The latest Judicial Commission of Inquiry into State Capture report, nearly 1 000 pages long, casts light on how the now-defunct Bosasa came to exert such powerful control over facilities management in South Africa’s prisons and other state-run facilities.

There was abundant evidence that Bosasa CEO and anti-apartheid activist Gavin Watson was a paranoid bully, who took delight in publicly humiliating staff and making them aware of his own self-importance and power by throwing around the name of politicians, such as former president Jacob Zuma.

The rewards for loyalty were potentially huge. Prayer meetings would kick off at 6:30am and go on until 8am, with Watson keeping a close eye on attendance to determine whose loyalty he could count on.

The Bosasa omertà (code of silence) was reinforced at a staff meeting in the Michelangelo Hotel in Sandton in 2010 when the Watsons (Gavin wasn’t the only Watson involved with Bosasa) made it clear that they were “brothers now and you try to break loose and there is going to be problems”.

This was at a time when the company was receiving considerable negative press following the presentation of a report to parliament by the Special Investigation Unit (SIU).

How the company got to control so much of the facilities management in the public sector is not a great secret. Parties were arranged, such as the Jazz Festival, where government officials were lavishly entertained, all at Bosasa's expense.

When there was trouble with the banks, they would be accused of harassing a BEE company. Chair Joe Gumede was in charge of human resources, security, and the Airports Company of SA (Acsa) contract, but he also had powerful political and police contacts.

Keeping staff on the straight and narrow

Employees who harboured thoughts of going on the straight and narrow were kept in line with threats that everyone goes down together and, in whistleblower Angelo Agrizzi’s case, with claims that the company had counter-intelligence on him.

The children of Gavin’s brother Valence Watson, who was also in control of Bosasa, were reportedly close to Zuma’s children. The Watsons were known to throw around the names of powerful political figures as a means of intimidation.

Though Agrizzi, former Bosasa chief operating officer, was part of the bribery, corruption and fraud at the group, it was largely due to his whistleblowing that this evidence came to light, supplemented by an additional 12 witnesses, says the report.

The era of corruption at Bosasa became most prevalent in 2004 and 2005 and lasted 13 years.

The Zondo commission’s report found the primary mechanism for gaining influence over public officials was cash bribes, building houses, providing furnishings, installing home security systems, buying motor vehicles and luxury gifts, and paying for travel and accommodation.

SIU thought to be ‘under control’

CFO Andries van Tonder testified that he did not come forward earlier with information as he was led to believe by Bosasa CEO and anti-apartheid hero Gavin Watson that the SIU in the police was under control due to Watson’s high-level political contacts.

After Agrizzi turned whistleblower, other senior executives in the organisation came forward with testimony, including Frans Vorster, who oversaw facilities management at mine hostels, and the Lindele Repatriation Facility, where illegal migrants are housed before being processed for deportation.

Agrizzi joined Bosasa, then called Dyambu Operations, in 1999 and quickly proved his worth by showing Gavin Watson how to properly present a tender. Not long after joining, he was exposed to Gavin Watson’s way of doing business by handing over bags of cash to key individuals, including trade union officials.

One such example of this cited in the report is when Watson handed over a bag to Jackson Mafeka, then leader of the National Union of Mineworkers (NUM) for the Kloof division of Gold Fields. Soon after that Dyambu Operations was awarded the catering contracts for Kloof and Libanon mines.

For this, Agrizzi was well remunerated, in 2017 receiving R27.4 million by way of earnings from Bosasa and R22 million by way of “additional benefits and value”.

After Agrizzi turned whistleblower he says he was offered R50 million to stay quiet – an offer he refused.

There appears to be some dispute as to who was the de facto CEO at Bosasa. Consultant Kevin Wakeford alleges it was Agrizzi. Agrizzi says he never had access to the bank accounts nor made any important decisions without running it past his boss, Gavin Watson.

Wakeford testified to the Zondo Commission that Agrizzi and Van Tonder were able to siphon large amounts of money out of Bosasa to a close corporation in which they were the sole members, Sinkoprop No. 8.

It was alleged they would send fictitious invoices to Bosasa and then authorise them for payment in their capacities as CFO and COO at Bosasa. It was for this reason that they were served by Bosasa liquidators with letters of demand for R91 million and R21 million respectively, claimed Wakeford.

Van Tonder falls out of grace

Van Tonder had been employed within the group in 1995 and for most of the time had a close relationship with Gavin Watson, accompanying him to business meetings where new ventures were discussed. That relationship deteriorated when the SA Revenue Service (Sars) concluded an investigation into Bosasa, and it seemed Watson had no further need for Van Tonder.

Among those alleged to have received bribes are Patrick Gillingham, former CFO at the Department of Correctional Services (DCS), and Linda Mti, former Commissioner at the DCS. Mti chose not to answer these allegations before the Zondo commission. Gillingham maintained the funds received were a loan, not a bribe.

Former SAA chair Dudu Myeni was also alleged to have been bribed.

Myeni gave the Zondo Commission the run-around by failing to appear, and then when she did, refusing to answer questions put to her by evidence leader Kate Hofmeyr on the grounds that she may incriminate herself.

The commission found the evidence of Myeni went beyond reasonable doubt and amounts to a “corrupt provision by Ms Myeni of a quid pro quo for the inducements and gain provided to her”.

Fronting

Agrizzi’s testimony before the Zondo Commission suggests Bosasa fudged its BEE status. He would often manufacture credentials by putting someone in place, giving them shares and full autonomy, but having a side agreement that they did not really own the shares until such time as they were paid for.

The true BEE status of Bosasa companies was not represented in tender documents presented to government departments.

Cash bribes and paying for the ANC’s elections using government money

Testimony by Agrizzi and Van Tonder focused on the volume of cash needed monthly for bribes. This was done by generating false invoices that would be run through the company’s own accounts department, often with the excuse that Bosasa was contracting with SMEs that did not have bank accounts and so needed cash.

Other ways of generating cash were funeral payout documents, false invoices for labour brokers, and – the corporate equivalent of identity theft – using the names of liquidated companies as suppliers.

Money was also funnelled to the ruling party by having a government department order software from Bosasa, which it had available at no cost to itself and which the government department may already possess. The money paid by the government would be split between Bosasa and the government official arranging the deal, with the officials using this for electioneering purposes for the ruling party.

Code words such as “chicken” were used for cash and “a ton of chicken” meaning R1 million in cash when communicating via WhatsApp with the leadership at Equal Trade, a company supplying chicken to the various Bosasa-run facilities.

At other times, “loaves” and “breadroll requirements” were used as code for cash bribes. Van Tonder testified that between R4 million and R6 million was collected from Equal Trade each month.

A similar modus operandi was used in dealing with another supplier, Jumbo Liquors.

The cash was stored in a walk-in vault known as “Gavin’s safe”, behind the Bosasa boardroom. The minimum amount stored in the vault was R2 million, though it was capable of holding R6.5 million, and there were at least four such vaults at the Bosasa premises.

The range and number of public office-bearers identified as potential recipients of inducement or gain include the president, deputy president, cabinet ministers, deputy ministers, office bearers, functionaries and officials of state institutions or organs of state.

Though the commission says Agrizzi’s testimony contradicted itself in certain instances, and was incorrect in others, on the main pillars of his evidence, there was corroboration, says the report. His evidence can therefore be accepted.

Zondo found there was overwhelming evidence of corrupt activities on the part of Gavin Watson, who had not availed himself of the opportunity to testify before the commission before he passed away. Nor have any of his brothers stepped forward to respond to allegations against them.

Watson died in a car accident in August 2019 when the Toyota Corolla he was driving ploughed into a pillar at the entrance to OR Tambo International Airport in Johannesburg.

Between 2000 and 2016, the value of government contracts secured by Bosasa was about R2.4 billion, with R75.7 million being paid out in bribes. These bribes do not include the value of houses built, fixtures, and fittings and bribes paid out in non-cash form.

Agrizzi comments

Asked to comment on the findings in the report, Agrizzi told Moneyweb: “I am glad that Acting Chief Justice Raymond Zondo, his team, and the team at the commission, acknowledged how important it was for us as whistleblowers to open up the deep-rooted corruption that engulfed our nation – and despite the implicated parties’ relentless attempts to discredit our testimony, we have been vindicated and South Africans can now see that all we ever wanted was to expose the truth and stop corruption.”

He added: “What we now hope for is that the continued SLAPP [Strategic Litigation Against Public Participation] suits conducted by various state institutions, funded and spuriously motivated by the very people we implicated, comes to an end, and that we return to an era of fairness and the rule of law.

Moneyweb