Corruption & State Capture: What Can Citizens
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Corruption & State Capture: What Can Citizens Do? Sarah Bracking Abstract: Given South Africa’s recent history of corrupt state capture, the country faces two possible fu- Downloaded from http://direct.mit.edu/daed/article-pdf/147/3/169/1831142/daed_a_00509.pdf by guest on 30 September 2021 tures: a further decline into spoils politics or a return to an improved constitutional democracy. This essay argues that the latter is more likely in the long run, but is by no means guaranteed. Achieving such a future requires public administrators, citizens, the private sector, and top lawmakers to insist on a public-focused social order. This essay suggests that a coalition of anticorruption agents must be built across the public and private sectors, and that this effort will be successful to the extent that it can link people across tradi- tional class and race divides. The Machiavellian behavior of political elites in modern Africa, as elsewhere, often attracts little prosecutorial response due to the widespread prac- tice of granting immunity to current and former of- ficeholders. Former President Jacob Zuma of South Africa is no exception: he was able to secure his first term in office despite previous charges of rape and 783 counts of fraud, corruption, and racketeering. After this inauspicious start, Zuma continued throughout his tenure (from 2009 to 2018) to accrue more cor- ruption accusations while continuing to evade pros- ecution.1 While political corruption is not new in postapartheid South Africa, the ten-year Zuma ad- ministration marked a shift from political corruption in the form of kickbacks and contracts for relatives to a more structural pattern of systematic state capture sarah bracking is Professor pursued with impunity. Since Zuma’s forced resigna- in the School of Global Affairs tion in February 2018, his deputy, Cyril Ramaphosa, at King’s College London. She is has served as president. However, the degree to which the author of The Financialisation of Power: How Financiers Rule Africa the deeper “shadow state” will persist remains to be (2016) and Money and Power: Great seen. The corrupt clique run by Zuma (and the Gupta Predators in the Political Economy of family, Zuma’s close associates) is essentially defunct, Development (2009). but weak and porous state structures governing con- © 2018 by the American Academy of Arts & Sciences doi:10.1162/DAED_ a_00509 169 Corruption & tracting and procurement remain for oth- paratuses intimidate any political person State Capture: ers to exploit, potentially including many who resists. What Can Citizens Do? Zuma-era persons who remain in place in While the contractual relationships of the the shadow state. South African “shadow state” are complex, State capture refers to the process of ob- during the Zuma era, they all tended to in- taining, or capturing, state regulatory au- volve associates of the Zuma family, mem- thority without democratic authorization. bers of the Gupta family (hence the moni- The persons capturing state powers can be ker “Guptagate” for recent corruption rev- private or–as in South Africa–a mix of pol- elations), and the families’ relatives or close iticians and private actors who have gained associates. Those close to the former pres- influence over regulatory processes to serve ident aimed “to convert political leverage Downloaded from http://direct.mit.edu/daed/article-pdf/147/3/169/1831142/daed_a_00509.pdf by guest on 30 September 2021 private interests. State capture of the South into commercial gain” by fashioning them- African government under the Zuma re- selves as “brokers-cum-fixers” in contracts gime proceeded in large part through con- involving state enterprises.5 They would set trol of the contracting authorities for lucra- up a legitimate commercial vehicle, usual- tive state-owned enterprises (soes). More ly with Zuma family members as benefi- recently, the power elite also consolidated ciaries, and then “bully” other players into state control by capturing the prosecuting the contract, arguing that without their authorities responsible for pursuing redress high-level political connections, the deal for criminal corruption within soes. would never go through. Using this negoti- Economist Haroon Bhorat and colleagues ating position, they would then change the have argued that the Zuma-centered power rules of the contract, often to extract huge elite staged a silent coup during the ten-year fees and service costs, which they subse- period from 2007 to 2017. This operation quently sent to offshore tax havens.6 For was not the result of isolated acts of corrup- example, the Guptas used a shell compa- tion, but a systematically pursued “political ny called Homix to broker a deal between project of a well-organised network.”2 Jour- Transnet (the national rail and port author- nalist and political adviser Sarah Chayes has ity) and the telecom company Neotel, net- noted that, in many countries, high levels of ting themselves more than zar100 million political corruption lead to the criminaliza- (about $8.4 million) simply for ensuring tion of the state and a corresponding dete- that Neotel got the Transnet deal. The “suc- rioration of security. However, the case of cess fees” from the deal were then funneled South Africa is not one of state capture by to tax havens such as the United Arab Emir- a criminal network, but an insider “politi- ates and Hong Kong through the Gupta- cal project at work to repurpose state insti- related intermediaries yka International tutions to suit a constellation of rent-seek- Trading Company and Morningstar Inter- ing networks.”3 To accomplish this political national Trade.7 Using this modus operan- project, Zuma and his cronies established di, Zuma-Gupta cronies secured inflated a symbiotic relationship between holders procurement contracts with the largest of political office and private actors, caus- state-owned enterprises, including aero- ing power to shift increasingly to a “shad- space conglomerate Denel, rail companies ow state,” where “deniability is valued, cul- Transnet and Passenger Trains, electricity pability is distributed (though indispens- utility Eskom, and the Departments of So- ability is not taken for granted) and where cial Security and Mineral Resources. trust is maintained through mutually bind- This economic project began with the ing fear.”4 This shadow state also ensures state-owned enterprises but, critically, that co-opted security and intelligence ap- evolved into state institutional capture. 170 Dædalus, the Journal of the American Academy of Arts & Sciences Beginning in about 2012, the clique began that such a report influenced his decision Sarah to capture key sites of financial control, to fire Gordhan.9 Bracking ultimately including the National Trea- sury itself. Other captured institutions in- As the state-capture project progressed, cluded the Financial Intelligence Centre, so too did public opposition, culminating which regulates illicit financial flows; the in a watershed moment of confrontation Chief Procurement Office, which regulates between Zuma allies and the opposition in and raises the alarm in procurement activ- 2017. As mounting evidence of the Zuma ities; the Public Investment Corporation; administration’s cronyism emerged in the the boards of development finance insti- public sphere in 2016 and 2017, the opposi- tutions; and the guarantee system, which tion rallied to accuse Zuma of corruption. Downloaded from http://direct.mit.edu/daed/article-pdf/147/3/169/1831142/daed_a_00509.pdf by guest on 30 September 2021 raises finances for state entities–without The term “state capture” appeared in ac- parliamentary oversight.8 The March 2017 cusations leveled by opposition parties, cabinet reshuffle that ousted Finance Min- watchdog organizations such as Right to ister Pravin Gordhan is cited as the mo- Know and Corruption Watch, investigative ment when the network finally gained con- journalists, and even some elements of the trol of the National Treasury. The network anc itself. Most anc members, however, also simultaneously captured key judicial countered with rhetorical maneuvers de- institutions, such as the National Prosecut- signed to draw attention away from Zuma’s ing Authority. malfeasance. They invoked “white monop- With the highest echelons of the state oly capital” as the real culprit, referring to captured–seemingly including the Nation- the continued hold of White-owned busi- al Prosecuting Authority, the Directorate for ness in the South African economy, and Priority Crime Investigation (also known cynically repurposing the language of the as the Hawks), the Chief of Police, and the radical agenda of anti-apartheid. anc Public Protectors’ Office–there was no one members suggested that all societal and left to indict President Zuma as corruption economic ills affecting the country could revelations emerged en masse in 2017. There be traced back to White business owners, were also sinister signs of wrongdoing with- and issued a new clarion call for “radical in the state itself, indicating that rogue ele- economic transformation.” This motif was ments of the intelligence services or a pri- intended to lend an air of legitimacy and vate mafia may be interfering with law en- moral righteousness to a grey area of graft forcement. For example, 2017 saw a spate of by suggesting that if White capital will not crimes seemingly linked to corruption scan- change voluntarily, then it is acceptable for dals, including the theft of fifteen comput- political leaders to pursue extralegal means ers from Chief Justice Mogoeng Mogoeng’s of redistributing wealth, even if these elites offices in March; the June death of a sec- are themselves the primary beneficiaries. retary at Eskom connected to corrupt ceo Thus, Zuma’s defenders attempted to ob- Brian Molefe’s fraudulent pension payout; scure and explain away a material pattern and three burglaries in July in which com- of endemic graft and fraud. puters were stolen from the offices of the However, the 2016 publication of then– Hawks, the National Director of Public Public Protector Thuli Madonsela’s State of Prosecutions, and the chief prosecutor.