Note: CityPress first reported on some elements that we’re dealing with in this story on Sunday, 26 February.
Safe house
The organogram was the size of the boardroom table. Approaching it, there was a distinct feeling that what we were about to see could never be unseen. The country we thought we lived in, from that moment on, would be an entirely different place.
“CRIME CARTELS OPERATING WITHIN ESKOM,” the header explained, all in caps.
In the body of the organogram, below the so-called “territorial ruler” and his primary enforcer, who was identified by name as the “henchman” and “assassin”, were the leaders and foot soldiers of the four cartels: the
Presidential Cartel, the
Mesh-Kings Cartel, the
Legendaries Cartel and the
Chief Cartel.
There were photographs of the major players, in some cases alongside the companies with which they were affiliated, but a lot of the information was yet to be confirmed. Still, in a column running between the cartels was a box titled, “Illicit procurement process to defraud Eskom”. This, we knew, was the covert information on how it all worked.
“What we have here,” said our source, “is not evidence. It’s intelligence. You guys will have to do the work of joining the dots.”
There were other conditions that came with our access to this “safe house”, out in a quiet suburb of Gauteng’s metropolitan sprawl. We had been asked to leave our phones in the car, so it went without saying that revealing any clues that could lead to the identification of our sources was an absolute no-go zone.
Also, for the moment, we were told, very firmly, that we could not quote from the intelligence reports until we were given the green light.
The reason for this was simple: our sources, former state intelligence operatives who were now working for the private sector, are still active in the field.
“If you want to get killed,” said our primary source, “you come play here.”
We nodded, and turned our attention back to the organogram. Aside from the identity of the “territorial ruler”, it was the “illicit processes” that drew our attention.
At the top of the column was an item marked “Soldier”, where it was explained that the cartel leader or one of his subordinates would “approach a specific
end-user” — for instance, an “engineer” in the generation or distribution division of Eskom — to begin the process.
“The
end-user [Eskom insider] is in cahoots,” the text noted, “and receives a substantial amount in cash, including extra funds to bribe the other employees in the supply chain to ensure their cooperation.”
Next, the text went deeper into how the
end-user operated and what he intended to accomplish, beginning with the “payment of an upfront bribe” to the store manager of a power station.
“The store manager then verifies how much of a specific type of equipment is available on inventory to be covered in a purchase order. Should the equipment to the value of the intended purchase order be available in stock, the existing equipment in stock will be hidden or displaced somewhere in the power station to justify the procurement/purchase request for additional equipment.
“Also, for the cartels to create a supplementary business to supply essential components or renew or continue maintenance contract works, the cartel will plot the destruction of infrastructure with insiders so that a breakdown can justify repairs or the supply of components via the cartel vendors.”
The text then went into information that is already in the public domain, such as
“malicious damage” to conveyer belts and the
“sabotage” of the railway line feeding the Majuba Power Station — the last example, it was noted, so as “to ensure the survival of their coal transport trucking companies supplying coal to Eskom”.
Finally, the text explained, the
end-user would approach the procurement manager, “or an employee referred to as a
Mphati in collusion with the cartel”.
This
Mphati, it was noted, had become “a very influential contact at the power station”. As the man in charge of procurement, he “receives an upfront inducement that serves as an acceleration fee to issue a purchase request (RFQ)”. And here, according to the intelligence, was where the “illicit procurement process” got set in motion.
“The procurement manager/buyer instructs the financial department to approve the expenditure that must, according to the supply chain directives of Eskom, have the signatures of both the
end-user and the store manager.”
Visit Daily Maverick’s home page for more news, analysis and investigations
So there it was, the scam in all its torrid glory, a simple outline of a criminal network so vast and heinous that it was bringing the country to its knees. The cartel members, with the backing and protection of the “territorial ruler”, would, by this stage in the process, have the South African taxpayers’ funds all but in their leather bags.
In the column’s third section, the intelligence went on to explain:
“The purchase request (RFQ) is then taken to a senior buyer who will receive their share of the bribe/pay-off. After that, three compulsory quotes will be obtained. All three quotations will originate from the same cartel as all three approaching members are members/soldiers of the same cartel.
“The soldiers/vendors manipulate the quotations so that a specific pre-chosen company is inevitably appointed as the final vendor, and a purchase order (PO) is issued accordingly. In addition, the buyers often will create a false urgency by sending official emails to the vendor to expedite delivery, which will then be used to justify a higher price. It will also then record that the PO is bona fide.”
But that wasn’t all. The fourth section, titled “Bribed security officers sign off on non-existent product delivery”, was pretty self-explanatory, with Eskom’s security staff in the secret employ of the cartels putting their signatures to “ghost deliveries” and verifying that the equipment had been inspected at the main gate.
“The end-user and store manager will receive the ghost delivery and sign the receipt to deliver the non-existing equipment. The hidden equipment is retrieved from where it was hidden and placed back into storage as if the equipment had been delivered.”
It was at this juncture that we came across the sentence which, we knew, would make our work incredibly challenging.
Aside from the fact that all bribes up and down the line were paid in cash, there was the following problem:
“All the procurement documentation from the purchase request to the delivery note will procedurally correspond with the equipment on inventory, making it difficult for forensic audits to identify fraud and malpractice.”
/file/dailymaverick/wp-content/uploads/2023/02/Kevin-Eskom-Intelligence-Files2.jpg)
www.dailymaverick.co.za
