09 Nov 2007: ISS Today: Public Servants, Private Enterprise Conflicting Interests?

ISS Today 9 Nov: Public Servants, Private Enterprise – Conflicting Interests?

 

 

The multi-billion rand bid for Johncom, owners of South Africa’s largest selling weekend newspaper Sunday Times, could not have come at a worse time for President Thabo Mbeki. Johncom includes influential titles in its stable such as The Times, the Sowetan, Daily Dispatch, and Herald, as well as half of Business Day and Financial Mail. 

 

Just two days before the bid by Koni Media Holdings hit headlines last weekend, the president criticised the country’s monopolistic media ownership structures. He was addressing the National Council of Provinces (NCOP) sitting in the rural community of Pniel as part of its programme of ‘Taking Parliament to the People’.  Koni Media Holdings is owned by, among others, a presidential political advisor, the former presidential protocol chief and a senior public servant.

 

With the countdown to the ruling African National Congress December conference truly underway, the succession battle kicks up a gear. Mbeki, who has declared himself available for the party presidency, is under close scrutiny. The political timing of this bid for one of the countries largest media groups by people said to be close to the president may well serve to embarrass the head of state. While some have suggested that the spectre of conflicts of interest looms large, Koni Media Holding has insisted there’s no hidden hand of government in the R7-billion (US$1billion) bid. Presidential advisor Titus Mafolo, former head of state protocol Billy Modise and Foreign Affairs spokesperson Ronnie Mamoepa are just “shareholders in their individual private capacity”, according to a company statement.

 
As Modise retired from government service a year ago, the focus of a potential conflict of interest falls on Mafolo and Mamoepa. While the presidential political advisor has remained silent, according to the South African Press Association (Sapa), Mamoepa has responded by saying that “as a constitutional democracy every citizen is allowed to engage in economic activities within the framework of the law ... Our interests have long been declared to government.”

 

The assertion of a citizen’s constitutional right to economic activity has been a constant refrain from those found with their hands in someone else’s cookie jar – including Vusi Mona, the former City Press editor sacked for his links to a PR company which received a R30-million business contract from the Mpumalanga provincial government in 2003. However public servants find themselves in a slightly different position as the Public Service Act stipulates that “every officer and employee shall place the whole of his or her time at the disposal of the State” and that no-one performs “remunerative work outside his or her employment in the pubic service without permission granted b the relevant Executive Authority”, usually the minister or someone nominated by the minister. An equally substantive issue was raised by ANC MP and former education minister, Kader Asmal who said it is “astonishing that civil servants are able to develop time and energy for what is really a takeover bid” of Johncom.

 

Conflicts of interest – both real and perceived – in the government machinery are a vexed issue. For many even the mere perception of a conflict of interest is as damaging as the real deal, particularly at this turbulent time in South African politics. There are just 37 days to go before the ANC elects a new president and decides whether or not to adopt proposed policies, including one on cooling-off periods for public servants and elected public representatives wanting to join the private sector.

 

Mafolo and Mamoepa’s foray into the private sector while working for government is not their first: as co-owners of Phatsima Aviation they acquired key shares in an aircraft component company in 2005. Mamoepa is also no stranger to controversy, as he had to repay a R20 000 ‘sponsorship’ organised by Deloite and Touche for his then actress girlfriend Nomsa Manaka. Nor are the two by any means exceptional. According to the Public Service Commission, as far back as 2005 the Auditor General identified 1678 senior public service managers who are directors or members in companies and closed corporation.

 

Public Service Regulations require all members of the senior management team to declare their financial interests. Like the disclosures of the elected public representatives from councillors to the Cabinet, these include shares, directorships, remuneration outside government and gifts, including hospitality. Yet government’s own statistics show that just 78% of all national government senior managers, who are required to declare, did so in 2005/6. This was, at least, an improvement over the paltry 55% who declared in 2002/3. The levels of disclosure within provincial government are somewhat erratic. 

 

Unlike the politicians’ disclosures, those of public servants are confidential. The Public Servants Regulations states that only the executive authority, usually the minister or a person designated by the minister, and members of the Public Service Commission have access to the disclosures. The only option available to the public is to go via the courts or invoke Access to Information legislation.

 

In the case of Mafolo the executing authority could be the President, or if the function is delegated, the Minister in the Presidency, Essop Pahad, or Director-General Frank Chikane. In Mamoepa’s case, it is Foreign Affairs minister Nkosazama Dlamini-Zuma.

 

The Public Service Commission is the custodian of those disclosure forms. It also checks disclosures and, if necessary, institutes investigation into possible conflicts of interest. If the commission believes there is a conflict, the executing authority is asked to investigate. If a conflict of interest is indeed found, the executing authority can, among other things, institute disciplinary steps or grant a “… waiver to the employee in respect of a future conflict of interest”.

 

If Mafolo and Mamoepa say they’ve declared their directorships in Koni Media Holdings, the fact there has been no investigation could be interpreted as giving the all clear.

 

But is it really as simple as making disclosures and trusting that the process will take care of itself? Only full transparency can dispel the perception of conflicts of interest, particularly where those perceived conflicts are linked to allegations of the enrichment of the privileged few at the expense of the poor majority.

 

Marianne Merten is a Researcher in the ISS Cape Town Corruption & Governance Programme