Critical South Africa Debates by Bryan Britton - HTML preview

PLEASE NOTE: This is an HTML preview only and some elements such as links or page numbers may be incorrect.
Download the book in PDF, ePub, Kindle for a complete version.

CORRUPTION

 

Deadly Sins

Bryan Britton

The Ten Commandments and Beatitudes prescribe good and moral behaviour. These are solid principles of ‘good’. But then what is evil? What should we avoid? Listed below are the roots of evil. These are traits of mankind that should be avoided because they are synonymous with evil.

Pride or vanity

Has been called the sin from which all other sins arise. It is the belief in oneself above a belief in God. It does not recognise the grace of God but places the individual’s priorities and egotistical wants above God’s wishes.

Envy

Is the desire for other people’s wealth, abilities, traits and possessions.

Gluttony

Is the personal desire for more than is required by any one individual.

Lust

Is a craving for the pleasures of the body.

Anger or wrath

Is an absence of love and in its place a tendency to fury.

Greed

Is the desire for material wealth, thus ignoring spiritual achievements.

Sloth

Is the avoidance of physical and/or spiritual works.

If we become slaves to these sins or endorse their existence in the way we live our lives, we invite negative and anti-spiritual influences to dictate our behaviour. You cannot build a moral life on any of these evils.

Sir Isaac Newton said: “To every action there is always opposed an equal reaction”.

The opposed reaction to these deadly evils, is the existence of good.

Morality

The evolution of morality refers to the emergence of human moral behavior over the course of human evolution. Morality can be defined as a system of ideas about right and wrong conduct. In everyday life, morality is typically associated with human behavior and not much thought is given to the social conducts of other creatures. The emerging fields of evolutionary biology and in particular sociobiology have argued that, though human social behaviors are complex, the precursors of human morality can be traced to the behaviors of many other social animals. Sociobiological explanations of human behavior are still controversial. The traditional view of social scientists has been that morality is a construct, and is thus culturally relative, although others argue that there is a science of morality.

Morality, from the Latin moralis meaning manner, character or proper behavior, is the differentiation of intentions, decisions, and actions between those that are distinguished as proper and those that are improper. Morality can be a body of standards or principles derived from a code of conduct from a particular philosophy, religion or culture or it can derive from a standard that a person believes should be universal. Morality may also be specifically synonymous with goodness or rightness.

Moral philosophy includes moral ontology, or the origin of morals, as well as moral epistemology or knowledge about morals. Different systems of expressing morality have been proposed, including deontological ethical systems which adhere to a set of established rules, and normative ethical systems which consider the merits of actions themselves. An example of normative ethical philosophy is the Golden Rule, which states that: "One should treat others as one would like others to treat oneself."

Immorality is the active opposition to morality (i.e. opposition to that which is good or right), while amorality is variously defined as an unawareness of, indifference toward, or disbelief in any set of moral standards or principles.

From Wikipedia, the free encyclopedia

In his attempt to explain the theory of moral virtue and  for that matter, the central goal, eudaimonia, Aristotle describes the important concept of finding middle ground in one’s life or, achieving a balance. In line with the theory of moral virtue Aristotle contends that to achieve these aims and reach eudaimonia, one of the most important lessons Aristotle teaches in the theory of moral virtue is strike a balance, or hit a mean between extremes in behavior, thought, and action. In the theory of moral virtue, Aristotle states that we must act knowingly and do the right thing because it is right, not because there is a personal stake in terms of the future possibility of pleasure or pain. In short, in this theory, what is morally right or wrong is something we understand in an intellectual sense and we apply this knowledge of moral behavior through our practice and habituation of moral virtues.

The Holy Bible defines immorality in Proverbs 6:16-19:

“There are six things the LORD hates, seven that are detestable to him:
haughty  eyes, a lying tongue, hands that shed innocent blood, a heart that devises wicked schemes,  feet that are quick to rush into evil, a false witness who pours out lies and a person who stirs up conflict in the community.“

People have always been immoral, shiftless, and self-gratifying. For ages, humankind struggled to find a conceptual system to operationalize their spiritual shortcomings. Here is a basic Christian definition for morality. A guide, if you will, as to the difference between right and wrong, good and evil, moral and immoral and deadly sins and opposing virtues.

Pride is excessive belief in one's own abilities that interferes with the individual's recognition of the grace of God. It has been called the sin from which all others arise. Humility is the opposing virtue.

Envy is the desire for others' traits, status, abilities or situation. Kindness is the opposing virtue.

Gluttony is an inordinate desire to consume more than that which one requires. Abstinence is the opposing virtue.

Lust is an inordinate craving for the pleasures of the body. Chastity is the opposing virtue.

Anger is manifested in the individual who spurns love and opts instead for fury. Patience is the opposing virtue.

Greed is the desire for material wealth or gain, ignoring the realm of the spiritual. Charity is the opposing virtue.

Sloth is the avoidance of physical or spiritual work. Diligence is the opposing virtue.

The report Eskom doesn't want you to see

Financial Mail is publishing the unsanitised version of one of the earliest versions of the Dentons report, as it is fundamental for SA to judge the evidence for itself

15 February 2017

Eskom has stymied all requests for the notorious Dentons report for two years.

After being misled by SA’s electricity parastatal about the status of the probe, the Financial Mail today publishes the unsanitised version of one of the earliest versions of the Dentons report.

Eskom has chosen not to provide this sort of transparency, but we believe it is fundamental for the South African public to judge for itself the evidence detailing the near-meltdown of the electricity parastatal.

Two weeks ago, Eskom finally yielded to pressure to release the report — for which it paid more than R20m — but disappointingly; it released a heavily redacted version.

The public deserves to know what caused Eskom’s near-collapse at a time when it had run out of money to pay staff, continue operating and build power stations.

img17.pngThe fact that Eskom has chosen not to adopt an approach of full transparency only strengthens our conviction that there ought to be a full and transparent judicial commission of inquiry into what went wrong, and how to fix Eskom. Employees, directors and suppliers accused of corruption should be given an opportunity to defend themselves, but must ultimately be held to account.

Eskom’s board should also be held accountable.

The document you will read here is the second Dentons report prepared for the board. An earlier “interim report”, which contained far more explosive details — including, allegedly, names of executives and directors implicated in corrupt deals — was destroyed by the board under a formal resolution adopted on August 14 2015.

Two weeks ago, Eskom chairperson Ben Ngubane admitted that Eskom had done little to investigate these allegations. In this respect, the board should be held accountable not only for doing nothing to probe these claims of corruption, but also for destroying this evidence.

This is critical, as many of those accused of enriching themselves at the taxpayers’ expense are still working at Eskom.

“We had to make a trade-off. We could choose whether to continue with a prolonged investigation into a company that was already depressed, which would demoralize staff, or we could fix what was wrong with Eskom,” Ngubane said. Rather, he said, the board chose to fix Eskom, “and that is why we today have electricity”.

But in the 304 pages disclosed today, Dentons reports how senior managers and directors of the electricity supplier set themselves up to do business with the utility.

It includes the following findings:

  • Eskom wasted about R200m over two years by failing to negotiate proper discounts with diesel suppliers. The company paid billions to companies without having received proper invoices, in many instances paying for services without evidence of having received the supplies for which it was paying.
  • Eskom contributed to its own financial problems, and contravened the Public Finance Management Act, by failing to put proper controls in place.
  • It consistently overpaid for diesel, coal, logistics and other contracts. This made its financial position worse, which was used to justify electricity price increases and further bailouts by the taxpayer.
  • Senior executives handpicked suppliers they wished to negotiate with, which meant that other, more capable and more cost-effective contractors were excluded.
  • Eskom employees diverted business opportunities to themselves, at the expense of the utility. This meant that staff was not focused on fixing the organisation, but on feathering their own nests.

img17.pngThese are just some of the allegations contained in this version of the report, which, as we have explained, was already sanitized from the earlier “interim report”. But even these were kept hidden from the public for two years.

The background to this investigation needs to be explained.

In the three years to mid-2015, Eskom implemented daily load shedding the country was in darkness, and business and the mines were told to slash electricity demand by about 20%. Foreign investors pulled the plug on big projects.

Eskom then collected an R23bn bailout from the government, plus another R60bn loan, which was converted into equity — which means it was effectively written off.

The taxpayer was the ultimate loser. Evidently, this is why Eskom would rather the public had no insight into this report.

Corruption and the Decline of Rome

Ramsay MacMullen

To Roman moralists the empire was always in decline, ever since some imagined state of republican virtues in the dim past. It is small wonder that most modern historians have shunned as hopelessly misleading the whole vague notion of 'moral decline'. But MacMullen, looking steadily into this blind zone and assembling plenty of evidence, has traced a neglected but very influential process in the political and social changes that eventually permitted the dismemberment of the Western empire. This is an important book which will initiate a long debate.

His thesis is that a sea-change occurred in the dominant ethic of government and civil life. The earlier Principate operated not through impersonal administration, but rather through favour, patronage, recognised ties of family, kinship, class, city and guild membership, and so on. This network of mutual obligations was stable and pervasive enough to mesh with government in managing, more or less effectively, the huge empire: that is, providing for basic security, rule of law and the conditions of economic livelihood.

Bribery and abuses always occurred, of course. But by the fourth and fifth centuries they had become the norm: no longer abuses of a system, but an alternative system in itself. The cash nexus overrode all other ties. Everything was bought and sold: public office including army commands and bishoprics, judges' verdicts, tax assessments, access to authority on every level, and particularly the emperor. The traditional web of obligations became a marketplace of power, ruled only by naked self-interest.

Government's operation was permanently, massively distorted. Imperial authority was of course upheld, since it was precisely the source of illicit gain. But its power was dissipated into thousands of private channels in a way that did not happen in the earlier empire. The very officials charged by emperors with investigating corruption would simply use their authority as hugely profitable protection rackets. Military commanders habitually avoided serious fighting, preferring armed extortion from civilians, embezzlement of army supplies, and the lucrative sale of exemptions from irksome duties all down the ranks. After all, they had to recoup the enormous sums they had borrowed to purchase their commands originally.

On the real size of the armies, MacMullen in not just sceptical but outright dismissive of even the 'paper' numbers – about half a million men – derived from the Notitia ("that dream book"). As well as being near-useless, the actual forces were a tiny fraction of this. The great gulf between paper and reality is explained by a century or more of inflated rosters, by legions of dead mens' pay and rations.

What is new in MacMullen's argument is not the existence of this corruption but its sheer scale and long-term global effects. Just how important a cause was this process in bringing things to the deplorable state they had visibly reached by the time of Honorius and Stilicho? How did it interact with other known factors, including attempts to curb it?

There certainly were honest and energetic commanders, prefects and emperors, pace Ammianus, who knew of this debilitating venality only too well. Yet while we hear of plenty of individuals being sacked (and often executed), we rarely hear of whole military units being disbanded and hence deprived of valuable supplies. How much of the military ineffectiveness was due to ghost legions still absorbing resources, and how much to the steady deterioration of the limitanei, the static border militia condemned to neglect and isolation by Constantine's apparently deliberate preference for defence of the throne, over defence of the frontiers?

If we accept the evidence that the total tax demands increased perhaps several-fold even after the already high levels of the Tetrarchy (when they had supported genuinely enlarged armies winning real victories on several frontiers simultaneously) then the later loss of real control must have amounted to virtual paralysis in many areas of the empire.

The official tax assessments were not arbitrary inventions, nor was their collection just random plunder. Legal warrant, however grossly abused, still counted: after all, the purely abstract units of tax liability, iuga and capita, were a commodity that was occasionally auctioned. But how were the assessments made, how many people calculated them, collected them, milked them and disbursed them, at what stages in the fiscal chain? The vastly elaborated fourth-century machinery of taxation and civil bureaucracy, however apparently necessary originally, may itself account for much of the eventual arteriosclerosis of government, even without the decay of the earlier service ethic.

These are just a small sample of the questions prompted by MacMullen. Far from leaving us in any mood of serene melancholy of the sic transit variety, it presents a vivid and frightening picture of how a great state and civilisation, the construction of centuries of painfully acquired political culture, can be cripplingly undermined. Despite its superbly sophisticated system of law, the slow acids of atomised, selfish individualism dissolved larger loyalties and ties on a widening scale until they became, in the manner of the untrammelled market, the rational norm of behaviour, which only the unusually brave and honest could swim against.

Guptas and the banks can now provide a court with details of the 72 suspicious transactions

Constitutionally Speaking

OCTOBER 19 2016

The decision by Finance Minister Pravin Gordhan to approach a court for a declaration that he was not permitted to intervene in the relationship between various Gupta-owned companies and the banks was surely a tactical move aimed at uncovering some of the financial dealings of the Guptas and the companies they own. The move provides the banks with the legal justification to break their client confidentiality and places pressure on the Guptas and the firms owned by them to explain 72 transactions – which the banks flagged as suspicious – to the appropriate court.

The Financial Intelligence Centre Act (FICA) is a complicated piece of legislation adopted in 2001 to combat money laundering and the financing of terrorist and related activities.

The Act places a duty on anyone who manages a business (which would have included the now suddenly retired CEO of Gupta-owned Oakbay Investments) and on any other institution with knowledge of a business (which would have included those banks who provided banking services to Oakbay Investments) to report certain suspicious transactions to the Financial Intelligence Centre (FIC).

Section 29 of the Act lists a series of transactions which must be reported to FIC. The list of transactions that must be reported relate both to the financing of terrorist and related activities and other suspicious transactions. The latter category includes transactions or series of transactions to which the business is a party that:

  • has no apparent business or lawful purpose;
  • is conducted for the purpose of avoiding having to report to the Financial Intelligence Centre;
  • may be relevant to the investigation of an evasion or attempted evasion of a duty to pay any tax, duty or levy imposed by legislation administered by the Commissioner for the South African Revenue Service; or
  • transactions which may show that the business has been used or is about to be used in any way for money laundering purposes.

Section 29 makes clear that the Guptas, businesses like Oakbay Investments and their bankers have a legal duty to report not only suspicious transactions that they know fall into the list above, but also suspicious transactions that they “ought reasonably to have known or suspected” to fall within the list above. Banks will therefore err on the side of caution and will report any transactions to FIC which they suspected to fall into the list of transactions set out above.

Section 31 of the Act also requires banks to alert FIC if one of its clients instructs it to make an electronic transfer in excess of R25 000 out of the country or receives money in excess of R25 000 from abroad.

The papers lodged on Friday by Minister Gordhan as part of his court application do not provide sufficient information about the 72 suspicious transactions reported to FIC by those banks who held accounts for the Guptas and their various businesses to determine whether the banks alerted FIC about these transactions because of concerns that the Guptas and their companies were trying to launder money to hide corruption, theft or fraud, because they were trying to avoid paying tax, because they were trying to move money out of the country, or for some other suspicious purpose.

We do know that the banks reported various suspicious transactions by the Guptas and many of the businesses they own (amounting to almost R7 billion) to FIC because the banks believed that they had a legal duty in terms of section 29 of the Act to do so. We also know that a lawyer for the Gupta-owned companies denied that there was anything wrong with the transactions but this blanket denial was not accompanied by detailed information to back up the denial.

But at this stage it is not clear whether the banks suspected the Guptas and several of their companies of involvement in money laundering, or whether they suspected them of other illegal activity.

It is also not known whether FIC reported any of the suspicious transactions to the Hawks or to the National Director of Public Prosecutions as it is legally empowered to do by section 34 of the Act in cases where it has reasonable grounds to suspect that a transaction or a proposed transaction constituted money laundering.

If some or all of the transactions were reported to FIC because of fears that it formed part of a money laundering scheme by the Guptas and their companies, it would raise questions about whether the Guptas are being investigated by the Hawks and if they are not being investigated, why the Hawks are not pursuing the matter.

Recall that money laundering is defined as an activity which has or is likely to have the effect of concealing or disguising the nature, source, location, disposition or movement of the proceeds of unlawful activities or any interest which anyone has in such proceeds.

It usually occurs when individuals try to hide the facts that money in their possession was obtained from criminal activity like corruption, fraud or theft. Money launderers “launder” the money obtained from crime by moving it from one bank account through various other banks accounts to the recipient to try and conceal the fact that the source of the money was some or other criminal activity.

When various businesses owned by the same family start moving around large sums of money between these businesses or between bank accounts without any obvious purpose, it would immediately raise questions about whether this is being done to launder money.

This often occurs when a person or entity is trying to avoid prosecution for the original criminal offence (which may include fraud and corruption) and to hide the fact that an individual or entity is benefiting from such fraud or corruption.

As noted above, there is not sufficient evidence in the public domain to make any credible assessment about whether the Guptas and their companies have been involved in activities which could amount to money laundering.

But some facts are now in the public domain which otherwise would never have seen the light of day. South Africans may never have heard about the almost R7 billions of suspicious transactions concluded by the Guptas and several of their companies over the past few years. Had the Minister of Finance not lodged his court application late last week this information would have remained secret.

This is because the Financial Intelligence Centre Act prohibits anyone from disclosing confidential information held by or obtained from the FIC except in defined situations which include “for the purpose of legal proceedings, including any proceedings before a judge in chambers”. Thus section 41 of the Act states that:

No person may disclose confidential information held by or obtained from the Centre except (a) within the scope of that person’s powers and duties in terms of any legislation; (b) for the purpose of carrying out the provisions of this Act; (c) with the permission of the Centre; (d) for the purpose of legal proceedings, including any proceedings before a judge in chambers; or (e) in terms of an order of court.

This is one reason why the banks would have refused to provide the so called ministerial task team with any reasons for the closure of the Oakbay bank accounts. The task team (which practically appears to have consisted only of Mineral Resources Minister Mosebenzi Zwane) was appointed by cabinet to approach the banks about their decision to cut ties with Oakbay Investments.

The cabinet might not have been aware when it asked the ministerial task team to approach the banks for an explanation of why they closed the Oakbay accounts, that it was mandating the task team to request the banks to commit a criminal offence in terms of section 60 of the Financial Intelligence Centre Act. This section prohibits the banks (and anyone else) from disclosing confidential information held by or obtained from FIC except under the prescribed circumstances listed in section 41 of the Act.

The Guptas themselves could of course have approached a court of law to challenge the decision by the banks to close their accounts. While case law suggests that such an application would not have been successful, it would have forced the banks and FIC to provide reasons why the 72 transactions by some of the Gupta brothers and by some of their companies were flagged as suspicious.

Whether this failure to approach a court was the result of an ignorance of the relevant legal provisions of FICA or because the Guptas were reluctant to ventilate the matter in open court because it did not want the banks to make public the reasons for the closure of the accounts, is not clear.

But this reluctance of the Guptas to approach a court has now become irrelevant after the Minister of Finance decided to do so instead.

The court application by the Minister – which is, quite frankly, legally unnecessary as the Minister already knows that he is not allowed to intervene in the dispute between the banks and Gupta-owned companies – was probably launched exactly to allow the banks to break their silence and to force the Guptas and their companies to explain the nature of the 72 suspicious transactions flagged by the banks.

The Guptas, through their lawyer, have welcomed the court application by Minister Gordhan claiming it will allow the Guptas to clear their name. If this is correct, it will allow the banks to provide the court with details of the 72 suspicious transactions and with reasons why they believed these transactions were suspicious. The Guptas will then be required to provide explanations of the suspicious transactions to try and explain why the 72 transactions are all above board.

It is only after all sides have submitted all the evidence they have about the 72 suspicious transactions by the Guptas and some of their companies to the court that a clearer picture will emerge. It is only then that we will have some indication of whether the Guptas should be investigated and perhaps prosecuted for corruption, fraud, theft or money laundering, or whether the banks all made a terrible mistake.

ANC municipalities have been robbing you dry

Staff Writer

img30.png

The City of Johannesburg recently tabled its Integrated Annual Report for the 2015/16 financial year, which showed rampant maladministration under the previous ANC-led government.

Mayor Herman Mashaba said the total balance for unauthorised expenditure under the ANC regime in the city reached R3.4 billion.

“A shocking lack of attention to financial management practices resulted in a failure to adequately investigate cases of unauthorised, irregular, and fruitless and wasteful expenditure,” said Mashaba.

The total balance of irregular expenditure in Johannesburg reached R1.8 billion, due to the contravention of supply chain management procedures under ANC rule.

“Disgracefully, unauthorised expenditure identified in previous financial years was not investigated to determine whether a person was liable for the expenditure,” said Mashaba.

Mashaba has started to take action, with arrests of allegedly corrupt city officials.

“The days of blatant maladministration in the city going unpunished have come to an end.”

Massive corruption and maladministration under the ANC

After the DA took over the country’s major metros and gained access to their finances, it uncovered a slew of corruption and maladministration under the ANC.

Tshwane mayor Solly Msimanga unveiled a serie