Shadow State: The Politics of State Capture - how it all came together

In mid-March 2017 Mark Swilling was travelling in business class to Johannesburg from Cape Town. He was in an aisle seat and Mcebisi Jonas, then the deputy minister of finance, was in the aisle seat on the opposite side. They had last worked together in the early 1990s when Jonas was active in the Eastern Cape, coordinating a forum focused on appropriate economic development strategies for that province. 

After exchanging the usual 'comradely' greetings, Jonas gave Mark his iPad and said, 'Read this and tell me what you think.' He had already by then refused a R600 million bribe offered to him by the Gupta brothers, a move, knowing him, that came as no surprise to Mark. Mark then read a paper that in subsequent months would be read again and again by the research team – the first comprehensive overview of what all South Africans would soon come to call 'state capture'. This was the paper that Mark gave to Ivor Chipkin at their first meeting to discuss the assembly of a team that would eventually produce the Betrayal of the Promise report.

Needless to say, it was a paper that needed to be kept totally confidential. 

Those who read this paper in those dark days of 2017 were all profoundly disturbed by it, and particularly frightened by the fact that it was written by a member of the Cabinet. Jonas candidly shared with Mark his deep pessimism about what was going on. He took down Mark's phone number, promising to call him. A few days later Mark got a call from Jonas asking to meet at the Sustainability Institute at Stellenbosch University. 

Jonas arrived and the first thing Mark noticed was that he gave his phone to the driver before entering the building. The two hours that followed were among the most remarkable and surprising Mark had experienced since 1994. Jonas spoke about what he thought was going on. Mark desperately wanted to tape what he was saying, or take notes, but he had no idea why Jonas was there and what he needed done. Mark just absorbed what he could, describing the experience to Ivor Chipkin a few days later as the sum of all fears. 

When Jonas finished briefing him, Mark asked why he had come to see him. Jonas wanted to know what the academics were doing about the situation. He said, 'Our concern is that the narrative is about corruption – that creates the wrong impression. South Africa needs to understand that this is a systemic problem – it is a political project to capture the state. The narrative needs to change.' He wanted to make it clear that this was not just a criminal enterprise. It was a political project. 

Mark then suggested setting up a group of academics who could pull together all the information and publish a report that, to use Pravin Gordhan's (then Minister of Finance) now famous phrase uttered at a press conference when he and Jonas were eventually fired two weeks later, 'joined the dots'. 

Jonas's immediate reaction seemed negative: 'We don't have the funds for that.' After Mark said the academics would raise the funds, Jonas agreed. Subsequently they would meet almost weekly, and a network of people within and outside the state was built up who provided the key information that was used in the report and in this book. 

Mark's first move after this initial meeting with Jonas was to contact Ivor, talking via the Signal app, and Ivor's immediate response was 'I'm in'. But he had independently established links with former National Treasury and South African Revenue Service (SARS) officials, and he warned Mark that this was dangerous work. What followed was a flurry of meetings with a number of prominent academics to invite them to join the group. Several of the academics contacted refused to participate, which reflected the atmosphere of the time. 

Those were dark days, when fear was used to fragment oppositional thinking and the Zuma-led power elite projected an image of supreme confidence, legitimised by the unwavering loyalty of the governing party, and by populist rhetoric like 'white monopoly capital' and 'radical economic transformation', language that was broadcast widely by the Gupta-financed campaign orchestrated by Bell Pottinger Private, a UK-based multinational public relations company. 

There was a constant sense of danger. The Public Affairs Research Institute (PARI) offices were broken into, and nothing stolen. Someone shot a bullet through Ivor's car window. Some members of the research team noticed surveillance vehicles outside their residences, and some started to worry about the safety of their children. Ominous statements by then Minister of State Security David Mahlobo about foreign funding, non-governmental organisations (NGOs) and regime change reinforced the sense of déjà vu, and a statement heard often was 'it's like the struggle years all over again'. 

Significantly, the academics who did get involved were relieved when their respective senior managers were extremely supportive. Fortunately the University of the Witwatersrand (Wits), the University of Johannesburg, the University of Cape Town (UCT) and the University of Stellenbosch were established universities that had not been browbeaten into political loyalty. We sympathised with those who felt less protected and had therefore turned down the invitation to be part of the group.

After the Cabinet reshuffle in late March 2017 resulted in the firing of Gordhan and Jonas, we had to quickly reposition our work. Until this point, our strategy had been focused on the building up of a narrative that effectively defended the National Treasury against capture by strengthening the hand of a group of ministers who were starting to coordinate a campaign against the Zuma-led power elite. After the reshuffle, the strategy shifted to a focus on compiling a report for broad public consumption that would reinforce the convening of some sort of multi-stakeholder national dialogue, possibly leading to the formation of a popular front. 

This eventually led to our collaboration with the South African Council of Churches (SACC), including a fascinating session with Archbishop Thabo Makgoba at his residence in Constantia, attended by many leading clerics. Powerful echoes of the struggle years overwhelmed us, especially when we looked across the table at the Reverend Frank Chikane, with whom Mark had last worked during the Soweto rent boycott in the early 1990s.

Remarkably, the group of academics who co-wrote the report quickly found common ground and made space in their schedules for getting the work done. The most significant moment in the process was the week we all spent together at the Centre for Complex Systems in Transition in Stellenbosch. While the research team worked on the components of the story, key people, including Jonas, came in for a day or two to make their contributions. By the end of the week the storyline had emerged, together with a work programme that defined who would write which chapter. Without this period of intense engagement and long hours of discussion it would not have been possible to reach the clarity needed to bring out a credible report by May 2017. 

After discussions with the SACC it was agreed that the report would be launched at a national consultative event organised by the Council. This was supposed to be a multi-stakeholder event. However, for two reasons that did not happen. Firstly, our lawyer advised against it, saying a lot of work was still needed to change the phrasing of the report if we wanted to avoid a serious defamation case. I learnt a key lesson: asserting something about someone supported by references as if it is true is defamation, whereas the way to avoid defamation is to say 'if this report is true, then …'.

This slight twist in the wording means you are admitting you did not do the original research, and you are not confirming what has been reported. All we had to do was draw conclusions from a reported fact that had not been publicly countered by a credible source, nor checked by us. Thus it would be the original report, not our own text, that carried the burden of proof. This saved our bacon. 

The second reason, as we explain in the Introduction to this book, was that the envisaged SACC event had turned into a launch of a different 'report', one whose purpose was to reveal the results of a separate 'unburdening' process that the SACC had initiated for church members compromised by the process of state capture. 

At an event convened by the team at PARI, we launched our report a week later in the auditorium of the Wits School of Governance. It was covered on prime-time TV and extensively reported in the national press. All the co-authors were involved in radio and TV talk shows, and delivered keynote addresses at several important events. The most notable of these was the National Conference of the South African Communist Party (SACP), addressed by Ivor and Sikhulekile. Several Cabinet ministers were present, as was Jesse Duarte, the deputy secretary general of the ANC at the time. 

Two days after the launch the #GuptaLeaks material – an enormous quantity of anonymously released emails relating to interactions and transactions between individuals involved with the Gupta family – broke into the public domain. We were offered access to this material prior to it being made public, but after convening urgently at a meeting at Cape Town International Airport, we decided this was not our role as academics and refused the offer. We felt it was too dangerous for us to make use of the emails, and that in any case this was a job better done by journalists. 

Fortunately the #GuptaLeaks emails, when they did hit the public domain, confirmed our argument and analysis. These two events, together with the SACC's presentation a week earlier, triggered a groundswell that effectively changed the public narrative from one of isolated instances of corruption into one about a systemic process of state capture coordinated by a power elite committed to an explicit political project. We called this the silent coup. 

The key lesson this process holds for us is about the role we academics must play in society and in public discourse. We go about our business assembling research projects and publishing in professional journals. Some of us are engaged at project level doing really good work. But more of us need to use our status and skills to speak truth to power. Society tends to have faith in us. However, funding requirements these days force many academics to conduct inter- or transdisciplinary research with societal stakeholders and policy makers. Quite often these collaborative projects prevent academics from 'speaking out' against poor governance, because this would put at risk the relationships that are needed to make the project work. 'Speaking truth to power' becomes a casualty when 'policy relevance' becomes sacrosanct. In more consensual societies this might not be a problem but it would be counterproductive in societies like ours, where deep divisions and sustained conflict are the norm. 

This book, like the original report, is inspired by the classic belief in the role of the organic intellectual who must speak truth to power, no matter the price. However, unlike in the past, the complexity of today's world requires academics to collaborate and to build the mutual trust that makes collaboration work effectively. Without collaboration, the vast quantities of information that stem from a wide variety of sources cannot be effectively assembled. Teams need to be formed comprising people with a range of different (but possibly overlapping) networks that make it possible not only to access diverse flows of information, but also to verify key pieces of information from different perspectives and sources. The metaphor for this type of collaborative work would be a kind of ideational meshwork that makes it possible to capture and interpret a much larger flow of information and ideas than would otherwise be possible for the lone researcher using traditional data-trawling methods. 

Making collaboration work, however, is no easy task. It means creating a space defined by a strong shared vision, but with soft boundaries that allow the space to morph over time in accordance with the preferences and inclinations of the team. The identity this generates allows members to feel they can take initiative without hierarchical decision-making, and that others can easily join. For example, after reading the report in a single sitting, Professor Anton Eberhard of UCT made contact with us to ask if he could do a case study of Eskom and publish it in the name of the SCRP. There were other similar approaches. However, this kind of amoebic form only really works when there is mutual trust and respect. This is not always the case, which is why a capacity to facilitate conflict resolution is also a requirement for this way of working.