30 Oct 2012 | Tony Leon | Original Publication: BDlive
We have advanced down the road where know-who rather than know-how is the price of admission to corporate riches, writes Tony Leon
ON FRIDAY, Silvio Berlusconi, Italy’s former prime minister, was sentenced to four years’ imprisonment for tax fraud. The more sensational of his trials — allegedly paying "Ruby the heart-stealer", an underage dancer, for sex and then abusing his position to secure her release — still lies ahead.
South Africans will be familiar with this trope: the lurid intersection of public office, abuse of position and problems with the taxman. Earlier this year, Berlusconi opined that "political credibility is like virginity — easy to lose, difficult to maintain and impossible to regain if lost".
A number of South African politicians — serving and aspiring — are currently in the dock of public opinion on issues of credibility. In the recessionary world, reputation management and how to repair damaged credibility is a growth industry, and in South Africa there is no shortage of clients.
First in the line-up is Cyril Ramaphosa, Lonmin director and a favoured deputy presidential candidate, according to some in the camp of President Jacob Zuma. The Prince Hamlet of the African National Congress is accused, based on e-mails he wrote to fellow Lonmin executives on the eve of the Marikana mine massacre, of being "complicit in mass murder". Sunday Times editor Ray Hartley did a suitable demolition job on the accusation and on advocate Dali Mpofu, who advanced it. He described this characterisation as "an absurd and slanderous lie". But it was a less sensational communication from Ramaphosa that compels attention and invites unease, even if in the tangled web of political influence-peddling by impeccably connected businessmen it causes little surprise.
In an e-mail to Lonmin chairman Roger Phillimore about the conduct and lack of action by Mineral Resources Minister Susan Shabangu, Ramaphosa advises "we should have a discussion (with her) to see what she needs to do". The idea that a company director can tell a minister "what to do" underlines how far we have advanced down the road where "know-who" rather than "know-how" is the price of admission to corporate advancement and riches.
South Africa is perhaps an extreme example of this tendency but it hardly stands alone. Even in the US, where generally (see Mitt Romney) success in business is the prologue to political office and not the reverse, we have the case of Dick Cheney, the veritable Darth Vader of modern politics. Before he crossed to the "dark side" of approving waterboarding and other torture exotica as state policy when vice-president, he was CEO and chairman of energy giant Halliburton. But his appointment to corporate office was based entirely on his impeccable political connectivity, having served in the administrations of presidents Gerald Ford and George Bush and then for 20 years in Congress.
Next in the field of evolving local reputations is Mamphela Ramphele. An avatar of good governance, harsh critic of government corruption, apostle of transparency and, on some accounts, an aspiring political leader, she is also chairwoman of Gold Fields. The company is currently in the frame with a controversial black economic empowerment deal concerning one of South Africa’s richest mines, South Deep. Some dodgy characters and powerful politicians were included in this bonanza. Her somewhat lame response to a Financial Mail inquiry — "I was not part of the decision-making at the time" — might be technically true, but hardly inspires confidence about shouldering responsibility or sweeping out the Augean stables of the political influence-peddling of which, in other contexts, she loudly complains.
Finally we have Finance Minister Pravin Gordhan. Of a dozen or so Cabinet ministers I shepherded around Argentina during my diplomatic stint there, he probably did most to advance South Africa’s international image. This was not because some of his colleagues underperformed during their visits. Rather, it was due to his credibility as a thoughtful steward of public finances. This proved to be sweet breath on the local air of Buenos Aires, weighed down by runaway government spending and high inflation.
In Parliament last week to present his medium-term budget policy statement, he promised to rein in government expenditure by, among other things, looking closely at the number of employees in the public sector, suggesting billions of rand could be saved by identifying "ghost and surplus workers".
His credibility test lies in making good on this promise. He needs to prove he doesn’t just sign the cheques but has the will and the power to obtain quos for the quids he dispenses. A good place for him to start would be South African Airways, for which he recently provided a further R5bn bail-out. He would do well to look up the website Avcom.co.za. It reports that SAA operates with about double the world average of employees per aircraft (957 per plane). If Gordhan does not start to make the necessary cuts he promised, he too might find he fails the Berlusconi test.
• Follow Tony Leon on Twitter: @TonyLeonSA