Zondo and Parliament: Overlooked flaw in the law that favours the crooks - News24

Paul Holden's famous book-length review of the state capture report, Zondo at Your Fingertips, is worth another look in light Chief Justice Raymond Zondo’s controversial anniversary remarks recently that Parliament has not implemented the kinds of reforms necessary to block state capture 2.0.

Gabriel Crouse

Paul Holden's famous book-length review of the state capture report, Zondo at Your Fingertips, is worth another look in light Chief Justice Raymond Zondo’s controversial anniversary remarks recently that Parliament has not implemented the kinds of reforms necessary to block state capture 2.0. 

Some 450-odd pages in, Holden's gutting recount of system-wide corruption opens its penultimate part with a chapter simply called "The problems". Weren't these already exposed in the preceding summary of thousands of pages of the state capture report, itself a summary of hundreds of thousands of pages of evidence?

Not quite. Those pages were full of names and events, bad actors, bad deeds, whistleblowers, schemes, conspiracies, excuses, lies, revelations, devastations, and the grim tally of stolen money. But something was missing. "The problems" were not yet fully discovered.

"The first part of the commission's report on the underlying causes and types of state capture," the chapter opens, "spent considerable time identifying a series of interlocking and mutually reinforcing problems". "[I]f unchecked", it continues, system-wide corruption could "flourish again".

What could these mysterious problems possibly be? 

The Mysterious Problems

The short answer is bad policy, including race law, or BEE, as it is understood in the broader sense. That is not an easy thing for many to read, so it is worth explaining carefully.

"The problems" chapter begins by laying out the tactics of corruption from pre-tendering offers for fake or duplicate jobs, abuse of "deviations" policy, the "misuse of confinements", and from there, it details checkered "parceling" practice, "preferential procurement" abuse, ex parte "communication with bidders", "retroactive changes to bidding criteria", and exploitation of the "contract variations" policy.

From there, the chapter recapitulates top personnel challenges, highlighting two more tactics, namely "strategic appointments and dismissals" and "blurring the lines of management and oversight" at SOEs.

Mystery of the tricks' success

Almost without exception, however, all ten listed exploits, from duplicate job tenders to blurred management lines, are used by crooks around the world: banal tactics, extraordinary domestic results. The mystery is not that there are crooks in South Africa using these tricks; the mystery is their extraordinary success.

By the way, no one is suggesting that South Africa is the planet's most corrupt country. According to World Bank data, about half the world's countries are more corrupt. But the same data show that our ability to combat corruption is declining at the seventh fastest rate in the world over the last few decades.

That is an ugly reality, and there are ugly responses. Racists blame this all on the race of many new appointments, which is a disgusting and stupid way to think, if thinking is the word.

"The problems" chapter, by contrast, offers a serious, troubling account of race law's facilitation of rent-seeking corruption in its next subsection, "The legislative framework and structure of public procurement".

"The first notable problem," Holden writes, "was the extremely complicated and diffuse nature of the legislative framework guiding procurement", incomprehensible to a "poor procurement officer" just trying to buy "toilet paper".

Why so complicated? "On the one hand," Holden writes, the Constitution "requires the implementation of a system that is cost-effective and efficient". On the other hand, "the Constitution also envisages that procurement will be used for the purposes of transformation," he continues.

"While it may be possible to achieve both things in most cases of procurement this is not to be taken for granted. In some cases, the choice will have to be made between the best-value bidder or the bidder that offers the best possibilities for transformation."

Truly, it is confusing to say that race is more important than value-for-money, and that the latter is also more than the former, yet that is roughly what the state capture report found to be the confusing imperatives of the "mosaic” procurement system.

Everyone pays the price 

In "the commission’s view", Holden went on, "there is an urgent need for clarity on how to balance these potentially competing imperatives."

There is the word, "clarity”. "Clarity” was missing, confusion spread, corruption trailed in its shadow.

At this point one might look back at the ten tactics of corruption and reconsider the listed abuse of "preferential procurement". "Preferential procurement seeks to award contracts, or portions of contracts, to black-owned businesses", but this ambition "was used to create opportunities for corruption", with Holden providing examples. 

In other words, race law is one tactic for crooks to exploit, a tactic among many. But race law is then provided special, separate attention in the "legislative framework and structure" section because it removes "clarity” itself.

The "clarity" problem underlies, interlocks, and reinforces all the bad actors (of all races) using all the bad tactics (including those with no relation with race) by openly legitimising the idea that "value-for-money" is an ambiguous imperative in the system.

Who paid the price? In my opinion, everyone pays a price and honest, poor, unemployed South Africans who flounder in a rent-seeker's paradise have it hardest.

How should "clarity” be put back into the system? "In the commission's view," Holden notes, "this should be done by focusing on best-value procurement: 'the primary national interest is best served when government derives the maximum value-for-money in the procurement process and procurement officials should be so advised'."

That recommendation is stunning, clear, and almost universally ignored.

Other legal problems 

"The second problem," Holden continues, "related to the first, is the extent to which procurement has become decentralised." 

Notice again that the problems in the "legislative framework" are not about bad people breaking the law; they are about badness in the law itself that make life easier for crooks. The "legislative framework" is Parliament’s primary domain.

Speaker Nosiviwe Mapisa-Nqakula said, "thus far, of the 19 recommendations relating specifically to the work of Parliament, 11 have been implemented, and eight are underway". But the "maximum value-for-money" recommendation is not even on the list.

Holden's "problems” chapter goes on to mention other very important legal problems worthy of more attention. Demoting race law is no panacea.

But Parliament has done the opposite, trumping race by amending the Employment Equity Act to establish a certificate subsystem tied to race "targets” that will exclude some companies from public procurement. Parliament is also considering a bill to put "race" into Home Affairs. The state of occlusion ramifies with predictable consequences.

I can't help thinking the "problems" discovery could be like the ineffable spark between the most famous fingertips scene ever painted, charging new life into non-racial South Africa. But instead, ignored, what I consider our best chance at civil clarity is hanging off the edge of the cliff, by its fingernails, or worse.

Gabriel Crouse is a fellow at the Institute of Race Relations