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#StateCaptureInquiry: Bosasa turned money laundering into a fine art

Opinion /  / 

Bosasa's former COO Angelo Agrizzi is seen on his final day at the state capture inquiry in Parktown. Picture: Nhlanhla Phillips/African News Agency(ANA)
Angelo Agrizzi returned to the inquiry to reveal solid numbers substantiating his earlier claims in previous testimony, of the alleged corrupt relationship between his former employer Bosasa and the state.

Several national and provincial government departments, he said, helped Bosasa obtain and retain contracts worth billions of rand collectively, for years, in return for bribes for the officials who made this happen.

The money had to be in cash form, so that it was untraceable and thus did not get either side into trouble.

About 38 public servants and politicians were on Bosasa’s payroll at any given time, said Agrizzi this week, walking away with their share of the R75million-per-annum piece of the cash-bribe pie.

Bosasa kept this loot in safes at the head office. The management and handling of the money was left to Agrizzi and chief executive Gavin Watson, through a log system using little black books, in which records would be made of what amount went to which official on which date.

To further ensure that the details could not be traced to the bribe recipients, the men used codes and not real names of the people. Different directors had their own cluster of bribe recipients, depending on what “project” they were aligned with.

When he first testified in January, the former chief operations officer told the inquiry how Bosasa had multiple methods of generating this cash meant for bribes, mainly through money laundering schemes that involved cash-based businesses.

Agrizzi himself was arrested on charges of money laundering, and appeared in the Specialised Commercial Crimes Court in February.

He was among six accused whom, the Hawks said, were linked to a 2009 Special Investigating Unit report that found Bosasa’s contracts with the Department of Correctional Services to be irregular. One of his co-accused is a current Bosasa employee, while two are former directors.

Cunning strategies

One such method, Agrizzi said, created fictitious invoices from Jumbo Liquor Wholesalers in western Joburg to Bosasa for liquor orders, sometimes amounting to R1m per week or fortnightly. Bosasa would then make payment by electronic transfer and the same amount, typically made possible through Jumbo’s weekend cash sales, would be transported back to Bosasa by an agent.

The Jumbo transactions would be facilitated by Riaan Hoeksma, who owns a company called Riekele Construction, Agrizzi revealed, he transported the cash between Jumbo and Bosasa.

A similar modus operandi would be used for the prisons catering arm of the company: when ordering supplies for correctional facilities, non-taxable items would be included on falsified invoices to evade scrutiny by the SA Revenue Service (Sars).

“Things like rice and beans would be on the list we don’t serve rice in prison,” said Agrizzi in January.

“When Sars looks at a non-vatable invoice, they will just chuck it aside.”

The costs of the items would then make up part of the billing to the Department of Correctional Services, but the goods would not be delivered.

The supplier would then do as Jumbo did and the cash would be transported to the Bosasa vaults.

Openly dishing out money for bribes

Watson would openly give bags of money to different Bosasa officials to facilitate bribes to those public officials with whom they associated on various projects they managed for the government.

“There was a vault at the office that we called ‘Gavin’s safe’, and often people would ask him for money and he would simply go in there and retrieve a money bag to give to them,” Agrizzi said.

It happened in front of him, said Agrizzi, and other directors and senior managers at Bosasa were familiar with the practice.

“What is the order of chicken today?” officials would ask when enquiring about the amount available in the safe, whenever the need arose for them to prepare payments.

Another witness, Greg Lawrence, made further money laundering claims. He shared details of cash payments he would make to Bosasa while employed by one of the company’s business partners, Greg Lacon-Allin.

In 2012, Lacon-Allin suggested to Lawrence that their company, Equal Trade4, supply Bosasa with cash received from the sale of their food and alcohol products, instead of banking it and incurring hefty cash deposit costs. They would then receive a commission from Bosasa.

Lawrence told the commission in February that his division of Equal Trade dealt with clients from the Southern African Development Community region, who would mostly prefer to pay for goods in cash.

At any given time, he was having to bank amounts of either R1m or R2m, with costs of just under 2% for each transaction. He noted the deposit fees incurred were some of the company’s largest costs.

Lacon-Allin’s plan, therefore, seemed like a viable solution to this increasingly troublesome problem, and so arrangements were made for Lawrence to make regular deliveries of cash to Bosasa head offices in Krugersdorp, or at agreed-upon locations.

He would always make the delivery to one contact, whose name he has since forgotten. Lawrence provided the commission with video footage, allegedly of himself and a friend, delivering cash to the offices of Bosasa. He recorded these transactions on several occasions, although he could not provide dates.

On Agrizzi’s initial evidence, Bosasa spent anything between R10000 and R300000 at a time on individuals, depending on their level of power and proximity to decision-making levels of a government entity.

One such R300000 payment was stuffed into a Louis Vuitton bag, he said, that Watson had bought for former SAA chairperson Dudu Myeni, and meant - in principle - for the Jacob Zuma Foundation, which she also chaired. Agrizzi said Bosasa was under no illusion that the money was actually for the former president, as it was paid monthly without fail.

Other politicians who received alleged bribes were either ministers or members of Parliament.

Millions were generated monthly for this purpose, in what Watson apparently called “monopoly money”.

* Talane is a writer for Corruption Watch

** The views expressed here are not necessarily those of Independent Media.

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#StateCaptureInquiry: Bosasa turned money laundering into a fine art