Task team report-back on meeting with Speaker

Public Enterprises

23 August 2017

Chairperson: Ms D Rantho (ANC) (Acting)

Audio
Task team report-back on meeting with Speaker

Documents
Terms of reference for enquiry into ESKOM, TRANSNET, and DENEL

Meeting Summary

This meeting held against the backdrop of the 16 August Committee meeting, in which it had adopted a legal opinion from the Parliamentary Legal Office to conduct an inquiry into governance failures at Eskom, Denel and Transnet (hereafter, State Capture inquiry). The Committee had agreed that a sub-committee should meet with the Speaker on 22 August to seek funding and an experienced evidence leader to question witnesses and analyse information in the State Capture inquiry.

The Chairperson reported that on 22 August the sub-committee met with the National Assembly House Chairperson and Secretary. The delegation requested that Adv Ntuthuzelo Vanara act as its evidence leader. They were told that Adv Vanara is unavailable because he is the evidence leader for the Ad Hoc Committee on the SABC Board Inquiry. The other requests were agreed to and they would be tabled before the Speaker. They would send a letter to the Committee which would explain the resources made available and timeline for their provision. Also promised was assistance in sourcing an evidence leader.

In discussion, Members asked why the delegation met with the House Chairperson rather than with the Speaker as mandated and why the Committee should have difficulty accessing the Speaker when they are all operating in the same environment. There were concerns about certainty about the nature of assistance Parliament will render to the Committee for the State Capture inquiry as there is no response on the way forward. Members agreed that the Committee must avoid giving the public an impression that it is dragging its feet on the State Capture inquiry. They resolved that Parliament must provide resources to the Committee to conduct its inquiry. They discussed offers of assistance from the public, notably Max du Preez to crowd fund the inquiry, and agreed to formulate modalities for channelling these requests.

Members restated their preference for Adv Vanara to act as evidence leader for the inquiry. They expressed concern that the Gupta family is disposing its business assets in a suspicious manner that indicates an intention to run away from South Africa. Members said the Gupta family should be among the first batch of witnesses to be summoned by the Committee. It was noted that special favours were granted by Eskom management to facilitate the Gupta family acquisition of some mines, which means that state resources could be involved in the acquisition of the assets now being disposed of by the Guptas. The sale of these mining companies to foreign companies rather than to black-owned South African companies was also raised in the light of black economic empowerment.

The Committee agreed to urgently commence its state capture investigation because of its importance to the nation. Accordingly, it resolved to formulate a programme on the investigation, and to work outside normal parliamentary hours if required. It also resolved to seek legal opinion on precautionary measures it should take against the disposal of assets that affect the state’s resources.

Meeting report

Report-back on mandated sub-committee visit to Speaker
Ms D Rantho (ANC), Acting Chairperson, stated that the meeting would not take up much time. She recalled that on 16 August 2017, the Committee had adopted a legal opinion from the Parliamentary Legal Office to conduct an inquiry into state owned enterprises, specifically, governance failures at Eskom, Denel and Transnet (hereafter, State Capture inquiry). The Committee had chosen a three-person, cross-party sub-committee to meet with the Office of the Speaker to request adequate resourcing and an experienced evidence leader to question witnesses and analyse information on state capture. Noting that the Committee has limited time to finalise its programme, she asked Members to first peruse the programme of Parliament before she presents the outcome of the sub-committee meeting with the Speaker’s Office. She stated that they are hamstrung by the packed nature of the parliamentary programme.

Mr S Swart (ACDP) recalled Mr Singh’s frustration over the Committee’s inability to commence the State Capture inquiry due to factors beyond its control. He suggested that the Committee could request special permission to sit outside normal parliamentary hours just as it did with the SABC Board inquiry. Due to the high public attention on this matter, the Committee could even sit during the December recess.

Mr M Gungubele (ANC) noted that the Committee’s main challenge is formulating proposals. He criticised parliamentary staff for not discussing the packed parliamentary programme with the Chairperson with a view for adopting viable options on the way forward. Parliamentary work need to ‘wake up’. Supporting Mr Swart’s proposal, he urged parliamentary staff to develop a plan of action that would enable the Committee to conduct its State Capture inquiry – even if it means sitting outside normal parliamentary hours.

Ms N Mazzone (DA) stated that the Committee must not restrict itself to Wednesday meetings. It should sit twice a week, and even thrice a week if need be. The notion that Public Enterprises Portfolio Committee meets every Wednesday only must be jettisoned. She supported Mr Swart’s proposal to sit outside normal hours. She urged the Chairperson to report on the undertaking from National Assembly House Chairperson, Mr Cedric Frolick, to timeously and fully provide the Committee with the resources it needs for conducting its State Capture inquiry. She urged the Committee to exploit the undertaking and ‘strike while the iron is hot'. She stated that ‘there are elements at work, that are trying to dispose of assets in this country to avoid coming to [to testify in] this investigation'. This situation ‘is the elephant in the room ... People are leaving this country before they can appear before this Committee [and accordingly,] we must make sure this Committee starts its work in earnest'.

Mr R Tseli (ANC) agreed with his colleagues that the pending inquiry has delayed for too long and should be expedited. He expressed his willingness to sit outside normal hours.

Dr Z Luyenge (ANC) expressed the unanimous agreement of the Committee to prioritise the State Capture inquiry because of its importance to the nation. The rot in governance must be exposed and the Committee should prioritise the summons of people who are about to leave the country.

Mr N Singh (IFP) acknowledged that although the Chairperson has good intentions for drawing attention to the Committee’s packed programme, the Committee must avoid giving the public an impression that it is dragging its feet on the State Capture inquiry. He urged the Chairperson to proceed to report on the meeting with Mr Frolick, since it has implications for how the Committee will arrange its programmes going forward. In his view, the Committee must not meet formally in order to formulate a draft programme. It must make a serious commitment. Once an evidence leader is appointed, two or three persons are enough to meet to formulate a programme, and circulate to members by email. He cited the example of the Ad Hoc Committee on Funding of Political Parties that he is part of, which is going to sit for as long as necessary to finish its work, even if it means working overnight. This Committee needs to make a similar commitment.

Mr P Gordhan (ANC) requested the Committee add to the agenda today’s news report about the disposal of assets by individuals implicated in the State Capture inquiry.

The Acting Chairperson reported that a three-person, cross-party delegation including herself, Ms Mazzone and Mr Singh met Mr Frolick yesterday, following his receipt of the Committee letter of 16 August requesting a meeting with the Office of the Speaker. Mr Frolick promised to consider the issues tabled before him and ‘take them forward'. He had attended the meeting with the Secretary of the National Assembly, Mr Masibulele Xaso. Mr Frolick agreed with the process and requisite resources proposed by the Committee. The only area of concern was the timeline within which the resources sought by the Committee would be provided. She later met him in the corridor and Mr Frolick promised to send a letter to the Committee – probably by today – explaining available resources and when they would be provided. He promised to assist the Committee begin its inquiry, since the inquiry is dependent on the provision of the promised resources. The evidence leader would probably require about two weeks to become acquainted with the evidence collated so far. Mr Frolick raised the issue of Adv Ntuthuzelo Vanara, who the Committee requested as evidence leader. But as Adv Vanara is the evidence leader for the ad hoc committee inquiry into the SABC, he is unavailable. Given that Parliament has never employed an evidence leader, Mr Frolick promised to assist in sourcing an evidence leader to assist the Committee’s inquiry. She believes he fully understood the reasoning behind the Committee’s request for an evidence leader. She called on Mr Singh and Ms Mazzone to fill in any gaps in the report she just made.

Ms Mazonne affirmed the Chairperson’s report. She stated that the Secretary of the National Assembly and Mr Frolick understood the Committee’s frustrations over its inability to commence its State Capture inquiry. They also understood the urgency of the matter. She added that the sub-committee had stressed its need for the services of Adv Vanara. It also emphasised that Parliament has the human resources to provide an evidence leader. It further expressed the Committee’s concern that the State Capture inquiry is being purposefully delayed. Mr Frolick denied that the inquiry is being deliberately delayed and promised to treat the delegation’s requests with urgency. Ms Mazzone had personally made a case for obtaining Adv Vanara’s services because of the ‘sterling work’ he did in the SABC inquiry and because he is experienced in leading and collating evidence. She had been told that Adv Vanara is working for Parliament as Acting Registrar of Members Interests following up on MPs that have not complied with the Members’ Interests requirements. She had suggested that Adv Vanara be redeployed to the State Capture inquiry where he would be of more value. She concluded that the meeting certainly ended on a positive note and Mr Frolick was fully aware of the urgency of the matter.

Mr Singh added that Mr Frolick suggested an inter-committee collaboration on the State Capture inquiry. The delegation replied that Mr Frolick’s office is well-suited to identify appropriate committees for collaboration and liaise with their chairpersons. The delegation raised the issue of external assistance. The Chairperson had informed Mr Frolick that some individuals had written to volunteer their services to the Committee on its inquiry. Mr Singh had cited the example of Prof Halton Cheadle of the University of Cape Town, who is gratuitously assisting the Ad Hoc Committee on Party Funding. He noted that Max du Preez had offered to assist the Committee to crowd-fund money to conduct the State Capture inquiry. He quoted extracts from a 22 August 2017 News24 report in which du Preez wrote: ‘I have an offer to make to Parliament: if you really don’t have money to properly investigate state capture, I will help get it for you through crowdfunding. Would R2 million be enough? R3 million? I will go one step further and persuade investigative journalists and other researchers working on the Guptas and their role in the state and with state-owned companies to give you a full briefing on their research and accompanying documents'. He urged the Committee to take up du Preez’s offer.

Mr N Shivambu (EFF) asked why the delegation met Mr Frolick rather than the Speaker. The Committee had clearly mandated the sub-committee to meet with the Speaker and request assistance to source an evidence leader to be paid for by Parliament. Even the meeting agenda indicates that the sub-committee would report back on its meeting with the Speaker. Why go to Mr Frolick, who would still need to report back from the Speaker? Given that the sub-committee has not met the Speaker, how can the Committee be certain of the nature of assistance which Parliament will render for the State Capture inquiry? Why should there be a long process to reach the Speaker? Why should the Committee have difficulty in accessing the Speaker when they are all operating in the same environment? The Speaker should be available to provide assistance to this inquiry. The Committee must get the Speaker’s attention to move forward in the inquiry. Meeting with the Speaker will also impact on the Committee’s programming. It should not be difficult to meet with the Speaker. If she does not have time to meet with the Committee, then the Committee can write to her for permission to access resources to conduct inquiry into Eskom, Transnet and Denel. He emphasised that technically, there is no report because the sub-committee has not met with the Speaker in line with its mandate and there is no response in terms of the way forward. There are only promises of commitment from Mr Frolick.  

Mr Gungubele responded that it was not wrong for the sub-committee to approach Mr Frolick. If results do not emerge from the meeting with Mr Frolick, then Mr Shivambu’s concern would become valid. He noted that resource constraint is no longer an obstacle against the Committee’s conduct of the State Capture inquiry. The Committee’s challenge is to remove uncertainty by articulating a clear programme of action. He proposed that, given the huge scale of the work, the capacity of parliamentary support staff must be utilised and a clear programme articulated. He ended by reiterating that the uncertainty around the State Capture inquiry is not helpful.

Dr Luyenge stated that the Committee must not play into the hands of people who do not want the inquiry to proceed or succeed. The challenge is not resources; rather, it is commitment to investigate state capture. Mr Shivambu is right to question the visit to Mr Frolick rather than the Speaker because it gives the impression of undue prolongation of the inquiry. He however conceded that it was not wrong for the sub-committee to approach Mr Frolick. It was merely unnecessary. The Committee must not find a reason to delay its probe of state capture.

Ms Mazzone requested the Chairperson explain why the sub-committee met with Mr Frolick rather than the Speaker.

The Chairperson explained that the Speaker was unavailable at the time the Committee decided to conduct the visit, thereby necessitating the meeting with Mr Frolick. She added that she couldn’t ‘jump Mr Frolick according to parliamentary protocol'. She couldn’t ‘jump to the Office of the Speaker'. She stated: ‘If my memory serves me well, at the end of the meeting or towards the end of the meeting [of 16 August 2017], it was clarified that we should go to Mr Frolick. It was said in the meeting, even if it does not show in the Minutes – but in the meeting, I am definitely sure it was said that we must go to the Office of – Mr Frolick’s office is a delegated office from the Office of the Speaker … It is the office that deals with the committees. And if that office fails us, then we can take it further to the Speaker. I think we haven’t done anything wrong going to the office of Mr Frolick'.
 
Mr N Kwankwa (UDM) stated that his party, the UDM, is more interested in results. ‘If going to Mr Frolick would yield the desired results, then that is fine'. The mistake the Chairperson made at the commencement of her report was failing to explain the reason the sub-committee went to Mr Frolick. He asked the Chairperson to ensure that Mr Frolick sends the Committee the letter of assistance he promised so the Committee would know its stand as soon as possible.

Mr Kwankwa supported Dr Luyenge’s caution for the Committee to avoid playing into public perceptions of unwillingness to conduct its State Capture inquiry. He urged Parliament to be cautious in how it accepts assistance from the public to avoid giving the impression that it is hamstrung or ‘toothless'. Parliament must provide resources to the Committee to conduct its State Capture inquiry. This is non-negotiable. He called on the Committee to formulate a draft programme to guide the Committee going forward.

Mr Swart restated that the Committee is expecting a letter from Mr Frolick that resources would be allocated to it to conduct its State Capture inquiry. He stated that his preference is for Adv Vanara to act as evidence leader for the Committee. He dismissed the excuse that Adv Vanara cannot be redeployed. The Committee should be careful not to set a parliamentary precedent by seeking the services of an outsider as evidence leader. He restated that the Committee must meet on more days and block off periods to enable it work faster. Max du Preez’s offer of assistance suggests public frustration at the slow pace of the Committee’s State Capture inquiry.

With respect to du Preez’s offer, a Member urged the Committee to issue directions on how the public can assist the Committee. He suggested that such offers should be routed through the Chairperson’s office in a coordinated manner.

Mr Gordhan noted the element of urgency of the inquiry into ESKOM et al and disposal of public assets. If a letter of assistance fails to come from Mr Frolick within a reasonable time, then the Committee could explore the option of help from outside Parliament. Considering that vital South African assets are being sold off in the last 48 hours, he suggested that the Committee should urgently draw up a list of six to seven witnesses it wishes to interrogate. If public officials are unwilling to testify before the Committee, they should be subpoenaed.  

The Chairperson noted the urgency needed in the State Capture inquiry. She urged members to be standby for any urgent issues that arise in the coming days. She promised to communicate the draft programme and any arising issue to members. If Mr Frolick’s letter comes today, she would immediately inform Members. She also called on members to suggest the witnesses that should be called first for the inquiry.  

Ms Mazzone raised alarm that the Gupta family is disposing of its business assets in a suspicious manner that indicates that they may be planning to run away from South Africa. She therefore called for members of the family to be among the first batch of witnesses to be called by the Committee. She also called for inquiry into the impact of these asset disposals on the South African economy, and the possibility of expediting the summoning of witnesses. She advised the Committee to explore options of intervening in asset disposals within the prescripts of the law.

Mr Gordhan noted that special favours were granted by the Eskom management, and possibly the Eskom Board to facilitate the Gupta family’s acquisition of some mines, notably Oakbay Company Ltd. If state resources were involved in the acquisition of the assets being disposed, then Parliament has a duty to investigate and possibly halt the asset disposals. In the light of black economic empowerment, he queried the sale of mining companies to foreign companies rather than to black-owned South African companies.

Mr Gungubele sought clarity on the right of Parliament to take precautionary measures against the disposal of assets that affect the state’s resources.

Mr Shivambu suggested that the Gupta family is merely restructuring their companies to hide their bank accounts because financial institutions have dissociated themselves from them. However, he believes that the paper trail of asset disposals would assist Parliament to track down the persons involved in the transactions and hold them to account. There is no need to panic. As long as the criminal justice system is working, transactions will be tracked and people will end in prison. Even if the Guptas run, they will be tracked down.

Dr Luyenge stated that Parliament has a duty to inform the electorate about the shady disposal of assets which have impact on the state’s resources. He suggested that Parliament should seek legal opinion over the extent to which Parliament can intervene in the Gupta’s asset disposals.

Ms Mazzone expressed concern that the Gupta family can escape without repercussions because South Africa has no extradition treaty with the UAE. She noted that Al Bashir and Grace Mugabe left South Africa despite calls to detain them.

Mr Swart declared that there is already unchallenged evidence for the Public Protector, the Directorate for Priority Crime Investigation (Hawks), and the National Prosecuting Authority (NPA) to freeze bank accounts. Parliament has the power to subpoena the Asset Forfeiture Unit within the NPA and the Hawks to ask what they have done with the available evidence on state capture. There is also enough evidence in the public domain for law enforcement agents to freeze bank accounts in order to prevent asset disposals. It might be helpful to have a discussion with the Chairperson of the Justice Portfolio Committee on these issues.

The Chairperson stated that if the Gupta family escapes, the NPA and the Hawks will have serious explanations to make to Parliament for failing to act. Law enforcement officials must do the right thing for the country. She affirmed that the Committee will seek legal opinion on Parliament’s powers to take peremptory measures against asset disposals.

Mr Swart suggested that while the Committee is awaiting directions from the Office of the Speaker, it could establish a cross-party sub-committee to discuss allocation of duties going forward.

The Committee adopted the minutes of the meeting of 16 August 2017.

The Chairperson thanked everyone and adjourned the meeting.