How bribery became a way of life in South Africa
Former Bosasa executive details massive fraud in explosive testimony as cleanup campaign reveals vast extent of country's corruption
By GEOFFREY YORK
Saturday, January 19, 2019 Print Edition, Page A19
JOHANNESBURG -- In the mornings, the executives of Bosasa held Christian prayer meetings. In the afternoons, they walked into their office vault, counted out their cash and stuffed it into unmarked bags to be delivered as bribes to government officials.
This was the testimony this week by Angelo Agrizzi, former chief operations officer of Bosasa, a South African company that earned huge profits from its many years of contracts with government departments and stateowned companies.
His explosive testimony about routine bribery and massive fraud, backed up by secret video recordings shown at a state inquiry, is the latest evidence of the vast extent of corruption in South Africa, where a cleanup campaign is beginning to reveal how much money has been stolen and how many scores of state officials have been on the take.
Bosasa paid monthly bribes, in cash and often in luxury gifts, to about 80 officials in the government and state companies, Mr.Agrizzi testified. "Once you start paying people bribes on a monthly basis for as long as they are there, you control them 100 per cent," he said.
Corruption flourished during the nine-year presidency of Jacob Zuma, which ended last year, and the cleanup effort has begun under his successor, President Cyril Ramaphosa. Yet even the new government has been tainted. It was recently revealed that Bosasa chief executive Gavin Watson provided 500,000 rand (about $48,000) to help finance Mr. Ramaphosa's campaign for the leadership of the ruling party, the African National Congress. When this was exposed, the president's campaign managers promised to repay the money.
Bosasa, now known as African Global Operations, has faced corruption accusations for more than a decade. It has never been charged, but this week the inquiry was given a reason for the lack of charges. A close friend of Mr.Zuma, state airline chairwoman Dudu Myeni, allowed Bosasa executives to see confidential documents from state prosecutors at a meeting in 2015, according to evidence at the inquiry.
And Bosasa is far from the only company to be tangled in the corruption issue. The most notorious figures are the Gupta brothers, a family of business tycoons that forged a corporate partnership with Mr. Zuma's son.
Through their political connections, they gained huge influence over South African state companies, including Transnet, the state-owned freight rail company, which awarded a controversial US$5-billion locomotive contract to Bombardier Inc. and three other suppliers in 2014.
This week, Transnet chairman Popo Molefe - appointed by the Ramaphosa government to lead a corruption cleanup - revealed the extent of Gupta influence over Transnet's contracts. The phenomenon has become known as "state capture," the corrupt takeover of a state company.
"We found that the architects of state capture had actively turned Transnet into their piggy bank," Mr.Molefe told local media this week.
"They had turned Transnet employees into cronies who served the agenda of the capture of Transnet, and removed all those who would not be compliant. The machinery was created for professional thieving ... it was nothing short of a horror movie ... many of these executives who were responsible for running Transnet went to the office every day primarily to loot."
Mr. Molefe announced that he plans to meet the four locomotive suppliers, including Bombardier, to discuss the possible repayment of excessive payments under the contract. The cost of the contract in 2014 had soared by nearly 40 per cent from an estimate just a few months earlier, and an investigation ordered by Transnet last year concluded that "suspicious" payments had been made to the locomotive suppliers, including Bombardier.
Olivier Marcil, vice-president of external relations at Bombardier, said the company rejects any allegations of unethical behaviour in its Transnet contract.
"There have been no 'overpayments' to Bombardier and this can be demonstrated," he told The Globe and Mail in an e-mail on Friday. "One must be cautious before unjustly associating Bombardier with potential wrongdoings of other companies."
Bombardier's continuing review of the allegations have found that the company has always acted in full compliance with the law and its contract obligations, he said. If the needs of Transnet change, Bombardier is "willing to identify and negotiate solutions," he said.
Transnet's executives have said they will testify to the inquiry into state corruption, which has riveted South Africa with dramatic testimony since it began its hearings last August.
The Bosasa evidence is the latest to grip the country.
The whistle-blower, Mr. Agrizzi, has painted a portrait of the company as a "cult" with Christian pretensions, under the firm control of Mr. Watson, terrorizing any dissidents and dishing out huge bribes to dozens of officials in government departments and state companies, including the post office, the airport management company and the prisons department, in exchange for contracts that were often grossly inflated or even fictitious. Every single contract was "tainted by bribes," he said.
The cash bribes to state officials were so routine that Bosasa executives called them "Monopoly money," Mr. Agrizzi said. There was so much cash in the Bosasa offices that he once found the equivalent of about $7,000 in a garbage bag.
In a six-minute video clip, secretly recorded at the Bosasa office vault, the inquiry saw Mr.Watson and other Bosasa executives counting stacks of cash in hundred-rand notes, each stack adding up to 100,000 rand, for a total of a million rand (about $100,000).
Mr. Agrizzi said the company did not keep written records of the bribes, but he wrote down the amounts in coded terms in a "little black book." His colleagues had their own nicknames for the bribes. "What is the order of chicken today?" they sometimes asked when discussing the cash needed for bribes.
The inquiry says the testimony by Mr. Agrizzi will implicate about 38 individuals in illegal payments. His testimony will continue on Monday.
Mr. Agrizzi, who received the equivalent of millions of dollars from Bosasa in salary and gifts such as luxury cars, has acknowledged to the inquiry that he is implicating himself in his testimony, along with Mr. Watson and other company executives.
He says he decided to become a whistle-blower after almost dying in heart surgery. "After that, I decided I could not continue," he said. "I was exposed to many unlawful activities."
The company's daily prayer meetings and all-night vigils with pastors and prophets were becoming "a mockery," he said.
The inquiry's officials have warned that Mr. Agrizzi has received threats and his life could be in danger.
He has been accompanied by armed bodyguards, and one of his sessions at the inquiry was cancelled for security reasons after a Bosasa employee was spotted at the inquiry's offices.
Former South African president Jacob Zuma waits for his court hearing in Pietermaritzburg, South Africa, in November. Corruption flourished during Mr. Zuma's nine-year presidency.
ROGAN WARD/AFP/GETTY IMAGES