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Final Letter to Zondo Commission Corporations 16.12.20

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Final Letter to Zondo Commission Corporations 16.12.20 Second Floor | Community House | 41 Salt River Road | Cape Town 7925 www.opensecrets.org.za | +27 21 447 2701 NPC 2017/078276/08 | PBO 930059106 Re: Urgent call to hold corporations accountable for state capture Date: 16 December 2020 To: Deputy Chief Justice Raymond Zondo The Chairperson Commission of Inquiry into allegations of State Capture, Corruption and Fraud ‘The Zondo Commission’ c/o Secretariat of the Commission Prof. Itumeleng Mosala Per email: [email protected]/ [email protected]; Dear Justice Zondo, We the undersigned organisations, whistleblowers and human rights activists, co-ordinated by Open Secrets, write to you as the Commission of Inquiry into allegations of State Capture, Corruption and Fraud enters its important final phase of work. We write to you today concerning a glaring gap in your work to date: framing the accountability of those corporations complicit in state capture. There is an urgent need to call corporations to provide detailed evidence of their alleged complicity in state capture to the Commission. We recognise that the Commission is under significant pressure and believe that recent legal steps taken by the Commission to compel former President Jacob Zuma to appear in a public forum to account before the Commission is to be lauded and is a step in the right direction. However, impunity thrives on a culture of silence and inaction. We believe that it is important to remind individuals such as Jacob Zuma that we are all equal before the law and that he is not beyond being held accountable for his alleged actions and that his appearance before the Zondo Commission is fundamental to ensuring the public’s right to know. We also write to you as South Africans commemorate the National Day of Reconciliation on 16 December, one week after International Anti-Corruption Day (09 December) and International Human Rights Day (10 December). We believe these dates represent three themes that are central to challenging issues of state capture, corruption and fraud in South Africa. They are that: • Corruption, fraud and state capture are a global phenomenon, not unique to South Africa, enabled by a global architecture which privileges corrupt corporations who profit from these crimes and who largely go unpunished. While corrupt politicians and state officials have committed serious crimes, they have have been aided in committing these crimes by the enabling and complicity of numerous domestic and global companies. We believe that their actions are systemic and unless these are adequately investigated, exposed and prosecuted, impunity will prevail. In short: unless we tackle the system which enables state capture, it will recur even as one corrupt political class is displaced by another as the infrastructure and institutions remain intact • There can be no reconciliation and justice without full truth telling. We have learnt as a nation from our apartheid past – and from the work of the TRC - that there can be no justice without the acknowledgement of wrongdoing, and the full understanding of accountability which includes truth recovery, criminal accountability, reparations and institutional reform. This is the cornerstone of reconciliation. We are deeply concerned that your Commission is yet to call corporations to fully account for their complicity in state capture. While we note the intention of corporations like McKinsey & Company to repay a small portion of the funds owed to South Africans, we fear that the manner in which this has been trumpeted by the Commission in a recent press statement suggests that justice is traded at a discount for the very rich and powerful. We have not yet seen any corporation forced to meaningfully account for their complicity in state capture before your Commission. Where representatives appeared most have only shown the vaguest amount of contrition and evidence leaders have not adequately cross-examined them about their complicity. We fear this creates an impression detrimental to the Commission: that they are being treated with ‘kid-gloves’. The public has a right to know the truth regarding the complicity of corporations in state capture. The Commission, a public forum that has extensive inquisitorial powers, has a unique opportunity to arrive at the truth which it has thus far failed to fully utilise. • State capture, fraud and corruption are violations of human rights. Corruption, especially grand corruption, has enormous implications, both direct and indirect, for the enjoyment of human rights. In the case of South Africa, the impact of state capture has been dire. It has deepened already desperate inequality and poverty in our country, stunted opportunities and cost the country hundreds of thousands of jobs which should have been created. It has meant that sick people have died in under-resourced hospitals, children have failed at school when they have not received textbooks, small businesses have shut as a result of power cuts, and people have gone hungry. It has also led to a trust deficit in state institutions and the private sector eroding our hard-won democracy. These crimes must lead to prosecutions, which demands evidence of criminal conduct by corporations and political elites. As such, the Commission has the responsibility to deeply probe the conduct of all players in state capture – including corporations. We fear that an impression is being created that powerful multinational corporations and their local business networks were somehow the unwitting participants or even ‘victims’ of crimes perpetrated by scheming politicians. The evidence which we and many other organisations have presented to the Commission shows that this is simply not true: these corporations have enabled serious crimes, all for the sake of profit. They are likely to do so again if their conduct is not properly interrogated or uncovered. This call for accountability is motivated by the generational damage caused to the lives of millions of people in South Africa. To be clear, we are not interested in factional political disputes and only the accountability of politicians but rather the full understanding of the institutional framework which must be dismantle. We believe that under the Constitution equality before the law demands accountability without fear or favour; even of the corporations given the constitution’s horizontal and vertical applicability. We thus write to you with a request that you urgently exercise use your powers under The Commissions Act of 1947 to summon private actors implicated in state capture to appear before the Commission and respond to questions regarding their conduct in the cases in which they are implicated. This will empower the Commission to make rigorous and effective recommendations to law enforcement authorities regarding further legal action to be taken against private actors implicated in wrongdoing. These questions should include: • Were they knowing participants in the illicit and illegal activities in question? • If not, did they satisfy the duties required by the law and their professions including due diligence to safeguard against unwitting accomplices to criminal activity? • Why did they not identify the obviously suspicious nature of many of the transactions sooner, and if they did, why did they not act to stop them sooner? • Do they acknowledge that a reasonable and responsible professional in their position should have done more to identify the criminal intentions behind many of the transactions and deals that they facilitated? • How much have they profited from these transactions, and how much of this illicit gain has been repaid, if any? • What punitive action have they taken against individual board members executives and employees (whether current or former) identified as being complicit in illegal activity? • What structural reforms have they enacted at their firms to prevent similar conduct in the future? • Are they willing to contribute to a reparations fund and if so are they willing to make a substantial commitment to such a fund? We urge you to use your powers to compel the following corporations (this list is not exhaustive) to appear before the Commission. We recognise that in some instances, representatives of corporations such as McKinsey & Co. and the major South African banks have appeared. However, we believe that the Commission has to date failed to fully probe their alleged complicity. They are: 2 LIST OF PRIVATE SECTOR WITNESSES TO BE COMPELLED TO APPEAR AT THE ZONDO COMMISSION Name of witness Context of information to be shared with the State Capture Commission • Provided banking facilities to Eskom. ABSA • Provided banking services for Albatime • Enabled state capture and corruption at SARS Bain & Company • Met with Zuma and possibly others. • Provided banking facilities for Guptas, Gupta front companies, Trillian, and Bank of Baroda Albatime. Combined Private • Transnet and Eskom contracts – kickbacks paid to several Essa companies like Investigations (CPI) Homix, Chivita etc. CRRC Corporation • Locomotive acquisitions and BEE contracts. Limited (China) • Implicated in dubious contracts with Eskom. Deloitte First National bank • Provided essential banking services for Estina. (FNb) • Providing banking services for recipients of Regiments money such as Maher Habib Bank Strategy Consultants & Ismer Consultants. • Implicated by Agrizzi testimony and alleged to have assisted with various Hogan Lovells financial transactions related to Guptas. HSBC • Handled numerous payments linked to Transnet
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