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ANC’s milking of state coffers has become a way of life, explosive report reveals

ANC’s milking of state coffers has become a way of life, explosive report reveals

ANC’s milking of state coffers |  Leveraging state coffers to fund and keep the ANC in power is deeply ingrained in the governing party’s political DNA, an explosive report to the Zondo Commission reveals.

Appearing before the Zondo Commission on Monday, 3 May, former Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana disclosed that it was common for the ANC to ask state agency CEOs to make a “donation” to the governing party.

While President Cyril Ramaphosa, appearing before the commission on 29 April, said it was “regrettable” that the ANC had accepted donations “from companies implicated in criminal activities”, he intimated he had largely been in the dark about this.


However, according to an explosive and confidential report submitted by the Government and Public Policy (GAPP) think tank to the Zondo Commission and an in possession of SA TIMES NEWS, the ruling party’s milking of state coffers has, over the years, become a way of life.

ANC’s milking of state coffers |

The submission, authored by GAPP director Ivor Chipkin,

and titled Making Sense of State Capture in South Africa, sets out that State Capture, in this context, refers to “a way of winning and maintaining political office through means that are unlawful, frequently criminal and often violent”.


The centrality of the ANC “as the conduit between the economy and the state and back again is key to understanding the situation in South Africa”, the author notes.

State Capture was as much about accumulation and self-enrichment as it was about maintaining the ANC in power, said the report.

“As long as the ANC remains in power the ability of respective governments to implement policies declines. Daily life in South Africa is becoming poorer, more sordid and dangerous,” the report warns.

Chipkin described this as South Africa’s “impossible conundrum”.

“Democratisation risks civil war, the status quo produces decline. There are no easy answers out of this dilemma.”

The dilemma, according to the submission, is that the ANC has “held in unstable equilibrium the various fragments of South African society.

“It has done so because of a paradox:

the very access to state positions and the resources that fuel factionalism in the ANC [are] also the basis of its strongest cohesion.”

The governing party’s “hostile elites” had to combine to win elections “in order to rise in the class structure and to enter senior positions”.

The model of the ANC’s politics of the transformation of South Africa’s class structure and the integration of political elites, the report states, was first developed in the provinces and particularly Mpumalanga under the premiership of David Mabuza, now the country’s deputy president.

“It is possible to reconstruct how it works because recently a large body of evidence has entered the public domain through the upcoming court case of Fred Daniel,” states the report. The matter is due to be heard in July.

ANC’s milking of state coffers |

Daniel, a conservationist, brought a R1-billion civil damages claim against the Mpumalanga Tourism and Parks Agency and other government entities in 201o.

Writing in a three-part series on the long-running battle between Daniel and Mabuza,

who was MEC for agriculture and land affairs in the Mpumalanga provincial government before becoming premier in 2009, Daily Maverick’s Kevin Bloom described the feud as about much more than money – it is about the “mechanics of corruption”.

Back in 2003 already Daniel had blown the whistle on a land claims scam that the government office had allegedly run using local middlemen. For his trouble Daniel faced violent harassment, smear campaigns and an endless supply of death threats.

“We saw that in Mpumalanga the criminal repurposing of the Mpumalanga Parks Board and the land reform process saw key individuals get very wealthy,” notes the report.

Beyond this, the commercialisation “also favoured the emergence of numerous front companies that were largely fund-raising fronts for the ANC. The State Capture Commission has heard compelling evidence that this model of politics was at work in the Free State too.”

What was foremost about the Daniel/Mabuza case, said the report,

was the political context Daniel “unwittingly entered into” when he bought large tracts of land in Mpumalanga with the intention of rewilding.

“What he came up against was not simply corruption, but a new model of patronage politics,” notes Chipkin.

This new model ensured that the spoils of government did not make their way to potential supporters, as voters, states the report.

While ANC finances remained a mystery, “how it finances itself organizationally and how the various power networks that compete within it pay for their activities, campaigns and election efforts are key to understanding contemporary politics”, notes Chipkin.

The changing character of the ANC over the past 20 years had altered

“not only the quantum of money that the ANC needs to raise in order to operate, but also how and by whom it is raised”.

This week Montana shed some light on an estimated R80-million that Swifambo Rail Leasing director Auswell Mashaba, a member of the ANC, made to the “movement” after his company was awarded a R3.5-billion contract by Prasa in 2013.

While Mashaba has refused to testify, in a previous affidavit to the commission he claimed, “I was forced to pay money to people who said they were collecting money for the ANC and I agreed to pay R80-million.”

Apart from Mashaba’s sugar daddy donation, Montana also revealed that he had met Angolan businesswoman Maria Gomes, and the then treasurer of the ANC, Zweli Mkhize, in Johannesburg to discuss donations to the ANC. Montana claimed Mkhize had provided Gomes with bank account details for donations.

“Chair, I was there with Mr Mkhize,” said Montana.

ANC’s milking of state coffers |

This week’s evidence on Prasa aside, the Zondo Commission has heard a tsunami of evidence about suitcases stuffed with cash and paid to the likes of Malusi Gigaba, Deputy Minister of Home Affairs/Minister of Public Enterprises/Finance/Home Affairs.

The struggle today is not simply between avowed constitutionalists and democrats and their opponents.

The struggle today is for the very integrity of the state in South Africa.

Others seen leaving the Gupta Saxonwold estate, the family’s office complex at Sahara Computers or a luxury Melrose Arch apartment with laden car boots include two former Transnet CEOs, Brian Molefe and Siyabonga Gama.

The GAPP submission to Zondo sets out how gaining control over the levers of power “through illegal and unconstitutional means” has been used by many in the ruling party.

“The struggle today is not simply between avowed constitutionalists and democrats and their opponents. The struggle today is for the very integrity of the state in South Africa,” Chipkin submitted.

According to the report, the diversion of vast sums of taxpayers’ money into “war chests” for the ANC and the governing party’s subsequent fragmentation into powerful warring factions reveals State Capture as an unconstitutional political project which threatens democracy.

The report notes that, “Despite the supposed supremacy of the Constitution,

the rules of the political game in South Africa are defined in the ANC and according to

its increasingly toxic culture incorporating authoritarian and democratic tendencies simultaneously.”

ANC’s milking of state coffers |

One of the keys to the ultimate success of the political project that evolved gradually into

State Capture was the integration of various homeland territories and their government

officials after 1994 as well as the inclusion and recognition of traditional leaders by the


This provided a path for “aspirant Black capitalists” and former state managers and

officials as the ANC came to control the distribution of senior positions in public service.

The revision of the ANC’s constitution in 1997 set out how the party would function and

elect leadership through its branches, which led to extraordinary growth –

from 621,237 members in 2,700 branches in 2007 to 1.2 million members in 2012.

In the run-up to Polokwane in 2017, ANC membership ballooned by 30%,

with high growth in the Eastern Cape and Free State.

By 2017, the Eastern Cape had fallen into third place behind Mpumalanga, and Limpopo

had almost caught up. Between 2012 and 2017, the report notes, “growth in three

provinces in particular was dramatic”.

“In 2012 the North West sent 234 delegates to Bloemfontein [elective conference in

Mangaung]. Five years later it sent 538, an increase of 113%, Mpumalanga sent 467

delegates in 2012 and 736 in 2017, a nearly 60% rise. The number of Free State

delegates rose 26% to 409.”

Also in 2009, notes the report, the size of the executive grew noticeably under Jacob


His government consisted of 33 ministers and 27 deputy ministers (totalling 60)

as opposed to Kgalema Motlanthe’s 27 ministers and 20 deputies.

ANC’s milking of state coffers |

“By the end of Zuma’s term, the executive had grown to 71.”

This growth, notes the report, also marked a shift towards more local and regional politicians “hoisted to the executive”.

In 2009, 16 members of the executive came from provincial or local governments,

making up 26% of the Cabinet. By 2014 this had risen to 26, or 40%.

If this happens, the ANC will cease to be the pivot point in the double process of political integration and economic transformation.

The ANC will cease to be the chief site of the political and become an ordinary political party in a political field defined by the constitution.

“From 2009 the composition of cabinet suggests that the (provincial) origins of a politician

had become an important criterion for their selection to cabinet,” the report notes.

A dominance in regional politicians from North West and Mpumalanga becomes clear from

2009, while the third leg of the “Premier League”, the Free State, “scores poorly in cabinet

positions, but not in the leadership of the ANC itself, where Ace Magashule, the former


Free State Premier, is the Secretary General of the party”.

The “palace” politics of the ANC, writes Chipkin, “comprises party leaders, their families

and their wider network of lovers and mistresses”.

ANC’s milking of state coffers |

It also included the leaders’ staff, bodyguards and drivers and personnel in private offices.

“It includes political allies and colleagues, many, as we have seen, former homeland

leaders and officials. Friends are there as are spiritual advisors (mainly from Rhema and

other Pentecostal churches).

In attendance are policemen and members of the intelligence community, both officially and unofficially.”

The ANC too had “a long entanglement with criminal gangs” and “gangsters and organised

criminal syndicates are present at the ANC court [in the metaphorical palace] too”.

While the negotiated settlement prior to 1994 had given the ANC “the keys to the political

kingdom”, the report notes that the economy “remained overwhelmingly in white hands”.

“The broad strategy of the movement was to capture state power so as to extend control over the economy.”

The politicisation of public administration in the 1990s meant that access to senior

positions in government was largely decided through ANC political structures, especially provincial and regional committees.

Party members had to pass through party structures before they could access resources.

“The failure to distinguish between political and administrative roles is especially acute at

local government where it is hard baked into the very definition of roles.”

The only way forward, says Chipkin, is the “progressive reform of government”.

“The professionalisation of the public service by, in the main, distinguishing between

political office and administrative office and creating a buffer between the two will

reinforce the autonomy of the civil service.”

If this buffer was achieved through a process of independent and meritocratic recruitment

and promotion it would gradually improve the organisational capacity of government departments at all levels.

“When accompanied by transparency in public procurement and intensive media reporting

on and civil-society monitoring of government performance there is a prospect of building

bureaucratic strength quickly.”

Most importantly, notes Chipkin, civil service reform will reduce the scope “for networks

within the ANC (and other parties) to deploy their members and associates into key

positions in government and in the state.

“If this happens, the ANC will cease to be the pivot point in the double process of political

integration and economic transformation.

The ANC will cease to be the chief site of the political and become an ordinary political

party in a political field defined by the constitution.”

What would become of frustrated elites?

“They too might reject the new political dispensation and choose exit.

This time, though, they will encounter a more powerful and capable state.