Player and referee Conflicting interests and the 2010 FIFA World CupTM Edited by Collette Schulz Herzenberg Monograph 169 April 2010 Contents Acknowledgements � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �iii About the authors � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � v Abbreviations � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � vii Chapter 1 Introduction � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 1 Collette Schulz Herzenberg Chapter 2 Soccer City: What it says about the murky world of government tenders 21 Rob Rose Chapter 3 Tendering irregularities in the Eastern Cape � � � � � � � � � � � � � � � � � � � � � � � � � � � 51 Eddie Botha and Gcina Ntsaluba Chapter 4 How FIFA corruption empowers global capital � � � � � � � � � � � � � � � � � � � � � � � � � 73 Andrew Jennings Chapter 5 FIFA’s ‘official’ suppliers: Shadowy tenders and conflicts of interest at Match � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 99 Rob Rose Chapter 6 Public loss, FIFA’s gain: How Cape Town got its ‘white elephant’ � � � � � � � 133 Karen Schoonbee and Stefaans Brümmer Monograph 169 i Chapter 7 Durban’s Moses Mabhida Stadium: Arch of hope or yoke of debt? � � � � �169 Sam Sole Chapter 8 Conclusions and recommendations � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �203 Collette Schulz Herzenberg Bibliographies � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 215 ii Institute for Security Studies Acknowledgements The Corruption and Governance Programme at the Institute for Security Studies extends its sincere appreciation to all those who were involved in the production of the report. The journalistic experience and skill of the various contributors made it possible to produce innovative and insightful research. We are also grateful to our peer reviewer for constructive criticisms. Appreciation is also extended to the South African officials and ordinary citizens who participated in the research by responding to enquiries and questions. We gratefully acknowledge the generous support of the Open Society Foundation in South Africa, which made this study possible. Monograph 169 iii iv Institute for Security Studies About the authors Eddie Botha is the investigations editor of the Daily Dispatch, and was previ- ously, among others, the political editor of the Financial Mail and Washington bureau chief for Rapport. Apart from a number of journalism awards, he has also received a Fellowship from the Carter Centre in Atlanta in 2008 for his contribution to mental health journalism. Stefaans Brümmer co-founded the M&G Centre for Investigative Journalism in 2010 following more than a decade specialising in investigative reporting, principally for the Mail & Guardian. He has honours degrees in political studies (University of Cape Town) and journalism (University of Stellenbosch). Stefaans has received numerous awards for exposés to which he contributed, including Oilgate, the Selebi affair and the arms deal scandal. Andrew Jennings is an award-winning British investigative reporter who con- tributes to leading newspapers and television programmes internationally. He is the author of five books, translated into 15 languages, on topics ranging from corruption at Scotland Yard to racketeering at FIFA. Currently the only reporter in the world banned by FIFA president Sepp Blatter, Andrew Jennings lectures at universities from Vancouver to Otago on corruption and investigation technique. He is a member of the Advisory Board of the Centre for Investigative Journalism at City University, London. Gcina Ntsaluba was an investigative journalist and reporter for the Daily Dispatch in East London at the time of writing. He joined the Dispatch in late 2008 after working at African Eye News Service in Mpumalanga, where he dis- covered his passion for investigative journalism. Monograph 169 v Rob Rose works in the business investigations unit at the Sunday Times. A lawyer by training, he has worked as a professional journalist since 2000 at various publications, including Business Day and Financial Mail, with a particular in- terest in exposing financial shenanigans. He has won numerous awards, includ- ing the 2007 Mondi Shanduka story of the year for his work on Brett Kebble, three Sanlam financial journalism awards, the Citadel award for investigative journalism in business, and the Citigroup Excellence in Journalism award. Karen Schoonbee is a freelance television journalist, who has researched, pro- duced, filmed and edited documentaries and current affairs programmes for a wide array of broadcasters and shows locally and abroad, including Special Assignment, Carte Blanche and Third Degree in South Africa. Karen holds a BA Communications (Unisa) and a National Diploma in Fine Art (Natal Technikon). Stephen ‘Sam’ Sole worked as a journalist for the investigative magazine Noseweek and then as political editor of the Sunday Tribune before joining the Mail & Guardian as an investigative journalist in 2002. He won the Vodacom Journalist of the Year award in 2003 for first reporting the criminal investiga- tion of then national deputy president Jacob Zuma. With Stefaans Brümmer, he won the 2003 Mondi Award for investigative journalism for a story on the di- version of a Nigerian state oil allocation to a company linked to figures in South Africa’s ruling ANC. In 2006 he was co-winner of the Vodacom Journalist of the Year Award for the Oilgate series. He is part of a team that was the runner- up for the Taco Kuiper investigative journalism award in 2007 and 2008, and that won the award in 2009. He teaches journalism part-time at the Durban University of Technology. Collette Schulz Herzenberg is a senior researcher at the Institute for Security Studies in Cape Town, focusing on corruption and governance issues. She holds a doctorate specialising in voting behaviour and an MSc in democratic governance from the University of Cape Town. Published work includes chap- ters in R Southall and J Daniel (eds), Zunami! The 2009 South African election, (Jacana and Konrad-Adenauer-Stiftung) and S Buhlungu, J Daniel, R Southall and J Lutchman (eds), The State of the Nation 2007 (Human Sciences Research Council Press: Cape Town). vi Institute for Security Studies Abbreviations ANC African National Congress BAC Bid Adjudication Committee BCM Buffalo City Municipality BEC Bid Evaluation Committee BEE Black Economic Empowerment BKS Bruinette Kruger Stoffberg BRT Bus Rapid Transport CFU Caribbean Football Union DEDEA Department of Economic Development & Economic Affairs EAC Executive Acquisition Committee ECTB Eastern Cape Tourism Board EIA Environmental Impact Assessment EPRU Eastern Province Rugby Union ExCo Executive Committee Monograph 169 vii FIFA Fédération Internationale de Football Association GEM Global Event Management IMG International Management Group IOC International Olympic Committee ISL International Sport and Leisure JAWOC Japanese Organising Committee KFS Kei Fleet Solutions KSDM King Sabata Dalindyebo Municipality LDM Letchmiah Daya Mandindi LOC Local Organising Committee NMBM Nelson Mandela Bay Municipality NSSA National Stadium SA PAIA Promotion of Access to Information Act PDA Protected Disclosures Act PNM People’s National Movement PPC Pretoria Portland Cement PSC Public Service Commission PSL Premier Soccer League viii Institute for Security Studies PTO Participating Tour Operators PWC Price Waterhouse Coopers RFP Request For Proposal SAFA South African Football Association SANParks SA National Parks TI Transparency International UDM United Democratic Movement UEFA Union of European Football Associations WPRFU Western Province Rugby Football Union Monograph 169 ix 1 Introduction Collette Schulz Herzenberg South Africa is host to the 2010 Fédération Internationale de Football Association (FIFA) World CupTM (referred to hereafter as the ‘World Cup’, the ‘FIFA World Cup’ or the ‘2010 World Cup’).1 It is the world’s largest media event and second largest sporting event after the Olympic Games. Its uncontested global media reach sets it in a class of its own. While the 2006 World Cup in Germany attracted a television audience of 26,29 billion viewers, the 2010 event is assured of even greater numbers. Its magnitude warrants the title of a ‘mega- event’, a term for a phenomenon that is considered to be a large-scale event with a high profile and global publicity. Mega-events are short-term, one-off events for the host country (such as the Olympic Games in Athens in 2004) and are associated with large-scale economic impacts on that country.2 World Fairs or expos would also fall into this category of events. Mega-events are an economic phenomenon.3 They are considered important vehicles for promoting economic growth and stimulating urban redevelopment as a result of increased tourism, infrastructural improvements and short-term employment.4 The South African Department of Tourism recently stated that Monograph 169 1 Player and Referee: Conflicting interests and the 2010 FIFA World Cuptm the economy will benefit significantly from the World Cup, with 2010 visitors expected to spend over R15,6 billion, up from earlier estimates of R8,5 billion.5 The department’s