The evolution of State Capture and the parallels with Sicily under Mafia boss Don Bernardo Provenzano

20 Jun 2022

Under Jacob Zuma, state institutions became a training ground for state employees and groups of individuals to repurpose state agencies and state-owned enterprises. Syndicates within the state agencies began to delegate the authority of the state to external private companies and families.

The period 2007 to 2022 will go down as eventful in the history of South Africa. It is marked by two, possibly three presidents who served incomplete terms and were removed from the top office for two fundamentally different reasons.

In 1986 I wrote an article under the name TB Fulani in The African Communist Number 106 on the effects of the South African economy on workers, in which I pointed out that the rand had tumbled to about 35 cents to a US dollar; the Johannesburg Stock Exchange (JSE) had to close for three days; and the Pretoria regime proposed the rescheduling of its debt repayment. This was an era of decline in the socioeconomic situation in apartheid South Africa. However, paradoxically for the oppressed black communities, the collapse of the apartheid economy signalled hope for change.

This was about four years before the unbanning of political organisations and the release of Nelson Mandela and all political prisoners. It followed the ANC Kabwe Conference in Zambia and the Harare Declaration which gave rise to the constitutional principles which paved the way to the Codesa process. It was a period of decline for the apartheid state and the ripening of the prospects of change for the better for those who were prosecuting the liberation Struggle. This was a pointer to the beginning of a new epoch for the majority of the black population.

The beginning of an era

When President Nelson Rolihlahla Mandela took over from President FW de Klerk, the process was less volatile in that the constitutional negotiation process allowed for a cessation of hostilities and the ushering in of a democratic state. This period was not just about the replacement of the apartheid constitution and the removal of racist laws, it was also about ensuring a smooth administrative transition, inducting the new cohort of civil servants into governance, building social cohesion through the deracialising of institutions of learning, allowing each ethnic community space to practice its culture and languages, and the democratisation of the economy.

All these were critical elements for nation-building and social cohesion. The replacement of the Interim Constitution of 1994, which paved the way to the Constituent Assembly to finalise and adopt the 1996 Constitution, was the signing of a national covenant for a non-racial, non-sexist society, where all ethnic communities will enjoy equal rights and opportunities.

President Mandela played a critical role in building the South African nation-state and promoting social cohesion among all the different ethnic and racial groups. Hence the concept of a rainbow which he and Archbishop Desmond Tutu so passionately promoted. The transition from the apartheid era to the new democratic epoch was smooth and well managed through the government of national unity. President Mandela to President Thabo Mbeki was simply continuity as Mbeki was deputy president and was already responsible for governance in the Mandela administration.

However, the events leading to 2007 when the world economy began to show signs of decline, and in 2008 the collapse of international markets, had a direct impact on the JSE. The South African property market was hit hard, thus reversing the gains of the black working and middle classes made in the early to late 1990s.

This economic depression was felt severely by the precarious middle class, that is, the lower segment of the black middle class and the working poor. Many industries closed down and laid off large numbers of workers, bond holders had their properties repossessed, and the precarious middle class had to be relegated down to working-class status.

The government and the labour movement locked horns on the appropriateness of the GEAR economic policy which the trade unions partly blamed for the collapse of the economy. The unions called for the nationalisation of state-owned enterprises (SOEs)and resisted the idea of bringing the private sector to partner with SAA. The decline of the economy marked the end of an era, and the ushering in of a new political epoch.

In 2008, the economic turmoil and the AIDS debate divided the country’s population and left the ANC split, some blaming Mbeki for these two international phenomena, which to my view was unfortunate. This resulted in a premature change of government, Deputy President Jacob Zuma took over as president of the ANC and Kgalema Motlanthe took over as interim president of the country following the recall of Mbeki from the presidency.

The transition from Mbeki to Motlanthe was relatively smooth under the circumstances. The Constitution and state institutions continued to maintain the integrity of the South African sovereign state and its agencies.

The Zuma administration

Zuma’s era in South African politics marked the end of an era. In contrast to the Mandela and Mbeki administrations, the Zuma era introduced a new public service ethos and a culture of self-serving and inward focus. State agencies were repurposed to serve the interests of individuals and families rather than the public. The constitutional principles and social values that were meant to hold society together, including the oversight role of parliamentarians, had to be questioned and revalidated by the judicial arm of the state.

State institutions became a training ground for state employees and groups of individuals to repurpose state agencies and SOEs. Syndicates within the state agencies began to delegate the authority of the state to external private companies and families. This new culture gave rise to two important issues which were raised by the public: first, whether South Africa is a failed state, and second, the seriousness of the notion of State Capture in the governance of state institutions.

When I checked the origin of State Capture on Wikipedia, the definition was first given by the World Bank around the year 2000, and used to describe “certain Central Asian countries which were making a transition from the Soviet communist system” to capitalism. State Capture described a situation where small corrupt groups used their influence over government officials to appropriate government decision-making processes in order to strengthen their own economic positions.

The Mail & Guardian, in an editorial on 14 September 2014, went further to define State Capture as “the efforts of a small number of people, aiming to benefit from the illicit provision of private gains to public officials in order to benefit from the workings of a government”. To illustrate the workings of these private individuals, The Mail & Guardian went on to cite the example of “the power (of private individuals) to appoint Cabinet ministers and the boards of state-owned enterprises”.

Let’s take the Constitutional Court judgment on Nkandla, for example. Chief Justice Mogoeng Mogoeng stated that President Zuma “failed to uphold, defend and respect the Constitution as the supreme law of the land”. The significance of that judgment, according to Max du Preez writing for News24 on 31 March 2016, is that “it clearly and simply brought the point home to many citizens that didn’t fully understand the very basis of our democracy – and that appears to include the president and the ANC’s parliamentary caucus – that South Africa isn’t a parliamentary or majoritarian democracy, it is a constitutional democracy”.

Du Preez continued that this Constitutional Court judgment made it clear that “not the president, the Cabinet, or Parliament may do anything, even make a law or appointment, that is in conflict with the Constitution, irrespective of the politician’s popularity or majority in the last election”.

In this regard, the judgment made it abundantly clear that when it comes to the Public Protector, her findings are binding and can only be overruled by a court of law. It is therefore not possible in light of this judgment that the state organs individually or collectively and intentionally can arrogate to themselves the powers of the Constitution and the organs of state. The confusion arises when the actions of the agents of state or the incumbent are conflated with the role of the institution of state. There should be a separation between the agency and the agent serving the institution.

This is well explained by the Zondo Commission, to which I refer below.

Then Deputy Chief Justice Raymond Zondo’s Commission on State Capture’s Report, Part One, can be paraphrased as indicating that:

State Capture agents were planning to create a shadow state;

State Capture agents were planning to remove people who had the necessary expertise and knowledge of the work of the institutions and replace them with their agents;

President Zuma was vulgar and calculating in betraying his people and that he colluded with the private sector to capture SARS;

The ANC abused the government tender system;

Former Johannesburg mayor Jeff Makhubo had twice received donations for the ANC while contracting for business in the city;

The Gupta family used pawns to milk the more than 740 SOEs and state companies; and

Malusi Gigaba was prepared to do wrong things for the Guptas.

After reading the report, the president of Business Unity South Africa (Busa), Bonang Mohale, stated that indeed there was State Capture in South Africa which rested on four pillars: (i) the creation of a shadow state; (ii) repurposing the SOEs; (iii) replacing the good people in the public service with bad people; and (iv) to take control of the R2-trillion that was under the management of the Public Investment Corporation as part of the strategy to capture National Treasury itself.

If this plan had succeeded, given that SARS accounts for 95% to 98% of state revenue, the collapse of this central state agent would have been disastrous for the country. This situation would have been exacerbated by the additional capture of Eskom and Transnet. In short, the Zondo Commission seems to suggest that there is a prima facie case for State Capture – of course, some of these findings remain allegations until proved in a court of law.

It is against this background of declining public interest and hopes for a better future that facilitated the entry of President Cyril Ramaphosa into the top seat of state power.

The Ramaphosa presidency

The Ramaphosa presidency was motivated by the fact that he came from the private sector and had the support of both black and white business. His credentials were clean, he had no record of corruption and he was also endorsed by the trade unions and the South African Communist Party. Public confidence was further reinforced by the assumption that he is wealthy and therefore unlikely to breach Treasury regulations.

Ramaphosa’s background in the Constitution-making process in the 1990s was an added value for his public endorsement for president. Amid all these positives were some dissenting views about his tentativeness when it comes to decision-making. But these criticisms did not dampen his commitment to bring about change in the country.

His presidency will be remembered for having ascended to power during the era of State Capture and looting. The fact that he is the president who governed during the State Capture inquiry – which he inherited from Zuma – can mistakenly be taken to mean he brought the Zuma era to an end.

The truth is that the era of diversion of state resources to individuals and groups has not ended. It continues. The only difference is that the looters have improved the looting methodology used by the Gupta family. Therefore there is a visible continuum from the Zuma era to the Ramaphosa administration.

First, the common information circulating in the business environment is that if you want to win a tender you must write the tender specifications. The tenderer who writes the specifications designs them to fit his/her company’s capabilities. This practice forces even innocent members of the community to become involved in illicit dealings with state agents, including BEE companies. This may not be defined as State Capture, but it is a continuation of the culture of corruption and diversion of state resources for illicit private individual and company benefits.

Second, the appointment of people in positions for which they do not qualify, as Bonang Mohale pointed out in respect to the State Capture practice, continues in all three spheres of the state. It is therefore not surprising to see many incomplete or abandoned road construction projects in different parts of the country. This is because the contractor has had to pay the state agent from the operational capital before the project even starts.

This practice has given a bad name to the BEE policy since it stigmatises black companies as being incapable of offering good-quality service. This suggests that the State Capture culture has mutated and reproduced itself in different forms which inadvertently negatively affects even innocent individuals and businesses.

Furthermore, the recently reported stashing of dollars on the President’s farm and the consequent reported burglary do not make the President look good. Following media reports, it seems he might have betrayed the trust the public had placed in him that because of his wealth he is unlikely to breach Treasury regulations. However, he may have to argue this in court.

For the purposes of connecting the dots back to the party, both Zuma and Ramaphosa were deputy presidents of the ANC to Thabo Mbeki and Jacob Zuma before 2007 and 2017, respectively. Allegations of wrongdoing or corruption in the government have a direct impact on the party and vice versa, especially when the leadership is implicated in those things.

The Italian mafia Boss Bernado Provenzano manipulated state operations from hiding for 40 years, to the extent that at one stage he was presumed dead. Following his eventual arrest, one of the prosecutors in the trial, Pietro Grasso, had to admit that he did not believe it was just one politician who protected Provenzano for 40 years. According to him, it was the entire political system, suggesting that the state agencies were involved in the crimes. Following Provenzano’s arrest, the public continued to ask why he had been allowed to operate freely for so long.

Indirectly responding to that question, Clare Longrigg, in her book Boss of Bosses (2008), clinically analysed how Provenzano saved the Mafia, and quotes Grasso as saying “he (Provenzano) was protected by professionals, politicians, businessmen, law enforcers”. This the investigators had established in the course of their investigation. Provenzano believed their gang had developed to a stage where they co-existed with the state.

The report of the Zondo Commission undoubtedly has come to a similar conclusion as Grasso. What saved the Italian state from a complete takeover by the Mafiosi was the level of development and sophistication of their state institutions. They were not dependent on individuals, and the system had developed its own internal protection mechanisms from infiltration.

Similarly, the role of intellectuals is to free themselves from depending on social media for information and conduct independent research on national issues, to objectively establish the truth and inform the public with tested knowledge without fear or favour. There is a danger that some individual academics and institutions of higher learning could find themselves as an extension of the state machinery, thus losing their intellectual rigour and the production of scholarly independent researched papers.

It is not the role of academics to become the mouthpiece of the state or an extension of the state propaganda machine. Academics must stand out, not by criticising, but by critically analysing some of the assumptions and assertions made by politicians on behalf of society.

In conclusion, as I pointed out above, it is the ruling elite that seeks entry into state institutions and to entrench the old order which gives access to and control over state resources while the poor are dying of hunger and diseases. The working class and the poor remain in poverty and a state of hopelessness, while the political leadership continues to be preoccupied with existentialism and self-preservation, as is the case in the rest of the African continent.

To quote Madoc Cairns, writing in The Guardian (13 March 2022), “any politics based upon the capacity of ordinary people to transform society ought to pay close attention to what ordinary people actually want”. DM

This is an edited version of a paper presented by Dr Botha at his doctoral graduation function at the University of Johannesburg on 16 June 2022.

Dr Thozamile Botha is a member of the Stalwarts and Veterans Group of the ANC. He has a PhD in Sociology from the University of Johannesburg.

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South Africa

The beginning of an era

The Zuma administration

The Ramaphosa presidency