Publication: Sunday Independent Issued: Date: 2003-09-07 Reporter: Charles Phahlane

Zuma to Argue that Monies were 'Loans'



Sunday Independent

Date 2003-09-07


Charles Phahlane

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Deputy President Jacob Zuma is to tell parliament's ethics committee that the amounts paid to him by Durban businessman Schabir Shaik and others were "loans" that he did not need to declare.

Parliament received documentation from the Scorpions late last week and the ethics committee is preparing to investigate the allegations. The documents show that Zuma did not declare an amount of nearly R1,2 million received from Shaik. Court documents also indicate that Zuma's home loan is paid by another Durban businessman, Vivian Reddy, through a trust account.

The Scorpions further allege that Zuma and Shaik went to elaborate lengths to hide the origin of the monies, which, they say, is a corrupt benefit from the arms deal.

The Scorpions say while there is a prima facie case against Zuma, it was not "winnable". They are only charging Shaik at this stage.

The Scorpions also say Zuma actively promoted Shaik's businesses and failed to recuse himself in what was a potential conflict of interest. The charge sheet against Shaik shows several instances where Zuma allegedly wrote letters to promote Shaik's various business interests.

Reddy allegedly made two payments of R50 000 to a construction company that built Zuma's Inkandla residence. Reddy also stood surety for R400 000 of Zuma's R900 000 bond. He has also been servicing the bond since January to the tune of R12 117,11 a month.

Sources close to Zuma said the Scorpions never scrutinised the confidential part of the register or the executive register during their investigation. The code required that loans be declared only in the confidential section of the register.

Also, when the Scorpions conducted raids on Shaik and Zuma, they did not find loan agreements between Zuma, Shaik and others, and these would be produced to the ethics committee to defend Zuma.

Zuma also did not disclose these documents to the Scorpions in answer to the 35 questions they sent to him. But the Scorpions also allege that Shaik falsified documents and backdated them with the intention to deceive.

Reddy has already said he was "appalled" that a formal, private agreement between friends was made public. The Scorpions had a formal acknowledgment of debt letter signed by Zuma, and he failed to understand why it was linked to something sinister.

Shaik also says that as Zuma's financial adviser, there was nothing he needed to declare to parliament.

But the ethics code says interests that should be declared include "any other benefit of a financial nature", which appears to include loans. The confidential part of the register refers to financial interests of a member's spouse, dependent child or permanent companion, which a member is aware of.

A perusal of Zuma's declaration to parliament does not show the "loans" and says his property interests were in the confidential part of the register.

The executive code, which Zuma signed into law on behalf of President Thabo Mbeki, says members of the executive should not use their position to "enrich themselves or improperly benefit any other person". They should also not expose themselves to any situation involving the risk of a conflict of interest between their official responsibilities and their private interests.

The penalties for breaching the code include a suspension from parliament for 15 days, a fine not exceeding a month's salary or a reprimand.

Zuma is to be grilled on Tuesday and Wednesday by both houses of parliament over the alleged corruption claims and his role as the head of the moral regeneration programme.

Mbeki will be asked to explain why he would not ask Zuma to step down, pending an investigation into the corruption allegations, next Thursday.

With acknowledgements to Charles Phahlane and the Sunday Independent.