The Right Honourable Lord Hain of Neath

House of Lords, London SW1A 0PW

Email: peter.hain@parliament.uk Tel: 020 7219 3000

President Joe Biden 6 September 2022

White House
Washington DC

Dear President Biden

REQUEST TO SUSPEND BAIN & Co FROM US GOVERNMENT CONTRACTS

This letter follows my exchange in February 2022 with the US Ambassador to the UK
over the role played by Boston-headquartered US management consulting firm Bain
& Co in wide-scale corruption in South Africa and the undermining of that country’s
democratic institutions.

In August of this year, the UK Cabinet Office instituted a 3-year suspension from UK
government contracts on Bain & Co, on the basis that the company “is guilty of grave
professional misconduct” in relation to its operations in South Africa.

That followed my repeated calls for the UK to take such action after Bain’s
despicable and shameful behaviour in colluding with former South African President
Jacob Zuma and advising him personally on how to disable the South African
Revenue Authority (SARS) in pursuance of his corrupt and malevolent purposes.

I urge the US Government to similarly institute a ban on Bain working for any public
sector organisation in your country, at least until the current judicial process over
Bain’s nefarious role in South Africa has completed its full course.

The UK government’s decision follows the findings of two independent judicial

commissions of inquiry in South Africa, namely the Nugent Commission in 2018 and
the Zondo Commission which concluded this year, chaired by Judge Robert Nugent
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and Chief Justice Raymond Zondo respectively. Both Commissions found Bain to
have been directly and intentionally involved in dismantling SARS, the country’s tax
authority, resulting in its inability to meet the country’s tax revenue targets and the
boom of illicit trade with devastating knock-on economic effects.

The Commissions described Bain to have been involved in a “premeditated

offensive” against SARS and that their involvement was “unlawful.” So concerned
with Bain’s involvement in the public sector was the Zondo Commission that in its
final report it recommended a review of all Bain’s South African public sector
contracts with a view to prosecution.

Bain transgressions in South Africa have led to it being subject of a US Department

of Justice investigation as well investigations by the South African National
Prosecuting Authority (NPA) and the Special Investigating Unit (SIU). Its close
relationship with former President Zuma placed it in the same network as his
notorious associates, the Gupta brothers, whom the US Treasury sanctioned for
corruption in October 2019.

Bain’s US-based global managing partner, Manny Maceda, underplays his

company’s actions at SARS as “mistakes”. But that contemptuously belittles the
immense social and economic damage Bain’s behaviour has caused ordinary South
Africans already suffering from crippling inequality and poverty under apartheid, as
well as the industrial scale-looting and cronyism during the Zuma decade in which
Bain was complicit.

As evidence presented at both Judicial Commissions showed, Bain’s relationship

with President Zuma followed a deliberate strategy endorsed by Bain’s global
leadership, to court favour with Zuma through known Zuma-affiliates, paid by Bain,
who themselves are the subject of ongoing investigations in the US and South
Africa.

Yet Maceda wants to lay the blame on the former head of Bain’s local office, Vittorio
Massone and claim that with his departure, it has now cleaned out its stables.
Nothing is further from the truth. At least 60 Bain employees were involved, including
four senior Bain officials currently based in the US, namely, (with current office
location in brackets): Onyinye Ibeneche Avbovbo (Boston), Eric Maltiel (San
Francisco), Bjorn Matthews (Dallas) and Richard Wilson (Denver).

As news of Bain’s involvement broke, Bain cynically simply shuffled its staff out of
South Africa to its global offices. The partner who ran the day-to-day maliciously
destructive work at SARS, Fabrice Franzen, remains at Bain, now based in the
Middle East. So too is the partner Stephane Timpano who prepared most of the
materials presented to President Zuma. Mr Massone who had been promoted to run
Bain’s Middle East operation was paid to leave the firm after a three-month
negotiation.

To this day, at least 20 senior people remain at the firm who were in some way
involved in the South African business at the time of the collusion with Zuma.

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Not only were senior US and UK Bain managers complicit in South Africa’s decade
of corrupt state capture, but they are also trying everything possible to cover it up.
That has included punishing and seeking to discredit one of its former Senior
Partners, Athol Williams, who provided valuable evidence to both Judicial
Commissions and to the UK Cabinet Office, and was explicitly praised by the Zondo
Commission.

Part of Mr Williams’s evidence has called into question the validity of Bain’s internal
investigation, conducted by US law firm Baker McKenzie, whose full findings Bain
failed to make available to both the Nugent and Zondo Judicial Commissions,
prompting them to accuse Bain of failing to cooperate as it should have. Despite
widespread appeals for Bain to make a full disclosure of its shabby role during the
Zuma/Gupta era, it has continued to withhold this evidence, choosing instead to
publish polished advertorials in newspapers.

While Maceda states that Bain is committed to ensuring their “mistakes” are not
repeated, he is silent on any commitment to make amends. While it has repaid the
fees it earned from SARS, it has not repaid the much larger proportion of its fees
earned through other questionable contracts with corrupted state owned enterprises,
and has certainly made no amends to the institutions and people it harmed.

I find it disturbing that a company of Bain’s stature is deemed to have "colluded with
the [South African] Executive, including President Zuma, to capture an institution
[SARS] that was highly regarded internationally and render it ineffective" as stated by
the Zondo Commission which concludes that Bain’s involvement with Zuma and
SARS to be "one of the clearest demonstrations of state capture". Until a global
corporate like Bain ceases its complicity in state corruption in countries like South
Africa, pays back all the considerable fees earned, and the legal and prosecutorial
proceedings it is now facing in South Africa are completed, no reputable government
should do business with it, certainly not in the US where Bain senior executives are
up to their necks in both that complicity and subsequent cover-ups of it.

I am therefore appealing to you to act on this matter and establish a clear precedent
that will signal to all US global companies, consultancies, lawyers, auditors and
financial advisers, that collusion with corrupt politicians and their business cronies in
other countries will not be tolerated.

Yours sincerely