South Africa’s Gupta family under FBI probe

October 20, 2017

FBI has opened a probe into US links to the Guptas, hardly surprising bearing in mind how state capture in South Africa has dominated the country’s headlines and widespread coverage around the world.At the same time UK has asked financial regulatory agencies to investigate possible ties between HSBC and Standard Chartered to South Africa’s Gupta family.In fact, after reading the state capture report, your blogger wrote on this blog how Gupta family is ruining South Africa’s reputation globally. The most startling details that have emerged over the last few months shows that Gupta family state capture is not simply that corruption has become a security issue in South Africa, but that it has directly contributed to the growth of the very forces the South Africa’s security agencies are desperately trying to contain and combat. The principal problem is the failure to understand cause and effect of Guptas. In my view, recognizing the sequence of Gupta family events is key. According to reports, the FBI is using information from the Gupta Leaks emails that were highly publicized few months back.FBI investigations is focusing on US citizens Ashish and Amol Gupta, nephews of Atul and Ajay Gupta who have a company which received payments from a Dubai-based, SA Gupta-linked company.There’s no argument that corruption is the great misunderstood counterpart to organised crime that South Africa is facing today. Organised crime is transnational, flexible and mobile, state agents are sovereign and fixed as has been demonstrated by state capture report in South Africa. The Gupta family has proved transnational crime is well organised and efficient, corrupt agents are disorganised and act independently. Thus, where organised crime is cunning and manipulative, state officials are vulnerable and incidental and that is where President Jacob Zuma son finds himself in. A political researcher once told me that corruption is the abuse of public office for private gain and reduces the role of the state in illicit activity as a problem of maverick officials motivated by personal interest. The complicity of state agents in South Africa has been the necessary counterpart to transnational crime in regard to Gupta family email leaks, the state networks and organisations promoted illicit activity which should be treated as an adjunct to transnational criminality for reducing their role to incidental protector rather than a primary beneficiary of criminal activity by the Gupta family who certainly made corruption more systematic and organised in the country as email leaks showed.

Endemic corruption perpetuated by Gupta family has seen all the fiscal, legal and political resources lie within the state, the literature of their crime continues to cast the South African state agents as the weaker agents in the game of graft. Seeing South Africa being captured by organised Gupta family criminal networks which is seeking to take on the state¹s coercive and legal machinery to shield and further their economic interests is saddening. South Africa is a country where parts of national government have been invaded by Gupta family that has become so embedded within the state, that their conduct is normalised and legitimised. Increasingly, vast tracks of the South African state are captured and under processes of internal reconfiguration by the Guptas. Nestled within the state machinery, Guptas criminal networks are able to use the mechanics of the South African state, the apparatus of law, the veneer of legitimacy that has has seen them create more fertile conditions for their operations in and outside South Africa. And thats why its hardly surprising for me to hear Peter Hain say that the London based banks might have transacted illicit funds linked to Gupta family via Hong Kong and Dubai and has asked for reviewing of transactions due to evidence that hundreds of millions of South African rand were laundered out of the country.The direction of Gupta family corrupt activities and money was from the bottom up. This has not been a patronage network if you ask me, as such, but one in which South African officials had to receive money from the Guptas if they wanted to keep their potentially lucrative positions like with the case at South Africa energy utility firm Eskom. In this case, management firm McKinsey worked with Eskom on a $120 million contract that is being investigated by South African parliament and police over alleged fraud.McKinsey this week said it had parted ways with some staff involved in its work at Eskom last year with Trillian, a local consultancy controlled at the time by members of the Gupta family.From the perspective of a ruling elite in South Africa with little interest in anything other than self-enrichment, this is, therefore, anything but a case of state failure. Gupta family work with Jacob Zuma’s son, Duduzane Zuma and have been accused by South Africa’s anti-corruption watchdog of using control over state agencies to siphon public funds.The South African state under President Jacob Zuma is fulfilling its primary purpose as far as those who were at its top were concerned. The disheartening impact on ordinary citizens confronted with endless demands for bribes to accomplish the most basic of everyday tasks is not difficult to imagine and one which the likes of Nelson Mandela, Steve Biko and Oliver Tambo would not have allowed to happen.Unfortunately, while South Africa’s problems may be extreme, they are far from unique and South Africans can only hope that FBI, Financial Conduct Authority, Serious Fraud Office and National Crime Agency in the UK will bring those criminals to book.

Contador Harrison