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Chancellor House and the art of grabbing

By Stefaans Brümmer

amaBhungane’s dictionary entry for the day:

grabology n. The systematic, usually practical study of the optimum means to grab as much as you can, while you can, because you can — after all, you’re a pompous political prick and who gives a damn about the poor?

amaBhungane’s insight for the day:

Simple truths often only sink in when they hit the public in the pocket.

Think Chancellor House. I co-wrote the series of articles in 2006 that exposed it as an ANC funding front. Vicki Robinson and I had put heart and soul into it, our scoop of the decade.

My colleagues and I are often criticised, with good reason, for not saying what we mean. Our investigations are lengthy, detailed and corroborated, but omit the “so-what” element, those basic paragraphs telling readers why what they’re about to read matters. Perhaps we don’t see the wood for the trees.

But I thought we had got it right that time. The first three paragraphs of our first Chancellor House story, I thought, could not have been clearer:

    The ANC’s new funding front

    This week, we expose a new business front set up by the African National Congress (ANC) to seek profit on its behalf.
    The Johannesburg-based Chancellor House group of companies has acquired “empowerment” stakes in a wide range of businesses.
    More often than not, these opportunities have depended on the government’s discretion — the award of state tenders, mineral rights and the like. This means the ANC, as ruling party, has been both player and referee.

In a sidebar we gave practical examples of Chancellor’s investments, starting with this:

    COMPANY Hitachi Power Africa, local subsidiary of Babcock-Hitachi Europe

    CHANCELLOR’S SHARE Reportedly 25%

    PARASTATAL OPPORTUNITY Hitachi Power Africa was formed last year in response to Eskom’s drive to increase electricity generation capacity. It has tendered for a R26-billion contract to construct a coal-fired power station near Lephalale.

Our scoop of the decade went down like a lead balloon. Unlike Oilgate when other media were humming with our exposé within days, there was hardly a whisper.

Fast forward a year, to November 2007: Sam Sole and I reveal that Hitachi, the company 25% owned by Chancellor House, has bagged the Eskom contract:

    ANC front wins huge state tender

    One of South Africa’s largest state contracts yet has been awarded to a consortium that includes the African National Congress’s (ANC) own funding company.

Another lead balloon. Who cared that the ANC, rather than some capitalist in Europe, would skim part of a R20-billlion contract?

Fast forward to today. Google “Chancellor House” in combination with “Eskom” and a cool 10 000-plus results pop up, with 62 news results in the past week alone.

Okay, someone’s noticed. How did that happen? It took opposition politician Lance Greyling to grab the moment this January, when he put out a statement asking ANC treasurer Mathews Phosa to “come clean over whether the ANC stands to benefit financially from [Eskom’s] proposed 35% electricity tariff increase per year for three years”.

The penny dropped. We, the public, would be paying so that the ANC can have that profit, which was inflated by who knows how much. Not good. The ANC was — and now everyone was saying what we had said in that very first story — profiting from being both player and referee.

Academics call it “rent-seeking” when political elites abuse their power to extract wealth. That sounds awfully polite. amaBhungane decree that henceforth the phenomenon shall be known as “grabology”.

Here’s the deal: when amaBhungane expose corruption and the abuse of power, we’ll do our best to be clear about what we’re trying to say — as long as you, dear reader, try to remember that wherever there is someone who’s grabbing, there’s also someone being grabbed from. And more often than not it’s the public.

Author

  • amaBhungane are the investigators of the M&G Centre for Investigative Journalism, a non-profit, public interest initiative to produce better investigative stories and plough back through internships and advocacy. On this blog, amaBhungane -- seasoned and award-winning journalists -- will penetrate the world of smoke and mirrors to bring you the story behind the story. www.amabhungane.co.za

28 Comments

  1. Dave Harris Dave Harris 16 April 2010

    All democracies function by parties having the ability to raise funds and run effective campaigns. Since previously privileged whites still control our economy, almost 2 decades after liberation, guess who bankrolls the DA and their rabid cohorts in the media? Remember, unlike the Nazi’s the SA apartheid regime has YEARS to prepare their their strategies to continue to hold onto power. They created media conglomerates to push their agenda, and much of the “investigative journalism” is engineered to do precisely that – play partisan politics.

    Our democracy is a unique beast, so I don’t begrudge the ANC for assembling their election war chest with savvy investments. It beats asking the Chinese government for funds to help finance elections doesn’t it?

    If our amaBhungane “investigative journalists” cared about the plight of the poor, they should spend their time on issues that REALLY matter – rampant corporate crime that has made life for the average working South African a constant struggle to pay bills while the disparity between rich and poor widens!!!

  2. marxism sux marxism sux 16 April 2010

    Corruption at its very best – it seems “Politiconeuring” is the new cousin of “tenderpreneuring” – clever move however, as while you keep the ANC as a business, beneficiaries will forever urge an unsuspecting public to “defend the ANC at the ballot box” – corruption pays hands down so why change the so-called “empowerment” structures?

  3. DeMing DeMing 17 April 2010

    I’m glad the lead balloons are finally flying!

  4. Butch Hannan Butch Hannan 17 April 2010

    Is there any person who knows exactly how much money the ANC has stolen from the citizens of this country. Here I am referring to government and municipalities. This no doubt amounts to many billions which could have been used to fix many of our problems. I am sure that most of our public service do not understand what the two words “civil servant” actually mean. All civil servants should have to sign a contract with the citizens of the country. I have compiled a tongue in the cheek “Contract for Civil Servants” which you can view on my website.

  5. Jan Jan 17 April 2010

    This is corruption, and corruption is wrong, and Dave Harris is defending it. I used to think he had a point here and there in his rants, but no – he has lost all credibility. Thanks for he article Stefaans.

  6. Mark Robertson Mark Robertson 17 April 2010

    I haven’t heard corruption described as ‘savvy investments’ before, but I guess there’s a first for everything. I guess the point that should be obvious is that the poor, above all, are the victims of corruption.

  7. ian shaw ian shaw 17 April 2010

    I have no doubt that Dave Harris himself is getting a share of the ANC’s iilegal riches, yet he blames the privileged whites for the counry’s ills.

  8. RubinB RubinB 17 April 2010

    @Dave Harris:….”so I don’t begrudge the ANC for assembling their election war chest with savvy investments”
    You are confusing blatant corruption with “savvy investments”? You have no ethics, my friend!

  9. EA Blair EA Blair 18 April 2010

    Yes Dave, you are so right, I am so looking forward to DA’s 100million, or is that 200million, election campaign in 2012.

    Moet, anybody?

  10. EA Blair EA Blair 18 April 2010

    p.s. Methode de Cap Classique is more DA style.

  11. Andre Philander Andre Philander 18 April 2010

    Good blog guys, and Dave Harris, you would be the last person I would want to sit next to in a class on government transparancy and political accountability or even morality, seriously, the excuse or reason that they did it so why shouldn’t I is an excuse used by teenagers. “Savvy investments” dear god no.

  12. Siobhan Siobhan 18 April 2010

    @ amaBhungane Go for it! And how about an optional sidebar that explains the import of your findings–for those who don’t see the implications written on the wall?

    @Dave H. LOL

  13. Gersie Dee Gersie Dee 18 April 2010

    So true Mr. Harris. Its funny how little objective opinion non-white (especially coloureds) South Africans have about the mining and farm land issues constantly brought up by Julius Malema. They mostly have no opinion on the broadening of the gap between the rich and the poor yet they are the ones being pushed further and further below the breadline.

    (I’m coloured btw)

  14. a bloke a bloke 18 April 2010

    Dave Harris works obliquely and so successfully for the DA I suggest he approach them to ‘assemble’ his war chest (too?).

    Thanks Stefaans.

  15. bob bob 18 April 2010

    What’s worse, the magnitude of the corruption or the widespread acceptance of corruption?

  16. Piet Opperman Piet Opperman 18 April 2010

    @ Dave Harris: You apparently have knowledge of unreported “rampant corporate crime that has made life for the average working South African a constant struggle.” You are, of course, aware that such knowledge should be reported to the police, and that failure to do so is a crime in itself?

    This, by the way, is the standardised response of the ANC to any accusation of corruption…

  17. Lyndall Beddy Lyndall Beddy 19 April 2010

    The Centralised Corruption of the ANC has little meaning for ordinary people – most of them are like Dave Harris who believe corruption is OK if it is black not white corruption, and also believe the myth that whites control the economy so this is OK, and only stealing from whites not from the poor.

    Where the message really gets home is at local municipal level where the electorate know the people involved, who the councillors are, and understand it is their money being stolen.

    Which is why you should be co-ordinating with local press (who usually can’t afford the risk of publishing all they know), and local ratepayers associations for news of local corruption.

    If I was M & G Editor I would get ALL the municipal corruption covered by the next election – a few municipalities every week.

    Maybe start with Ventersdorp. Is it not under administration?

  18. tony A tony A 19 April 2010

    Very well Dave Harris, the ANC manipulates tenders in their favour, collects and pockets the profits, to hell with the poor and this is OK with you.
    What a statement you make

  19. Mosweu Ngwane Mosweu Ngwane 19 April 2010

    The irony of this particular deal is that the ANC chooses to maintain a monopoly in electricity supply, through ESKOM. ESKOM does a terrible job of running the parastatal, and Chancellor house benefit financially because of the poor management that the ANC inflicts upon the electricity sector. The worse ESKOM manage their mandate, the more money the ANC will make.

  20. Dave Harris Dave Harris 19 April 2010

    @Gersie Dee
    Thank you for your feedback! It made my day.

    @Piet Opperman
    AHA…do I sense a moment of epiphany Piet?

    @tony A
    Do you really understand how democracy works and the need for a strong opposition party? That DA party is a train wreck in slow motion!

    @Mosweu Ngwane
    Excuse me? Can you explain your twisted logic?

  21. Panchetta Panchetta 19 April 2010

    Dave Harris feeds off the opprobrium of smarter people. He retorts with these silly one liners that make him think he is clever. He should be ignored for a fool looking for attention.

  22. Maj0be Maj0be 19 April 2010

    I am seriously getting tired of da rhetorics that hav becum popular with THOUGHT LEADER’s regulars, they r da 1st 2 talk about ‘benefiting da poor’ but when issues r raised that r realy going 2 benefit da poor eg, land reforms and nationalisation r brought up, they r da loudest when it cums 2 crushing it… B against da ANC if it pleases u but dont use da ‘poor’ in ur argument cos it dont care about them.

    @Dave, i agree with u 100%

  23. MLH MLH 20 April 2010

    Well, this pointed out just how slow ALL South Africans are…and aren’t we just? Why are we so apathetic that we just assume someone else will take on our battles? For the sake of our own personal peace? Good luck, Pravin (he’s enquiring); like us, it took you long enough; I would have expected you to have the information at your fingertips!

  24. tony A tony A 20 April 2010

    Sorry Dave Harris, you must be the only inteligent person arround-

  25. zoom zoom 23 April 2010

    @ Dave Harris; “In reality, however, the project would largely benefit major industries which consumed electricity below cost, and whose apartheid-era secret agreements prevented them from sharing the costs associated with construction of the project and repayment of the loan” … and you think this is good idea? mmm, interesting.

  26. Lyndall Beddy Lyndall Beddy 24 April 2010

    Dave Harris

    These speial deals for cheap electricity for an aluminium smelter in Mozambique to assist “African Development” were done in 1997.

    Can you see the “apartheid” rulers selling SA electricity below cost, subsidised by South Africans, to another country?

  27. Lyndall Beddy Lyndall Beddy 24 April 2010

    Two days ago the manager of Lookout Reaturant in Plett was shot and killed by robbers. This is a resturant well known to SA tourists. It is also the 3rd such attack at close up time on managers.

    In the 6 years I have lived in this area one farmer a year has been killed.

    None of any of this is in the national press. No wonder we all believe the media is complicit in hiding crime – unless the international press forces them reportlike with Terreblanche, who is only one of 4200 farmers killed since 1994.

  28. Peter L Peter L 28 April 2010

    @Dave Harris

    Party funding
    Regarding party funding, this should be subject to strict rules and full disclosure by all parties.

    Rules would govern (forbid in some cases?) funding by foreign governments and entities (modern Imperialism?), criminal organisations, organisations with vested interests (recipients of tenders) etc.

    “Savvy investments”
    Sure no-one would begrudge any political party filling their election war chests with the proceeds of “savvy investments”, but there is a huge difference between “savvy” investments, and investments made in a company with the corrupt inside knowledge that your orgainsation plans to dishonestly award said company a state tender worth tens of billions, thereby ENSURING a abnormally high return – this is effectuvely stealing from the taxpayers, who include the poor (they pay vat, fuel levies and other indirect taxes)

    Corporate crime
    Where is the evidence and what are the details?
    I work in Finance for a major multinational organisation, and I can assure you that we abide by the strictest standards of clean corporate governance with full disclosure.
    Our hourly paid and unionised workers are amongst the highest paid in industry – well above the market rate for the job, unlike management, that are paid the market rate.

    Who bankrolls the DA and the media?

    The print media is black owned and foreign owned (Tony O’Reilly – a self-confessed ANC supporter).
    SABC is state owned and controlled by ANC.
    E-TV is owned by an organisation with strong ANC links.

    Party funding sources are undislosed – who knows the sources? Not you!

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