Shortly before receiving the third FSHS payment, Mpambani emailed an employee at the South African Music Awards (SAMAs) with a special request. ‘Please be advised that MEC Mathabo Leeto (Sports, Arts, Culture and Recreation FS) and her husband have expressed a keen interest in attending the SAMA 2015. As this will be a private arrangement and not through her office, I will be attending to her needs and requests,’ Mpambani wrote. ‘The travelling guests will be 6 in total (excluding the 2 bodyguards) and I will also be part of the guests.
Kindly advise how we can arrange for the accreditation for the security detail. Since accommodation has been arranged, please advise on VIP/Executive tickets.’
A few days later, the SAMA employee came back with a quote of just over R4 000 for the tickets. But Mpambani did not immediately settle the invoice. Instead, he waited until 26 March, the day on which Blackhead–Diamond Hill received their third payment from the FSHS.
Mpambani apparently made good on his promise to attend to Leeto’s needs at the SAMAs. The awards ceremony was held at Sun City on Sunday 19 April. That weekend, Mpambani spent almost R50 000 at The Palace of the Lost City, Sun City’s most luxurious hotel. This was all money channelled into 605 Consulting’s account from the asbestos contract’s third instalment. While these amounts are small in the greater scheme of things, the transactions seemingly showed that Leeto was indeed a recipient of at least some of the asbestos funds,
supporting my source’s theory that Leeto and ‘MEC’ are one and the same. Leeto denied that she and her husband attended the SAMAs or that they stayed in The Palace hotel. Her spokesperson said it was a
‘blatant lie to tarnish her name’.
Not long after the third instalment was paid, Magashule showed his hand.
Shortly before 10 a.m. on Friday 10 April, Mpambani withdrew R300
000 from 605 Consulting’s FNB account at one of the bank’s branches in Rivonia. A few days before, he had transferred R7 million of the third FSHS instalment to the 605 Consulting account in two tranches, marking the payments as ‘engineering services’. Loaded with cash, Mpambani once again drove to Bloemfontein, where he booked himself into a local guesthouse. At just after 7 p.m. that evening, he received an email from one of Magashule’s staffers. ‘See below bank details. I just don’t have details for Unisa. Will forward as soon as I get them,’
Ipeleng Morake, an employee in the premier’s office, wrote from her private Gmail account.
The ‘below bank details’ were contained in an email that had been sent to her earlier that day by Moroadi Cholota, Magashule’s personal assistant. Cholota had also used a private Gmail account, but her email to Morake included her job title and contact details at the Free State Office of the Premier. The forwarded email included the bank details for the University of the Free State (UFS), North-West University (NWU) and the Central University of Technology (CUT). Mpambani was instructed to reference certain student numbers when he made the payments. These details must have been discussed with him elsewhere, as the student numbers were not included in Morake’s email.
The following morning, after creating payment links to ‘UFS’, ‘NWU’
and ‘CUT’, Mpambani made eight successive payments totalling just over R240 000 from 605 Consulting’s account. Each payment was identified by a different student number and labelled ‘student bursary dona[tion]’. Shortly thereafter, Cholota emailed Mpambani. ‘I received all the proof of payments. Thank you very much and may the good Lord bless u,’ she wrote.
I showed this information to a few sources who had insight into Magashule’s way of doing business. Apparently his unofficial bursary schemes were an open secret. My sources alleged that Magashule promised to cover the university or college fees of scores of young people in the province. He did not pay these fees himself, but instead directed businesspeople who had clinched government contracts to do so.
I showed the Excel spreadsheet to some of these sources. They told me something that resonated with what I had repeatedly heard while researching Magashule’s dealings. ‘Don’t just look for money flowing into Magashule’s own pockets,’ one told me. ‘After he had helped you get a contract, he would take his cut in the form of something like a credit facility. In this case, he would have told the asbestos guy when and how to make certain payments until the R10 million was finished.’
Another source, a former associate, encouraged me to look out for possible cash payments. ‘Ace likes cash, because it doesn’t leave much of a trail. He always has lots of cash with him,’ alleged this person. The IgoFiles appear to support both these claims.
On 6 May 2015, Cholota emailed Mpambani with another special request. ‘Following the discussion with Ipeleng Morake, Premier requested that you pay full amount of R470 000 and the remaining amount of R30 000 to one of the SRC President in Cuba,’ she wrote,
this time from her official government email account. She included the banking details for Pule Nkate, who is described by FS News Online as the ‘Student Representative of South African [Medical] Students in Cuba’. 2 Attached to the email was an invoice for tablet devices valued at R470 000. If Mpambani settled these bills, he did so either in cash or from accounts that do not show up in the IgoFiles.
The FSHS paid a fourth instalment of R15 million to the Blackhead–
Diamond Hill joint account on 4 June 2015. Mpambani handled this payment in a now familiar manner. Half of the R15 million was transferred to Sodi’s Blackhead Consulting, while the rest was flushed into the accounts of Diamond Hill and 605 Consulting in several payments that ranged from R900 000 to R3 million and that were labelled as ‘project management’ or ‘engineering services’ fees. From his company accounts, Mpambani made payments to a range of other parties for ‘consulting services’, ‘engineering services’ and ‘loans’.
They were mostly rounded figures of as much as R1 million at a time.
Mpambani also sent emails during this period that provided insight into his relationship with Magashule. On 8 June, a representative from China U-Ton Holdings, a Chinese fibre-optics company with a listing on the Hong Kong stock exchange, emailed Mpambani, Free State Development Corporation CEO Ikhraam Osman and David Nkaiseng, the FDC official who had sent Mpambani the details of Magashule’s trip to Cuba. ‘I must say that it was my great pleasure to know you and I fully enjoyed our meetings and dinner last week,’ wrote the China U-Ton representative. ‘I have returned to China over the weekend and would like to reiterate our interest in working with FDC … to construct a fibre optics network.’
Mpambani responded as follows: ‘We are excited of the opportunity to
partner with a reputable entity as your esteemed organisation. As discussed, we will embark on a trip to China with the Premier of the Free State Province in July and would like to take the opportunity to visit some of the functional [China U-Ton] sites.’ While it does not look like this deal ever materialised, the exchange highlighted the fact that Mpambani was involved in the province’s business dealings with private companies and showed his continued proximity to Magashule.
The IgoFiles reveal that Mpambani used some of the money from the fourth FSHS payment to sponsor a R40 000 luxury holiday for Chris Ackeer, Magashule’s aide and alleged fixer. Documents show that Ackeer and two young women flew to Cape Town, where they stayed in an upmarket apartment at the V&A Waterfront for a couple of nights in early July. The trio racked up huge bills at restaurants and clothing stores, which Mpambani seemingly paid using money from the asbestos audit. Just two days before Ackeer’s trip, Mpambani paid himself a ‘salary’ of R100 000 from the Diamond Hill account. The money was paid into his personal RMB cheque account, from where he seemingly settled Ackeer’s holiday expenses. Ackeer denied that Mpambani had paid for any of his holidays.
On 11 August 2015, the FSHS paid a fifth instalment of R36.5 million to the Blackhead–Diamond Hill joint account. Mpambani immediately transferred R12.5 million to Diamond Hill and R1.5 million to 605
Consulting. He then drove from Johannesburg to Bloemfontein, where he booked himself into his usual guesthouse. Magashule’s official diary places him in Bloemfontein during this time. An email from Cholota to Mpambani the next day suggests the businessman met with either the premier or one of his representatives. ‘Good day. This was the initial request send [ sic] to the Premier,’ Cholota wrote at around 1 p.m. on
12 August. Included in her email was another sent to Magashule in July that year from Refiloe Mokoena, who was at the time an acting judge in the Bloemfontein and Johannesburg High Courts. ‘Dear Premier,’ Mokoena had written. ‘Herewith please find the necessary documents for purposes of settling my daughter’s university account.’
Mokoena’s daughter had been accepted into Lycoming College in the United States, and she needed about R150 000 to cover the first tranche of fees. On 13 August, the day after Cholota forwarded Mokoena’s request to Mpambani, the latter paid US$4 000 (roughly R51 000 at the time) from Diamond Hill’s account to help cover the costs. The money was paid into Lycoming College’s account. On 18
August, Cholota thanked him in an email for the money. ‘Proof of payment received and acknowledged. Thank you very much,’ she wrote.
Mokoena’s stint as an acting High Court judge came to an end in January 2016. 3 She later became head of legal at the South African Revenue Service, where she played a key role in a VAT scandal involving the Guptas and then SARS boss Tom Moyane.4 Mokoena was also a member of the new board for state-owned arms manufacturer Denel appointed by then public enterprises minister Lynne Brown in mid-2015. This board later approved questionable deals between Denel and the Gupta-linked company VR Laser, fuelling suspicions that Mokoena and her colleagues had been appointed by the Saxonwold shadow state. It is not clear when or how Mokoena met Magashule.
After contributing to Mokoena’s daughter’s college fees, Mpambani returned to Johannesburg, where he withdrew R200 000 from 605
Consulting’s account at FNB’s Merchant Place branch in Sandton.
Three days later, he drove back to Bloemfontein, where he spent two nights in a guesthouse. During this time, he withdrew a further R55
000 from FNB ATMs, including R35 000 at the Brandwag ATM
around the corner from Free State House. According to his diary, Magashule was in Bloemfontein during Mpambani’s latest visit to the city. Furthermore, emails in the IgoFiles show that the premier’s office was in contact with the businessman during this time.
Of the R12.5 million Mpambani transferred into Diamond Hill’s account on 11 August, only R600 000 remained the following week.
Once again, Mpambani had made large payments for things like
‘engineering services’. One such payment, for R3.1 million, went to Kato Motsoeneng, the former Tswelopele and Mohokare municipal manager and co-founder with Mpambani of Diamond Hill Trading 71.
Over the entire period of the asbestos auditing saga, Mpambani channelled more than R5 million to Motsoeneng or to Katfin Financial Solutions, another of Motsoeneng’s companies. Mpambani mostly marked the payments as ‘engineering services’, although neither Motsoeneng nor Katfin appears to be registered with engineering bodies.
Sources from the Free State told me Motsoeneng was once a key mover in the province’s political circles, until he had a bitter fight with Magashule over tenders. I wanted to ask Motsoeneng about his windfall from Mpambani, but he died in 2016. He was forty-six years old. His wife told me that he was hospitalised after a fall and later passed away in a Johannesburg hospital. She did not want to talk about her late husband’s dealings.
By late August 2015, Mpambani was increasingly dividing his time between Johannesburg and Bloemfontein. After a short stay in
Gauteng, he was back in the Free State on 24 August. This time, he drew R12 000 from the FNB near Magashule’s official residence.
Again, the premier’s diary shows that Magashule was in town that day.
Shortly thereafter, Mpambani received another back-channel request from the premier’s office.
On 28 August, a Vodacom employee emailed a quotation for 200
electronic tablet devices to Ipeleng Morake. Morake first forwarded the quotation from her official work account to her private Gmail address.
From there, she sent it to Mpambani, who quickly settled the bill of R300 000 for the tablets. Morake later told me the devices were for students. It appears that Magashule was again playing Father Christmas with taxpayers’ money. When I asked her why she had forwarded the request through her private email account, Morake remained silent.
Mpambani continued to make payments for ‘engineering’ and
‘consulting’ services. Apart from the larger payments, he made several smaller payments ranging between R100 000 and R300 000. Some of these were made on days when he was in Bloemfontein, or shortly before or after Magashule’s staffers contacted him.
25
The ANC’s asbestos benefits
One of the most enduring allegations against Magashule is that he ran a bona fide shakedown operation in the Free State. The former premier allegedly made sure that businesspeople who got contracts from provincial departments and municipalities paid their dues to him as soon as they received money from the public purse. Several sources who once worked with Magashule claimed that such dubious funds were intended not only for his own pockets, but also for those of the ANC.
The IgoFiles provide unique insight into how the former premier tapped into the proceeds of the asbestos auditing contract to further his own political agenda and to benefit his party. In what can only be described as a kickback scheme, Mpambani funnelled money that came directly from the province’s coffers towards party-political projects. His orders to do so came from Magashule’s office.
In November 2015, Magashule’s newly appointed spokesperson Tiisetso Makhele joined eighteen fellow Free State compatriots on a three-week jaunt to Cuba. ‘[T]he ANC Free State Provincial Executive Committee, under the visionary leadership of Comrade Ace Magashule, sent me and 18 other comrades on a political course in the South American island of Cuba,’ Makhele later wrote in The Weekly. 1 The group of travellers, which according to Makhele became known as ‘the Cuban 19’, should have thanked South African taxpayers for their lengthy holiday in the Caribbean.
On 28 January 2016, shortly after their return to the Free State,
Moroadi Cholota once again emailed Mpambani. ‘Good day. Kindly find the below details as discussed telephonically,’ she wrote, including the bank details for Astra Travel, a travel agency in Bloemfontein. Her timing was impeccable. Just forty minutes after she sent the email, the FSHS transferred R10 million into the Blackhead–Diamond Hill joint account. This was the sixth payment for the asbestos audit.
The fact that Magashule’s personal assistant emailed Mpambani during the exact time frame in which the FSHS paid yet another instalment to Blackhead–Diamond Hill resonates with what I was told by several of the former premier’s erstwhile associates and allies. ‘Ace kept tabs on all the large and medium-sized payments made by municipalities and provincial departments. He knew exactly when most companies were due to receive money from his government, and he would then very quickly collect his share once the payment had been made,’ a former MEC in one of Magashule’s earlier executive councils told me.
The following day, Cholota sent Mpambani an invoice for R250 000
from Astra Travel for the ‘Cuba delegation’. It was for the group’s accommodation abroad. ‘Kindly find the attached invoice as discussed.
Hope you will find it in order,’ she wrote. In this instance, by following the money trail it is possible to see exactly how Mpambani attended to this political request with the proceeds of the asbestos auditing contract. Through a series of complex transactions, the businessman moved the FSHS bounty around in a manner that has all the hallmarks of a classic money-laundering operation.
When the sixth instalment of R10 million landed in Blackhead–
D
iamond Hill’s account, Mpambani immediately transferred about R5
million to Blackhead Consulting. He also put R600 000 into his private
RMB account. A couple of days later, he paid over R4 million to 605
Consulting. As soon as the R600 000 landed in the RMB account, Mpambani transferred R400 000 and R160 000 respectively to Diamond Hill. He marked these transfers as ‘loans’. He then immediately transferred these amounts from the Diamond Hill account to 605 Consulting, marking them as ‘loan–Diamond Hill’. Minutes after the R400 000 ‘loan’ landed in 605 Consulting’s account, Mpambani paid R250 000 to Astra Travel to settle the bill for the Cuban 19. He marked the payment as ‘Travel–Cuba’.
And the ‘loan’ of R160 000? About two weeks before the FSHS paid out the sixth instalment, Mpambani received an email from Kemi Akinbohun, a lawyer from Welkom, with the banking details of a non-profit entity called Evolution POT. ‘Kindly note that we shall send you a formal acknowledgement of the receipt of the donation when received,’ Akinbohun wrote. Two weeks later, after Mpambani had channelled some of the FSHS cash through Diamond Hill and into 605
Consulting’s account, he paid R100 000 to Evolution POT, marking it as ‘school fees donation’. According to its website, Evolution POT is a foundation established by Mathabo Leeto. Its objectives include
‘capacity building and training’, ‘moral regeneration’, ‘healthy living styles’ and ‘support [for] youth education’. Akinbohun confirmed the donation and said Mpambani’s money was used to buy school uniforms for needy children. The donation had not been influenced by MEC Leeto, insisted Akinbohun.
According to accommodation bookings in the IgoFiles, Mpambani was in Bloemfontein when he made the first payment to Evolution POT
and settled the travel bill for the Cuban 19.
By now, there was a clearly discernible pattern. No sooner had the
FSHS transferred money into the Blackhead–Diamond Hill account than Mpambani would receive requests from Magashule’s aides or people linked to politicians like Leeto. He would then move his share of the money into his own company accounts, from where he would make all manner of payments, including settling the requests. Mpambani also started to withdraw ever-larger amounts of cash before or during his trips to Bloemfontein.
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