Zuma under pressure to quit as graft probe suggests crimes

Calls for South African President  Jacob Zuma to resign grew louder after the nation’s graft ombudsman ordered an investigation into possible criminal activity by government officials following a probe into their dealings with the prominent Gupta family.

With thousands already protesting against state corruption in Pretoria, the capital, a 355-page report said Zuma and some ministers may have breached the government’s code of ethics. It called on the president to set up a judicial commission of inquiry to probe his relationship with the family, who are his friends and in business with his son. It details allegations that the Guptas may have influenced the appointment of cabinet members and received special treatment for a coal business linked to the family and Duduzane Zuma.

The allegations of corruption at the highest levels of government are the latest blow to Zuma’s presidency. The report was released on a dramatic day when Zuma abandoned his request to the High Court to block its publication and protesters demanding an end to state corruption demonstrated in Pretoria. Since taking office in 2009, he’s been implicated in a series of scandals, including a March 31 ruling by the nation’s highest court that he violated the constitution by refusing to repay taxpayer funds spent on his home.

“The report confirms the variety of allegations leveled against our president in the last year or two,” Daniel Silke, director of the Political Futures Consultancy in Cape Town, said by phone. “It further erodes confidence in President Zuma, who is reeling already. Having this report in black and white from a source like the Public Protector is the final straw in the curtailment of the Zuma era before his term ends in 2019.”

Bribe Allegation

Among the most striking revelations in the report are an allegation by Deputy Finance Minister Mcebisi Jonas that the Guptas offered to pay him 600,000 rand ($44,373) in cash and deposit 600 million rand into an account of his choice, if he took up the family’s offer to become finance minister and remove key treasury officials who were thwarting the family’s business ambitions. The Guptas have denied making the offer.

The ombudsman said Zuma’s failure to investigate Jonas’s allegation may have violated the executive ethics code. Zuma fired the respected Nhlanhla Nene as his finance minister in December and gave the post to little-known lawmaker David van Rooyen.

“It is worrying that the Gupta family was aware, or may have been aware, that Minister Nene was removed 6 weeks after Deputy Minister Jonas advised him that he had been allegedly offered a job by the Gupta family,” the ombudsman said. It was “equally worrying” that Van Rooyen visited the Johannesburg suburb where the Guptas lived on seven occasions, including on the day before his appointment as minister was announced, she said.

The rand rallied to its strongest in 11 weeks after the High Court ordered the release of a report. It jumped as much as 2.2 percent to the strongest level since Aug. 18 before paring its advance to 1.1 percent at 13.4628 per dollar by 10:52 p.m. in Johannesburg, strengthening the most among 31 major and emerging market currencies tracked by Bloomberg.

Gupta Offer

The ombudsman says in the report that Brian Molefe, the chief executive officer of Eskom Holdings SOC Ltd., the state power company, and Ajay Gupta, called each other 58 times, while mobile-phone evidence showed that Molefe was in the vicinity of the Guptas household 19 times between Aug. 5 and Nov. 17 last year.

Molefe said by phone he was seeking legal advice. Gert van der Merwe, a lawyer for the Gupta family’s holding company, Oakbay Investments, said in an e-mailed statement the evidence in Madonsela’s report is “riddled with errors and is subject to rebuttal.”

Zuma’s office said earlier Wednesday that he would study the report to see whether “it should be a subject of a court challenge.”

Madonsela’s Regret

The ombudsman’s report was completed just days before Thuli Madonsela’s seven-year term as graft ombudsman came to an end and she was replaced by Busisiwe Mkhwebane, who didn’t oppose the court bid to halt the report’s release. Zuma and the Guptas have denied wrongdoing.

Madonsela said she should have taken a harder stance against Zuma in her report, and accused the president of breaking his word by failing to answer her questions and failing to show up for planned meetings. Zuma is legally bound to abide by her directives, she said.

“I regret listening to lawyers who represented the broader legal community that I should tread softly with this report mainly to avoid a successful court review of the report,” she said by phone from Johannesburg.

In her report, Madonsela said she had decided to direct that a judicial commission be set up to probe Zuma’s relationship with the Guptas because her office hadn’t been given sufficient funds to complete the job.

Mmusi Maimane, the leader of the main opposition Democratic Alliance, which originally asked the Public Protector to investigate his relationship with the Guptas, called on Zuma to resign.

“Given the scale of the state capture that is detailed in the report, which he has allowed and indeed fostered, he cannot continue in office,” he said in an e-mailed statement.