South Africa’s Public Protector has this week released a much-anticipated ‘state capture’ Report. The report offers up details of the vast influence that the Gupta family wields in the appointment of government ministers and the board members of major parastatals (see here).
The Gupta family has strong links with South Africa’s president, Jacob Zuma. One of Zuma’s wives was employed as a communications officer at JIC Mining Services while his daughter is a former director of Sahara Computers. Both companies belong to the Guptas. Zuma’s son is a former CEO of Shiva Uranium, a subsidiary of Oakbay Investments, the holding company of the Gupta family businesses. The India-born Gupta brothers (Atul, Ajay and Rajesh) have interests in mining (coal, gold and uranium), technology, energy and media. They own among other things a national newspaper and 24-hour news channel.
In 2013, the family was embroiled in controversy when a chartered plane carrying guests to the wedding of their niece landed at a military base in Pretoria (see here). It was alleged that the landing was personally authorised by the president as a favour to friends.
The Guptas’ alleged power and influence
One of the interesting parts of the Public Protector’s Report is the notion that the Gupta family engineered both the abrupt sacking of Finance Minister Nhlanhla Nene, and his replacement by the previously unknown, David Van Rooyen. Zuma reversed the decision to appoint van Rooyen following a serious backlash from the business sector and billions of dollars being wiped off the nation’s stock market over just four days.
The Report supports Deputy Finance Minister Mcebisi Jonas’ public allegation that ‘the Guptas offered him the position of minister of finance before Nene was deposed. It turns out that Jonas declined this offer, as well as a bribe amounting to R600 million ($44m) and immediate cash payment of R600,000 (about $44,000). As a finance minister Jonas was supposed to implement a number of orders from the Guptas including sacking the Director General of the Treasury and other key members of executive management who were seen as stumbling blocks in efforts to secure lucrative deals from the state.
The incorruptible Jonas?
The actions of Deputy Minister Jonas are interesting when seen in light of the collective action theory of corruption (see here). Seeing that as corruption is endemic in South Africa, the collective action approach would consider an attempt to fend off the powerful Gupta family as being misguided or irrational. Considering the Guptas overwhelming political clout and the apparent arrogance with which they made their offers, most people would have yielded, reasoning that refusing to cooperate wasn’t going to change the rotten lot in Zuma’s administration. If anything, fighting the Guptas would most likely cost them their careers. Meanwhile, the Guptas would still have used their vast economic and political resources to identify a willing puppet, as indeed it seems they did in the person of David van Rooyen.
Apart from the fact that ‘working with the Guptas’ would be financially rewarding to Jonas, being appointed in place of Nene would probably appease sceptical investors. The appointment of a deputy minister of finance wouldn’t have hurt the market the way Van Rooyen’s— a former mayor of a small town— did. The whole thing would likely have been a win-win situation for all involved. All these considered, why then did Jonas make this potentially personally costly decision?
Well, his media statement (see here), suggests that he took a moral stance against what he saw as the “mockery of our hard earned democracy [and] the trust of our people….”. But this is simply reiterating an ethics code we expect all public officers to uphold, and to declare when called upon to explain their gallant actions. It is a moral code many of those who get ensnared in the web of corruption also profess. Indeed, there is no shortage of stories of highly moral individuals getting involved in graft, either as receivers of bribes or as payers. This is in fact one of the reasons why anti-corruption research is increasingly sceptical of the alleged positive effect of ‘religiosity’ (as a proxy for moral values) in the fight against corruption (see here).
Where corruption is seen as systemic, whether or not to participate in it does not boil down to personal ethics and values; it is a consequence of institutional forces rather than a broken moral compass. There is something about the decision to resist the Guptas that goes beyond the moral convictions of Mcebisi Jonas.
Mark Granovetter’s threshold model of collective action provides a good starting point for understanding deputy minister’s laudable actions. The model treats binary decisions in which an actor, faced with two competing alternatives, makes a behavioural choice that is inconsistent with the maximum pay off he would get if he acted differently. Granovetter defines a person’s threshold for acting in the group (public) interest as the proportion of the group he would have to see acting in this manner before doing so himself.
A student with a low threshold will not wait for “gestures” from other students indicating their wish to leave a boring lecture before he stands up and leaves. Such an individual can initiate actions that benefit the common good even when this is most likely to result in significant costs to him/herself. While moral considerations may be a starting point, they are not necessarily the main reasons why a low-threshold person acts, often or at first alone. This potentially explains why two people with the same moral principles can act differently when faced with the Gupta-type overtures.
University of Sussex