Publication: Mail and Guardian Issued: Date: 2005-11-18 Reporter: Stefaans Brümmer Reporter: Sam Sole

Scopa Hits Out at Oilgate 'Irregularity'

 

Publication 

Mail and Guardian
Date

2005-11-18

Reporter

 Stefaans Brümmer, Sam Sole

Web Link

www.mg.co.za

 

Parliament's standing committee on public accounts (Scopa) this week criticised Imvume Management and oil parastatal PetroSA over the Oilgate transaction that funded the African National Congress before last year’s elections.

Scopa’s critique -- the first official, public acknowledgement that the transaction was irregular -- contradicted the National Assembly’s adoption a day earlier of Public Protector *1 Lawrence Mushwana’s report on Oilgate.

Mushwana had found that PetroSA’s decision to pay an advance to Imvume was “lawful, well-founded and properly considered” *2.

The Mail & Guardian revealed in May that Imvume had asked PetroSA for a ­R15-million advance on an oil transaction; that it had diverted R11-million of this to the ANC; and that PetroSA had subsequently doubled up the payment, meaning public money flowed to the party.

Scopa noted in a resolution on Wednesday that PetroSA itself had admitted to a “lapse” in the decision to pay the advance without assessing the risk. Scopa also said the way the payment was effected — into a different account and in a different currency than usual — was “irregular”.
 
Scopa reserved harsher words for Imvume. Its resolution noted that Imvume had “clearly misled PetroSA with regard to the purpose behind its request for an advance payment”. Scopa said PetroSA had believed Imvume needed the advance “to pay its employees their end-of-year remuneration, including cash bonuses”.

Freedom Front Plus MP Willie Spies said on Thursday that Scopa’s finding was “significant as it backs our fraud charges”. The FF+ pressed charges of fraud and reckless trading against Imvume and its chief executive, Sandi Majali, in early August. The charges were based on the same set of facts.

The FF+ earlier complained that the police commercial crime branch was dragging its feet over the investigation. Spies said on Thursday that the Scopa finding would make the charges hard to ignore.

Scopa based its findings on an earlier committee hearing at which PetroSA bosses testified. It also had access to correspondence between PetroSA and the auditor general. Letters from the AG to PetroSA criticised the parastatal’s failure to perform a risk assessment when Imvume requested the advance. PetroSA admitted to the AG that it should have done a review.

This is all in stark contrast to Mushwana’s report that relieved PetroSA of all blame. The report, widely condemned as a “whitewash” on its release in late July, was formally adopted by the National Assembly on Tuesday, over the objections of opposition parties.

Mushwana’s report was shepherded to the assembly by the portfolio committee on minerals and energy, which also held hearings on Oilgate. Democratic Alliance MP Anchen Dreyer, who wrung concessions from Scopa before the final resolution was adopted, described the difference between the two now formal positions as “unusual”.

She said she was “impressed” by the handling of the matter by new Scopa chairperson Themba Godi, a Pan Africanist Congress MP. “Perhaps Scopa is wanting to regain lost credibility.”

Imvume and Majali’s lawyer, Barry Aaron, on Thursday claimed it was a “misrepresentation” to say Scopa had found that Imvume had misled PetroSA. He suggested this was only PetroSA’s “subjective perception or … impression”.

Aaron added: “There was nothing untoward in Imvume’s request for the payment to be effected into an Imvume bank account other than the account which had previously been used. At no time did Imvume mislead PetroSA. There is certainly no evidence of such a fanciful allegation.”

What did Mbeki know?

The Presidency this week maintained an evasive silence on the nature of the relationship between President Thabo Mbeki and Oilgate’s Sandi Majali when the latter sought crude oil from pre-war Iraq.

The United Nations-appointed International Inquiry Committee (IIC) into the Iraq Oil for Food scandal reported last month that when Majali visited Iraq in December 2000 to negotiate oil for his company Montega Trading, he “described himself as an adviser to both the ANC and President Mbeki”.

The African National Congress has denied Majali was a presidential adviser. Deputy President Phumzile Mlambo-Ngcuka said in Parliament this week: “The Presidency was also, as far as we know, never informed about anybody who has claimed to be the President’s adviser.”

She added: “Business people take chances, and they don’t always go and ask the permission of the person whose name they are going to drop when it suits them”

The Mail & Guardian revealed last year that when Majali travelled to Iraq that December, he was accompanied by ANC secretary general Kgalema Motlanthe and treasurer Mendi Msimang. ANC presidency head Smuts Ngonyama has confirmed that he, too, went on the trip. It appears unlikely that Mbeki was not in the loop.

In Parliament this week, Democratic Alliance leader Tony Leon asked if Majali, Motlanthe, Msimang and Ngonyama had “consulted with the Presidency regarding their visit to Baghdad, Iraq, in December 2000”. Mlambo-Ngcuka’s written answer seemed a deliberate evasion — it told of unrelated trips to Iraq by Deputy Foreign Affairs Minister Aziz Pahad.

Earlier, the Presidency avoided answering questions from the M&G. Presidential spokesperson Murphy Morobe declined comment pending the justice ministry’s consideration of the IIC report and the finalisation of United Nations processes.

The M&G asked Morobe to respond to a claim, in a Majali CV, that he had worked with the office of the deputy president when Mbeki occupied that position.

The symbolic founder of the “charitable trusts” that own Majali’s Imvume Management — which also obtained Iraqi oil — was Daniel Lengosane, then head of security in the presidency.

With acknowledgements to Stefaans Brummer, Sam Sole and Mail and Guardian.


*1  Government Protector .

*2  No one can take this stooge seriously, nor his predecessor, nor whoever writes these reports.