Politically-connected businessman Thulani Majola has dispensed his largesse far and wide, and across political divides – his patronage spreading as both the political landscape and his own interests have become more diversified.
Since 2016, he has paid over R14-million to various ANC entities. He has also paid over R3-million to Santaclara Trading, a front company of EFF leader Julius Malema. (See accompanying graph detailing the payments.)
*To access the documents we used in our investigation, click on the Evidence docket.
Majola’s history of bankrolling the ANC predated his relationship with the EFF, but as the latter grew in political influence, so too did Majola’s financial support for Malema and his party.
Since the 2016 municipal elections made the EFF a kingmaker in Johannesburg and Tshwane and demonstrated the party’s clout, Majola’s payments to Malema have tracked the party’s rise. Apart from the Malema company, he has made payments to a company linked to EFF secretary general Marshal Dlamini, a key fixer in metros.
As recounted in part I of this series, the EFF leadership came to his aid in Giyani, Limpopo, where his company was bogged down in a botched multibillion-rand water project.
Malema’s support did not prevent the project from eventually collapsing, but by that time Majola had shifted his focus.
He has homed in on local powerbrokers elsewhere, seemingly courting politicians wherever he does business. In KwaZulu-Natal, where he bagged a R100-million infrastructure assessment tender, he paid the provincial ANC – see Big money in KZN alongside.
Similarly, in Ekurhuleni, he has given money to the local ANC, which runs the metro.
Majola’s political connections have been openly on display before. A late 2019 photograph snapped at Mzwandile Masina’s 45th birthday party shows the Ekurhuleni mayor standing with, among others, ANC national executive committee member Tony Yengeni, Malema, and then-EFF spokesperson Mbuyiseni Ndlozi. Between Malema and Ndlozi, in a bowtie and dark blue dinner jacket, is a grinning Majola.
The EFF did not respond to requests for comment for this article. Spokesperson Vuyani Pambo said a 2019 ban on amaBhungane remained “firmly” in place.
A spokesperson for the Ekurhuleni metro said that the mayor does not have a close relationship with Majola.
“Mr Majola did not receive a personal invite to the Executive Mayor’s 45th birthday event. The Mayor is a well-known public figure, and his birthday party attracted many patrons. It must be stated that there is a differentiation between knowing an individual and having a close relationship with someone.”
AmaBhungane attempts to get comment from ANC spokesperson Pule Mabe elicited no substantive response.
In earlier correspondence with amaBhungane, Majola and LTE admitted to R200 000 in payments to Santaclara that were reported on by the Sunday Times. But they denied knowing that Santaclara was linked to Malema – only that it sought donations for political t-shirts. They also denied any further payments to Santaclara or any to DMM Media and Entertainment, the company linked to the EFF secretary general.
Majola and LTE distanced themselves from allegations that the EFF had lobbied on LTE’s behalf in Giyani or that the money paid to Santaclara had anything to do with political protection, saying that if the EFF had engaged government over the water project, “LTE was not party to any of these engagements”.
They did not respond to later questions about whether the millions they paid to the ANC and EFF were linked to tenders in Ekurhuleni or elsewhere, or whether they were in exchange for political goodwill from the two parties.
When it rains, it pours
From 2016, the City of Ekurhuleni, one of Gauteng’s major industrial centres, became LTE’s new rainmaker, awarding the company a series of large contracts. Since that year, the metro has paid LTE in excess of R345-million according to detailed information the city disclosed in response to a Promotion of Access to Information Act request.
On 15 July 2016, Ekurhuleni advertised a tender for the establishment of a panel of “technical resource teams” to provide built environment consulting for the city’s real estate department over a three-year period.
Over the next five days, LTE paid R2-million to the ANC in Gauteng and a further R500 000 to the party’s Ekurhuleni region.
The LTE payments came just in time for the ANC. Hotly contested local government elections were only a couple of weeks away.
In that same month, Santaclara, the Malema front company, also received money: that initial LTE payment of R500 000 mentioned in part I. Just what this payment was tied to – Giyani, Ekurhuleni or perhaps solely a campaign donation – remains unclear.
Though there are indications that some of LTE’s payments to politicians may have been tied to specific tenders – such as the payment to the ANC in Ekurhuleni coinciding with a tender from that metro – other payments cannot be linked to particular commercial opportunities for LTE.
It is possible that Majola made regular payments to parties to earn their favour, and retain it, while at the same time doling out more money for particular quid pro quos.
By the end of the year, LTE’s appointment to the built environment panel was confirmed, alongside a handful of other service providers. A letter confirming such is dated 25 November 2016. Bid documents show that well over a hundred companies submitted bids, but the majority were rejected on one or other technicality.
The value of the work the panel was expected to perform was estimated at R911-million excluding VAT and escalations, and would be divided up among the panel members based on how well they scored in the bid. LTE was given an in-principle allocation of around R81-million of the total, though it would earn far in excess of that.
Asked if Majola’s payments to politicians had any influence on LTE winning tenders from Ekurhuleni, the metro’s spokesperson said: “This allegation is unfounded and not true. The City of Ekurhuleni follows all due processes outlined in the Municipal Finance Management Act [MFMA] and the city’s supply chain management policies in awarding contracts.”
“The city follows a transparent competitive bidding process in awarding contracts and it must be emphasised that our bid adjudication process is open to the public. It must also be stated for the record that, in terms of MFMA no politicians are involved in any process related to the awarding of contracts/tenders.”
Pay for play?
LTE’s success in scoring the 2016 consulting tender was followed by another Ekurhuleni tender in October of the following year, again awarded by the city’s real estate department.
The department planned to appoint “alternative building technology contractors … on an as and when required basis … until 30 June 2020”.
Service providers would be appointed to one of four panels from where they would be tasked to oversee construction projects for the metro from beginning to end, using technologies and materials to make building more sustainable, eco-friendly and low cost.
LTE’s bid, in a joint venture with Setheo Engineering, was successful and it was appointed to one of the panels. However, LTE would find itself in a partnership that turned ugly.
Setheo Engineering was already a controversial company. At the centre of a R126-million Johannesburg project in 2015 to upgrade the Eldorado Park substation, it was accused of colluding with officials to be paid for work that was not carried out, and falsifying a bank guarantee.
But this time round, Setheo may have been outsmarted by LTE. In court papers, Setheo alleged that LTE cut it out of the tender, commencing work without informing it.
This was only discovered when another company, Afribizz Construction, “came knocking at [Setheo’s] door demanding payment for having performed subcontracting services for the JV”.
Setheo, on its version, had never contracted with Afribizz, which presumably had been subcontracted by LTE.
Setheo did not respond to questions for this story, saying the matter was still before court.
In 2017, the year LTE got placed on the alternative building technology panel, Majola and LTE paid a total of R1 350 000 to the ANC and R650 000 to Santaclara.
LTE continued to make money from contracts under this panel until at least the end of 2020. It raked in at least R160-million, the data disclosed by the city in response to our access-to-information request shows.
Playing the panels game
Again, though it is tempting to surmise a firm link between LTE’s earnings bonanza and its political donations, the evidence is inconclusive.
Previous amaBhungane exposés on a Johannesburg fleet tender and a Tshwane fuel tender where contractors made payments to Santaclara and another Malema company gave insights into how tenders may have been manipulated. How Ekurhuleni tenders would have suffered the same fate – if they did despite checks and balances – is not known.
However, the arrangement of having panels of pre-approved service providers who could be called upon as and when needed, as in the case of the Ekurhuleni tenders, appears to have suited LTE very well.
Multiple service providers are appointed to a panel, usually for a period of a few years, and work is allocated between them over that time.
Panels in theory provide an efficient way for state bodies to procure from a reliable pool of prequalified service providers, instead of having to go out on time-consuming open tenders for each and every project of a particular type, such as construction.
But panels also create an additional opportunity for corruption in the process of distributing work among companies.
Companies on panels are supposed to be given a fair opportunity to quote for and perform work, for instance by being allocated projects based on a rotation system, or according to how well companies scored in the tender process. But in practice there may be insufficient oversight in allocating the work and it may be left to the discretion of officials.
An Ekurhuleni official told amaBhungane that this creates the opportunities for favouritism – “Why would one company get R100-million, and another get R10-million?”
There may be legitimate reasons for some level of disparity. But why, as was the case with companies that were on one of LTE’s panels, would some get very little or no chance at all?
According to two sources from one company, they did not receive a single project throughout the years their panel existed. They claimed that they were approached by anonymous officials from the metro who attempted to extort bribes from them.
One said that the officials made it clear that if the company wanted work as a panel member, it would have to pay.
“We are not really connected people, we wanted [to be on the panel] because it’s something we’d like to get involved in,” the source said. “We knew we were up against companies that have good relationships at a political level in Ekurhuleni, and we were hoping we’d get something to do at some point, but unfortunately that never happened.”
Another company approached by amaBhungane said it had received no work at all.
And the owner of a third company on one of LTE’s panels said there was nothing to ensure fairness and transparency once a panel was formed. The owner claimed that his company only received one relatively small project of under R10-million, and that they faced an uphill battle getting paid.
LTE, on the other hand, has benefitted handsomely from the panels it sits on.
Whereas LTE was initially allocated work to the value around R81-million as part of its 2016 “technical resources teams” panel, it ended up making about double that amount. And from the 2017 panel it made a similar amount again: R161-million.
All told, since 2016 the metro paid LTE over R345-million for contracts under the two panels plus a few smaller ones – a healthy return on investment for Majola, whether or not he paid the parties for specific favours or just to keep them sweet.
Responding to the allegation of unfairness in the allocation of work, a city spokesperson said: “The City of Ekurhuleni follows all due processes outlined in the Municipal Finance Management Act and the City’s Supply Chain Management Policies in awarding contracts. The City follows a transparent competitive bidding process in awarding contracts, and it must be emphasized that our bid adjudication process is open to the public.
“Please provide us with these alleged, ‘major discrepancies and inequities’ in how work has been divided. We urge the contractors to approach the South African Police Service to report any incidents of extortion or corruption that may have taken place.”
- Additional reporting by News24