\u201cI … resigned as a member of Molelwane Consulting and director of all other companies in November 2011.\u201d<\/p>\n
That is what Johannesburg mayor Geoff Makhubo told amaBhungane in 2018.<\/p>\n
We had just uncovered a secret agreement to pass 10 percent of a City of Johannesburg contract to Makhubo\u2019s company Molelwane Consulting.<\/p>\n
* Read the original amaBhungane investigation<\/a>.<\/strong><\/p>\n The contract had been awarded to state capture kingpins Regiments Capital in 2006, before Makhubo held a position in the city. But when he was appointed member of the mayoral committee for finance in 2011, it became a conflict of interest for him to oversee the city\u2019s finances and benefit from one of its largest contracts.<\/p>\n Makhubo denied a conflict, saying in one of four written responses<\/a> at the time: \u201cI … resigned as a member of Molelwane Consulting and director of all other companies in November 2011.\u201d<\/p>\n In another he said: \u201cI … made a commitment to the Mayor of the day and the ANC when I was appointed to the position member of mayoral committee that I will unwind my interests and resign all my directorships. All this was done in November 2011.\u201d<\/p>\n Except company records show that Makhubo remained a member, holding two thirds of Molelwane until October last year.<\/p>\n And evidence presented at the Zondo commission into state capture on Friday suggests he did not surrender his financial interests in the opaque consulting firm either.<\/p>\n Evidence leader Matthew Chaskalson told the commission they had identified R35.7-million from Regiments that flowed into Molelwane between 2008, when Makhubo became treasurer of the ANC\u2019s Greater Johannesburg region, and 2016, when the ANC lost political control of the city.<\/p>\n Of that, at least R7.1-million was allegedly transferred to Makhubo\u2019s personal bank account.<\/p>\n Confronted with this evidence, Makhubo was forced to concede that he did not resign from Molelwane in 2011 as he had told amaBhungane in 2018. Instead, he told Deputy Chief Justice Raymond Zondo that he signed a resolution to resign in 2011 but that this was never filed.<\/p>\n In part this was because Molelwane is a closed corporation and resigning as a member would mean giving up his ownership stake too. And with millions still flowing into Molelwane, Makhubo was reluctant to let go.<\/p>\n \u201cI wanted to divest myself … but it was never to be,\u201d Makhubo conceded.<\/p>\n \u201cMy understanding … was I would resign but would then start valuing and seeing what stood to Molelwane, a company that I had worked for for eleven years and built from scratch \u2013 how do I get back my sweat capital, how do I get whatever is due to me … the issue was I could not leave … because I was building wealth.\u201d<\/p>\n But Makhubo\u2019s vague answers did not sit well with Zondo.<\/p>\n \u201cBy 2018, you would have known that the resignation had not happened although there was a resolution, is it not?\u201d he asked.<\/p>\n When Makhubo confirmed that this was correct, Zondo pushed again: \u201cI can understand a situation where you had taken the steps that you believed were necessary in order to effect a resignation, like signing the resolution or signing the letter of resignation… So you think you had resigned.<\/p>\n \u201cBut by 2018, I take it that you knew that the resignation had not happened… So the question would arise, how you would say [to amaBhungane] in 2018 you did resign in circumstances where one expects that you know that the resignation resolution was not acted upon. You understand where my concern is?\u201d<\/p>\n In fact, Makhubo had gone even further. In one of his 2018 responses, he wrote that his office \u201cmade follow ups and confirmation was received that my resignations have been noted and processed\u201d.<\/p>\n It is also worth pointing out that Makhubo had the opportunity to correct any inaccurate statements he may have made in 2018. AmaBhungane exchanged nine letters with Makhubo over an almost two month period \u2013 five sets of questions from us and four written responses from him \u2013 before our investigation was published.<\/p>\n But when the commission asked Makhubo whether he misled amaBhungane \u2013 and thus the public \u2013 in 2018, he refused to concede.<\/p>\n Instead, he told the commission that he \u201cdid not believe in the innocence of these questions from amaBhungane… I thought they were loaded with lots of politics.\u201d<\/p>\n The problem for Makhubo is that instead of ignoring our questions, he provided false assertions that could now hurt him.<\/p>\n For instance, by claiming that he resigned \u201cto deal with real or potential conflict of interest\u201d, he showed an appreciation for the fact that remaining a member of Molelwane \u2013 as he did \u2013 was a conflict of interest.<\/p>\n The city has previously confirmed that Makhubo declared his interest in Molelwane. But as far as we are aware, he did not disclose Molelwane\u2019s 10% cut of Regiments\u2019 contract and failed to recuse himself when decisions were taken that would benefit Regiments. As political head of the finance department, Makhubo was directly responsible for overseeing Regiments\u2019 contract with the city.<\/p>\n We’re a non-profit newsroom that exposes wrongdoing, empowering people to hold power to account. But we cannot do it without your support<\/a>.<\/i><\/em><\/p>\n Molelwane will once again be important when Makhubo returns to the commission to testify about payments that he allegedly solicited from IT company EOH \u2013 payments that either went directly to him, to Molelwane or to fund the ANC.<\/p>\n Taken together, the evidence presented so far strongly suggests that Makhubo engaged in a quid pro quo<\/em> with both Regiments and EOH, and that both companies paid him to wield his political influence in their favour, whether that was to secure contracts with the city or to keep them sweet.<\/p>\n