Nhlanhla Nene: end of the road for SA’s ‘Mr no’
Outgoing finance minister Nhlanhla Nene dropped a few bombs at the Zondo commission last week — some of them in his own backyard …
Nhlanhla Nene’s testimony at the state capture inquiry has become something of a double-edged sword for the former finance minister. While some are hailing him as a hero for standing up to former president Jacob Zuma on, among other things, the nuclear build programme, others are calling him dishonourable after he admitted to a number of meetings with the Gupta family at their Saxonwold home — particularly given his previous denial of such interactions.
To make matters worse for Nene, in the wake of his testimony to the commission, the Mail & Guardian and amaBhungane reported that his son, Siyabonga Nene, had asked the Public Investment Corp (PIC) to fund part of a deal to buy a stake in a refinery in Mozambique.
Nene on Friday released a statement in which he apologised to South Africans for meeting the Guptas at their residence and not in his office, or at least in public. Over the weekend, he asked President Cyril Ramaphosa to relieve him of his duties — tendering his resignation after five short months as finance minister. On Tuesday, Ramaphosa accepted his resignation, appointing former Reserve Bank governor Tito Mboweni in his place.
Nene was the first serving cabinet minister to appear before deputy chief justice Raymond Zondo’s commission. In doing so, he gave South Africans some insight into what it was like to serve on Zuma’s executive at the time of the "capture" of the SA state. But Nene wasn’t just any cabinet minister; he was "Mr No" — the man standing between the public purse and the wanton disbursement of public funds.
As such, he would have found himself at the centre of the state capture process. Which is why three key themes in his testimony deserve attention.
Spies and webs of lies
In Nene’s telling, one afternoon in mid-2015 he was called out of a meeting with National Treasury director-general Lungisa Fuzile to see Zuma — "now!" On arrival, he told the commission, he found Zuma with a Malaysian official from Engen/Petronas.
In an unseemly break with protocol, the president told Nene that SA needed its own refinery and Petronas was prepared to sell one to PetroSA.
Zuma wanted Nene, as finance minister, to approve a guarantee for PetroSA so it could raise the funds. Nene said he would consider it, "subject to the normal evaluation process".
Bizarrely, Nene said Zuma also used the opportunity to tell him there were "apartheid agents" within the Treasury – something he dismissed at the time as a conspiracy theory.
Yet, a month later, a dodgy "intelligence report" called Project Spider Web surfaced. The document suggested that the Treasury had been captured by apartheid-era intelligence operatives and "white monopoly capital" in order to control the country’s finances.
It’s worth noting Nene’s earlier point to the commission: "Those who wish to pursue a systematic strategy to raid the public coffers or those who are intent on taking decisions that have the potential to undermine fiscal sustainability would attack [the] role or credibility of Treasury."
The Project Spider Web report, which circulated within the government, sought to smear senior Treasury politicians and officials. It was the first in a chain of events that would include the firing of Nene. It mentioned such people as former deputy finance minister Mcebisi Jonas, Fuzile, National Treasury deputy DG Ismail Momoniat, chief procurement officer Kenneth Brown and PIC CEO Dan Matjila.
The "project" appeared to be designed to influence economic and fiscal policy and key appointments in institutions such as the SA Reserve Bank, the Treasury, the department of trade & industry, and state-owned enterprises (SOEs).
Enter the "Queen of Leaves".
Nene said the report’s central allegations about him included that he was being "handled" by Maria Ramos — code-named "Queen of Leaves" — who was said to be influencing key positions at the Treasury and appointments at SOEs. He was also said to be implicated in possible personnel changes at those institutions.
Nene called the allegations "baseless and without merit".
At the time, he said, he "was concerned that Treasury was now going to be targeted in an attempt to undermine its legitimate role and function".
In hindsight, those fears seem well founded — particularly given the silence that has shrouded the "spider web" report since.
The State Security Agency was supposed to investigate the genesis of the dossier. Yet when the DA in 2016 raised questions about the investigation, the then state security minister David Mahlobo — a staunch Zuma ally — noted that it was "top secret" and the question would be forwarded to the joint standing committee on intelligence.
Nothing has been heard since.
No storm in a teacup
Probably the biggest public fallout from Nene’s testimony — and arguably the part that raises the most questions — arises from his admission that he met privately with the Guptas. Nene previously claimed he had not met the family other than at public events — yet on the stand he did an about-turn, admitting he had met them "on numerous occasions" between 2010 and 2014.
His testimony showed how much influence the family wielded — he said they regularly attended government events and were clearly close to Zuma.
Nene said he first met the Guptas at a presidential dinner after the 2009 state of the nation address. He was later invited to tour their Sahara Computers offices in Midrand, which he did twice in 2010. At these visits, the family marketed themselves as "good corporate citizens" who did not do business with the state, and who paid their taxes.
Nene told the commission how Ajay Gupta, who served on the International Marketing Council during Zuma’s tenure, indicated that he was an economist and an adviser to the president. "He invited me to tea, to his house, to discuss the economy," Nene said.
While Nene seemed to see nothing wrong with this at the time, he changed his tune last week, calling the decision "poor judgment".
Nene again highlighted the Gupta-Zuma connection, recalling that during most of his visits to Saxonwold, Zuma’s son Duduzane was present — though he claims to have had little interaction with him beyond pleasantries.
It was only in 2013, Nene says, that he became suspicious of the family’s intentions after reports surfaced of their involvement in the funding of the Estina dairy farm. That same year he was invited to the now infamous Gupta wedding at Sun City, though he declined the invitation. But his suspicions were not enough to stop him from visiting the family again in 2014, on two occasions.
Nene remains adamant that the family did not ask him to do anything for them, and did not offer him any inducement. But he cannot escape the suggestion of impropriety that colours these engagements — particularly given the lack of detail about what transpired at them.
Nene seemed to think there was nothing wrong, at the time, with popping into the Saxonwold house for a chat. But did other businesspeople ask the finance minister around for tea — and did he so readily go? His repeated visits at the least suggest the kind of power the family held over Zuma and his executive.
Zuma goes nuclear
If there was a moment in Nene’s testimony when Zuma’s hand appeared obvious, it would be his discussion of the multibillion-rand nuclear build programme.
He said the president fired him because he refused to toe the line on this project and others. Despite pressure from the president and his cabinet colleagues, Nene had refused to sign off on the programme and a deal with Russia.
Nene recalled how, a few months before he was fired, he had been accused of "insubordination". This was because he refused to sign a letter committing SA to the deal, right before a one-on-one meeting between Zuma and Russian President Vladimir Putin.
It was Nene’s role as "Mr No" that resulted in him falling foul of his colleagues — and likely led to his dismissal.
What it means
Nene’s testimony provided an inside view of Zuma’s executive and state capture. It also raised questions about his relations with the Guptas
While in Russia, he had been pressured by Zuma and the then energy minister Tina Joemat-Pettersson to sign off on the deal, but with no information on the financial implications, a funding model and risk mitigation strategies, he was unable to do so.
"Mr Zuma said he was not happy that I was not doing what I was supposed to have done a long time ago [finalising financial aspects of the deal] so that he could have something to present when he meets President Putin for the one-on-one meeting."
As a result, he came to be viewed as "a person standing in the way of the nuclear deal".
On December 9 2015, at a marathon meeting, the executive approved the energy department’s nuclear proposal without a feasibility study or a phased approach to procurement, according to cabinet minutes. It’s not clear who attended the meeting or whether there was opposition from any of the ministers. But on that day, Nene was on his way home when he got a call telling him the president wanted to see him. He immediately turned back to the Union Buildings. Zuma told him the ANC top six had agreed on his deployment to the Brics bank — something neither Zuma nor the ANC, said Nene, had the authority to do.
With that, Nene found himself out of a job. Firing him, he said, took just a matter of minutes.