PART VI: VOL 2

GLOBULAR TABLE OF CONTENTS

THE CONCEPT OF STATE CAPTURE IN THE COMMISSION’S TERMS OF REFERENCE

...................................................................................................................................... 1

PRESIDENT MATAMELA CYRIL RAMAPHOSA’S EVIDENCE ........................................ 75

THE ROLE OF THE RULING PARTY .............................................................................. 197

PARLIAMENTARY OVERSIGHT ..................................................................................... 283

 Judicial Commission

of

Inquiry into Allegations

of

State Capture, Corruption and Fraud in the

Public Sector Including Organs of State

Report: Part VI
Vol. 2: State Capture Established

Chairperson: Justice R.M.M Zondo

Chief Justice of the Republic of South Africa
 STATE CAPTURE ESTABLISHED

TABLE OF CONTENTS

Introduction ......................................................................................................................... 1

State Capture As Understood In The Public Discourse ................................................... 2

The Public Protector’s State Of Capture Report ............................................................... 5

The Judgment Of The High Court ...................................................................................... 9

The Academic Literature .................................................................................................. 12

Engagement With State Capture In The Commission .................................................... 19

The Commission’s Terms Of Reference.......................................................................... 25

The Commission’s Definition Of State Capture .............................................................. 29

State Capture At Transnet ................................................................................................ 34

Was There State Capture?................................................................................................ 64

State Capture: Sars ........................................................................................................... 68

The Role Played By Bain .................................................................................................. 70

The Appointment Of Mr Tom Moyane As Sars Commissioner ...................................... 71

The Axing Of Key, Long Serving Individuals .................................................................. 72

The Appointment Of Compliant Individuals .................................................................... 73

The Disassembling Of Sars’ Compliance Units .............................................................. 73

Conclusion ........................................................................................................................ 74
 THE CONCEPT OF STATE CAPTURE IN THE COMMISSION’S

TERMS OF REFERENCE

Introduction

1. This Commission is the result of remedial action directed by the former Public Protector,

Ms. Thuli Madonsela, on 2 November 2016, in her report titled State of Capture. The

report was issued in terms of section 182(1)(b) of the Constitution read with section 8(1)

of the Public Protector Act. 1

2. The State of Capture report relates to an investigation into complaints of alleged

improper and unethical conduct by former President Zuma, certain state functionaries

and the Gupta family in the appointment and removal of cabinet ministers and directors

of SOEs which possibly resulted in the improper and corrupt award of state contracts

and other benefits to the Gupta family.

3. The essential task of the Commission, as stated in the Proclamation2 establishing it, is

to investigate allegations of state capture, corruption and fraud. The terms of reference

of the Commission (“the TORs”), discussed more fully later, are broad in scope, with

the Commission being appointed “to investigate matters of public and national interest

concerning allegations of state capture, corruption and fraud.” As will appear later, this

broad formulation is narrowed somewhat by the terms of particular TORs.

4. The Proclamation specifically requires that in investigating, reporting and making

recommendations the Commission shall be guided by the Public Protector's State of

1 Act 23 of 1994
2 Proclamation No. 3 of 2018 GN 41403 GG 25 January 2018
 Judicial Commission
of
Inquiry into Allegations

of

State Capture, Corruption and Fraud in the

Public Sector Including Organs of State

Report: Part VI
Vol. 2: President Ramaphosa as President

Chairperson: Justice R.M.M Zondo

Chief Justice of the Republic of South Africa
 PRESIDENT MATAMELA CYRIL RAMAPHOSA’S EVIDENCE

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................ 75

Evidence given as President of South Africa .............................................................. 76

Ramaphosa’s understanding of State Capture ........................................................... 76

President Ramaphosa’s knowledge of and response to State Capture .................... 80

The ‘sign posts’ ........................................................................................................... 80

The ‘five options’ ......................................................................................................... 81

President Ramaphosa’s interactions with the Guptas ............................................... 86

President Ramaphosa’s interactions with Bosasa ..................................................... 87

APPOINTMENTS AND DISMISSALS ................................................................................ 88

The removal of Mr Nene .............................................................................................. 88

The appointment of Mr Des van Rooyen as Minister of Finance .................................. 90

The appointment of Mr Pravin Gordhan as Minister of Finance ................................... 91

The removal of Mr Gordhan and Mr Jonas .................................................................. 94

Matters concerning National Treasury ...................................................................... 100

The nuclear build programme .................................................................................... 100

The Oakbay bank accounts matter ............................................................................ 103

The public discourse .................................................................................................. 124

Addressing State Capture .......................................................................................... 125

Institutional changes.................................................................................................. 126

As Deputy President.................................................................................................. 128

Conclusion: What did he know, when did he know it, and what did he do about it?
...................................................................................................................................... 129

Evidence given as President of the ANC ................................................................... 132

 PRESIDENT MATAMELA CYRIL RAMAPHOSA’S EVIDENCE

Introduction

178. President Matamela Cyril Ramaphosa (“President Ramaphosa”) is the President of the

Republic of South Africa. He has held this position since the resignation of President

Jacob Zuma on 15 February 2018. Previously, he served as the Deputy President of

South Africa during the second term of former President Zuma, from 26 May 2014.

Many of the events investigated by this Commission took place during this time period.

179. President Ramaphosa is also the President of the African National Congress (ANC).

He has held this position since his election at the ANC’s 54th National Conference at

NASREC in December 2017. He was the Deputy President of the ANC from December

2012. He was previously the Secretary-General of the ANC from 1991 to 1997. Between

1997 and 2012, he held no official political position, although he remained a member of

the ANC’s National Executive Committee (NEC).

180. President Ramaphosa testified at the Commission in his capacity as the President of

the ANC, and former Deputy President of the ANC. President Ramaphosa deposed to

an affidavit dated 22 April 2021, which was admitted as Exhibit BBB1. Additional

documents compiled by the Commission were admitted as Exhibit BBB2. President

Ramaphosa had also previously deposed to an affidavit on 2 July 2019, which was

included in Exhibit BBB2.

181. President Ramaphosa also testified at the Commission in his capacity as the President

of South Africa, and former Deputy President of South Africa. He deposed to an affidavit

dated 24 May 2021, which was admitted as Exhibit BBB3. Additional documents

compiled by the Commission were admitted as Exhibit BBB4.

 Judicial Commission

of

Inquiry into Allegations

of

State Capture, Corruption and Fraud in the

Public Sector Including Organs of State

Report: Part VI
Vol. 2: The Role of the ANC

Chairperson: Justice R.M.M Zondo

Chief Justice of the Republic of South Africa
 THE ROLE OF THE ANC

TABLE OF CONTENTS

INTRODUCTION .............................................................................................................. 197

STRUCTURES OF THE ANC ........................................................................................... 198

THE RELATIONSHIP BETWEEN PARTY AND STATE .................................................. 198

CORRUPTION AND STATE CAPTURE........................................................................... 201

THE ANC’S RESPONSE TO STATE CAPTURE: ............................................................ 203

The ANC acts ............................................................................................................... 214

The ANC in Parliament ................................................................................................ 220

Was it enough? ........................................................................................................... 225

DEPLOYMENT (CADRE DEPLOYMENT)........................................................................ 228

The political-administrative interface ........................................................................ 228

The ANC’s version ...................................................................................................... 230

Records and minutes .................................................................................................. 232

What is the scope of the Deployment Committee? ................................................... 233

Does the Committee give recommendations or instructions? ................................ 235

What are the Committee’s selection criteria? ........................................................... 239

The possible role of deployment in State Capture.................................................... 241

PARTY FUNDING ............................................................................................................ 263

The Political Party Funding Act.................................................................................. 263

Evidence of money flows to the ANC ........................................................................ 264

 THE ROLE OF THE RULING PARTY

Introduction

507. Understanding the role of the African National Congress (“ANC”) is vital to

understanding State Capture in South Africa. It has been the only governing party since

the advent of democracy in South Africa in 1994, and specifically during the years under

review. It has been responsible for deploying persons to the highest positions in the

state. It has a significant majority in Parliament, allowing it effectively to control oversight

of the Executive. State capture happened under its watch.

508. In addition, various ANC leaders have been implicated by witness testimony at the

Commission. There has also been substantial evidence that the party itself was a

beneficiary of State Capture, as it received payments from third parties who are alleged

to have corruptly acquired government contracts.

509. It is necessary therefore to interrogate the role of the party in:

509.1. actively engaging in corrupt activities for its own gain;

509.2. allowing corrupt activities to continue under its watch and failing to intervene to

prevent or halt such activities;

509.3. creating the framework for corruption and State Capture to flourish.
 Judicial Commission

of

Inquiry into Allegations

of

State Capture, Corruption and Fraud in the

Public Sector Including Organs of State

Report: Part VI
Vol. 2: Parliamentary Oversight

Chairperson: Justice R.M.M Zondo

Chief Justice of the Republic of South Africa
 PARLIAMENTARY OVERSIGHT

TABLE OF CONTENTS

INTRODUCTION .............................................................................................................. 283

CONSTITUTIONAL PROVISIONS ON PARLIAMENTARY OVERSIGHT AND

ACCOUNTABILITY TO PARLIAMENT .................................................................. 284

THE CORDER REPORT .................................................................................................. 287

The “Oversight and Accountability Model” adopted by Parliament ............................ 289

THE IMPORTANCE OF PORTFOLIO COMMITTEES ...................................................... 291

RELEVANT RULES OF THE NATIONAL ASSEMBLY .................................................... 292

THE OFFICIAL STANCE OF THE MAJORITY PARTY ON PARLIAMENTARY OVERSIGHT

............................................................................................................................... 295

Did Parliament have a duty to investigate or enquire into allegations of state capture or

corruption? ............................................................................................................ 297

Parliamentary oversight in practice in relation to allegations of state capture and/or of

improper influence by the Gupta brothers .......................................................... 300

Events in 2011 .................................................................................................................. 300

Events in 2013 ................................................................................................................. 305

Events in 2014-2015 ........................................................................................................ 307

Events in January to March 2016 ................................................................................... 309

Refusal of request for an enquiry by the PCPE ............................................................ 314

Rejection of the DA motion in September 2016 to establish an ad hoc committee ... 317

Events up to May 2017 .................................................................................................... 319

PCPE’s decision on 23 May 2017 to conduct an enquiry ............................................. 323

The “Gupta leaks” and the “Frolick letters”.................................................................. 325

What explains the shift in stance? ..................................................................................... 327

Who took the decision to issue the Frolick letters? ............................................................ 336
 PARLIAMENTARY OVERSIGHT

Introduction

734. The Commission is required by its terms of reference624 to “inquire into, make findings,

report on and make recommendations concerning” what is summarized in its title as

“allegations of state capture, corruption and fraud” in the public sector, including organs

of state625. Those allegations include allegations concerning undue influence by, or

benefit to, members of the Gupta family and extend to alleged corruption in the awarding

of contracts or tenders by state owned companies.

735. In the main the Commission has concerned itself with determining whether state

capture, corruption or fraud occurred in the public sector, the nature and scale thereof

and who participated in this. However, to make recommendations concerning the

avoidance of similar problems in the future, it is necessary to consider what explains

why state capture and corruption were able to become so entrenched and to persist

over an extended period and to consider, in particular, why institutions which ought to

have contributed to detecting or addressing these maladies may not have been as

effective in doing so as one would have hoped. Amongst these institutions is

Parliament.

736. Parliament has a constitutional duty to exercise oversight over the executive branch of

government (“the executive”), including organs of state such as State-Owned Entities

(SOE’s); and the executive is accountable to Parliament. Questions, therefore, arise as

to whether, during the period considered by the Commission, Parliament exercised

624 Proclamation No. 3 of 2018, GG No. 41403 of 25 January 2018

625 This term may be taken to summarize the allegations referred to in paragraphs 1.1 to 1.9 of the Terms of
Reference