Ajay Gupta (left) and Atul Gupta (right). Picture: MARTIN RHODES
Ajay Gupta (left) and Atul Gupta (right). Picture: MARTIN RHODES

The US government has refused to give reasons why it sanctioned the Gupta brothers and Salim Essa only and not US firms implicated in wide-ranging state-capture allegations in SA.

“It’s not something we can comment on,” said Sigal P Mandelker, the under-secretary of the US treasury for terrorism and financial intelligence, during a tele-press conference on Friday.

US firms implicated in state-capture activity reportedly include global consultants Bain, McKinsey, Gartner and international law firm Hogan Lovells, which has US and European roots.

In July 2018, McKinsey agreed to voluntary return more than R1bn relating to consultancy fees it charged Eskom for its 2016 turnaround programme, saying that it did not want any “tainted money”. McKinsey worked alongside Gupta-linked company Trillian Capital in the project.

The law firm Hogan Lovells was accused of being complicit in state capture, an allegation it denied, after it was appointed by axed Sars commissioner Tom Moyane in October 2016 to investigate former COO Jonas Makwakwa. This came after the Financial Intelligence Centre flagged suspicious transactions into Makwakwa’s bank account and that of his partner, which allegedly amounted to R1.7m over six years.

The law firm submitted its report to Sars in June 2017, recommending that disciplinary action be taken against Makwakwa for non-disclosure of external interests.

However, the revenue service through its own internal inquiry later acquitted Makwakwa of all charges. Moyane, who was viewed as close to former president Jacob Zuma, was accused of dismantling Sars and leaving the revenue service with a R100bn tax hole.

Consequences for kleptocrats

On Friday, Mandelker would not comment as to why no sanctions had been imposed on government officials and other businesspeople accused of abetting wide-scale corruption involving the Gupta family, who are Zuma’s personal friends.

“As you may  know, we don’t comment on why we do or not take action against certain individuals,” said Mandelker, adding there was a long-standing practice prohibiting commenting on the kind of action they might take in future. She made the remarks a day after the US imposed sanctions on the Gupta brothers Ajay, Atul and Rajesh, and their business associate Essa.

This meant all their properties and financial interests in the US will be frozen and ensure that they or their companies will not be able to do business in the US, which accused them of using their close proximity to Zuma to raid the state purse.

The Guptas, who are business partners of Zuma’s son Duduzane, stand accused of running a parallel government designed to advance their businesses, with Zuma allegedly ceding much of his power, including that of firing and hiring ministers and influencing government policies, to them.

“The Gupta family leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets,” said Mandelker on Thursday. On Friday, she said the US will continue to hold corrupt businesspeople who use their proximity to politicians to engage in corrupt practices.

She bemoaned corruption for weakening democratic institutions and undermining the rule of law the world over, saying the department is determined to stop kleptocrats from stealing from the people.

The Gupta family and other kleptocrats would no longer be able to use the US  financial system to “hide and clean their money”. However, Mandelker would not say whether the Guptas have any assets in the US. “We don’t comment where assets are specifically held.”

Mandelker commended the “extraordinary work” by civil society, whistle-blowers, investigative journalists and NGOs in exposing the Gupta corruption, saying: “We will continue to impose tangible consequences on kleptocrats and well-connected elites who steal from their people.”