Crony Capitalism 2.0 and the Wretched of South Africa by | Patrick Bond

by Jun 4, 2012All Articles

Do Pretoria and Johannesburg deserve the fate of Sodom and Gomorrah, cities along the ancient Jordan River which were, according to The Book of Genesis, consumed by fire and brimstone as punishment for sinful hedonism?
Etymologically, Sodom – today just a salt pan at the Dead Sea – comes from ‘fortified’ and Gomorrah meant ‘deep’ with ‘copious water.’ So the names match nicely, given the respective catastrophes besetting Pretoria’s police – national commissioners Jackie Selebi and Bheki Cele implicated in corruption with a potential third, Richard Mdluli, nearly there – and Joburg’s goldmines: Acid Mine Drainage; a corrupt Paris firm’s 2001-06 water commercialization (causing a decade’s worth of Soweto community protests); and at the city’s main post-apartheid water source in Lesotho’s dams, notorious eco-destructive graft.
Sodom and Gomorrah initially existed in an Eden-type setting on the Jordan River (this, of course, a couple of millennia before Israel occupied the West Bank, stealing all the good land and water). Before sin became pervasive, the Jordan Valley was politically comparable to at least the image of a contemporary Rainbow Nation, one born in 1994 of heroic struggle after a national liberation movement overcame apartheid crimes against humanity, led by Saint Nelson Mandela.
Eighteen years later, with the scale of state-related corruption reaching R25 billion per year, according to the Special Investigating Unit, and private-sector corruption at least twice that according to Transparency-South Africa, God’s wrath against the rulers of Pretoria and Johannesburg appears overdue.
Good riddance, Brett Kebble
Why, then, are the relatively minor machinations of the late Brett Kebble during the late 1990s and early 2000s of such enduring interest? (He ripped off maybe a billion and a half rand in his decade of CEO chaos.)
Historians may well decide that Kebble’s career represented a kind of diamond-encrusted-gold-ringed finger rudely pulled from a cracking Mbeki-era dyke – already shaking at the foundations after the Mandela-era Arms Deal – thus swamping the heart and soul of the African National Congress (ANC) leadership with financial malfeasance and political rot.
Kebble was, after all, extremely good at his game, up to the point the inverted pyramid crashed in mid-2005. More brazenly than any other previously-and-still-empowered South African, he utterly scammed the new political elite, investors and the cultural crowd with his patriotic-white-friend-of-black-empowerment-and-the-arts hustle. That’s why a critique on the political terrain that Allan Kolski Horwitz chooses in the parody play Comrade Babble, does so much collateral damage to South Africa’s multiple opportunists.
Though the wreckage Kebble left was extensive, he was killed at the remarkably young age of 41, and is remembered amongst financier peers mainly for having run into the ground the once-proud mining houses JCI, Western Areas and Randgold. Summing up his contribution to South African entrepreneurship, veteran business editor Jim Jones recalls,
Kebble’s modus operandi was the same as that of many fraudsters. He quietly transferred and sold shares in London-listed Randgold & Resources (R&R) to pay pressing creditors, but concealed those transfers so as to fool creditors and shareholders of JCI and R&E into believing their claims against the public companies were backed by R&R shares worth R1.2 billion. And he quietly sold a significant part of JCI’s shareholding in gold company Western Areas for another few hundred million rands. Then there were shares, worth hundreds of millions, in uranium hopeful Afrikander Lease, in Harmony and Anglo Platinum, which have disappeared without trace.
The most detailed autopsy of the scamming was by Barry Sergeant, whose book Brett Kebble: The Inside Story, reveals how much was stripped through unsound financial engineering:
the uneasy truth of the overall matter is that, under Kebble, JCI itself was a gigantic slush fund. A thorough forensic examination and analysis of the JCI group accounts from 1997, including deconsolidation and reconstruction of the accounts, revealed that JCI had posted total losses of R792 million from 1997 to 2004. This is simply staggering, given that at no time during this entire period did JCI have any form of normalised income…
Sweltering under his own flawed delusions, Kebble was forced to fritter about, blowing his off-key clarion, moving from one rats-and-mice deal to the next, concocting one irregular transaction after another. The virtuoso moved into a jejune phase of his business career, seemingly determined to prove that when measured as a conventional businessman, he was a complete and utter disaster.
But he got away with it for way too long, thanks to the lack of regulator oversight, as well as the blindness of South Africa’s business journalists, with the exception of noseweek’s Martin Welz and The Citizen’s Paul Kirk, both of whom made it to Kebble’s ‘hit list’.
Because of slack bureaucrats and newspapers, not much was evident to the outside world until mid-2003. Though his firms were in negative equity in 1999 and personally he was technically insolvent as early as 2001, Kebble’s disasters multiplied mostly under cover. Finally in August 2005, the deathly-ill mining houses were stripped from his control by his leading creditor, Investec, and his main outside investor, the R220 billion Allen Gray fund which owned around a fifth of the three Kebble-controlled firms. (Other Randgold shareholders in turn sued Investec for continuing Kebble’s Ponzi scheming long, after his firms should have been eased out of management’s hands.)
A few weeks later came the near-fatal shooting of Allen Gray investigator Stephen Mildenhall, so ordered by Kebble because of his critical audit of JCI and Randgold books.
Then on 28 September 2005, Kebble suffered what the National Prosecuting Authority termed an ‘assisted suicide’, shocking South Africa. Why did he go in this convoluted manner? The man who hired the shooters, Clinton Nassif, “was looking for means of killing Kebble in a way that would not look like a suicide, so that the insurance could still pay out and look after his family,” Nassif’s main assistant testified in court, confirming Kebble’s scamming orientation right to the very end.
Indemnity from prosecution was given to the three killers, but it was the underworld crime boss Glenn Agliotti – a dear friend of then Police Commissioner Jackie Selebi (‘finish en klaar’) – who confessed to have been the main suicide assister. He nevertheless won acquittal from Judge Frans Kgomo, and the whole episode of prosecuting Kebble’s death still reflects incredibly badly on South African politics, policing and justice.
Kgomo referred to Mario Puzo’s mafia novel The Godfather: “The trickery and shenanigans practised … as demonstrated in that book was demonstrated by this family, the Kebbles.” In his judgment, Kgomo continued, “‘The Don’ was Brett Kebble, the ‘consiglieri’ was John Stratton, the ‘caporegime’ was the accused, the ‘lower caporegime’ was Clinton Nassif and the ‘button men’ were [self-confessed hitmen] Mikey Schultz and bouncers Nigel McGurk and Faizel Smith.”
But police and prosecutorial incompetence – or worse, conspiracy to sabotage the case – left Kebble’s murder, by seven bullets at near point-blank range in his top-of-the-range Mercedes late one spring night in suburban Johannesburg, shrouded in dust.
To add to the confusion, even after Kebble’s financial fall and disreputable death, a horde of politicians and businessmen proudly considered themselves as friends. Consider this partial list of high-profile attendees of Kebble’s October 2005 Cape Town funeral: Essop Pahad, David Gleason, Brigitte Radebe, Saki Macozoma, Peter Gray, Mafika Mkwanazi, Tokyo Sexwale, Tony Yengeni, Ebrahim Rasool, Mo Shaik, Pam Golding, Nomaindia Mfeketo, Limpho Hani, Mbulelo Goniwe, Baleka Mbete and Dali Tambo.
The pallbearers were ANC youth leaders Lunga Ncwana, Songezo Mjongile, Andile Nkuhlu and Sharif Pandor.
But Kebble’s damage at a systemic level is far more impressive, especially given the loose morals of the man who pulled off what was perhaps South Africa’s worst-ever corporate mauling, on the watch of managers from major financial institutions like Allen Gray, who watched it happen in slow motion, again and again, between 1997 and 2005.
As an aside, it always makes me chuckle to read, repeatedly, how South Africa’s financial system is judged one of the world’s most healthy and well managed – ranking fourth in the World Economic Forum’s most recent Global Competitiveness Report – while thinking of how the major banks and investment houses sunk pension and insurance funds down Kebble’s black hole of corruption.
Charming Kebble’s financial scamming
Seducing politicos and investors alike, the Kebble charisma, drilled in early at St Andrews boarding school and then the University of Cape Town Law School, was apparently mesmerizing. As Chris Barron explained in the Sunday Times shortly before Kebble’s murder,
He’s extremely urbane: impeccably dressed and groomed, a polished talker with an accent to match. He plays the great entertainer well. He has a good line in jokes to suit every occasion (even down to a private secretary called Meininghaus), and is clearly a man of culture. He quotes Shakespeare, is a nimble pianist and pays serious money for serious art. Then, of course, he’s clever. His brain operates on a higher level. He can interpret a balance sheet at a glance, make lightning fast mental calculations, spot the gap and visualise the shortest way through it.
Kebble came of age in a time, before the 2002-08 world commodities boom and during the initial debt-loaded-dealing era of black empowerment, when any smart mining house was considering disinvestment (not least for huge forthcoming environmental liabilities including Acid Mine Drainage) and when any huckster could move in. As Barron recalls,
Analysts and journalists were swept along as much by his polished persona as by a gung-ho, devil-may-care attitude that made the local mining world as exciting as during the heady days of Barney Barnato. If they hadn’t been so busy laughing at his jokes, admiring his fancy fingerwork on the ivories and his ability to quote Shakespeare, they might have been more sceptical and noticed vaguely disturbing signs.
As Barron continues, the SA financial industry stood exposed as inexperienced rubes:
From the start he was a heavy share trader, trading up to a million Rand Leases shares a day. It was a tendency that should have sounded a warning. The way he took over Randgold and others was impressive, but it was essentially pushing numbers round a board, not building solid shareholder value. There was no cash in sight. He was simply using one company to take over another by transferring shares. Admittedly value was being added for shareholders along the way, but how much in relation to the value being added to Kebble family interests was a question that the sheer complexity of the structure Kebble was creating made almost impossible to answer.
The first disaster, remarks Barron, did not trip up Kebble for more than a few weeks:
SA investors barred from foreign stocks saw Kebble’s West African mines as the next best thing to Bre-X, and that virtually every local analyst thought Kebble could do no wrong pushed Randgold shares from R4 to R41.50 in 1997. Share options worth millions were granted to the Randgold directors before the Bre-X bubble burst and Randgold shares plummeted to R2.
Kebble responded to failure by raising the stakes:
Years of uncritical adulation had fed Kebble’s always incipient arrogance to the point where it had become uncontrollable. In terms of the mining business he was still an upstart, but he intimidated those with far more experience who disagreed with him. He phoned fund managers and demand to know why they were selling Randgold or related shares.
As if to underline the naivety of the Johannesburg Stock Exchange crew, says Barron,
Rather than accuse Kebble of gross unprofessionalism, analysts still somewhat starry-eyed over his virtuoso personality tut-tutted that this was merely a case of over-enthusiasm, of wanting to move too quickly because to Kebble “slow is boring”… [T]here then came Kebble’s cavalier use of money owing to shareholders of Randfontein, a company in which he had a minority stake, to add cashflow to a Kebble family mine, Western Areas. Still excuses were found for his behaviour, still directors and advisers gave him the benefit of the doubt.
Barry Sargeant picks up the story:
JCI’s auditors throughout the relevant period, Charles Orbach & Company, could well argue that the accounts of JCI and its subsidiaries complied with all the technical rules that auditors are expected to apply, but there can be no question that the economic substance of JCI’s accounts was unmitigated trash. Had they been presented on a see-through basis, as in the various appendixes to this book, JCI would have been stampeded by entire kennels of fiduciary watchdogs, including the SA Institute of Chartered Accountants, the Public Accountants’ and Auditors’ Board, the JSE (which, ironically, has a special committee to monitor accounts), the Financial Services Board and the full gamut of law enforcement agencies. The overweening naivety of these various oversight entities will remain both unthinkable and unpalatable.
One reason he got away with it for so long was that Kebble had an awe-inspiring capacity to not only drop names of political heavyweights, but to deposit small fortunes into their bank accounts.
Playing politics with poison
In 2010, thanks to yet another leaked police tape, much more was finally understood regarding Kebble’s strategic maneuvres. He located himself directly within the personality divide between the Mbeki and Zuma camps, a fissure that imploded the ANC during ‘eight days in September 2008’, as Frank Chikane’s book has it. The palace coup was justified by Zuma’s men, on grounds he was being unfairly abused by Mbeki’s organs of the state.
Kebble’s so-called ‘voice from the grave’ tape, recorded in the office of crime intelligence commander Mulangi Mphego at police headquarters in Pretoria in 2003, allowed Mail&Guardian journalists Jackie Mapiloko and Sam Sole to trace some links directly to the president of Interpol, SA Police Commissioner Selebi, who was later imprisoned for corruption charges:
In the meeting, Kebble repeats and fleshes out claims he had already made in private – that he was a victim of an abuse of office by former director of public prosecutions Bulelani Ngcuka and his Scorpions investigators… It is clear from the tape that [Kebble right-hand man John] Stratton was in regular contact with Mphego – whom he calls “Mphegs” – and was providing him with information from Kebble’s own private intelligence network. In the meeting Kebble links Ngcuka to the same group of alleged power-brokers who were to emerge in the hoax email allegations and in the so-called Zuma tapes that scotched the Zuma prosecution. They include businessmen Saki Macozoma and Mzi Khumalo and Ngcuka’s wife, Phumzile Mlambo-Ngcuka…
In the meeting Kebble makes it clear that he believes Ngcuka’s investigation of cases against him and his father – over two separate cases of alleged corporate fraud – were legally unfounded and politically motivated. Kebble, who emerges from the two-hour meeting as an astute and polished communicator, tells Mphego and Lalla:
“I knew from a fairly early stage – because he came to tell me – that Mzi [Khumalo] had a close relationship with Ngcuka. He came and said, ‘You know these claims you’ve got against me [Kebble’s company JCI was seeking to enforce a R30-million debt against Khumalo] … I know Bulelani very well and maybe if we can settle this thing he won’t be so hard on you …’ I then started to look very closely at who was around Ngcuka and found these guys had a pattern of operating. They would get together regularly – Mzi, Saki, Moss Ngoasheng [former president Thabo Mbeki’s former economic adviser] … and Bulelani and friends – get together and drink heavily every Friday night … and hatch their plots… The reason for this attack [on me] is that Bulelani’s office is being abused. The office is used not in pursuit of justice; it was used to settle scores, commercially and politically.”
As Mapiloko and Sole continue, Kebble took his war with the Mbeki cronies very seriously:
Kebble told the spy chiefs that he was about to go public with his allegations and added that he was “very grateful for the guidance and help you have given us”… Of significance is that the meeting took place about a month after Mphego had also secretly filmed an interview with Glenn Agliotti, in which the policeman confronted Agliotti about claims that he was using money from the Kebbles to pay off Selebi. In that interview Agliotti said he had used Selebi’s name to get money out of Kebble, but Mphego makes no mention of this in his interview with Kebble and Stratton. Instead, he approached Agliotti’s role obliquely, hinting that some of Kebble’s associations might be undermining his credibility… Kebble said: “We’ve never paid any money to anybody for any favours … I put money in to fund the ANC lavishly, I fund the ANC Youth League lavishly.”
Corrupting the youth
According to the SA Revenue Service, Kebble’s estate owed a bill of R180 million, and Randgold alone demanded R290 million from the dead man’s assets. The decade of decadence left vast claims by jilted investors, not to mention the huge shareholder losses in corporate securities that Kebble had turned into loo paper. The firms responsible for winding up Kebble’s liabilities came up short, holding only R40 million in left-over personal assets listed in his will.
How would the trustees squeeze a bit more money back for Kebble’s creditors and the taxman? Even after he was effectively bankrupt, Kebble continued to dish out financial favours, for which the trustees demanded repayment. The list of 17 recipients of last-gasp Kebble largesse, and claims made against them by the estate’s trustees, is fascinating, and helps explain how the ANCYL’s investment arm had tens of millions of rands at its disposal by the mid-2000s:
  • a variety of ANC branches received R4.6 million;
  • the ANC Youth League itself got R1.3 million;
  • ANCYL leader Lunga Ncwana and the family trust received more than R10 million;
  • ANCYL national executive committee member Songezo Mjongile received nearly R850 000; and
  • approximately R500 000 was owed each by ANCYL secretary general Sihle Zikalala, Thuthukile Mazibuko Skweyiya (wife of former minister Zola), and the late trade union leader and ANC member of parliament John Gomomo.
The disgraced former ANC spokesperson Carl Niehaus was charged with R100 000, and though he claimed it was for media work he did for Kebble, for whatever reason he agreed to repay the full amount. So did the estate of Gomomo (R480 000), marking yet another great labour leader’s descent into the hell of class-treason. It was also reported that ANC politician and businessman Chris Nissen repaid R370 000 and that the Democratic Alliance repaid R250 000 it received in 2004.
But the ANC refused to repay on grounds, as we consider in the conclusion, that Kebble got value for money. Court records show that some of Kebble’s payments to the ruling party were routed through Sekunjalo CEO Dr Iqbal Surve, youth league member Lunga Ncwana, the Sandton Park Plaza and the Balalaika hotel. Kebble’s payments to the ANCYL included R400 000 for its 2004 Western Cape provincial conference, R335000 for the tombstone of Mxolisi Majombozi and an “end-of-year road show”, and R30000 for “travelling and accommodation expenses” for league officials.
Others did more venal heavy lifting for Kebble, and were paid accordingly. According to Jim Jones, “Kebble sought to burnish his public image by channelling about R30-million through journalist David Gleason when Gleason acquired nominal ownership of Finance Week. That venture folded, but Gleason continued to deliver favourable press coverage or attacks on those with whom Kebble had commercial disputes.”
Although as Kebble bragged, the ANCYL’s Lembede Investment Holdings was given lavish support – or some say was manipulated – by Kebble, recent president Julius Malema pleaded ignorance: “We don’t even know what Kebble look like.” (Malema was one of the most visible to make inroads into Crony Capitalism 3.0, but the failure of 2.0 is probably a prerequisite, one that Kebble assisted through his version of Black Economic Empowerment suicide, as noted below.)
But his predecessor, Fikile Mbalula (now sports minister), the Malema ally who is anticipated to run against incumbent Gwede Mantashe for general secretary of the ANC in December 2012, was a well-lubricated and occasionally-grateful beneficiary. Interviewed for journalist Mandy Weiner’s exhaustive book Killing Kebble, the dead man’s butler, Andrew Minaar, remarked of Mbalula: “He’d come here and in like an hour he’d finished off a bottle of Johnny Walker Blue Label.”
Talking to Weiner, Kebble personal assistant Laura Sham also recalled Mbalula’s posse: “They’d be fine when they arrived, but the more they drank, they’d become hooligans. I knew Fikile drank quite a bit. They behaved like absolute hooligans.”
(After the Mail&Guardian reported all this, Mbalula sued for defamation and decisively lost.)
Sham explained the ambivalent relationship Kebble had with the ANCYL: “He gave them R4-million for their conference one year. Brett’s name was in the papers a lot at the time and he wasn’t looking good. They actually said to him ‘please don’t come to the conference’ after he funded their conference … Brett came into the office and he was so downtrodden. He said to me: ‘How quickly they forget’ … It was a slap in the face.”
Denying the slight, Mbalula told the M&G’s Mandy Rossouw that he thought Kebble had been treated fairly: “He wanted political capital out of that relationship to advance his business interests and the youth league wanted to advance its business interests.”
The most corrupted of all?
The highest-profile cretins within South Africa’s unauthentic bourgeoisie may well be Zuma nephew Khulubuse, Zuma lawyer Michael Hulley and Mandela grandson Zondwa, because of the economic, labour and ecological volcanoes they willingly inherited from Pamodzi Gold and amplified under the name Aurora Empowerment Systems. But the grandfather of ANC corruption via black business chicanery must be Mzi Khumalo, whom Kebble met thanks to the latter’s former legal secretary, Judy Sexwale, who is the wife of Tokyo.
The ill-fated Kebble-Khumalo relationship was sealed in a 1996 joint purchase of JCI in which Anglo American sold them more than a third of the firm for R54 per share. Although he is discredited by taking tens of millions of rands of the bankrupt Kebble’s money, Gleason’s account in a puff-piece Business Day obituary provides some background:
Responding to Anglo American’s decision to unbundle its ownership of JCI in favour of black ownership, Kebble cobbled together an empowerment consortium and twinned himself with former Robben Islander Mzi Khumalo. After an agonisingly long struggle with a group led by Cyril Ramaphosa – during which JCI’s share price climbed to levels never again seen – Khumalo and Kebble triumphed. But the price was high, not only in money terms. When Khumalo transgressed corporate governance norms inside the house, a long-simmering antagonism between the two men burst into a conflagration that cost Khumalo his chairmanship and left the relationship in permanent animus.
By 1998, after the 50 percent crash of share prices on the Johannesburg Stock Exchange caused by contagion from the world emerging market crisis, they were in trouble and asset-stripped JCI. Khumalo was accused of feeding the best gold mines back to Anglo at a deep discount (the shares were down to R37 then) and later ripping off Harmony gold mines by prematurely cashing in Simane partner shares from a black empowerment gift made by Kebble allegedly worth more than R1 billion. The case went to court in 2000.
According to a report by financial journalist Sherilee Bridge,
JCI’s property assets, including its Gold Fields Properties, were unbundled into a new entity called Mzi Khumalo Enterprises with R140 million in cash, Kebble said.
“It was highly unpopular at the time but we considered it an empowerment deal and wanted him to have something to start afresh,” he said. The [court] documents allege that Khumalo never returned the shares or paid for them but that the shares were unlawfully transferred into a trust account, believed to be the Khumalo Family Trust, or sold on without permission… “What happened to Mzi was like winning the lottery,” Kebble said…
The Scorpions are investigating two former officials of the Industrial Development Corporation alleged to have accepted a bribe in the Harmony-Simane empowerment deal. The empowerment deal was plunged in controversy after the shares sold to Simane were thought to have been sold on despite a lock-in clause that prohibited this.
But by 2002, on Moneyweb’s radio show, Kebble explained how he thought a bust loan was the basis for Khumalo’s own manipulation of the state:
ALEC HOGG: You’re bringing up Mzi Khumalo, you’re bringing up a score to be settled – what proof do you have of that?
BRETT KEBBLE: Mzi owes us a lot of money and he has not paid us.
ALEC HOGG: What’s a lot of money?
BRETT KEBBLE: Well, close on R50m. So he’s avoided paying us for many years. There’s a lot of interest on this money, so it gets to around R50m. He came and had a meeting with me one day at the time when this matter was being, as I said, plucked from the hands of the FSB.
ALEC HOGG: All right, let’s go back a little. This has to do with the share price, or the allegations of share price manipulation of four years ago?
BRETT KEBBLE: Correct. So we heard one day via the media that the Director of Public Prosecutions was going to investigate the matter further and would then make a pronouncement. At about the same time I got a visit from Mzi Khumalo, who told me that he was a great friend of Bulelani Ngcuka’s, that they spent a lot of time together and that he could influence certain outcomes with this individual, and that Bulelani was looking for a big, white fish to fry and that I was going to be that fish.
Whether true or not, a deal was done with Khumalo to settle for the R30 million in 2004. And yet within a few years, Khumalo was himself fried as Ngcuka was edged out of power by the Zuma Tsunami. In mid 2011, the SA Reserve Bank attempted to attach Khumalo’s assets and shares worth R1 billion as penalty for violating exchange controls in collusion with Deutsche Bank’s London office. By late 2011, Khumalo’s main SA vehicle, Metallon Corporation, was liquidated. Earlier, his hotel business – Joob Joob Investments – was shut down because he didn’t repay R27 million while building the Zimbali hotel north of Durban, in what is Africa’s most exclusive gated community.
Khumalo’s hutzpah, over-the-top scamming and utilization of friends in high places was so similar to Kebbble’s rise and demise, that one must tip a hat to the bitter teacher.
Forging art empowerment
What we know of another crucial but soon soured partnership is Kebble’s love for high art. The Brett Kebble Art Award started in 2003 with R100 000 for the winner, a prize doubled in 2004 to R200 000. His personal collection – 142 pieces mostly collected during the post-2001 splurge when he was bankrupt – fetched R54 million at auction, including much-desired pieces by famous South Africans Maggie Laubscher, Irma Stern, Walter Battis, William Kentridge and Alexis Preller. It was far less than the R100 million anticipated by trustees desperate to pray creditors.
Kebble’s empowerment rhetoric notwithstanding, there was apparently only one major black artist’s works in the stable, and those two George Pemba paintings were suspected by noseweek to have been ripped off by Kebble from JCI, whose corporate collection had been reduced to “very little of value,” according to a valuer in 2006.
Aside from noseweek, a sole critical voice spoke out publicly against Kebble’s art sponsorship, and then only mildly: Sean O’Toole in theMail&Guardian in 2004. He remarked upon Kebble’s
radically revamped, steroid-enhanced art award (double the prize money and run by a professional, reputable curator). Quite befitting the pomp that surrounds the award, the do was at Kilimanjaro, an ostentatious supper club in Johannesburg’s maximum-security Melrose Arch complex. Visual art consultant Clive van den Berg, the newly appointed curator, delivered a carefully worded and credible outline of his vision for the award, before a choreographed piece of music announced Kebble’s arrival. The polite hush became even politer. Both jovial and eloquent, Kebble expanded on his passionate interest in art, which he said offered a “soft refuge for people such as myself.”
“I can’t imagine my life without art,” he said from a lonely circle of light in an otherwise darkened room. “This award is my way of putting something back in for the enjoyment.” Power has the uncanny ability to induce awe. When Kebble finally opened the microphone to the floor, he was greeted with an odd mixture of polite kowtowing and meaningless silence…
For the young, the impecunious and the marginalised, the question of ethics has not even featured. And why should it? Only a fool or a William Blake-like mystic would say “thanks, but no thanks” to a first prize of R200 000. This is not to sidestep the crux of the dilemma, succinctly paraphrased by polemical magazine noseweek: “One would have to be extraordinarily naive to see the awards as anything but a shameless attempt to divert public attention from the… charges of fraud and share manipulation Kebble and his dad Roger are facing”…
Kebble stared me down before replying: “I usually respond with two words. The first starts with an ‘f’.” He quickly qualified this with a more reasoned argument that included references to “empowerment and transformation” and “an African partnership based co-operation.”
That word partnership can sometimes be genuine, though with Khumalo it wasn’t. Instead, like colonial-era Central African Federation leader Godfrey Huggins’ description of how Rhodesia should be run, by whites with black labour, it was akin to “the partnership of rider and horse.” Can we, to conclude, take this relationship up a level, to the partnership between crony capitalists and the ruling party?
Monetary lubrication of wretched politics
Delivering the first eulogy at Kebble’s Cape Town funeral, Thabo Mbeki’s closest confidante, Minister in the Presidency Essop Pahad, warned his gathered friends that “What Brett said … in private should remain private.” Indeed, it was good advice to the scoundrels present. Not only can we understand why, from the pages above, but this remark also sheds light on why in 2008 a Secrecy Bill was put forward by Mbeki’s government that, made yet more extreme under Zuma, signaled the need to ‘keep private’ the corruption that infects the highest levels of South Africa’s new elite.
The most corrupted victim-villain that emerged from the Kebble catastrophes is our ruling party. Not only was Kebble’s money a massively corrupting influence on the inside, it also made possible the skewering of the ANC as being bought-and-paid-for. Much worse than merely an allegation by disillusioned leftists (like myself) and the liberal opposition, this corruption is now a frank confession.
ANC Treasurer Mendi Msimang, who as husband of the notorious health minister Manto and a long-time exiled functionary, knew how power worked and in a 2010 court deposition, let the cat out of the bag. Without any attempt at disguising the role of money in politics, Msimang argued against the Kebble trustees’ attempt to retrieve R3.5 million from the ANC and R850 000 from the ANCYL, pointing out quite calmly in an affidavit that “donors receive value for the funds donated” because corporates’ “indirect benefit” was that in the South African political climate, “the gallant effort and contribution of the ANC” would keep their investments safe.
According to Msimang, Kebble was “maintaining an institution of democracy which (enabled) him to acquire his wealth, which in (turn), enabled him to operate his business in a democratic state free of racism, economic sanctions and free of all the negativity brought by (apartheid).”
Notwithstanding all the recent talk-left about the merits of mines nationalization versus a major new resources tax in the ANC’s leadership, had Kebble lived to 2012 he would have been pouring more investments into hastening the walk-right, i.e. improving the conditions required to best “operate his business,” and reaping his due returns from an ANC embedded within South Africa’s Minerals Energy Complex. The 2012 State of the Nation address and Budget Speech, after all promised more hundreds of billions of rands in subsidies directed to mining houses, reflecting an investment climate “free of all the negativity” associated with either apartheid or the masses’ contemporary demands for redistribution.
How far up did the ANC’s crony-capitalism rot spread, and how early can we find Kebble’s fingerprints? Right to the top, it seems, for the company Catalyst Props was used by Mandela’s lawyer Ismail Ayob (who subsequently fell out with Mandela over money) to buy the original Houghton house Mandela lived in during the 1990s. The 1992 purchase price was R525 000 and Kebble bought it in 2000 for R3 million, then also becoming a director of Catalyst. According to journalist Jeremy Gordin, writing in 2006,
Mandela and murdered mining magnate Brett Kebble were on first-name terms – and in 2000 Kebble bought, apparently at Mandela’s suggestion, the former president’s first home in Houghton. Kebble then allowed Mandela to continue using the house for the work of the Nelson Mandela Foundation for the next few years…
Ayob said that Mandela and Kebble, introduced to one another by then Gauteng premier Tokyo Sexwale, had been on first-name terms – “there was no Mr Mandela and Mr Kebble, it was Madiba and Brett,” said Ayob – and that they had had a very cordial relationship. “And Kebble was a man of very great largesse. You have no idea of how large or widespread his largesse was,” said Ayob… “These days, as you well know, Kebble has become the devil incarnate – and no one wants to admit the connection between him and Madiba.”
The question must, as ever, be raised: do corporations regularly buy influence within the ANC? As publicized in March 2012, did cellphone giant MTN pressure the South African state to not oppose Iran’s nuclear weapons programme, given its vast ownership stake in Iranian telecommunciations? Or did the Chinese government contribute to the ANC and receive value in the form of repeated denials of the Dalai Lama’s visa application? Did this practice start in 1997 when Nelson Mandela awarded the Cape of Good Hope prize to the corrupt Indonesian dictator Suharto, just prior to his democratic overthrow, in exchange for a $25 million donation Suharto made to the ANC? The examples are too numerous to contemplate.
In April 2005, efforts by transparency advocates to have corporate donations to political parties revealed were rejected by the Cape High Court, which judged these parties to be ‘private,’ hence not needing to disclose their funding sources.
Conclusion: ‘Kebbleism’ and ANCorruption
But is there any sort of principal at play here, by which purchase of value resulted in a strengthened political current (as opposed to competing faction)? The first time I heard of a new ideology coming from the corpse of Brett Kebble was in a Daily Maverick report by cynic-journo Stephen Grootes, from a December 2009 SA Communist Party congress: “There’s another great word coming out of the conference relating to the League so far – ‘Kebbleism’.”
Within three months, the Communication Workers’ Union endorsed the Cosatu demand for “lifestyle audits of public representatives and leaders, as a ‘Kebbleism’ had taken root.” In February 2011, the KwaZulu-Natal branch of the National Union of Metalworkers of SA criticized a provincial variant of the “deep-seated and entrenched Kebbleism within the ANCYL in order to capture state machinery for self-centred economic and accumulation interests.”
In March 2010, the Friends of Jacob Zuma website carried a post by ‘Concer’ (one of many exhibiting both irrational loyalty and deep wisdom) which reflects the views of so many ANC cadres that it should be quoted at length, notwithstanding the pseudonymical source:
Kebblism started to manifest itself toward the end of Thabo Mbeki’s term and I thought that when the new administration took over, it would make it its priority clamp down on this phenomenon called kebblism but instead it is in this new administration that this phenomenon has entrenched itself, and is now spiralling out of control.
As some people say, our personalities are twofold, we have a bad and good side. Today I will like to say that Mr Kebble was a very good, kind hearted man, and his benevolence was quite remarkable. But the kind of politics he introduced had far reaching implications to our society. It corrupted the soul of the national liberation and that corrupting has spread over to government, culminating in the collapse of service delivery in many parts of the country. Not only that, Kebblism has encouraged venality, produced leaders who are embarrassing the ANC, leaders who claim to be poor but live lifestyles of millionaires. Instead of taking us to their confidence they deny their opulence but we do see the posh cars they drive, we do see the expensive clothes they were and the houses they live in – these things exist and can be verified.
We can deny the truth but facts are there – kebblism is in control.
What, then, was Kebble’s underlying ideology? It has long been evident to opportunistic observers that “talk left, walk right” will take you a long way in Southern African politics, with Robert Mugabe the most extreme case but Mbeki, Zuma, Malema and many others practicing that dance. But Kebble? Here he is talking to M&G reporter O’Toole in 2004:
Some of those we’ve empowered have become part of an elite and developed amnesia. There is a self-proclaimed black royalty. Most of them couldn’t give a shit about liberation. Some people were never interested in brotherhood.
Seriously? Yes, this was the spin from Kebble in his final months, according to O’Toole’s transcript:
Either you have a view like me. You share capital and try to build it to spread wealth and develop a whole number of entrepreneurial opportunities for people where they can rise up as entrepreneurs and things flourish all over the place à la the free market in America.
Or, you have a situation where you have the five white families who ran the country during the old order being replaced by five black families in the same position; a simple transfer of elites. I resent that. For me it is a great philosophical barrier that I can’t and won’t abide. That’s why I get attacked.
This country’s major problem, historically, was that the economy was run by five major groupings, and most of those were family-orientated. It stifled the economy and in many cases led to a lack of development. It enhanced and entrenched the apartheid system. That was the primary reason for the old-order attack [on me].
This, then, was South African Crony Capitalism 1.0, white-on-white state-capital coziness. The best single example, insiders say, was Anglo American’s delivery on a silver platter of Gencor to Afrikaners when, in the 1960s, the equivalent of Malema anti-mining populism was rearing its head from the boer.
Kebble continued his class analysis of South African Crony Capitalism 2.0, the construction of which he excelled at, white-on-black:
What has happened since then is that the old order has gone and co-opted a few little Uncle Toms, pasted them onto their boards and companies, promised them all kinds of power and ability to do things, given them a selective and very discreet deal-flow and also set them up as people who would attack my philosophy…
It makes me sick, quite frankly … that the biggest problem I have is this group of people getting into a huddle trying to monopolise deal-flow, not by being the best, not by getting up early every day and doing their job, not by being clever and smart and building alliances, but by sitting around and drinking huge cases of single-malt Scotch and getting pissed regularly, doing all sorts of strange things to small animals and young girls late at night.
There are no reports of the Kebble mansions in Inanda, Johannesburg and Bishopscourt, Cape Town hosting strange things of that sort, though the liquor flowed, by all accounts.
The most confusing confidante of the huckster was probably David Gleason, and you the reader may want to take some parts of his eulogizing seriously, though not the bulk:
Passionately committed to SA, Kebble long held the view that the undue enrichment of the new elitists was an extravagance it could not afford and that the only way forward was to enlist the hopes and aspirations of the ruling party’s vast grassroots support base. Neglect of this vital constituency, he believed, would bring radicalism and ruin in its wake. It was this that drove him to become something of a doyen of black empowerment advocates…
In recent years, Kebble became engrossed in the political agenda which the country is following. He made no apology for this. In his personal political philosophy, with which I frequently disagreed, there is a close nexus between business and politics (I agree with this). He was anxious, he said, to ensure the choices made by politicians would encourage rather than retard business development. And he expressed a particular anxiety about South Africa’s army of the unemployed and the vast number of poverty-struck communities. He took the view that the rise of the new elitists, many attached or close to the ruling party, would become anathema to the party’s massive grass-roots support base.
The factionalism within the ANC and the emergence of power centres concentrated on pushing the agendas of the newly rich, was a matter he viewed with profound concern. His own leanings, increasingly I thought to the left, led him to lend support to deputy president Jacob Zuma. When then national director of public prosecutions, Bulelani Ngcuka, attacked Zuma through a smear campaign rather than a proper prosecution, he smelt another example of a gross abuse of political power. His support for Zuma, now facing corruption charges, took the form of active advice…
I last saw Kebble over lunch on the day he died. He said then that he couldn’t understand why Mbeki had persisted in attacking him and over such a long period. He clearly felt this keenly. It made no sense to him that, considering all he was doing was embracing the very policies the ANC had evolved over the long years in the wilderness, he had been singled out as a pariah. The answer, of course, was his espousal of the Zuma cause. This is not exactly popular among those in power, anxious to hold onto the important levers.
It is evident that Kebbleism fails partly because it picks the losers not winners, including the opposition DA. And yet nearly exactly three years after Kebble’s murder, Zuma did eventually evict Mbeki, albeit not thanks to the tycoon’s ‘advice’ but rather to trade union and communist agitation within the ANC’s branches at a time Mbeki was blamed (correctly) for widespread AIDS suffering and economic inequality.
Still, underlying the rot in the ruling party was money of the sort Kebble dished out, and very few people – including myself or my own comrades within South Africa’s independent left, which made little or no comment and no outright attacks on Kebbleism – can claim to have adequately addressed the devil incarnate in good time. Wits journalism professor Anton Harber, appropriately asked,
I have often wondered if the Kebble case was our Enron, where journalists failed to ask obvious questions and probe beneath the company´s public relations machinery until after the company collapsed and it was too late. Barry Sargeant had taken a pot shot or two at Kebble as early as 10 years ago, but faced legal action and intimidation. He stayed with the case, and has since written a book with some startling claims about Kebble. Martin Welz of Noseweek magazine used leaked documents to show that Kebble had never paid taxes, and raised questions about why the receiver of revenue and his team had not noticed this. Welz said he had internal correspondence that showed there was one key figure in the receiver´s office who repeatedly prevented the investigation into Kebble from going anywhere, and suggested this was because of this person´s closeness to the ruling party.
The initial reaction of the country’s main media watchdog, Business Day,was pathetically self-interested, in this editorial the day after the murder:
A rich and important businessman lies dead in his bullet-ridden luxury car in the dead of night in the nation’s financial capital. Shot by drive-by assassins, the man is slumped in his seat, the car driven up onto the kerb. It is a scene reminiscent of Bogota or some banana republic, but in our case the dead man is Brett Kebble and the place is Johannesburg, the greatest city in Africa. The first and most obvious thing to say about the murder of Kebble is that the economic consequences of not solving it quickly are beyond calculation. We cannot allow our already tarnished reputation as a violent society to drift into the sphere of business being done through the barrel of a gun.
Actually, the reputation of South Africa as a banana republic will continue to grow, thanks to Business Day’s overall ask-no-questions approach to mining capital. In ecological terms, for instance, the paper’s editor Peter Bruce distinguished himself as a maniac in the Kebble tradition by celebrating the 2012 State of the Nation address by Zuma, demanding that the state help capital ‘mine more and faster and ship what we mine cheaper and faster.’
To be fair, Bruce also once confessed how South Africa really works, whether under Zuma or (in this instance in 2003) Mbeki: “The government is utterly seduced by big business, and cannot see beyond its immediate interests.”
The ANC’s corruption in Kebble’s den reminds of Fanon’s warning inWretched of the Earth:
This native bourgeoisie, which has adopted unreservedly and with enthusiasm the ways of thinking characteristic of the mother country, which has become wonderfully detached from its own thought and has based its consciousness upon foundations which are typically foreign, will realize, with its mouth watering, that it lacks something essential to a bourgeoisie: money.
The bourgeoisie of an under-developed country is a bourgeoisie in spirit only. It is not its economic strength, nor the dynamism of its leaders, nor the breadth of its ideas that ensures its peculiar quality of bourgeoisie. Consequently it remains at the beginning and for a long time afterwards a bourgeoisie of the civil service. It is the positions that it holds in the new national administration which will give it strength and serenity.
If the government gives it enough time and opportunity, this bourgeoisie will manage to put away enough money to stiffen its domination. But it will always reveal itself as incapable of giving birth to an authentic bourgeois society with all the economic and industrial consequences which this entails.
Wrecking a few companies is one thing, but wrecking a country through these sorts of personal manipulations of the powerful is a tragedy turned farce. Because Fanon again warns of the logical result, right?:
The party is becoming a means of private advancement. There exists inside the new regime, however, an inequality in the acquisition of wealth and in monopolization. Some have a double source of income and demonstrate that they are specialized in opportunism. Privileges multiply and corruption triumphs, while morality declines. Today the vultures are too numerous and too voracious in proportion to the lean spoils of the national wealth.
The party, a true instrument of power in the hands of the bourgeoisie, reinforces the machine, and ensures that the people are hemmed in and immobilized. The party helps the government to hold the people down. It becomes more and more clearly anti-democratic, an implement of coercion. The party is objectively, sometimes subjectively, the accomplice of the merchant bourgeoisie.
If Fanon is right – and fifty years hence, he appears to be, in virtually every post-colonial but neo-colonial African country – then we might conclude, now, that Kebbleism is a fatal political disease afflicting the ANC. Indeed, to return to our opening metaphor, it’s a disease closely comparable to the description Moses offered of Sodom and Gomorrah: “a burning waste of salt and sulfur: nothing planted, nothing sprouting, no vegetation growing on it.”
Is it then the case, learning, as we do, so much from Kebble himself, that the ANC’s only cure is an assisted suicide?
Patrick Bond directs the UKZN Centre for Civil Society,
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