South Africa Faces Long Haul to Roll Back Corruption Scourge

(Bloomberg) -- A bid by South African authorities to tackle the corruption that marred former President Jacob Zuma’s tenure may drag on for years, with no guarantees of successful prosecutions or recouping billions of rand pilfered from the state.

The government’s ability to halt “state capture,” a local term used to describe the looting, and return the funds will be a key test for President Cyril Ramaphosa’s drive to restore the trust of the electorate and investors in public institutions. About 100 billion rand ($8 billion) may have been stolen, according to Pravin Gordhan, a former finance minister who now oversees state companies.

South Africa Faces Long Haul to Roll Back Corruption Scourge

A high-powered judicial panel led by Deputy Chief Justice Raymond Zondo that was initially supposed to sit for six months says it needs at least two years to expose wrongdoing -- and it doesn’t have the power to arrest anyone or seize assets. Those tasks will fall to a police force and prosecution service that have been gutted of senior staff over recent years and have had a dismal record in securing convictions of the rich and powerful.

“The sheer scope of the challenge facing the state capture investigation team defies comprehension,” Bart Henderson, chief executive officer of the Africa Institute of Corporate Fraud Management, said by phone from Johannesburg. “Who says it’s going to lead anywhere? When it comes to getting stolen money back, I wouldn’t hold my breath.”

The extent of the graft was laid bare in separate probes conducted by the nation’s graft ombudsman, a group of leading academics and panels of lawmakers. They placed members of the Gupta family, who were in business with one of Zuma’s sons, and their allies at the center of the corruption that Zuma and several cabinet ministers and senior officials allegedly facilitated.

Zuma, who is due in court on Friday to face charges of accepting bribes from arm dealers dating back to the 1990s, and the Guptas, who have fled the country, deny wrongdoing. Two attempts by the National Prosecuting Authority’s asset forfeiture unit to seize vehicles and properties belonging to the family to recoup funds illegally diverted from a state-funded dairy project have been overturned by the High Court due to a lack of evidence.

South Africa Faces Long Haul to Roll Back Corruption Scourge

Ramaphosa, who took office in February after the ruling African National Congress forced Zuma to resign, has said his administration is committed to stamping out state capture and prosecutors won’t wait for the Zondo commission to wrap its work up to charge those responsible.

He’s appointed a new police chief and head of the elite Hawks corruption investigative unit, while the boards and management of several state-owned companies have been replaced. Chief prosecutor Shaun Abrahams, who opposition parties accuse of obstructing cases against Zuma allies, has retained his post while a lawsuit filed by a civil rights group that aims at removing him because his predecessor’s removal was unlawful runs it course.

Fast-Tracked Prosecutions

Justice Minister Michael Masutha said in a June 4 interview that he’s instructed the prosecutions agency to cooperate with Zondo’s commission to ensure investigations aren’t duplicated and prosecutions are fast-tracked. The government may request the United Arab Emirates to extradite members of the Gupta family who are based there, he said.

Zondo said his panel intends to start holding public hearings in August, and any evidence collected will be admissible in future legal proceedings.

“We will be working flat out to make sure this investigation doesn’t take one day longer than it should,” he told reporters in Johannesburg on May 24. “We will be trying to make sure that we strike a fair balance between not delaying too much but at the same time making sure that we do a proper job.”

The panel was allocated 230 million rand for its first six months of work, Zondo told Johannesburg-based Talk Radio 702.

David Lewis, the executive director of South African transparency group Corruption Watch, said Zondo’s commission could unearth new evidence on state capture, help explain how it came about, identify systemic weaknesses and propose policy measures that could prevent it from happening again.

“I think some big names are going to ultimately go to jail,” Lewis said. “But not everybody who deserves to go to jail is going to go. That is not a uniquely South African phenomenon.”

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