Gangster State

by Pieter-Louis Myburgh

  The IgoFiles, Magashule’s diary and other records allowed me to identify a sequence of events that show how Mpambani channelled even more of the money from the asbestos auditing contract into political projects. On Tuesday 19 January 2016, Magashule met with President Jacob Zuma at the latter’s Mahlamba Ndlopfu residence in Pretoria. That same day, ANC spokesperson in the Free State Thabo Meeko tweeted: ‘ANC Free State to convene the mother of all marches in defence of President Zuma, on 06 Feb 2016. In Bloem. Details to follow.’

  Zuma was in the middle of yet another political storm after his shock appointment, and subsequent reversal, of Des van Rooyen as finance minister a month before. His relationship with the Guptas was also keeping him in the firing line and he needed all the support he could get. The march was scheduled for the week after the FSHS made its sixth payment for the asbestos audit, and Mpambani’s money once again came in handy. On Wednesday 3 February, he withdrew half a million rand in cash from the FNB branch in the Sandton City shopping mall. He then drove to the Free State, swiping one of his bank cards at the Grasmere and Vaal toll plazas before later buying petrol at the Engen 1-Stop on the N1 outside Bloemfontein.

  While we do not know for sure what the R500 000 was for, the

  IgoFiles suggest that Mpambani met with someone about the planned Zuma march that same day. The following day, he made three separate payments totalling about R230 000 to three transport companies. He marked the payments as ‘bus shuttle services Igo-Cosatu’, ‘bus shuttle services WL Mangaung’ and ‘bus service – rally’ respectively. He also sent payment notifications to the three transport companies. I spoke to an employee at one of the bus companies, and he confirmed that they had been paid to drive members of the ANC Women’s League (WL) to the rally. This person would not disclose where the money had come from. As it happens, MEC Leeto was treasurer of the ANC Women’s League in the Free State during this time.

  Mpambani would later also make at least one payment to Thabo Meeko, albeit a relatively small one. In November 2016, Mpambani made an eWallet payment of R2 000 to a cellphone number which a simple Google search revealed to be Meeko’s.

  The February march, meanwhile, was touted as a celebration of the ANC’s 104th birthday, but it turned out to be blatant propaganda in support of the party’s beleaguered president. A few thousand marchers, wearing mostly yellow ANC T-shirts or green ANC Women’s League uniforms, walked through Bloemfontein’s streets before gathering at the city’s Dr Petrus Molemela Stadium. A news broadcast of the event shows a huge ‘Hands Off President Zuma’ banner and marchers carrying placards displaying the same message of support. 2 Later, then ANC secretary-general Gwede Mantashe and Magashule addressed the crowd, 3 with Mantashe claiming that reports about the Gupta family’s links to top politicians were exaggerated. ‘If people have relations with the Guptas it’s their business, I don’t have a relationship with them, I have no problem with people who have a relation with them,’ he said

  from the podium. 4

  Mpambani had clearly been on Magashule’s mind during that week.

  On the Tuesday before the rally, he received an invitation to the premier’s upcoming State of the Province Address. As had happened the previous year, it appears that Mpambani drove down to Bloemfontein specifically for the event on 16 February. Data in the IgoFiles shows that he swiped 605 Consulting’s bank card at toll gates en route.

  The FSHS transferred the seventh instalment to Blackhead–Diamond Hill on 28 April 2016. It amounted to exactly R15 million. Mpambani transferred half of it to Sodi’s Blackhead Consulting and the remaining R7.5 million to 605 Consulting. From the latter account, Mpambani made the usual payments for ‘engineering services’ and ‘professional services’. Less than two weeks later, only about R200 000 of the R7.5

  million remained in the 605 Consulting account.

  In keeping with the pattern, Mpambani travelled to Bloemfontein frequently after receiving the latest instalment. On Monday 9 May, he withdrew R100 000 in cash from the FNB ATM around the corner from Free State House. He almost certainly had contact with Magashule or someone close to him that week, as evidenced by events.

  According to his diary, Magashule was at the ANC’s Bloemfontein offices on Friday 13 May to prepare for the party’s manifesto launch.

  That same day, Mpambani transferred R50 000 from the 605

  Consulting account for ‘bus shuttle service’. The ANC’s manifesto launch for the upcoming local government elections took place the following day. It was held in Botshabelo, near Bloemfontein, with Zuma as the keynote speaker. Magashule also delivered a speech.

  Considering the timing of the payment and the fact that Mpambani was

  in Bloemfontein at the time, it is unlikely that the bus service would have been for anything other than the manifesto launch.

  In late July 2016, with the local elections only days away, Mpambani made his most direct financial contribution to the ruling party. He funded this donation with the proceeds of the asbestos auditing contract in a clear example of the ANC’s habit of funding itself with money squeezed from state coffers through dodgy contracts. The little scheme worked as follows: By 28 July, 605 Consulting still had a small amount of money left over from the seventh FSHS instalment paid out in April. That day, Mpambani transferred R100 000 from the 605

  Consulting account to his FNB Private Wealth cheque account, marking it as ‘salary’. Just a few minutes later, he transferred this entire ‘salary’ from his Private Wealth account to an unknown bank account, flagging it as ‘party fundraising’. A subsequent SMS sending-fee notification stated that the payment was for ‘ANC Fundraising’.

  26

  Zizi

  One notable problem with the IgoFiles was the fact that they mostly contained bank records, emails and other documents relating to only Igo Mpambani’s financial activities. The dealings of Edwin Sodi, Mpambani’s partner in the Free State asbestos audit project, therefore remained hidden from view. However, in an attempt to quell my suspicions about Blackhead Consulting’s role in the saga, Sodi and his lawyers invited me to inspect the company’s bank statements for the period in which the Blackhead–Diamond Hill joint venture received millions of rands from the Free State Department of Human Settlements.

  I accepted the invitation. If anything, the exercise further fuelled my doubts over the contract. As mentioned in Chapter 22, one version of the ‘cost of business’ spreadsheet in the IgoFiles, along with a draft email written by Mpambani, implicated Sodi in suspicious payments.

  Sodi was to ‘take care’ of those payments highlighted in yellow, while Mpambani would handle the rest of the amounts detailed in the spreadsheet, according to the email.

  Sodi did not deny that he had seen such a spreadsheet, but he seemed to suggest that the version I obtained had been altered. ‘The spreadsheet that was prepared does not bear the abbreviations and names asked about,’ his lawyers said. They denied that Sodi or his company had made any donations or payments to politically exposed individuals or entities that could reasonably be viewed as ‘kickbacks’

  or ‘bribes’ related to Blackhead’s government contracts.

  ‘Blackhead is a reputable business operating fully within the laws of South Africa, is tax compliant and rejects the allegations that its business has benefitted from any unlawful activity or political connections,’ Sodi’s lawyers claimed. ‘All the contracts that Blackhead has won have been through proper procurement processes. Any other suggestion is simply wrong.’ They said they had undertaken a

  ‘complete review’ of Blackhead’s financial activities. ‘It does not disclose payments to any politically connected individuals.’

  The lawyers were certain that once I had sight of Blackhead’s bank records, I would conclude that Sodi’s firm had not made any of the suspicious payments listed in Mpambani’s version of the spreadsheet.

  They were wrong.

  On 26 March 2015, the FSHS transferred R25 million to the Blackhead–Diamond Hil
l joint account, according to bank records in the IgoFiles. This was the third payment. If the spreadsheet were accurate, after receiving a slice of this instalment from the FSHS, Blackhead would have been required to pay altogether R3.2 million to five of the abbreviated third parties listed in the document. The amounts ranged between R300 000 and R1 million. One such payment, at least according to the spreadsheet, was for an amount of exactly R1 million to a certain ‘TZ’. One of my sources alleged that

  ‘TZ’ was a top-level official at the national Department of Human Settlements who had played a role in transferring the asbestos audit contract to the Free State without a tender process. This official’s name is being withheld on legal advice, seeing as the IgoFiles do not contain proof that this person received the money.

  But a peek at Blackhead Consulting’s bank statements allowed me to establish that Sodi’s firm had indeed made at least one payment that

  matched those listed in the spreadsheet. On 27 March, a day after the R25 million landed in the Blackhead–Diamond Hill joint account, Mpambani transferred almost R20 million to four bank accounts. Of that, R10 million went to Mastertrade, the company owned by Sello Radebe, the former Free State official who evaded my queries about his role in the saga. Mpambani also transferred R6.4 million to two accounts belonging to his other companies. The remaining money, exactly R3.2 million, went into the account of Blackhead Consulting.

  In other words, Mpambani paid Blackhead the exact amount that Sodi’s firm was required to pay five third parties after the third instalment from the FSHS, as detailed in the spreadsheet. On 1 April 2015, just a few days after Mpambani transferred the money, Sodi paid exactly R1 million to an unknown account. The payment was marked as a ‘loan’. I could not help but wonder if this was perhaps the payment to ‘TZ’. I asked Sodi’s lawyers to whom Blackhead had lent money. I also asked them for a loan schedule and loan agreement. This time, they remained mum. Blackhead Consulting also extended a ‘loan’

  of R5 million, among other payments, to another unknown third party.

  The firm’s lawyers ignored my queries over this second loan.

  Just before the Blackhead–Diamond Hill joint venture received its third instalment from the FSHS, Sodi made another curious payment.

  On 24 March, he transferred R250 000 to Bongani More. Blackhead also paid More R100 000 in October the following year. Poring over Blackhead’s bank records, the name immediately rang a bell. I later recalled that I had come across a Bongani More during my research into Ace Magashule’s student days. Someone had told me that More was a student leader at Fort Hare when Magashule was there. More importantly, More later became a deputy director-general at the

  Gauteng Department of Human Settlements. This department was Blackhead’s first client for an asbestos audit project, and it was from here that Blackhead’s services, along with Diamond Hill’s, were transferred to the Free State. I wondered if More was one of the many officials Blackhead and Diamond Hill needed to pay off. If not, why did Blackhead pay More R350 000 during the period of the Free State asbestos audit saga? I asked Sodi’s lawyers to comment on Blackhead’s payments to More, but they sidestepped my questions.

  More read my WhatsApp message regarding the alleged payments, but he did not reply.

  Blackhead also made a series of payments to the ANC. Between September 2015 and February 2016, Sodi’s firm transferred R100 000

  to someone listed in its bank statements as ‘ANC volunteer’. In January 2016, Blackhead paid R150 000 for ‘ANC TG funds’. The company also transferred a neat R500 000 for the benefit of ‘ANC

  Gauteng’ in July 2016. In all, the ANC and its unnamed ‘volunteer’

  received R750 000 from Blackhead during the time of the asbestos audit. In light of long-standing concerns that the ANC was funding itself through alleged kickbacks from government contracts, I asked Sodi if these payments were in any way related to the Free State contract. One of his lawyers responded as follows: ‘My client has made no secret of his membership of and support of the ANC. The fact that my client has made donations to the ANC does not mean that any of the contracts which it has won are tainted by any form of irregularity.

  All the contracts that Blackhead has obtained have been through an open and transparent tender process.’ The last assertion was not quite correct. There had been no tender process for the Free State asbestos audit. As previously explained, Blackhead and Diamond Hill bagged

  the lucrative contract through the transfer of the original Gauteng contract.

  A series of payments made by Blackhead Consulting in 2016 also caught my eye. In the month-long period between late August and late September, Sodi’s firm made three payments totalling almost R105 000

  to someone listed in its bank records as ‘Zizi’. The name had been redacted with a black marker, but whoever did this did not do a very good job. Holding the black blotches to the light, the name ‘Zizi’

  clearly shone through. Asked why the name had been redacted, Sodi’s lawyer later said his client had wanted to protect the identities of certain individuals. ‘He does not seek to hide any inappropriate payments. Where a name has been redacted this is to protect the privacy and confidentiality of the recipient.’

  I could not help but wonder if this was an attempt to cover up payments to Zizi Kodwa, the ANC’s then acting national spokesperson and one of the party’s most visible members. There was a tangential link between Kodwa and Sodi, so it did not seem entirely implausible.

  As mentioned in Chapter 21, Blackhead Consulting allegedly started securing contracts from the Gauteng government when Nomvula Mokonyane was still premier of the province. Sources claimed that Sodi and Mokonyane were close, but Sodi denied that his company had secured contracts because of their alleged friendship. Kodwa, meanwhile, became Mokonyane’s ‘special adviser’ in 2013, towards the end of her stint as premier. 1

  I wondered whether Kodwa had perhaps met Sodi during this time and for some reason ended up on Blackhead’s payroll. I expressly asked Sodi’s lawyer if the ‘Zizi’ listed in Blackhead’s bank statements was the ANC’s well-known spin doctor. If it was a different Zizi, could

  Blackhead indicate who this person was, I asked. He ignored these questions and instead gave me a general response about the need for

  ‘privacy’ and ‘confidentiality’. I was hoping Kodwa would be willing to engage with me over the matter. After all, the acting ANC

  spokesperson had taken a vocal stance against corruption, state capture and strange payments from government contractors after revelations about controversial state contractor Bosasa’s murky dealings surfaced in early 2019.2 Former Bosasa executive Angelo Agrizzi’s shocking testimony at the Zondo Commission of Inquiry elicited this comment from Kodwa: ‘We can’t have public servants who are in the pocket of people who are a cartel, who are basically running the country like an underworld, like a mafia. ’3

  I asked Kodwa if he had ever received money from Blackhead Consulting. I also asked him if the alleged payments might have been connected to his former position as Mokonyane’s special adviser.

  Kodwa ignored the question about the alleged payments. His only response came in the form of a WhatsApp message: ‘My name is Zizi Kodwa I was never advisor to Minister of Water Affairs Ms Mokonyane, thanks.’ I pointed out that there were newspaper reports about his role as Mokonyane’s adviser during her term as Gauteng premier, but at this point Kodwa cut all communication with me. I even hounded him for a response on Twitter, but he kept ignoring me. We will have to keep wondering whether some of Blackhead Consulting’s proceeds from the Free State asbestos audit or other government contracts ended up in Kodwa’s account. If true, it begs the question of why Kodwa received such payments.

  Finally, a payment made by Blackhead in late 2015 also drew my attention. On 11 August, the FSHS paid R36.5 million into the

  Blackhead–Diamond Hill joint account. This was the fifth instalment for the asbestos audit. That same day, Mpambani
transferred over R13

  million to Blackhead Consulting. About six weeks later, on 18

  September, Blackhead paid R400 000 to an unknown account. The transaction was marked ‘Parys farm’. The mention of Magashule’s hometown naturally sparked my interest. By way of explanation, Sodi told me he owned a farm near Parys. I later checked up on this. There were no records at the Bloemfontein deeds office for a farm owned by Sodi or any of his companies or related entities in that part of the province. When I pointed this out to Sodi’s lawyers, they stated the following: ‘The purchase of the farm is on an instalment sale basis with transfer to take place on payment of the final instalment. The final instalment has not yet been paid.’ I asked for the farm and portion numbers to locate the property, but the lawyers ignored my request.

  By allowing me to review Blackhead Consulting’s bank statements, Sodi’s legal team hoped to convince me that the transaction records in Mpambani’s ‘cost of business’ spreadsheet were incorrect. Their tactic had the opposite effect. Blackhead made at least one payment that correlated with the spreadsheet. Sodi’s lawyers then refused to indicate who had been on the receiving end of this transaction. They also failed to disclose details of some of the other payments I flagged, including those made to ‘Zizi’. These outflows, along with the confirmed donations to the ANC, only cemented my belief that the Free State’s R255-million asbestos audit project was replete with political meddling and possible corruption.

  27

  The last cash run

  The FSHS made the final payment for the asbestos audit in August 2016. It came to a hefty R77.5 million, meaning that the department had now splurged altogether R230 million on the dubious project.