thatcher, seems to be diluted now.

Asked about Wagner, Pandor downplayed its significance, comparing it to the comparatively miniscule Dyck group which she calls the Van Dyck group.

What Putin and Zuma seem to have in common is cynicism about the values underlying democracy. But Zuma was stopped in part because our Constitution and civil society are both much stronger here. State Capture was a blemish on the system, and enough checks and balances were applied to stop it.

In Putin’s Russia, State Capture is the system. This emerged at the very beginning of Putin’s presidency. Russia was already corrupt, but there was media freedom, a wide array of candidates for public office, and reasonably fair elections.

Putin stopped all that, and no institutions were able to restrain him.

One of Ramaphosa’s first acts as president was to cancel the Russian nuclear deal. He sent his new deputy Mabuza to Moscow to convey the decision. There was a second message: Ramaphosa also told his deputy to confirm that Putin’s planned state visit to South Africa was cancelled too.

But Mabuza keeps going back.

Somehow the story of the repeated need for Russian anti-poison doctors, first for Zuma, later for Mabuza, feels wrong. South Africa indeed has political assassinations, but the chosen methods are much more bloody, and none has been verified involving high-profile ANC leaders since Chris Hani, before the democratic government was born.

Could it be that this poison case is the reverse? That they weren’t poisoned at all, but that Russian scientists advised them they were, providing an excuse for repeat visits at which there is plenty of time to scheme? DM

This article is adapted from the book ‘Cyril’s Choices, An Agenda for Reform’ by John Matisonn. Matisonn, a former senior United Nations official in Afghanistan, is executive director of Ideas for Africa (Pty) Ltd.

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