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South Africa: US Sanctions Taken Against “State Capture” Protagonists

(Durban, October 11th, 2019) – The OFAC decision to sanction the main actors of the “State Capture” scandal is a victory for whistleblowers who disclosed critical information, at considerable threat to themselves, about the corrupt network connected to former South African President Jacob Zuma, said the Platform to Protect Whistleblowers in Africa (PPLAAF) today.

“This is a step in the right direction, while I am grateful for the US treasury in imposing the sanctions, I appeal our SA crime fighting agencies to expeditiously investigate and prosecute the architects and enablers of State Capture. These people stole and looted the efforts of the South African people to create a State that fully respects the Rule of Law”, said Mosilo Mothepu, one of the whistleblowers at the origin of the revelations. “Now South Africa needs to properly fight against the impunity of those who are responsible for State Capture in order to restore faith and natural justice that has been absent for so long”.

Mothepu was a former senior employee at Trillian Financial Advisory, part of the Gupta-controlled Trillian group. Her disclosures and that of other courageous whistleblowers such as Bianca Goodson exposed the hijacking, erosion and hollowing out of key government entities through influence peddling, contract steering, corruption and fraud. The disclosures exposed the collusion of key government officials working with the Guptas – who employed the former President’s son, Duduzane Zuma, and their associates such as Salim Essa.

The ‘State Capture’ scandal describes the corrupt relationship between the wealthy Gupta family and former South African president Jacob Zuma, his family and leading members of South Africa’s leading political party, African National Congress (ANC). State Capture encompasses the pillage of national companies and institutions, corrupting the people of power, as well as changing the country’s laws, so they would all work in the private interest’s interest.

Other whistleblowers from state-owned entities such as rail and transport company Transnet as well as private institutions such as Habib Bank were also instrumental. The revelations of these whistleblowers show the extent of the Guptas’ control over politicians and state-owned companies and the involvement of many international firms with the Gupta family’s businesses. In particular, state-owned electricity-utility company Eskom and international firms HSBC and Mckinsey. It also shows, for example, how the Guptas pushed for South Africa’s Finance minister being fired and planned to exploit access to the National Treasury under his replacement.

The revelations of the “State Capture” pushed ex-President Jacob Zuma to resign on February 14th, 2018. On October 10th, 2019, the South African authorities announced that he will be tried for corruption on facts unrelated to “State Capture”.

“The US decision to sanction those who captured the South African State for their own interests sends a strong message in favor of the international fight against kleptocracy,” said William Bourdon, PPLAAF’s chairman. “A few years ago, these whistleblowers who bravely revealed these activities that are contrary to the public interest were treated as public enemies. Today the World understands that they are heroes. Their efforts were not in vain”.

Today, the hard work of whistleblowers and journalists has resulted in official US penalties.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) declared that it sanctioned them under the Global Magnitsky Act because they were “members of a significant corruption network in South Africa that leveraged overpayments on government contracts, bribery, and other corrupt acts to fund political contributions and influence government actions”.

The Global Magnitsky Act is an executive order which gives authority to the US President to impose sanctions on corrupt actors globally. Sanctioned individuals are prohibited from visiting the US, holding dollars, dealing with any US person or entity, or accessing any assets held in US jurisdictions.

“Besides further tarnishing the Guptas reputation internationally, their freedom to do business will now be greatly constrained by the US sanctions as they find themselves completely cut off the dollar system,” said Henri Thulliez, PPLAAF’s co-founder. “For businessmen, being sanctioned by the US is nothing short of an economic death sentence.”

PPLAAF stood by Goodson’s and Mothepu’s sides, alongside other whistleblowers who remain anonymous. PPLAAF assists them in the development of legal strategies, assisting in the development of affidavits, financing lawyers on a pro bono basis, attending legal proceedings, responding to legal threats, assisting governmental processes by serving as an intermediary among other aspects.
In 2017, PPLAAF met US government officials to cooperate and assist on investigations regarding State Capture. This work was joined by PPLAAF’s collaboration with South African Federation of Trade Unions (SAFTU) and with South Africa’s Asset Forfeiture Unit (AFU) to launch legal proceeding to recover illicitly obtained Gupta assets.

In early 2017, PPLAAF participated in the publication of the ‘GuptaLeaks’: hundreds of thousands of documents, emails, etc. sent between the Guptas and their associates, showing the extent of the Gupta family’s control over politicians and state-owned companies, and the involvement of many international firms with the Gupta family’s businesses.

The Gupta family is a wealthy family, who moved from India to South Africa in the 1990s and turned a computer parts business into a conglomerate with properties in media, mining and professional services. The family has been the focus of extensive scrutiny because of its close ties to South Africa’s ex-president Jacob Zuma and its inner circle.

Salim Essa, an associate of the Gupta family, owned shares in several Gupta companies. Essa was the owner of Trillian Capital, a consultancy company. Two of the State Capture most prominent whistleblowers, Bianca Goodsoon and Mosilo Mothepu, were the chief executive directors of Trillian subsidiaries. Essa is accused of corruption alongside the Guptas.

PPLAAF is a non-governmental organization created in 2017 with hubs around Africa. It provides support to assist whistleblowers including encrypted communication, free legal advice or representation against employers, continued assistance to protect the whistleblower in the disclosure of information to the public, the development of legislation to protect whistleblowers and legal cases based on whistleblower information.

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