The 2013/14 auditor-general’s report on the DPRT unwittingly revealed when Magashule seemingly began to take an interest in the CDP. In that year, ‘the Premier requested an independent consulting firm to conduct an investigation at the department relating to the verification of Contractor Development Program (CDP) Contractors,’
read the report. Ironically, ‘the investigation was initiated based on irregularities and allegations of misconduct and corruption on the part of certain employees of the department’. 12 Later developments suggest that Magashule intervened for entirely different reasons.
In 2015, the DPRT expanded the CDP to include new emerging contractors, the names of which were subsequently announced in an April 2016 government tender bulletin. Of the thirty-three new CDP
companies, thirty-one hailed from the area around Parys. ‘[The] Fezile Dabi region was overlooked in previous years,’ the department later claimed in a presentation document on its development programme. 13
I started to research the new CDP companies for an article in the Daily Maverick, and could scarcely believe to what extent the programme had been transformed into a feeding trough for relatives of the province’s political elite. Among the new contractors were
Botlokwa Holdings, owned by Thoko Malembe; ME Construction, owned by Ezekiel Magashule, the then premier’s younger brother; MDBS Trading, owned by S’busiso and Duduza Ntombela, the sons of current Free State premier Sisi Ntombela; Juda in Zion Trading, owned by Katleho Mochela, the daughter of Parys mayor Joey Mochela; and 4Ever Friends Trading, founded by Moshe Tladi, the late ANC regional secretary for the Fezile Dabi region.14 Of the thirty-three new contractors, at least ten were directly linked to either Magashule, his political allies or his former business associates.
Some of the companies were absorbed into the CDP itself, which would have enabled them to become subcontractors on lucrative road maintenance projects, while others were given contracts for grass cutting and related services. A select few got the best of both worlds.
Botlokwa, for example, was included in the CDP and secured contracts for ‘grass cutting’, ‘fleet branding services’ and to ‘supply, deliver and install emergency response and law enforcement vehicle accessories’. 15
It is not clear how much money Botlokwa and the other connected companies received through the CDP and related contracts, but sources in the department allege that it amounted to millions.
Furthermore, some of these new contractors were not even based in the Fezile Dabi district. According to information at my disposal, Thoko spent her time between Bloemfontein and Johannesburg.
Duduza Ntombela worked at the provincial Department of Social Development in Bloemfontein. His younger brother, S’busiso, apparently lived in Johannesburg. None of the three responded to queries about their involvement in the CDP.
The DPRT predictably denied that the premier’s family members and their fellow CDP beneficiaries were appointed through dubious means.
‘We hereby wish to advise you that the Department of Police, Roads and Transport has followed due processes in terms of Supply Chain Management as required for the appointment of contractors in the Contractor Development Programme,’ it told me. 16
Apart from lucrative contracts, the DPRT also gave the connected companies Ford Ranger bakkies, trailers and grass-cutting equipment free of charge. Previous CDP beneficiaries were not as fortunate. The department told me that the vehicles and equipment had cost taxpayers R11 million, but the figure seemed a little low. After my story on the scandal broke in the Daily Maverick, a local DA councillor told Volksblad that some of the bakkies were seen all over Parys and that a few of them had been fitted with tinted windows and shiny ‘mag’
wheels. 17 It was unclear how many of these vehicles were actually being used for grass cutting and other road maintenance projects.
The worst part of the CDP scandal is that it came at great cost to a group of emerging contractors in the Free State with no political connections. When I first researched the matter, I spoke to a few contractors who had been included in the CDP initially. They told me that their contracts from the DPRT dried up when Thoko Malembe, Ezekiel Magashule and the other connected businesspeople were pushed into the programme. By early 2019, the situation had not changed. ‘The department does not want to hear us out,’ said one dejected former CDP beneficiary. ‘If you want to get anywhere in this province, you have to be connected to Ace.’
PART VII
THE IGOFILES
20
Enter Igo
Long before he became involved in Ace Magashule’s circle, Phikolomzi Ignatius Mpambani was something of a local hero in the northern Free State town of Welkom.
Mpambani matriculated from St Dominic’s College, a private school, in 1997. 1 It was a difficult time for Welkom – the gold-mining sector that had for decades been the lifeblood of the town’s economy was in serious decline. 2 But Igo, as his friends and family affectionately called him, was destined to do greater things.
He did well in school. Some of those who knew him described him as gifted and brilliant. In 1999, he left the province’s ailing gold-mining mecca after clinching a scholarship to study at Texas Southern University in Houston. He first obtained a bachelor’s degree in finance and economics before completing his MBA in accounting and finance in 2004. 3
On his return to South Africa in the mid-2000s with two sought-after qualifications, Mpambani got a job as an investment banker at the Johannesburg office of the international banking group Standard Chartered. 4 He apparently harboured much bigger ambitions, however, and was with the bank for less than a year.
During his stint at Standard Chartered, Mpambani put together the first Beach on the Track New Year’s Eve festival, an annual event held at Phakisa Freeway, a motor-racing circuit just outside Welkom. At its pinnacle, the festival attracted thousands of partygoers and boasted impressive line-ups of local and international DJs and other
entertainers.
‘The concept was created to provide upwardly mobile and working class individuals with the opportunity to enjoy the festive season in grand style without spending a fortune,’ Mpambani told the Sowetan in 2010. 5 Nevertheless, Beach on the Track catered for those with thicker wallets too. At the 2013 edition, socialites and celebrities such as Kenny Kunene and Boity Thulo partied to the music of rap group Teargas while the VIP crowd sipped on Moët champagne and Belvedere vodka. 6
By this time, Mpambani had established himself as a fixture in the Free State’s tender scene. He first got into business with fellow Welkom local Sechaba Mogoera in around 2006, and the duo soon made headway in the highly politicised business environment.
Mpambani was made co-director of two of Mogoera’s companies –
Sechaba Group and Sechaba Solutions. Soon, both were clinching construction tenders in and around Welkom. According to a source who knew Mpambani and Mogoera, the two young businessmen fostered or consolidated valuable political connections in the Free State during this period.
One such connection was Mathabo Leeto, the then mayor of Matjhabeng local municipality, which includes Welkom. According to my sources, Leeto, who later became the Free State MEC for sport, arts, culture and recreation under Magashule’s premiership, had a long-standing relationship with Mpambani’s family. She was apparently close to Mpambani’s mother, who for many years worked as a nurse in Welkom. The two women also shared a background as political activists during the struggle.
Incidentally, Leeto has had corruption charges and investigations
hanging over her head since her time as mayor. She was charged for allegedly accepting bribes related to tenders awarded by the Matjhabeng municipality between 2007 and 2009. 7 When the charges were withdrawn in late 2016, then premier Magashule released a statement welcoming the development and claiming, incorrectly, that Leeto had been found not guilty. 8 Leeto was charged again in February 2018, 9 only for the NPA to back down later that year. 10
It was from
Leeto’s Matjhabeng municipality that Mpambani and Mogoera scored some of their earliest projects as tenderpreneurs, according to my sources. But they soon started to extend their reach.
One court record from a civil case in the Free State mentions the involvement of Mpambani and Sechaba Solutions in a 2007 project to construct a sewerage network for the Hoopstad municipality. 11 Sechaba Solutions also got a foot in the door at the provincial Department of Human Settlements in 2008, when it got a small contract worth around R2 million. 12
Their fortunes improved dramatically, however, after Magashule became Free State premier. In the 2009/10 financial year, Sechaba Solutions’ earnings from the FSHS climbed from R2 million to R13
million thanks to a contract to construct subsidised houses in Bultfontein, a small town some seventy-five kilometres from Welkom. 13
Two sources who knew the businessmen well told me that Mogoera and Mpambani became acquainted with Magashule shortly before he became premier in 2009. One of these sources said Mogoera
‘supported’ Magashule in those early days. This alleged support sometimes took the form of paying for buses whenever Magashule organised political rallies in the province, claimed the source.
My sources also said that Mogoera had a falling-out with Magashule not long after the latter came to power. ‘There was an exodus of people in Mogoera and Mpambani’s circle to Gauteng because Ace had closed their money taps,’ said one. FSHS records seem to support this claim.
In the 2008/09 and 2009/10 financial years, Sechaba Solutions earned R15 million from the housing department, but in 2010/11 its earnings dwindled to a meagre R56 000. After that, Sechaba Solutions did not do business with the department again. 14 But according to my sources, only Mogoera remained persona non grata. Magashule later welcomed Mpambani back into his Free State fold.
According to a third source, Mpambani became close to Glen Netshivhodza, the Parys businessman who is also one of Magashule’s closest associates. As mentioned previously, Netshivhodza was appointed chairperson of the Free State Tourism Authority in 2013.
The entity fell under the provincial Department of Economic Affairs and Tourism, the same department Magashule had led under Lekota in the mid-1990s. (It was later rebranded as the Department of Economic, Small Business Development, Tourism and Environmental Affairs.) Around the time of Netshivhodza’s appointment as chair of the tourism authority, the entity began pouring substantial amounts of taxpayers’
money into Mpambani’s Beach on the Track parties. The authority, which received between R30 million and R50 million from its parent department each year, confirmed in its annual reports that the Beach on the Track festival was one of the events it ‘successfully held and supported’. 15 The reports do not specify how much the entity made available to Beach on the Track, but one source familiar with the deal says the tourism authority contributed about R10 million annually.
The cooperation between Mpambani and Mogoera, meanwhile, came
to an end in around 2012. Mpambani, now back in Magashule’s favour, needed new entities through which he could continue to do business in the Free State. In 2012, he co-founded Diamond Hill Trading 71 with Kato Motsoeneng, a former municipal manager in the province’s
Tswelopele
and
Mohokare
local
municipalities.
Motsoeneng’s last stint as a municipal manager had ended under suspicious circumstances in late 2010, when he resigned from the Mohokare municipality, based in the southern Free State town of Zastron, amid a graft investigation commissioned by the Department of Cooperative Governance and Traditional Affairs. 16 Like Mpambani, Motsoeneng was said to be close to Magashule.
Mpambani next registered 605 Consulting Solutions in July 2014. His wife, Michelle, would later become a director of this venture. Although he was still involved in the Beach on the Track event and other business projects in the Free State, Mpambani and Michelle chose to settle in Johannesburg. He was ready for the big league.
It was in 2014 that Mpambani and a coterie of businesspeople, politicians and government officials apparently began to mastermind the looting of more than R250 million from the Free State government’s coffers. Based on several records, timelines and interviews with sources, it seems clear that Magashule became a key figure in this saga. The leaked documents and emails I refer to as the IgoFiles especially fuel suspicions that the then premier was closely linked to Mpambani and that he had benefited from the asbestos audit.
21
Plunder plot
Ace Magashule and six of his closest associates from the Free State landed in Havana, Cuba, just before 1 p.m. on Wednesday 28 January 2015. With the final leg of their draining journey from Johannesburg now over, the group no doubt looked forward to some downtime in the Cuban capital.
Accompanying the Free State premier were businessman Tlale Mokgadi, Lesedi FM presenter Thuso Motaung, Free State ANC
secretary William Bulwane, provincial MEC for police, roads and transport Sam Mashinini, and two other government officials.
According to an official government briefing document, they formed part of a forty-nine-person delegation that consisted of provincial government officials, the mayors of select Free State towns, MECs and businesspeople. 1 The same document outlined the purposes of the trip, which included an opportunity to ‘strengthen relations with [Cuba’s]
Matanzas Province’, ‘political education’, a ‘visit to our [South African medical] students’ and a ‘tour of Cuba’. The trip lasted a total of two weeks and was funded by taxpayers.
In keeping with the ruling ANC’s enduring inability to separate state and party functions, the aforementioned briefing document highlighted elements of that year’s ANC January 8th Statement as further justification for the trip. These included the ANC’s decision to
‘consolidate and strengthen existing party-to-party relations with like-minded sister parties all over the world’, and ‘solidarity with Palestine; Western Sahara and Cuba’.
The then MEC for human settlements, Olly Mlamleli, was also part of the delegation. She had come to Cuba to interview and recruit thirty Cuban engineers for deployment in Bloemfontein and other municipalities in the province. This initiative would later draw widespread criticism after it came to light that the cost of employing and accommodating the Cuban engineers over a period of three years would wipe out R110 million from the provincial fiscus.2 Moreover, according to news reports, the engineers could not speak English well, and most of them apparently did not do much work once they arrived at the various municipalities. 3
The businesspeople accompanying Magashule, meanwhile, were supposedly present as part of a joint effort by the Cuban province of Matanzas and South Africa’s Free State province to ‘facilitate and promote economic and commercial links between businessmen and enterprises of the respective provinces, thus contributing to the development of this important sector between the two countries’. 4
One businessman not named in the official briefing document but who was present in Cuba at the same time as the South African delegation was Igo Mpambani. Documents in the IgoFiles show that he arrived in Cuba just two hours after Magashule and his fellow travellers from the Free State. His presence was not a coincidence and he was certainly not in Havana to enjoy a Caribbean holiday. The purpose of Mpambani’s visit was to process the first invoices for a R255-million contract from Magashule’s provincial government for auditing houses with asbestos roofs.
How this asbestos auditing contract came about is pertinent to this story.
In 2013, the national Department of Human Settlements advertised a bid for the appointment of a panel of companies to assist the Gauteng housing department and municipalities with ‘planning and implementation support’. The companies were referred to as professional resource teams (PRTs). 5 One of the companies subsequently appointed to the panel was Johannesburg-based Blackhead Consulting, which in April 2014 received a letter of notificat
ion from the national department’s director-general, Thabane Zulu. ‘As you are aware, the services to [be] executed will be needs based and on an “instruction to perform work” (IPW) basis.
Appointment to a departmental panel is for a period of three years,’
Zulu wrote to Edwin Sodi, Blackhead Consulting’s CEO. 6
Like many of the characters in this saga, Zulu has a colourful past. In 2007, he crashed his Range Rover in Pietermaritzburg after being followed by a mysterious car with blue lights. When the police arrived on the scene, they found almost R50 000 in his boot.7 Zulu at the time claimed the money was his own and there was nothing irregular about it. In 2010, he was appointed director-general for human settlements.
According to a report in the Sunday Independent, he formed part of the South African Social Security Agency’s bid adjudication committee that in 2011 approved a R10-billion bid from the controversial Cash Paymaster Services to administer social grants. The report alleged that Zulu had received a ‘bribe’ of R1.4 million in relation to the contract.
He strongly denied the allegation. 8
Blackhead’s IPW from Zulu, meanwhile, allowed the company to be appointed by the Gauteng Department of Human Settlements in accordance with a needs-based model. In other words, the department could appoint Blackhead whenever it needed its services without each
time having to advertise a fresh tender. The bid process that led to Blackhead’s appointment was questionable from the start. Why, for example, did the national department administer a tender process for service providers to do work for the provincial department? The latter has its own procurement unit to appoint contractors through its own supply-chain management processes.
Gangster State Page 26