Three ministers allegedly involved in attempted R5bn UIF corruption

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JEREMY MAGGS: The organisation, Public Interest South Africa says it’s deeply concerned about allegations made by Mthunzi Mdwaba, the axed chair of Productivity South Africa, and also the chief executive of Thuja Capital, regarding a reported attempt to secure a R500 million bribe in connection with a R5 billion deal with the Unemployment Insurance Fund [UIF].

I want to make some sense of this. From Public Interest South Africa, Tebogo Khaas, a very warm welcome to you. Very quickly, give me the context, can you summarise the nature of the allegations that were made?

TEBOGO KHAAS: Yes, thank you for the opportunity, Jeremy. In sum, what Mr Mdwaba is alleging is that certain ministers, three ministers to be precise, had approached him with regards to the R5 billion tender or deal that he had sought to secure at the UIF. They were asking for 10% of that R5 billion, an amount of R500 million.

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I believe, today I saw some reports where it actually mentioned one of the ministers who have been alleged to be implicated as Minister of Employment and Labour, Thulas Nxesi. We do note that there’s been a long-running skirmish between Minister Nxesi and Mr Mdwaba on various issues, including while Mr Mdwaba sought to be appointed as director general of the International Labour Organisation.

So we’re not sure really what the motive is and we’re not sure about the veracity of such allegations, and we still don’t know who the other two ministers are. But all that we also know is that he’s alleged that there are intermediaries who were actually negotiating the 10% bribe with him or through him with Thuja Capital, his company.

JEREMY MAGGS: Can you detail for me what the ramifications might have been if this deal on the UIF had proceeded without the bribe being exposed?

TEBOGO KHAAS: It’s unfathomable, R5 billion, I just don’t know how many RDP [Reconstruction and Development Programme] houses you can build with R5 billion. But certainly, because this money belongs to workers who contribute monthly to the Unemployment Insurance Fund, one cannot but imagine how much the fiscus would have lost and whether such an amount would have been recoverable, had those vigilant and very upright senior officers at the UIF not pushed back.

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R5 billion is a lot of money. Economists can really tell us how many families you can feed, how many stipends you can pay out. But that’s a lot of money, Jeremy, and to the extent that half of it, R2.5 billion was given as a grant in kind, it means that at least 50% of it was assured not to come back if it had really left the coffers of the UIF.

JEREMY MAGGS: And again, it raises the questions, does it not, around principles of transparency and good governance, which in this particular case seem to be completely absent?

TEBOGO KHAAS: No, absolutely. To start with, you ask yourself, how does a company that has allegedly been set up two days before the deal get to now be se securing a R5 billion deal? A company that is not even Vat registered and is taking money from employees who are UIF registered and it’s probably not even UIF registered itself.

So it’s really alarming and for us, it just shows the extent of the rot and lack of shame that permeates through the public sector and people are not even ashamed by the Zondo report, it appears.



It looks like there’s wanton corruption that just continues unabated.

JEREMY MAGGS: So very quickly, how and should this be investigated and who should be investigated?

TEBOGO KHAAS: We believe that, first of all, the Presidency must take note of this, and he must appoint with immediate effect, I do not know if parliament would also be required to be involved in it being touching on ethics, but certainly an investigation ought to be instituted to make sure that we remove any fears or to alleviate any public [mistrust] that is [held] by the public in government.

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Either the Hawks or somebody else must actually be tasked to make sure that they expedite this or any investigation, including that of Mr Mdwaba, and the circumstances…

JEREMY MAGGS: What are your expectations as far as Mr Mdwaba are concerned?

TEBOGO KHAAS: Well, our expectations were that, why did he sit with this information when it was important? He could have approached the authorities in December when he was first allegedly approached because they could have set up a sting to make sure that any individuals who are alleged to have been corrupt actually could be caught.

But instead, he waited until the minister had stopped this deal, which raises the question as to what his motive was.

But be that as it may, motive is not important, we want to make sure that the authorities get to the bottom of this issue and make sure that any wrongdoing, all those who are found to have done any wrong, actually account for their actions.

JEREMY MAGGS: Tebogo Khaas, thank you very much indeed.

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